Zygo Corporation (Nasdaq:ZIGO) today announced its financial
results for the third quarter of fiscal 2014 ended March 31, 2014
and points out the following highlights in the quarter:
- Revenue up 15% over the prior year quarter to $39.7 million.
- Gross Margin of 45.5%.
- EPS improved 100% over prior year on a GAAP basis.
Revenue in the third quarter of fiscal 2014 increased 15% to
$39.7 million from the $34.5 million reported for the comparable
prior year quarter and declined 18% from 48.2 million reported for
the second quarter of fiscal 2014. Revenue in the nine months ended
March 31, 2014 increased 17% to $128.0 million compared to $109.4
million in the comparable prior year period.
Net income in the third quarter of fiscal 2014 was $1.9 million,
or $0.10 per diluted share, compared to $1.0 million, or $0.05 per
diluted share, in the comparable prior year quarter. As set forth
in the "Reconciliation of Reported Results to Non-GAAP Results" in
this press release, on a non-GAAP basis, net income for Q3 of
fiscal 2014 was $2.7 million, or $0.14 per diluted share. Non-GAAP
net income excludes $1.3 million ($0.8 million net of tax) of costs
related to the recently-announced merger and additional costs for
the Company's auditors to review the ongoing analysis of its tax
accounts. Non-GAAP net income and earnings per diluted share for Q3
of fiscal 2013 were the same as GAAP reported earnings at $1.0
million, or $0.05 per diluted share.
Year to date net income was $8.1 million, or $0.42 per diluted
share, compared to $3.6 million, or $0.19 per diluted share, in the
prior year. On a non-GAAP basis, net income was $10.6 million,
or $0.55 per diluted share, in the first nine months of fiscal 2014
and $3.6 million, or $0.19 per diluted share, in the first nine
months of the prior fiscal year. Non-GAAP net income and EPS
in the first nine months of fiscal 2014 exclude the costs related
to the recently announced merger, separation of the former CEO, the
auditor review of the Company's analysis of its tax accounts and a
terminated acquisition effort.
Bookings for the third quarter of fiscal 2014 were $47.1 million
(Metrology Solutions Division 69% of the total; Optical Systems
Division 31%), compared to $38.4 million in the previous quarter
and $50.2 million in the comparable prior year
quarter. Backlog was $84.3 million at March 31, 2014, $76.9
million at December 31, 2013 and $88.9 million at March 31, 2013.
Metrology Solutions Division bookings represented 45% of the
March 31, 2014 backlog, Optical Systems Division bookings were
55%.
The value of bookings included in backlog with delivery dates
beyond twelve months from March 31, 2014 is $2.7 million. The
value of bookings excluded from backlog of March 31, 2013 with
delivery dates beyond 12 months was $2.8 million. If those
bookings had been included in backlog at March 31, 2013, the
reported backlog would have been $91.7 million.
As previously reported, the Company has been undergoing a review
of its tax accounts using third party advisors. As a result of
that review, the Company reported that subsequent to the issuance
of the financial information for the third fiscal quarter
ended March 31, 2013, the Company's management identified the
following errors within the Company's accounting for income taxes,
which the Company determined to be immaterial to the financial
information previously reported:
- An overstatement in recorded tax expense related to certain
transactions with foreign subsidiaries, partially offset by an
understatement in tax expense recorded in a reduction of reserves
against uncertain tax positions related to transfer
pricing. The Company's deferred tax assets were understated
for tax benefits that had not historically been captured from
transactions between the Company and its foreign subsidiaries,
primarily related to its German subsidiary ZygoLot. For the
three and nine months ended March 31, 2013, correction of the two
errors aggregated to an increase in income tax expense of $0.2
million and a decrease in income tax expense of $0.6 million,
respectively, with a corresponding change in deferred tax assets.
- An overstatement of recorded state research and development tax
credits, which are available for use to offset future state taxes
on capital. The Company had incorrectly recorded these State
credits in its tax accounts for States where we pay tax on capital,
not on income. To correct that overstatement, the previously
recorded deferred tax assets related to these credits was
reversed. For the three and nine months ended March 31, 2013,
correction of the error resulted in an increase to income tax
expense of $0.2 million and $0.6 million, respectively, with a
corresponding decrease to deferred tax assets.
- An error in accounting for the tax basis of fixed assets
acquired in the Company's acquisition of the Richmond, California
operations in November 2010. The tax basis of the fixed assets
acquired that was used in the calculation of the deferred tax
accounts since the acquisition date was overstated, and as a result
the associated deferred tax liability was understated. The
calculated tax basis did not include a basis adjustment for a
future discount liability recorded as part of the original
acquisition. For the nine months ended March 31, 2013, the
correction of the error resulted in an increase in income tax
expense of $1.7 million with a corresponding decrease in deferred
tax assets.
