OREGON | 0-12853 | 93-0370304 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
13900 NW Science Park Drive, Portland, Oregon | 97229 | |||
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 | ||
Electro Scientific Industries, Inc. | |||
By: | /s/ Allen Muhich | ||
Name: | Allen Muhich | ||
Title: | Vice President, Chief Financial Officer and Corporate Secretary |
• | Fourth quarter orders of $111.8 million, reflecting 36% year over year growth. Fiscal 2018 orders of $451.4 million, up 144% from fiscal 2017 |
• | Fourth quarter and fiscal 2018 revenue of $113.4 million and $367.9 million, respectively; each more than doubled the revenue in fiscal 2017 |
• | Backlog of $148.4 million, primarily expected to ship in the first half of fiscal 2019 |
• | Fiscal 2018 GAAP operating margin of 20.6%. Non-GAAP operating margin was 27.4% |
• | Fiscal 2018 GAAP EPS of $3.27 and non-GAAP EPS of $2.78. For the fourth quarter GAAP EPS was $2.10 and non-GAAP EPS was $1.02, exceeding one dollar for the first time in recent history |
• | Fiscal 2018 operating cash flow of $67.4 million, leading to total cash and investments balance of $125.0 million |
Fiscal quarter ended | Fiscal year ended | ||||||||||||||||||
(In thousands, except per share data) | Mar 31, 2018 | Dec 30, 2017 | Apr 1, 2017 | Mar 31, 2018 | Apr 1, 2017 | ||||||||||||||
Net sales: | |||||||||||||||||||
Systems | $ | 103,522 | $ | 99,418 | $ | 40,029 | $ | 325,349 | $ | 125,098 | |||||||||
Services | 9,871 | 11,422 | 9,889 | 42,535 | 35,925 | ||||||||||||||
Total net sales | 113,393 | 110,840 | 49,918 | 367,884 | 161,023 | ||||||||||||||
Cost of sales: | |||||||||||||||||||
Systems | 53,247 | 52,502 | 27,499 | 185,354 | 81,350 | ||||||||||||||
Services | 5,424 | 5,182 | 4,189 | 21,700 | 18,207 | ||||||||||||||
Total cost of sales | 58,671 | 57,684 | 31,688 | 207,054 | 99,557 | ||||||||||||||
Gross profit | 54,722 | 53,156 | 18,230 | 160,830 | 61,466 | ||||||||||||||
Gross margin | 48.3 | % | 48.0 | % | 36.5 | % | 43.7 | % | 38.2 | % | |||||||||
Operating expenses: | |||||||||||||||||||
Selling, general and administration | 11,128 | 11,040 | 13,781 | 46,624 | 52,698 | ||||||||||||||
Research, development and engineering | 9,038 | 8,165 | 8,461 | 34,411 | 31,719 | ||||||||||||||
Restructuring costs | (144 | ) | 706 | 6,614 | 3,935 | 6,935 | |||||||||||||
Acquisition and integration costs | — | — | — | — | 366 | ||||||||||||||
Impairment of goodwill | — | — | 7,445 | — | 7,445 | ||||||||||||||
Net operating expenses | 20,022 | 19,911 | 36,301 | 84,970 | 99,163 | ||||||||||||||
Operating income (loss) | 34,700 | 33,245 | (18,071 | ) | 75,860 | (37,697 | ) | ||||||||||||
Non-operating (expense) income: | |||||||||||||||||||
Interest and other (expense) income, net | (283 | ) | 789 | 103 | 93 | 265 | |||||||||||||
Total non-operating (expense) income | (283 | ) | 789 | 103 | 93 | 265 | |||||||||||||
Income (loss) before income taxes | 34,417 | 34,034 | (17,968 | ) | 75,953 | (37,432 | ) | ||||||||||||
(Benefit from) provision for income taxes | (40,671 | ) | 61 | (45 | ) | (40,270 | ) | (23 | ) | ||||||||||
Net income (loss) | $ | 75,088 | $ | 33,973 | $ | (17,923 | ) | $ | 116,223 | $ | (37,409 | ) | |||||||
