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Cymer Reports Second Quarter 2011 Operating Results
Jul 21, 2011 (04:07 PM EDT)


SAN DIEGO, July 21, 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 second quarter ended June 30, 2011.

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

For the second quarter of 2011:

  • net income totaled $27.7 million, equal to $0.89 per share (diluted), compared to net income of $21.2 million, equal to $0.70 per share (diluted) in the second quarter of 2010 and net income of $28.8 million, equal to $0.94 per share (diluted) in the first quarter of 2011.
  • revenue totaled $158.2 million compared to revenue of $131.9 million in the second quarter of 2010, and revenue of $154.4 million in the first quarter of 2011.

Commenting on results, Bob Akins, Cymer's chief executive officer, said, "In the second quarter of 2011, we continued our focus on delivering products of increased customer value. Installed Base Products revenue increased five percent as compared to the previous quarter.  Second quarter light source shipments remained at a high level as key customer deep ultraviolet (DUV) selections awarded to us in the second half of 2010 continued to translate into increased market share.  We continued to increase our investment in extreme ultraviolet (EUV) and we recently completed the installation of our second EUV 3100 source at an additional chipmaker location.  We also received acceptance from an additional customer of our second TCZ Gen 4 crystallization system.  We continued to focus on ramping our EUV and TCZ manufacturing and support capabilities in response to recently received orders."

In the second quarter of 2011, the company shipped 47 light sources, of which 28 were ArF immersion, 17 were KrF and 2 were ArF dry, and the company installed 56 light sources at chipmaker and other end user locations.  Gross profit was $84.2 million for the second quarter of 2011, yielding a 53.2 percent gross margin.  Total operating expenses, which include research and development and selling and administrative expenses, were $47.3 million.  Total operating income was $36.9 million or 23.3 percent of revenue.  The second quarter effective tax rate was 25 percent.  As of June 30, 2011, cash and investments totaled $281 million.

DUV and IBP bookings for the second quarter of 2011 totaled $141.3 million, resulting in a book-to-bill ratio of 0.91.  Fifty-four percent of the DUV bookings in the second quarter were ArF immersion, 41 percent were KrF, and 5 percent were ArF dry. The company ended the quarter with a DUV backlog of $57.8 million.  In addition to the DUV backlog, the company previously announced significant orders for EUV 3100 and 3300 sources and TCZ systems.  

Company Outlook  

Commenting on the outlook, Akins stated, "The lower level of second quarter DUV light source orders is reflective of chipmakers recently assessing their capital investments.  As a result, we expect to ship a significantly reduced number of DUV light sources in the third quarter.  Our investment in advanced performance enhancements for our flexible power DUV light sources and our focus on product reliability continues to strengthen our competitive position.  Therefore, we believe when light source demand improves we will continue to be very well positioned to support customer equipment investment.  We anticipate that our Installed Base Products revenue will remain strong, primarily driven by installed base growth, pulse mix and initial expansion to EUV and TCZ products. In spite of slowing DUV demand, we are committed to EUV source development and commercialization as we believe that our LPP EUV source technology is the most viable path towards enabling the extension of Moore's Law.  Customer pull for EUV and TCZ products is a significant driver of future growth for the company."

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

  • Revenue to be approximately $130 million.  
  • Gross margin to be approximately 50 percent.
  • R&D expenses to be approximately $34.5 million.
  • SG&A expenses to be approximately $16.5 million.
  • The third quarter effective tax rate to be approximately 21 percent.

Cymer's management will hold a conference call at 2:00 pm (PDT) today, July 21, 2011, to discuss second quarter operating results and third 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 development of the company's EUV source technology, the company's development of and manufacturing capability for its silicon crystallization tool for the display industry, 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 risk that the company's EUV 3100 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


Six Months Ended


June 30,


June 30,


2011


2010


2011


2010

Revenue

$ 158,235


$ 131,864


$ 312,633


$ 245,645

Cost of revenue

74,051


62,373


148,936


119,338

Gross profit

84,184


69,491


163,697


126,307

Operating expenses:








  Research and development

30,455


21,617


58,234


41,502

  Sales and marketing

5,992


6,332


12,026


11,466

  General and administrative

10,825


10,346


20,868


19,557

    Total operating expenses

47,272


38,295


91,128


72,525

Operating income

36,912


31,196


72,569


53,782

Other income (expense):








  Foreign currency exchange gain (loss)

122


(160)


906


(56)

  Interest income

116


173


262


313

  Interest expense

(204)


(139)


(337)


(316)

  Other income (expense)

2


-


3


-

Total other income (expense)

36


(126)


834


(59)

Income before income taxes

36,948


31,070


73,403


53,723

Income tax expense

9,227


9,858


16,883


16,654

Net income

$   27,721


$   21,212


$   56,520


$   37,069

  Net loss attributable to noncontrolling interest in subsidiary

-


-


-


148

Net income attributable to Cymer, Inc.

