Last updated on April 16, 2014 at 8:29 EDT

Cymer Reports Third Quarter 2012 Operating Results

October 26, 2012

SAN DIEGO, Oct. 26, 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 third quarter ended September 30, 2012.

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

For the third quarter of 2012:

  • net income totaled $9.8 million, equal to $0.31 per share (diluted), compared to net income of $11.3 million, equal to $0.36 per share (diluted) in the third quarter of 2011 and net income of $9.6 million, equal to $0.30 per share (diluted), in the second quarter of 2012.
  • revenue totaled $131.5 million compared to revenue of $128.7 million in the third quarter of 2011, and revenue of $149.3 million in the second quarter of 2012.

Commenting on the results, Bob Akins, Cymer’s chief executive officer, said, “Third quarter profitability exceeded our expectations driven by higher gross margin and lower than forecasted operating expenses. Revenue was below our July guidance as deep ultraviolet (DUV) light source demand softened throughout the quarter. Additionally, customer acceptance of a Display Products Group (DPG) Gen 4 tool did not occur in the quarter. OnPulse revenue, which accounts for approximately 88 percent of our Installed Base Products (IBP) revenue, increased as compared to the prior quarter primarily due to a continued higher mix of ArF pulses and installed base growth. We demonstrated sustained 30 Watts EUV source expose power during the quarter and we completed the delivery of our first EUV 3300 source to ASML.”

In the third quarter of 2012, the company shipped 27 DUV light sources, of which 17 were ArF immersion and 10 were KrF, and the company installed 24 DUV light sources at chipmaker locations. Gross profit was $71.8 million for the third quarter of 2012, yielding a 54.6 percent gross margin. Total operating expenses, which include research and development and selling and administrative expenses, were $62.7 million. Total operating income was $9.0 million or approximately seven percent of revenue.

DUV and IBP bookings for the third quarter of 2012 totaled $112.4 million, resulting in a book-to-bill ratio of 0.86. Forty-seven percent of the DUV unit bookings were ArF immersion and 53 percent were KrF. The company ended the quarter with a DUV backlog of $50.3 million.

As of September 30, 2012, cash and investments totaled $305.1 million.

Forward Looking Statements
This document contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. 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 plans for 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, and expectations for growth in Installed Base Products revenue. 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 inability to obtain Cymer shareholder approval or regulatory approval for the proposed transaction with ASML; the satisfaction of other conditions to the closing of the proposed transaction with ASML; the possibility that the length of time necessary to consummate the proposed transaction with ASML may be longer than anticipated; risks associated with integrating the businesses of Cymer and ASML; the possibility that the businesses of ASML and Cymer may suffer as a result of uncertainty surrounding the proposed transaction with ASML; 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. The foregoing list of factors is not exhaustive. 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 an industry leader in developing lithography 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, CA, has more than 1,200 employees on payroll (expressed in full time equivalents) 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.

    (in thousands, except per share data)
                                         Three Months Ended           Nine Months Ended
                                            September 30,               September 30,
                                            -------------               -------------
                                             2012               2011            2012        2011
                                             ----               ----            ----        ----
    Revenue                              $131,478           $128,698        $431,288    $441,331
    Cost of
     revenue                               59,690             63,635         205,206     212,571
                                           ------             ------         -------     -------
     profit                                71,788             65,063         226,082     228,760
                                           ------             ------         -------     -------
    Operating expenses:
        development                        46,088             35,240         138,685      93,474
        marketing                           5,968              6,200          18,938      18,226
        administrative                     10,686             10,217          31,519      31,085
                                           ------             ------          ------      ------
          expenses                         62,742             51,657         189,142     142,785
                                           ------             ------         -------     -------
     income                                 9,046             13,406          36,940      85,975
                                            -----             ------          ------      ------
    Other (expense) income:
        gain                                 (436)               (30)           (989)        875
        income                                292                205             972         467
        expense                              (141)              (184)           (520)       (521)
        (expense)                              12                 (3)            168           0
                                              ---                ---             ---         ---
     income                                  (273)               (12)           (369)        821
                                             ----                ---            ----         ---
     taxes                                  8,773             13,394          36,571      86,796
     expense                               (1,053)             2,144          (4,389)     19,026
                                           ------              -----          ------      ------
     income                                $9,826            $11,250         $40,960     $67,770
                                           ======            =======         =======     =======
    Earnings per share:
       Basic                                $0.31              $0.37           $1.32       $2.23
                                            =====              =====           =====       =====
       Diluted                              $0.31              $0.36           $1.29       $2.19
                                            =====              =====           =====       =====
    Weighted average shares
       Basic                               31,284             30,555          31,125      30,428
                                           ======             ======          ======      ======
       Diluted                             32,004             30,992          31,814      30,991
                                           ======             ======          ======      ======