Net income (loss) per share—basic | $ | 2.19 | $ | 0.99 | $ | (0.54 | ) | $ | 3.42 | $ | (1.15 | ) | |||||||
Net income (loss) per share—diluted | $ | 2.10 | $ | 0.94 | $ | (0.54 | ) | $ | 3.27 | $ | (1.15 | ) |
(In thousands) | Mar 31, 2018 | Dec 30, 2017 | Apr 1, 2017 | ||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 76,792 | $ | 62,251 | $ | 56,642 | |||||
Short-term investments | 47,121 | 36,824 | 5,743 | ||||||||
Trade receivables, net | 63,044 | 75,674 | 40,494 | ||||||||
Inventories, net | 87,686 | 74,502 | 58,942 | ||||||||
Shipped systems pending acceptance | 4,734 | 5,780 | 5,713 | ||||||||
Other current assets | 5,493 | 5,116 | 6,180 | ||||||||
Total current assets | 284,870 | 260,147 | 173,714 | ||||||||
Non-current assets: | |||||||||||
Property, plant and equipment, net | 22,025 | 19,732 | 21,619 | ||||||||
Deferred income taxes, net | 43,518 | — | 890 | ||||||||
Goodwill | 2,626 | 2,626 | 3,027 | ||||||||
Acquired intangible assets, net | 5,169 | 5,525 | 6,564 | ||||||||
Other assets(1) | 14,780 | 18,274 | 18,931 | ||||||||
Total assets | $ | 372,988 | $ | 306,304 | $ | 224,745 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 37,354 | $ | 38,577 | $ | 21,213 | |||||
Accrued liabilities | 34,533 | 40,391 | 22,186 | ||||||||
Deferred revenue | 9,818 | 11,982 | 14,712 | ||||||||
Total current liabilities | 81,705 | 90,950 | 58,111 | ||||||||
Non-current liabilities: | |||||||||||
Long-term debt | 12,766 | 12,875 | 13,489 | ||||||||
Income taxes payable | 1,901 | 1,587 | 1,036 | ||||||||
Other liabilities | 10,258 | 10,085 | 7,578 | ||||||||
Total liabilities | 106,630 | 115,497 | 80,214 | ||||||||
Shareholders’ equity: | |||||||||||
Preferred and common stock | 210,995 | 211,330 | 207,152 | ||||||||
Retained earnings (accumulated deficit) | 54,816 | (20,273 | ) | (61,407 | ) | ||||||
Accumulated other comprehensive income (loss) | 547 | (250 | ) | (1,214 | ) | ||||||
Total shareholders’ equity | 266,358 | 190,807 | 144,531 | ||||||||
Total liabilities and shareholders’ equity | $ | 372,988 | $ | 306,304 | $ | 224,745 | |||||
End of period shares outstanding | 34,387 | 34,309 | 33,260 |
(1) | Included in Other assets is long-term restricted cash of $1.1 million each on March 31, 2018, December 30, 2017 and April 1, 2017. |
Fiscal quarter ended | Fiscal year ended | ||||||||||||||||||
(Dollars and shares in thousands) | Mar 31, 2018 | Dec 30, 2017 | Apr 1, 2017 | Mar 31, 2018 | Apr 1, 2017 | ||||||||||||||
Sales detail: | |||||||||||||||||||
Printed Circuit Board | $ | 76,772 | $ | 83,799 | $ | 28,339 | $ | 256,430 | $ | 88,771 | |||||||||
Component Test | 9,459 | 7,473 | 7,382 | 32,790 | 22,381 | ||||||||||||||
Semiconductor | 24,055 | 12,351 | 8,036 | 55,171 | 29,557 | ||||||||||||||
Industrial Machining | 3,107 | 7,217 | 6,161 | 23,493 | 20,314 | ||||||||||||||
Net Sales | $ | 113,393 | $ | 110,840 | $ | 49,918 | $ | 367,884 | $ | 161,023 | |||||||||
As % of net sales | |||||||||||||||||||
GAAP | |||||||||||||||||||
Gross profit | 48.3% | 48.0% | 36.5% | 43.7% | 38.2% | ||||||||||||||
Selling, service and administration expense | 10% | 10% | 28% | 13% | 33% | ||||||||||||||
