PORTLAND, Ore., Aug. 01, 2018 (GLOBE NEWSWIRE) --
Electro Scientific Industries, Inc. (NASDAQ:ESIO), an innovator of
laser-based manufacturing solutions for the microtechnology
industry, today announced results for its fiscal 2019 first quarter
ended June 30, 2018. Financial measures are provided on
both a GAAP and a non-GAAP basis. Non-GAAP results exclude the
impact of purchase accounting, equity compensation, restructuring,
and other items shown in the non-GAAP reconciliation table
below.
First quarter revenue was $110.6 million, compared
to $72.7 million in the first quarter of last fiscal
year. GAAP net income was $31.1 million or $0.87 per
diluted share, compared to net income of $2.9
million or $0.08 per diluted share one year ago. On
a non-GAAP basis net income was $34.6
million or $0.96 per diluted share, compared to net
income of $13.0 million or $0.38 per share in
the prior fiscal year's first quarter.
Michael Burger, ESI's president and CEO, stated, "The technology
trends toward the need for precision laser processing and component
test within the consumer electronics and automotive markets have
enabled us to post a strong start to our fiscal year with 52% year
on year revenue growth and excellent overall financial
performance."
Total orders for the quarter were $82.3 million, compared
to $76.6 million one year ago and $111.8
million in the prior quarter. Burger continued, "We have seen
a dramatic increase in demand for our MLCC testing tools as many
MLCC producers have begun adding manufacturing and testing capacity
that partially offset the expected cyclical softness in new demand
for flexible circuit laser drills and resulted in an overall 7%
year on year order growth."
GAAP gross margin was 48.1%, compared to 36.3% in the first
quarter of last fiscal year. Operating expense was $20.2
million, down from $23.0 million last year. Operating
income was $33.0 million, or 30% of revenue, compared to
income of $3.5 million in last fiscal year's first
quarter.
Non-GAAP gross margin was 48.3%, compared to 46.7% one year ago,
primarily as a result of significantly higher revenues.
Non-GAAP operating expense decreased year over year from $20.3
million to $18.7 million as a result of the completion of the
Company's restructuring activities, and non-GAAP operating income
was $34.8 million or 31% of sales.
Balance Sheet and Cash Flow
At quarter end, total cash, restricted cash and current investments
increased to $131.0 million. The company generated $9.8
million of cash from operations during the quarter despite
sequential increases in inventory and accounts receivable that
resulted from the timing of customer shipments.
Second Quarter 2019 Outlook
Based on current market and backlog conditions, revenues for fiscal
2019 second quarter are expected to be
between $80 and $90 million. Non-GAAP earnings per
diluted share is expected to be $0.52 to $0.62.
Burger concluded, "I’m pleased to see the same technology trends
toward connected devices, automotive and 5G that led to strong
demand for flex products have now resulted in increased demand for
our MLCC test tools, strengthening our belief that overall company
demand will remain above historical levels for the foreseeable
future."
The company will hold a conference call today at 5:00 p.m.
ET. The call will include a review of the financial results,
operational performance and business outlook, followed by a
question and answer session. The conference call can be accessed by
calling 888-419-5570 (domestic participants) or 617-896-9871
(international participants). The conference ID number is 93200917.
A live audio webcast can be accessed at www.esi.com.
Discussion of Non-GAAP Financial Measures
In this press release, we have presented financial measures which
have not been determined in accordance with generally accepted
accounting principles (GAAP) and are therefore non-GAAP financial
measures. Non-GAAP, or adjusted, financial measures exclude the
impact of purchase accounting, equity compensation, restructuring,
and other items. We believe that this presentation of non-GAAP
financial measures allows investors to assess the company's
operating performance by comparing it to prior periods on a more
consistent basis. We have included a reconciliation of various
non-GAAP financial measures to those measures reported in
accordance with GAAP. Because our calculation of non-GAAP financial
measures may differ from similar measures used by other companies,
investors should be careful when comparing our non-GAAP financial
measures to those of other companies.
About ESI
ESI enables our customers to commercialize technology using
precision laser processes. ESI's solutions produce the industry's
highest quality and throughput, and target the lowest total cost of
ownership. ESI is headquartered in Portland, Oregon, with
global operations and subsidiaries
in Asia, Europe and North America. More
information is available at www.esi.com.