- An understatement in recording the Company's net operating loss
carryforward related to excess tax benefits on share-based
compensation. The unrecognized excess tax benefits in certain
years were not recorded in accordance with the same methodology the
Company had elected on the date of adoption of FAS
123R. Correction of the error resulted in an increase to the
deferred tax asset related to the net operating loss carryforward
and an increase to additional paid-in capital of $1.4 million as of
June 30, 2013.
- An error in the recognition of uncertain tax positions against
a net operating loss carryforward related to an
acquisition. The Company's uncertain tax positions had been
understated by $1.1 million and were corrected to reflect the
uncertainty around the availability of an acquired net operating
loss carryforward. As of June 30, 2013, correction of the
error resulted in an increase in other long-term liabilities of
$1.1 million with a corresponding decrease in retained
earnings.
The Company's management has evaluated the impact of these
errors on the previously reported financial information. On
the basis of quantitative and qualitative considerations, the
Company's management does not believe the errors are material to
the previously-issued financial information. The financial
information for the previous periods presented in this press
release reflects the restated balances, rather than the amounts
previously-reported. The Company will present and expand on
this information in the Form 10-Q to be filed for the quarter ended
March 31, 2014. The table below provides a reconciliation of
the restated balances to the amounts previously-reported:
(Amounts in thousands, except per share
amounts) |
|
|
Fiscal 2013 |
Three Months Ended |
Nine Months Ended |
|
March 31, 2013 |
March 31, 2013 |
|
As Previously |
|
As Previously |
|
|
Reported |
As Restated |
Reported |
As Restated |
Income tax benefit (expense) |
$ 890 |
$ 504 |
$ (866) |
$ (2,602) |
Net Income attributable to Zygo
Corporation |
1,366 |
980 |
5,333 |
3,597 |
|
|
|
|
|
Basic Earnings per Share |
$ 0.07 |
$ 0.05 |
$ 0.29 |
$ 0.20 |
Diluted Earnings Per Share |
$ 0.07 |
$ 0.05 |
$ 0.28 |
$ 0.19 |
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
Basic Shares |
18,506 |
18,506 |
18,434 |
18,434 |
Diluted Shares |
19,126 |
19,126 |
19,080 |
19,080 |
|
|
|
|
|
Fiscal 2013 |
At June 30, 2013 |
|
|
|
As Previously |
|
|
|
|
Reported |
As Restated |
|
|
Deferred income taxes - Current
asset |
$ 7,261 |
$ 8,631 |
|
|
Deferred income taxes - Long-term
asset |
$ 14,967 |
$ 10,490 |
|
|
Deferred taxes and long term
liabilities |
5,701 |
4,473 |
|
|
Total shareholders' equity - Zygo
Corporation |
$ 183,841 |
$ 181,962 |
|
|
On April 11, 2014, we announced that we have entered into a
definitive merger agreement with AMETEK, Inc. ("AMETEK") pursuant
to which AMETEK has agreed to acquire all of the outstanding shares
of common stock of Zygo for cash at a purchase price of $19.25 per
share. The transaction, which was unanimously approved by the
Board of Directors of Zygo, is subject to certain customary closing
conditions, including approval of the merger by Zygo's stockholders
and regulatory clearance.
Commenting on the third quarter results, Gary K. Willis, interim
Chief Executive Officer of Zygo Corporation, commented, "Revenue in
the third quarter continued to improve on a year-over-year basis,
as we expected, and the bookings activity continued to reflect the
positive reception to our new products, solid sales of existing
profiler models and several significant Optics Division
orders."
John P. Jordan, Vice President, Chief Financial Officer and
Treasurer of Zygo Corporation, said, "Gross margin in the third
quarter of fiscal 2014 of 45.5% increased from the prior year third
quarter due primarily to improved mix of metrology product (67.2%
in Q3 14 vs. 61.6% in Q3 13) and decreased from the prior quarter
margin due to a lower ratio of metrology product in Q3 vs Q2 (67.2%
in Q3 14 vs 70.3% in Q2 14). Margin on certain metrology
product lines was also lower than in the prior quarter due to the
change in mix of product shipped in those product
lines. Operating expenses increased slightly from the same
quarter in the prior year due to costs associated with the pending
merger ($720K) and the cost of our auditors' review of our ongoing
review and analysis of our tax accounts ($533K), partially offset
by lower incentive compensation costs. Operating expenses were
lower than the prior quarter due in part to the CEO separation
costs and incentive compensation costs included in the second
quarter that were not in the third quarter. Cash improved to
$97.1 million during the quarter as a result of the strong earnings
and continued improvements in accounts receivable. We have
also made significant progress with resolution of the deferred tax
balances, and testing is being conducted in order to conclude that
the material weakness has been remediated."