Research, development and engineering expense | 8% | 7% | 17% | 9% | 20% | ||||||||||||||
Net operating expenses | 18% | 18% | 73% | 23% | 62% | ||||||||||||||
Operating income (loss) | 31% | 30% | (36%) | 21% | (23%) | ||||||||||||||
Non-GAAP | |||||||||||||||||||
Gross profit | 49.2% | 48.9% | 45.7% | 48.1% | 42.3% | ||||||||||||||
Net operating expenses | 17% | 17% | 40% | 21% | 48% | ||||||||||||||
Operating income (loss) | 33% | 32% | 5% | 27% | (6%) | ||||||||||||||
GAAP - Effective tax rate % | (118.2%) | 0.2% | 0.3% | (53.0%) | 0.1% | ||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||
Basic | 34,350 | 34,224 | 33,065 | 33,967 | 32,551 | ||||||||||||||
Diluted GAAP | 35,830 | 36,010 | 33,065 | 35,571 | 32,551 | ||||||||||||||
Diluted Non-GAAP | 35,830 | 36,010 | 33,822 | 35,571 | 32,551 | ||||||||||||||
End of period employees | 615 | 595 | 683 | 615 | 683 | ||||||||||||||
Reconciliation of Cash and Investments | |||||||||||||||||||
Mar 31, 2018 | Dec 30, 2017 | Apr 1, 2017 | |||||||||||||||||
Cash | $ | 27,043 | $ | 33,565 | $ | 29,302 | |||||||||||||
Cash equivalents | 49,749 | 28,686 | 27,340 | ||||||||||||||||
Restricted cash | 1,093 | 1,087 | 1,090 | ||||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | 77,885 | 63,338 | 57,732 | ||||||||||||||||
Short-term investments | 47,121 | 36,824 | 5,743 | ||||||||||||||||
Cash, restricted cash and current investments | $ | 125,006 | $ | 100,162 | $ | 63,475 |
Fiscal quarter ended | Fiscal year ended | ||||||||||||||||||
(In thousands, except per share data) | Mar 31, 2018 | Dec 30, 2017 | Apr 1, 2017 | Mar 31, 2018 | Apr 1, 2017 | ||||||||||||||
Gross profit per GAAP | $ | 54,722 | $ | 53,156 | $ | 18,230 | $ | 160,830 | $ | 61,466 | |||||||||
Purchase accounting | 242 | 242 | 447 | 977 | 1,133 | ||||||||||||||
Equity compensation | 69 | 64 | 105 | 277 | 503 | ||||||||||||||
Charges for other asset and inventory impairment | 277 | — | 1,696 | 13,554 | 2,642 | ||||||||||||||
Charges from VAT audit | 521 | 777 | — | 1,298 | — | ||||||||||||||
Charges for impairment of intangibles | — | — | 2,349 | — | 2,349 | ||||||||||||||
Non-GAAP gross profit | $ | 55,831 | $ | 54,239 | $ | 22,827 | $ | 176,936 | $ | 68,093 | |||||||||
Operating expenses per GAAP | $ | 20,022 | $ | 19,911 | $ | 36,301 | $ | 84,970 | $ | 99,163 | |||||||||
Purchase accounting | (114 | ) | (116 | ) | (414 | ) | (566 | ) | (1,077 | ) | |||||||||
Equity compensation | (1,223 | ) | (649 | ) | (1,707 | ) | (4,336 | ) | (5,934 | ) | |||||||||
Impairment of assets | — | — | — | — | (46 | ) | |||||||||||||
Acquisition and integration costs | — | — | — | — | (366 | ) | |||||||||||||
Restructuring costs | 144 | (706 | ) | (6,614 | ) | (3,935 | ) | (6,986 | ) | ||||||||||
Impairment of goodwill | — | — | (7,445 | ) | — | (7,445 | ) | ||||||||||||
Non-GAAP operating expenses | $ | 18,829 | $ | 18,440 | $ | 20,121 | $ | 76,133 | $ | 77,309 | |||||||||
Operating income (loss) per GAAP | $ | 34,700 | $ | 33,245 | $ | (18,071 | ) | $ | 75,860 | $ | (37,697 | ) | |||||||
Non-GAAP adjustments to gross profit | 1,109 | 1,083 | 4,597 | 16,106 | 6,627 | ||||||||||||||
Non-GAAP adjustments to operating expenses | 1,193 | 1,471 | 16,180 | 8,837 | 21,854 | ||||||||||||||