$   27,721


$   21,212


$   56,520


$   37,217

Earnings per share:








  Basic

$       0.91


$       0.71


$       1.86


$       1.25

  Diluted

$       0.89


$       0.70


$       1.83


$       1.23

Weighted average shares outstanding:








  Basic

30,529


29,716


30,364


29,856

  Diluted

30,993


30,127


30,925


30,194



CYMER, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share data)






June 30,


December 31,


2011


2010

ASSETS




Current assets:




  Cash and cash equivalents

$ 201,809


$         154,312

  Short-term investments

65,526


54,964

  Accounts receivable, net

131,066


127,747

  Inventories

218,818


213,002

  Deferred income taxes

12,555


11,961

  Other current assets

58,285


55,027

    Total current assets

688,059


617,013

Long-term investments

13,666


7,506

Property, plant and equipment, net

110,587


104,705

Deferred income taxes

34,538


35,690

Goodwill

17,471


8,833

Intangible assets, net

10,867


7,645

Other assets

7,604


5,939

Total assets

$ 882,792


$         787,331

LIABILITIES




Current liabilities:




  Accounts payable

$   33,599


$           27,731

  Deferred revenue

46,882


30,593

  Deferred income taxes

176


0

  Other current liabilities

45,009


68,121

    Total current liabilities

125,666


126,445

Deferred revenue

2,664


690

Deferred income taxes

1,813


21

Other liabilities

25,873


21,920

    Total liabilities

156,016


149,076

EQUITY




Cymer, Inc. stockholders' equity:




  Preferred stock

-


-

  Common stock

44


43

  Additional paid-in capital

646,091


620,272

  Treasury stock

(492,890)


(492,890)

  Accumulated other comprehensive income (loss)

3,300


(2,881)

  Retained earnings

570,231


513,711

  Total equity

726,776


638,255

Total liabilities and equity

$ 882,792


$         787,331



CYMER, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


Six Months Ended


June 30,


2011


2010

Operating activities:




  Net income

$   56,520


$ 37,069

  Adjustments to reconcile net income to net cash provided by (used in)




    operating activities:




    Depreciation, amortization and accretion

9,663


9,789

    Stock-based compensation

7,268


5,180

    Bad debt recoveries

(176)


(696)

    Excess tax benefits from stock option exercises

(3,820)


(1,370)

    Provision for deferred income taxes

5,337


(3,669)

    Loss on disposal or impairment of property, plant and equipment

67


61

    Change in assets and liabilities:




      Restricted cash

-


(3,754)

      Accounts receivable

(2,711)


(36,676)

      Accounts receivable, related party

-


732

      Inventories

(9,994)


(17,745)

      Other assets

(4,089)


(1,434)

      Accounts payable

6,131


12,520

      Accounts payable, related party

-


(9,157)

      Deferred revenue

19,795


(1,362)

      Other liabilities

(25,686)


2,103

         Net cash provided by (used in) operating activities

58,305


(8,409)

Investing activities:




  Acquisition of property, plant and equipment

(9,307)


(7,879)

  Cash paid for acquisition of eDiag, net of cash acquired

(3,785)


-

  Purchases of investments

(87,664)


(57,880)

  Proceeds from sold or matured investments

70,711


50,659

         Net cash used in investing activities

(30,045)


(15,100)

Financing activities:




  Proceeds from issuance of common stock

14,901


3,017

  Purchase of noncontrolling interest

-


(1,456)

  Excess tax benefits from stock option exercises

3,820


1,370

  Repurchase of common stock into treasury

-


(19,310)

  Payments under capital lease obligations

(40)


-

         Net cash provided by (used in) financing activities

18,681


(16,379)

Effect of exchange rate changes on cash and cash equivalents

556


316

Net increase (decrease) in cash and cash equivalents

47,497


(39,572)

Cash and cash equivalents at beginning of the period

154,312


118,381

Cash and cash equivalents at end of the period

$ 201,809


$ 78,809

Supplemental disclosure of cash flow information:




  Interest paid

$        149


$      196

  Income taxes paid

$   24,904


$ 24,143

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




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

$          41


$ (2,268)

Net decrease in in-transit proceeds from issuance of common stock

$        (14)


$      (81)

Property and equipment acquired under capital lease obligations

$        324


-

Future install payments for acquisition of eDiag

$   (8,184)


-



SOURCE Cymer, Inc.