Zygo Corporation is a worldwide supplier of optical metrology
instruments, precision optics and electro-optical design and
manufacturing services serving customers in the semiconductor
capital equipment, bio-medical, scientific and industrial
markets.
Forward-Looking Statements
All statements other than statements of historical fact included
in this news release regarding financial performance, condition and
operations and the business strategy, plans, anticipated revenues,
bookings, market acceptance, growth rates, market opportunities and
objectives of management of the Company for future operations are
forward-looking statements. Forward-looking statements provide
management's current expectations or plans for the future operating
and financial performance of the Company based upon information
currently available and assumptions currently believed to be valid.
Forward-looking statements can be identified by the use of words
such as "anticipate," "believe," "estimate," "expect," "intend,"
"plan(s)," "strategy," "project," "should" and other words of
similar meaning in connection with a discussion of current or
future operating or financial performance. Actual results could
differ materially from those contemplated by the forward-looking
statements as a result of certain factors. Among the important
factors that could cause actual events to differ materially from
those in the forward-looking statements are fluctuations in capital
spending of our customers; fluctuations in revenues to our major
customers; manufacturing and supply chain risks; risks of order
cancellations, push-outs and de-bookings; dependence on timing and
market acceptance of new product development; rapid technological
and market change; risks in international operations; risks related
to the integration of manufacturing facilities; risks related to
any reorganization of our business; risks related to changes in
management personnel, including risks related to the Company's
recent and announced changes in senior management and the Board of
Directors; dependence on proprietary technology and key personnel;
length of the revenue cycle; environmental regulations; investment
portfolio returns; fluctuations in our stock price; the risk that
anticipated growth opportunities may be smaller than anticipated or
may not be realized; risks related to business acquisitions; and
risks associated with our recently announced contemplated merger
with AMETEK, Inc., including its possible impact on our
relationships with customers, suppliers, employees and others with
whom we have business relationships and on our financial condition.
Zygo Corporation undertakes no obligation to publicly update or
revise forward-looking statements to reflect events or
circumstances after the date of this news release except as
required by law. Further information on potential factors that
could affect Zygo Corporation's business is described in our
reports on file with the Securities and Exchange Commission,
including our Form 10-K for the fiscal year ended June 30, 2013,
filed with the Securities and Exchange Commission on September 13,
2013.
Zygo Corporation and
Subsidiaries |
Condensed Consolidated
Statements of Operations |
(Unaudited) |
|
|
|
|
|
(Amounts in thousands, except per share
amounts) |
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
March 31, |
March 31, |
|
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Net revenue |
$ 39,713 |
$ 34,533 |
$ 127,992 |
$ 109,374 |
Cost of goods sold |
21,633 |
19,273 |
66,779 |
61,338 |
Gross profit |
18,080 |
15,260 |
61,213 |
48,036 |
|
45.5% |
44.2% |
47.8% |
43.9% |
|
|
|
|
|
Selling, general and administrative
expenses |
10,141 |
9,362 |
33,164 |
26,451 |
Research, development and engineering
expenses |
4,742 |
4,990 |
14,916 |
14,073 |
Operating profit |
3,197 |
908 |
13,133 |
7,512 |
|
|
|
|
|
Other income (expense) |
45 |
(266) |
150 |
(438) |
Income before income tax, including
noncontrolling interest |
3,242 |
642 |
13,283 |
7,074 |
Income tax (expense) benefit |
(1,331) |
504 |
(4,871) |
(2,602) |
Net income including noncontrolling
interest |
1,911 |
1,146 |
8,412 |
4,472 |
Less: Net income attributable to
noncontrolling interest |
13 |
166 |
305 |
875 |
Net income attributable to Zygo
Corporation |
$ 1,898 |
$ 980 |
$ 8,107 |
$ 3,597 |
|
|
|
|
|
Earnings per share attributable to Zygo
Corporation |
|
|
|
|
Basic shares |
$ 0.10 |
$ 0.05 |
$ 0.43 |
$ 0.20 |
Diluted shares |
$ 0.10 |
$ 0.05 |
$ 0.42 |
$ 0.19 |
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
Basic shares |
18,900 |
18,506 |
18,771 |
18,434 |
Diluted shares |
19,336 |
19,126 |
19,284 |
19,080 |
|
|
|
Zygo Corporation and
Subsidiaries |
Condensed Consolidated
Balance Sheets |
(Unaudited) |
(Amounts in thousands) |
|
|
|
|
|
|
March 31, 2014 |
June 30, 2013 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 97,056 |
