EX-99 3 ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Richard Dressler Vice President, Finance, Chief Financial Officer, and Treasurer Voice: 860-347-8506 inquire@zygo.com For Immediate Release ZYGO ANNOUNCES FISCAL 2003 FOURTH QUARTER AND YEAR END RESULTS MIDDLEFIELD, CONNECTICUT (AUGUST 21, 2003).....Zygo Corporation (NASDAQ: ZIGO) Net sales of $26.8 million for the fourth quarter of fiscal 2003 increased by $4.3 million, or 19%, from the comparable prior year period sales of $22.5 million. Net sales for the fourth quarter of fiscal 2003 included $5.1 million from a development services agreement, as compared to $1.4 million in the comparable prior year period. Net sales of $102.6 million for the fiscal year ended June 30, 2003 increased by $22.3 million, or 28%, from the comparable prior year period sales of $80.3 million. Net sales for the fiscal year ended June 30, 2003 included $18.8 million from the development services agreement, as compared to $1.4 million in the prior year. The development services agreement is expected to be substantially completed by June 2004. Revenue under this agreement can vary significantly from quarter to quarter. For the fourth quarter of fiscal 2003, net sales in the semiconductor segment were $15.1 million, or 56% of total net sales, as compared to $10.4 million, or 46%, in the prior year period and net sales in the industrial segment were $11.7 million, or 44% of total net sales, as compared to $12.1 million, or 54%, in the prior year period. The increase in net sales in the semiconductor segment was primarily due to the increase in sales of $3.7 million from the development services agreement. For the fiscal year ended June 30, 2003, net sales in the semiconductor segment were $59.3 million, or 58% of total net sales, as compared to $37.5 million, or 47%, in the prior year period and net sales in the industrial segment were $43.3 million, or 42% of total net sales, as compared to $42.8 million, or 53%, in the prior year period. The increase in net sales in the semiconductor segment was primarily due to the sales from the development services agreement. The Company recorded net earnings of $0.7 million for the fourth quarter of fiscal 2003 as compared to a net loss of $2.6 million for the fourth quarter of fiscal 2002. On a diluted per share basis, the net earnings were $0.04 per share for the fourth quarter of fiscal 2003 as compared to a net loss of $0.15 per share for the fourth quarter of fiscal 2002. The net earnings for the fourth quarter of fiscal 2003 and the net loss for the fourth quarter of fiscal 2002 include the loss from 1 discontinued operations of our TeraOptix unit of $11 thousand and $2.9 million, respectively. The income from continuing operations for the fourth quarter of fiscal 2003 was $1.3 million, or $0.07 per share, as compared to $0.3 million, or $0.02 per share, for the fourth quarter of fiscal 2002. The Company recorded a net loss of $10.6 million for the fiscal year ended June 30, 2003 as compared to a net loss of $11.7 million for the fiscal year ended June 30, 2002. On a diluted per share basis, the net loss was $0.60 per share for the fiscal year ended June 30, 2003 as compared to a net loss of $0.67 per share for the fiscal year ended June 30, 2002. The net loss for the fiscal year ended June 30, 2003 includes losses of $2.5 million related to the operations of our discontinued TeraOptix unit and charges of $9.7 million related to the disposal of our discontinued TeraOptix unit. The net loss for the fiscal year ended June 30, 2002 includes losses related to the operations of our discontinued TeraOptix unit of $7.4 million. The net loss for the fiscal year ended June 30, 2002 also includes a gain on the sale of our Automation Systems Group of $6.1 million before related exit costs of $1.9 million, inventory write-downs of $0.8 million, and tax expense of $1.3 million. The income from continuing operations for the fiscal year ended June 30, 2003 was $1.6 million, or $0.09 per share, as compared to a net loss of $4.3 million, or $0.24 per share, for the fiscal year ended June 30, 2002. As previously announced, the Company discontinued its telecommunications TeraOptix business unit. The Company disposed of its equipment and is currently marketing for sale its facility located in Westborough, Massachusetts. Accordingly, the results of TeraOptix have been presented as a separate line item on the income statement as discontinued operations, net of tax, for all periods presented. In addition, the loss on disposal of the business, net of tax, has been recorded as a line item for the fiscal 2003 periods presented. All continuing operations line items presented exclude TeraOptix results. Gross profit for the fourth quarter of fiscal 2003 totaled $9.6 million, an increase of $1.4 million, or 17%, from $8.2 million in the fourth quarter of fiscal 2002. Gross profit as a percentage of sales for the fourth quarters of fiscal 2003 and 2002 were 36% and 37%, respectively. Gross profit for the fiscal year ended June 30, 2003 totaled $35.4 million, an increase of $7.9 million, or 29%, from $27.5 million in the fiscal year ended June 30, 2002. Gross profit as a percentage of sales for the fiscal years ended June 30, 2003 and 2002 were 35% and 34%, respectively. Gross profit included $1.1 million and $3.8 million for the fourth quarter and fiscal year ended June 30, 2003, respectively, for the development services agreement, as compared to $0.3 million