Forward-Looking Statements
The statements contained in this press release that are not
statements of historical fact, including our expected financial
results for the fiscal 2019 second quarter, our expectations
regarding market and backlog conditions, anticipated technology
trends, our belief that overall company demand will remain above
historical levels for the foreseeable future, and other statements
containing the words "believes", "expects", "anticipates,"
"continue," "will," "may," "should," and similar words, constitute
forward-looking statements that are subject to a number of risks
and uncertainties. These forward-looking statements are based on
information available to us on the date of this release, and we
undertake no obligation to update these forward-looking statements
for any reason. Actual results may differ materially from those in
the forward-looking statements. Risks and uncertainties that may
affect the forward-looking statements include those described in
our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
as well as: the risk that anticipated growth opportunities may be
smaller than anticipated or may not be realized; risks related to
the relative strength and volatility of the electronics industry;
the volatility associated with the industries we serve which
includes the relative level of capacity and demand, and financial
strength of the manufacturers; the risk that customer orders may be
canceled or delayed, including as a result of any shipment delays;
our ability to respond promptly to customer requirements; the risk,
especially at heightened production levels, that we may not be able
to ship products on the schedule required by customers, whether as
a result of production delays, supply delays, or otherwise; our
ability to develop, manufacture and successfully deliver new
products and enhancements; the risk that customer acceptance of new
or customized products may be delayed; the risk that large orders
and related revenues may not be repeated; our ability to create and
sustain intellectual property protection around our products; the
risk that competing or alternative technologies could reduce demand
for our products; the risk that we may not be successful in
penetrating new or adjacent markets; the risk that our new products
may not gain acceptance in the marketplace; the risk that new
products may not be introduced to the market in the anticipated
time frame or at all; foreign currency fluctuations; the risk that
duties or tariffs could be imposed or increased on goods imported
or exported by us; the risk of timing of shipments or increased
costs related to licenses for goods exported by us; the risk that
changes to policies regarding immigration and visits to the
United States could negatively impact our ability to hire or
retain and train qualified personnel or our ability to operate
internationally on an integrated basis; our ability to utilize
recorded deferred tax assets; taxes, interest or penalties
resulting from tax audits; and changes in tax laws or the
interpretation of such tax laws.
Contact
Erica Mannion or Michael Funari
Sapphire Investor Relations, LLC
617-542-6180
investorrelations@esi.com
ELECTRO SCIENTIFIC INDUSTRIES, INC. AND
SUBSIDIARIES
First Quarter Fiscal 2019
Results
Condensed Consolidated Statements of
Operations
(Unaudited)
| |
|
|
|
|
|
| |
Fiscal quarter ended |
| (In
thousands, except per share data) |
Jun 30, 2018 |
|
Mar 31, 2018 |
|
Jul 1, 2017 |
| Net
sales: |
|
|
|
|
|
| Systems |
$ |
96,857 |
|
|
$ |
103,522 |
|
|
$ |
62,093 |
|
| Services |
13,767 |
|
|
9,871 |
|
|
10,591 |
|
| Total net sales |
110,624 |
|
|
113,393 |
|
|
72,684 |
|
| Cost of
sales: |
|
|
|
|
|
| Systems |
50,094 |
|
|
53,247 |
|
|
41,426 |
|
| Services |
7,332 |
|
|
5,424 |
|
|
4,838 |
|
| Total cost of sales |
57,426 |
|
|
58,671 |
|
|
46,264 |
|
| Gross
profit |
53,198 |
|
|
54,722 |
|
|
26,420 |
|
| Gross margin |
48.1 |
% |
|
48.3 |
% |
|
36.3 |
% |
| Operating
expenses: |
|
|
|
|
|
| Selling, general and administrative |
10,130 |
|
|
11,128 |
|
|
12,808 |
|
| Research, development and engineering |
10,059 |
|
|
9,038 |
|
|
8,934 |
|
| Restructuring costs |
— |
|
|
(144 |
) |
|
1,211 |
|
| Total operating expenses |
20,189 |
|
|
20,022 |
|
|
22,953 |
|
| Operating
income |
33,009 |
|
|
34,700 |
|
|
3,467 |
|
|
Non-operating income (expense): |
|
|
|
|
|
| Interest and other income, net |
452 |
|
|
(283 |
) |
|
(184 |
) |
| Total non-operating income (loss) |
452 |
|
|
(283 |
) |
|
(184 |
) |
| Income
before income taxes |
33,461 |
|
|
34,417 |
|
|
3,283 |
|
| Provision
for (benefit from) income taxes |
2,318 |
|
|
(40,671 |
) |
|
381 |
|
| Net
income |
$ |
31,143 |
|
|
$ |
75,088 |
|
|
$ |
2,902 |
|
| Net income
per share - basic |
$ |
0.90 |
|
|
$ |
2.19 |
|
|
$ |
0.09 |
|
| Net income
per share - diluted |
$ |
0.87 |
|
|
$ |
2.10 |
|
|
$ |
0.08 |
|
Electro Scientific Industries,
Inc.