    (in thousands)

                                            September 30,           December 31,
                                                              2012                   2011
                                                              ----                   ----
    Current assets:
       Cash and cash
        equivalents                                       $110,071               $125,027
       Restricted cash                                       6,150                  5,903
        investments                                        153,622                124,712
       Accounts receivable,
        net                                                129,997                123,970
       Inventories                                         286,729                221,740
       Deferred income taxes                                36,258                 26,963
       Other current assets                                 49,976                 35,601
                                                            ------                 ------
         Total current assets                              772,803                663,916
    Long-term investments                                   41,401                 73,811
    Property, plant and
     equipment, net                                        142,997                119,015
    Deferred income taxes                                   31,510                 34,591
    Goodwill                                                17,125                 16,792
    Intangible assets, net                                   8,971                  9,928
    Other assets                                            12,960                  9,691
    Total assets                                        $1,027,767               $927,744
                                                        ==========               ========
    Current liabilities:
       Accounts payable                                    $55,199                $38,876
       Deferred revenue                                     86,301                 56,546
       Deferred income taxes                                   178                    171
       Other current
        liabilities                                         34,711                 49,619
                                                            ------                 ------
         Total current
          liabilities                                      176,389                145,212
    Deferred revenue                                         7,184                  5,871
    Deferred income taxes                                    1,484                  1,463
    Other liabilities                                       23,130                 27,255
         Total liabilities                                 208,187                179,801
                                                           =======                =======
    Stockholders' equity:
       Preferred stock                                           -                      -
       Common stock                                             45                     44
       Additional paid-in
        capital                                            687,277                658,755
       Treasury stock                                     (492,890)              (492,890)
       Accumulated other
        comprehensive loss                                  (9,764)               (11,918)
       Retained earnings                                   634,912                593,952
                                                           -------                -------
       Total stockholders'
        equity                                             819,580                747,943
    Total liabilities and
     stockholders' equity                               $1,027,767               $927,744
                                                        ==========               ========

    (in thousands)

                                             Nine Months Ended
                                               September 30,
                                                              2012      2011
                                                              ----      ----
    Operating activities:
       Net income                                          $40,960   $67,770
       Adjustments to reconcile
        net income to net cash
        provided by
         operating activities:
          amortization and
          accretion                                         21,990    14,744
          compensation                                      18,582    11,960
         Bad debt expense                                      408         6
         Excess tax benefits from
          stock option exercises                            (2,630)   (3,902)
         Provision for deferred
          income taxes                                      (3,640)   (2,398)
         Loss on disposal or
          impairment of property,
          plant and equipment                                  174       127
         Change in assets and
           Restricted cash                                    (247)   (5,790)
           Accounts receivable                              (6,402)    3,836
           Inventories                                     (65,625)  (21,666)
           Other assets                                    (17,336)   (2,968)
           Accounts payable                                 16,758     7,502
           Deferred revenue                                 31,611    20,895
           Other liabilities                               (16,303)  (29,740)
                                                           -------   -------
              Net cash provided by
               operating activities                         18,300    60,376
                                                            ------    ------
    Investing activities:
       Acquisition of property,
        plant and equipment                                (41,580)  (14,837)
       Cash paid for
        acquisition of eDiag,
        net of cash acquired                                     0    (3,785)
       Purchases of investments                           (246,611) (204,131)
       Proceeds from sold or
        matured investments                                247,857   105,952
                                                           -------   -------
              Net cash used in
               investing activities                        (40,334) (116,801)
                                                           -------  --------
    Financing activities:
       Proceeds from issuance
        of common stock                                      7,521    14,966
       Excess tax benefits from
        stock option exercises                               2,630     3,902
       Install payments related
        to prior acquisition                                (3,000)        0
       Payments under capital
        lease obligations                                     (244)      (83)
                                                              ----       ---
              Net cash provided by
               financing activities                          6,907    18,785
                                                             -----    ------
    Effect of exchange rate
     changes on cash and
     cash equivalents                                          171       359
                                                               ---       ---
    Net decrease in cash and
     cash equivalents                                      (14,956)  (37,281)
    Cash and cash
     equivalents at
     beginning of the period                               125,027   154,312
                                                           -------   -------
    Cash and cash
     equivalents at end of
     the period                                           $110,071  $117,031
                                                          ========  ========

SOURCE Cymer, Inc.

Source: PR Newswire