Non-GAAP operating income (loss) | $ | 37,002 | $ | 35,799 | $ | 2,706 | $ | 100,803 | $ | (9,216 | ) | ||||||||
Non-operating (expense) income, net per GAAP | $ | (283 | ) | $ | 789 | $ | 103 | $ | 93 | $ | 265 | ||||||||
Expense (income), on charges from VAT audit, Gain on asset sale, net of other non-operating expense (income) | 336 | (687 | ) | — | (351 | ) | — | ||||||||||||
Acquisition-related adjustments | — | — | — | — | (190 | ) | |||||||||||||
Non-GAAP non-operating income (expense) | $ | 53 | $ | 102 | $ | 103 | $ | (258 | ) | $ | 75 | ||||||||
Non-GAAP income (expense) before income taxes | $ | 37,055 | $ | 35,901 | $ | 2,809 | $ | 100,545 | $ | (9,141 | ) | ||||||||
Net income (loss) per GAAP | $ | 75,088 | $ | 33,973 | $ | (17,923 | ) | $ | 116,223 | $ | (37,409 | ) | |||||||
Non-GAAP adjustments to gross profit | 1,109 | 1,083 | 4,597 | 16,106 | 6,627 | ||||||||||||||
Non-GAAP adjustments to operating expenses | 1,193 | 1,471 | 16,180 | 8,837 | 21,854 | ||||||||||||||
Non-GAAP adjustments to non-operating income (expense) | 336 | (687 | ) | — | (351 | ) | (190 | ) | |||||||||||
Income tax effect of other non-GAAP adjustments (a) | (41,225 | ) | (235 | ) | 32 | (41,967 | ) | (252 | ) | ||||||||||
Non-GAAP net income (loss) | $ | 36,501 | $ | 35,605 | $ | 2,886 | $ | 98,848 | $ | (9,370 | ) | ||||||||
Basic Non-GAAP net income (loss) per share | $ | 1.06 | $ | 1.04 | $ | 0.09 | $ | 2.91 | $ | (0.29 | ) | ||||||||
Diluted Non-GAAP net income (loss) per share | $ | 1.02 | $ | 0.99 | $ | 0.09 | $ | 2.78 | $ | (0.29 | ) |
(a) | The income tax effect of other non-GAAP adjustments in the fourth quarter of 2018 and fiscal 2018 was primarily due to release of tax valuation allowance. |
Fiscal quarter ended | Fiscal year ended | ||||||||||||||||||
(In thousands) | Mar 31, 2018 | Dec 30, 2017 | Apr 1, 2017 | Mar 31, 2018 | Apr 1, 2017 | ||||||||||||||
Net income (loss) | $ | 75,088 | $ | 33,973 | $ | (17,923 | ) | $ | 116,223 | $ | (37,409 | ) | |||||||
Non-cash adjustments and changes in operating activities | (48,457 | ) | (18,872 | ) | 16,789 | (48,795 | ) | 36,576 | |||||||||||
Net cash provided by (used in) operating activities | 26,631 | 15,101 | (1,134 | ) | 67,428 | (833 | ) | ||||||||||||
Net cash (used in) provided by investing activities | (10,993 | ) | (2,974 | ) | (203 | ) | (47,353 | ) | 2,614 | ||||||||||
Net cash (used in) provided by financing activities | (1,739 | ) | 1,838 | 13,923 | (1,132 | ) | 14,165 | ||||||||||||
Effect of exchange rate changes on cash | 648 | 302 | 255 | 1,210 | (627 | ) | |||||||||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 14,547 | 14,267 | 12,841 | 20,153 | 15,319 | ||||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | 63,338 | 49,071 | 44,891 | 57,732 | 42,413 | ||||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ | 77,885 | $ | 63,338 | $ | 57,732 | $ | 77,885 | $ | 57,732 |
Fiscal quarter ending Jun 30, 2018 | |
Non-GAAP diluted earnings per share | $0.75 - $0.95 |
Purchase accounting | (0.01) |
Equity compensation | (0.04) |
Income tax | (0.09) - (0.12) |
GAAP diluted EPS | $0.61 - $0.78 |
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