First Quarter Fiscal 2019
Results
Condensed Consolidated Balance
Sheets
(Unaudited)
| (In
thousands) |
Jun 30, 2018 |
|
Mar 31, 2018 |
|
Assets |
|
|
|
| Current
assets: |
|
|
|
| Cash and cash equivalents |
$ |
74,854 |
|
|
$ |
76,792 |
|
| Short-term investments |
55,026 |
|
|
47,121 |
|
| Trade receivables, net |
80,525 |
|
|
63,044 |
|
| Inventories |
94,265 |
|
|
87,686 |
|
| Shipped systems pending acceptance |
1,937 |
|
|
4,734 |
|
| Other current assets (1) |
5,041 |
|
|
5,493 |
|
| Total current assets |
311,648 |
|
|
284,870 |
|
| Non-current
assets: |
|
|
|
| Property, plant and equipment, net |
22,870 |
|
|
22,025 |
|
| Non-current deferred income taxes, net |
43,637 |
|
|
43,518 |
|
| Goodwill |
2,626 |
|
|
2,626 |
|
| Acquired intangible assets, net |
4,812 |
|
|
5,169 |
|
| Other assets(1) |
11,110 |
|
|
14,780 |
|
| Total assets |
$ |
396,703 |
|
|
$ |
372,988 |
|
|
Liabilities and shareholders' equity |
|
|
|
| Current
liabilities: |
|
|
|
| Accounts payable |
$ |
32,616 |
|
|
$ |
37,354 |
|
| Accrued liabilities |
32,193 |
|
|
34,533 |
|
| Deferred revenue |
9,026 |
|
|
9,818 |
|
| Total current liabilities |
73,835 |
|
|
81,705 |
|
| Non-current
liabilities |
|
|
|
| Long-term debt |
12,659 |
|
|
12,766 |
|
| Income taxes payable |
2,345 |
|
|
1,901 |
|
| Other liabilities |
10,614 |
|
|
10,258 |
|
| Total liabilities |
99,453 |
|
|
106,630 |
|
|
Shareholders' equity: |
|
|
|
| Preferred and common stock |
211,766 |
|
|
210,995 |
|
| Retained earnings |
86,000 |
|
|
54,816 |
|
| Accumulated other comprehensive (loss) income |
(516 |
) |
|
547 |
|
| Total shareholders' equity |
297,250 |
|
|
266,358 |
|
| Total liabilities and shareholders' equity |
$ |
396,703 |
|
|
$ |
372,988 |
|
| End of
period shares outstanding |
34,525 |
|
|
34,387 |
|
(1) On June 30, 2018, $1.1 million of current restricted
cash was included in Other current assets. Included in Other assets
as of March 31, 2018, is long-term restricted cash of $1.1
million.
Electro Scientific Industries, Inc.