$ 83,056 |
Receivables, net |
28,893 |
32,360 |
Inventories |
35,131 |
30,185 |
Prepaid expenses, prepaid taxes and other
current assets |
5,029 |
5,429 |
Revenue recognized in excess of billings
on uncompleted contracts |
2,677 |
5,342 |
Deferred income taxes |
11,900 |
8,631 |
Total current assets |
180,686 |
165,003 |
Marketable securities |
616 |
662 |
Property, plant and equipment, net |
36,838 |
34,343 |
Deferred income taxes |
8,214 |
10,490 |
Intangible assets, net |
4,188 |
4,615 |
Total assets |
$ 230,542 |
$ 215,113 |
|
|
|
Liabilities and Equity |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 10,157 |
$ 7,170 |
Billings in excess of costs and estimated
earnings on uncompleted contracts |
2,832 |
6,481 |
Accrued expenses, deferred revenue and
deferred taxes |
13,744 |
12,965 |
Income tax payable |
1,603 |
19 |
Total current liabilities |
28,336 |
26,635 |
|
|
|
Deferred taxes and long-term liabilities |
6,346 |
4,473 |
|
|
|
Commitments and contingencies |
-- |
-- |
|
|
|
Total shareholders' equity - Zygo
Corporation |
193,948 |
181,962 |
Noncontrolling interest |
1,912 |
2,043 |
Total equity |
195,860 |
184,005 |
Total liabilities and
equity |
$ 230,542 |
$ 215,113 |
|
|
|
|
|
Zygo Corporation and
Subsidiaries |
Reconciliation of
Reported Results to Non-GAAP Results |
(Unaudited) |
|
|
|
|
|
(Amounts in thousands, except per share
amounts) |
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
March 31, |
March 31, |
|
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
GAAP Operating profit (as reported) |
3,197 |
908 |
13,133 |
7,512 |
Adjustment to selling, general and
administrative expenses (Note 1) |
-- |
-- |
2,066 |
-- |
Adjustment to selling, general and
administrative expenses (Note 2) |
-- |
-- |
628 |
-- |
Adjustment to selling, general and
administrative expenses (Note 3) |
720 |
-- |
720 |
-- |
Adjustment to selling, general and
administrative expenses (Note 4) |
533 |
-- |
533 |
-- |
Total adjusted Operating
profit |
$ 4,450 |
$ 908 |
$ 17,080 |
$ 7,512 |
|
|
|
|
|
Total other income (expense) (as
reported) |
45 |
(266) |
150 |
(438) |
Net income attributable to noncontrolling
interest (as reported) |
13 |
166 |
305 |
875 |
|
|
|
|
|
GAAP income tax benefit (expense) (as
reported) |
(1,331) |
504 |
(4,871) |
(2,602) |
Adjustment to income taxes (Notes
1,2,3,4) |
(473) |
-- |
(1,456) |
-- |
Total adjusted income tax expense |
$ (1,804) |
$ 504 |
$ (6,327) |
$ (2,602) |
|
|
|
|
|
Adjusted net income attributable to Zygo
Corporation |
$ 2,678 |
$ 980 |
$ 10,598 |
$ 3,597 |
|
|
|
|
|
GAAP earnings per diluted share attributable
to Zygo Corporation (as reported) |
$0.10 |
$0.05 |
$0.42 |
$0.19 |
Adjusted earnings per diluted share
attributable to Zygo Corporation |
$0.14 |
$0.05 |
$0.55 |
$0.19 |
Weighted average shares used in diluted
shares calculation |
19,336 |
19,126 |
19,284 |
19,080 |
Note 1 – For the nine months ended March 31,
2014, reported results included separation costs and related tax
effect incurred in connection with the previously-announced
separation of the Company's former Chief Executive Officer.
Note 2 - For the nine months ended March 31,
2014, reported results also included the cost of a terminated
acquisition effort and the related tax effect.
Note 3 - For the three and nine months ended
March 31, 2014, reported results also included the costs associated
with the pending merger and the related tax effect.
Note 4 - For the three and nine months ended
March 31, 2014, reported results also included the cost of
accounting fees related to the Company's auditors' review of the
Company's ongoing analysis of its tax accounts.
Adjusted net income and adjusted net earnings per diluted share
are operating performance measures defined by the Company and used
by the Company's management to evaluate its operating activities,
and a reconciliation of those amounts to reported results is
presented above. These non-GAAP measures are not alternatives
to, and are not intended to replace, the most directly comparable
reported measures under GAAP and should not be considered as
alternatives to net income and net earnings per diluted share, or
any other measure of consolidated operating results, under
GAAP. The Company believes that providing such non-GAAP
measures and reconciliation is useful to users of the financial
statements, since such measures involve certain significant and
unusual adjustments to the Company's results, thus enhancing
comparability of the Company's results between periods
presented.
CONTACT: For Further Information Call:
John P. Jordan
Vice President, Chief Financial Officer & Treasurer
Voice: 860-347-8506
inquire@zygo.com
Zygo (NASDAQ:ZIGO)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Zygo (NASDAQ:ZIGO)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024