Analysis of
First Quarter Fiscal 2019 Results
(Unaudited)
| |
Fiscal quarter ended |
| (Dollars and shares in
thousands) |
Jun 30, 2018 |
Mar 31, 2018 |
Dec 30, 2017 |
Oct 1, 2017 |
Jul 1, 2017 |
| Sales
detail: |
|
|
|
|
|
| Printed
Circuit Board |
$ |
66,337 |
$ |
70,896 |
$ |
76,933 |
$ |
38,187 |
$ |
46,185 |
| Component
Test |
9,405 |
8,401 |
6,504 |
7,007 |
7,448 |
|
Semiconductor |
18,777 |
22,362 |
10,664 |
9,641 |
5,181 |
|
Industrial Machining |
2,338 |
1,863 |
5,317 |
5,481 |
3,279 |
|
Service |
13,767 |
9,871 |
11,422 |
10,651 |
10,591 |
|
Net Sales |
$ |
110,624 |
$ |
113,393 |
$ |
110,840 |
$ |
70,967 |
$ |
72,684 |
| As % of Net Sales |
Fiscal quarter ended
|
|
GAAP |
Jun 30, 2018 |
|
Mar 31, 2018 |
|
Jul 1, 2017 |
| Gross
profit |
48.1% |
|
48.3% |
|
36.3% |
| Selling,
general and administrative expense |
9% |
|
10% |
|
18% |
| Research,
development and engineering expense |
9% |
|
8% |
|
12% |
| Total
operating expenses |
18% |
|
18% |
|
32% |
| Operating
income |
30% |
|
31% |
|
5% |
|
Non-GAAP |
|
|
|
|
|
| Gross
profit |
48.3% |
|
49.2% |
|
46.7% |
| Net
operating expenses |
17% |
|
17% |
|
28% |
| Operating
income |
31% |
|
33% |
|
19% |
| |
|
|
|
|
|
| GAAP - Effective tax
rate % |
6.9% |
|
(118.2%) |
|
11.6% |
| Weighted
average shares outstanding |
|
|
|
|
|
|
Basic |
34,459 |
|
34,350 |
|
33,432 |
| Diluted
GAAP |
35,924 |
|
35,830 |
|
34,321 |
| Diluted
Non-GAAP |
35,924 |
|
35,830 |
|
34,321 |
| End of period
employees |
634 |
|
615 |
|
607 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| Reconciliation
of Cash and Investments |
Fiscal quarter ended
|
| |
Jun 30, 2018 |
|
Mar 31, 2018 |
| Cash |
$ |
25,808 |
|
$ |
58,817 |
| Cash equivalents |
49,046 |
|
17,975 |
| Current restricted
cash |
1,097 |
|
— |
| Long-term restricted
cash |
— |
|
1,093 |
| Cash, cash
equivalents, and restricted cash at end of period |
75,951 |
|
77,885 |
| Short-term
investments |
55,026 |
|
47,121 |
| Cash,
restricted cash and current investments |
$ |
130,977 |
|
$ |
125,006 |
| |
|
|
|
Electro Scientific Industries,
Inc.
First Quarter Fiscal 2019 Results
Reconciliation of GAAP to Non-GAAP Financial
Measures
(Unaudited)
| |
Fiscal quarter ended |
|
| (In
thousands, except per share data) |
Jun 30, 2018 |
|
|
Mar 31, 2018 |
|
|
Jul 1, 2017 |
|
|
Gross profit per GAAP |
$ |
53,198 |
|
|
$ |
54,722 |
|
|
$ |
26,420 |
|
| Purchase accounting |
243 |
|
|
242 |
|
|
251 |
|
| Equity compensation |
106 |
|
|
69 |
|
|
67 |
|
| Charges for other asset and inventory impairment |
— |
|
|
277 |
|
|
7,194 |
|
| Charges from VAT audit |
(97 |
) |
|
521 |
|
|
— |
|
|
Non-GAAP gross profit |
$ |
53,450 |
|
|
$ |
55,831 |
|
|
$ |
33,932 |
|
| |
|
|
|
|
|
|
Operating expenses per GAAP |
$ |
20,189 |
|
|
$ |
20,022 |
|
|
$ |
22,953 |
|
| Purchase accounting |
(114 |
) |
|
(114 |
) |
|
(219 |
) |
| Equity compensation |
(1,393 |
) |
|
(1,223 |
) |
|
(1,211 |
) |
| Restructuring costs |
— |
|
|
144 |
|
|
(1,211 |
) |
|
Non-GAAP operating expenses |
$ |
18,682 |
|
|
$ |
18,829 |
|
|
$ |
20,312 |
|
| |
|
|
|
|
|
|
Operating income per GAAP |
$ |
33,009 |
|
|
$ |
34,700 |
|
|
$ |
3,467 |
|
| Non-GAAP adjustments to gross profit |
252 |
|
|
1,109 |
|
|
7,512 |
|
| Non-GAAP adjustments to operating expenses |
1,507 |
|
|
1,193 |
|
|
2,641 |
|
|
Non-GAAP operating income |
$ |
34,768 |
|
|
$ |
37,002 |
|
|
$ |
13,620 |
|
| |
|
|
|
|
|
|
Non-operating income (expense), net per GAAP |
$ |
452 |
|
|
$ |
(283 |
) |
|
$ |
(184 |
) |
| (Income) expense, on charges from VAT audit, Gain on asset
sale, net of other non-operating expense (income) |
(49 |
) |
|
336 |
|
|
— |
|
Non-GAAP non-operating income
(expense) |
$ |
403 |
|
|
$ |
53 |
|
|
$ |
(184 |
) |
|
Non-GAAP income before income taxes |
$ |
35,171 |
|
|
$ |
37,055 |
|
|
$ |
13,436 |
|
| |
|
|
|
|
|
| Net
income per GAAP |
$ |
31,143 |
|
|
$ |
75,088 |
|
|
$ |
2,902 |
|
| Non-GAAP adjustments to gross profit |
252 |
|
|
1,109 |
|
|
7,512 |
|
| Non-GAAP adjustments to operating expenses |
1,507 |
|
|
1,193 |
|
|
2,641 |
|
| Non-GAAP adjustments to non-operating expense |
(49 |
) |
|
336 |
|
|
— |
|
| Income tax effect of other non-GAAP adjustments |
1,734 |
|
|
(41,225 |
) |
|
(24 |
) |
|
Non-GAAP net income |
$ |
34,587 |
|
|
$ |
36,501 |
|
|
$ |
13,031 |
|
|
Basic Non-GAAP net income per share |
$ |
1.00 |
|
|
$ |
1.06 |
|
|
$ |
0.39 |
|
|
Diluted Non-GAAP net income per share |
$ |
0.96 |
|
|
$ |
1.02 |
|
|
$ |
0.38 |
|
Electro Scientific Industries,
Inc.
First Quarter Fiscal 2019
Results
Condensed Consolidated Statements of
Cash Flows
(Unaudited)
| |
Fiscal quarter ended |
|
| (In
thousands) |
Jun 30, 2018 |
|
|
Mar 31, 2018 |
|
|
Jul 1, 2017 |
|
| Net
income |
$ |
31,143 |
|
|
$ |
75,088 |
|
|
$ |
2,902 |
|
| Non-cash
adjustments and changes in operating activities |
(21,374 |
) |
|
(48,457 |
) |
|
4,529 |
|
| Net cash
provided by operating activities |
9,769 |
|
|
26,631 |
|
|
7,431 |
|
| Net cash
(used in) investing activities |
(9,916 |
) |
|
(10,993 |
) |
|
(4,789 |
) |
| Net cash
used in financing activities |
(840 |
) |
|
(1,739 |
) |
|
(506 |
) |
| Effect of
exchange rate changes on cash |
(947 |
) |
|
648 |
|
|
135 |
|
| NET
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
(1,934 |
) |
|
14,547 |
|
|
2,271 |
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF
PERIOD |
77,885 |
|
|
63,338 |
|
|
57,732 |
|
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF
PERIOD |
$ |
75,951 |
|
|
$ |
77,885 |
|
|
$ |
60,003 |
|
| Reconciliation of GAAP to Non-GAAP Financial
Measures - Projected |
Fiscal quarter ending
September 29, 2018 |
| |
|
|
Non-GAAP earnings per diluted share |
0.52 - 0.62 |
| Purchase accounting |
(0.02) |
| Equity compensation |
(0.05) |
| Other items |
(0.10) |
|
GAAP earnings per diluted share |
0.35 - 0.45 |
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