for both the fourth quarter and fiscal year ended June 30, 2002. Research, development, and engineering expenses ("R&D") for the fourth quarter of fiscal 2003 totaled $4.0 million, an increase of $0.6 million, or 18%, from $3.4 million in the comparable prior year period. The increase was primarily due to costs associated with our Zygo Applied Optics group in Southern California, which commenced operations in the second half of fiscal 2003. R&D for the fiscal year ended June 30, 2003 totaled $12.7 million, a decrease of $5.0 million, or 28%, from $17.7 million in the comparable prior year period. The decrease was primarily related to the completion of several large research and development projects in the semiconductor segment in the prior year and the transfer of engineering resources to revenue producing projects in the current fiscal year. 2 Backlog at June 30, 2003 totaled $37.2 million, a decrease of $4.2 million, or 10%, from $41.4 million at March 28, 2003. Backlog at June 30, 2003 decreased $3.3 million, or 8%, from $40.5 million at June 30, 2002. Orders for the fourth quarter of fiscal 2003 totaled $22.6 million (gross orders of $26.3 million less cancellations of $3.7 million). Orders by segment for the fourth quarter of fiscal 2003 consisted of $13.2 million, or 58%, in the semiconductor segment and $9.4 million, or 42%, in the industrial segment. The Company maintained cash, cash equivalents, and marketable securities at June 30, 2003 totaling $52.9 million, an increase of $14.4 million from June 30, 2002. The increase was primarily due to a reduction in accounts receivable, a decrease in inventory, an improvement in operating results, and income tax refunds. Management's View Fiscal 2003 was a year of transition as we exited the telecommunications market and concentrated on our core business segments of metrology and optics. With three successive quarters of profitable earnings from continuing operations and an increase in cash and marketable securities of $14.4 million over the year, we enter fiscal 2004 with renewed optimism. While our traditional markets in the industrial sector have and should continue to serve us well, we see a significant opportunity in the semiconductor market. We do not anticipate that the semiconductor market will recover to historical 20% growth rates. However, with the technical challenges facing chip manufacturers to maintain yields as line widths shrink and in-line production metrology becomes essential, we believe growth rates of greater than 15% per year are reasonable goals for the metrology segment of the semiconductor equipment market. The flat panel market continues to demonstrate robustness. We received an order for two automated G5 metrology systems in the fourth quarter. In addition, we received an optics contract of $6.0 million, of which $1.8 million (12 months of shipments) was entered into backlog in the fourth quarter. ZYGO's teleconference to discuss the results of the fourth quarter and year ended June 30, 2003 will be held at 6 PM Eastern Standard Time on August 21, 2003 and can be accessed by dialing 800-633-8514. This call is web cast live on ZYGO's web site at www.zygo.com. The call may also be accessed for 30 days following the teleconference. Zygo Corporation (NASDAQ: ZIGO), headquartered in Middlefield, Connecticut, is a worldwide developer and supplier of high precision optics, optical assemblies, high performance metrology instruments, and automation for the semiconductor and industrial markets. See ZYGO's web site at www.zygo.com for additional information. 3 All statements other than statements of historical fact included in this news release regarding the Company's financial position, business strategy, plans, anticipated growth rates, and objectives of management of the Company for future operations are forward-looking statements. Forward-looking statements are intended to 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," "plans," "strategy," "project," and other words of similar meaning in connection with a discussion of 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 in the semiconductor industry, fluctuations in net sales to our major customer, manufacturing and supplier risks, dependence on new product development, rapid technological and market change, international operations, dependence on proprietary technology and key personnel, length of the sales cycle, environmental regulations, and changes in expected costs of discontinued operations. Further information on potential factors that could affect Zygo Corporation's business is described in the Company's reports on file with the Securities and Exchange Commission, including its Form 10-K for the fiscal year ended June 30, 2002. 4 Zygo Corporation and Subsidiaries Condensed Consolidated Statements of Operations
------------------------------------------------------------------------------------------ ------------------------------ (Thousands, except per share amounts) Three Months Ended Year Ended ----------------------------- ------------------------------ June 30, June 30, June 30, June 30, 2003 2002 (1) 2003 2002 (1) ------------- ------------- ------------- ------------- Net sales $26,848 $22,508 $102,577 $80,268 Cost of goods sold 17,266 14,268 67,132 52,805 --------- --------- --------- --------- Gross profit 9,582 8,240 35,445 27,463 Selling, general, and administrative expenses 3,850 4,542 20,320 21,922 Research, development, and engineering expenses 3,963 3,434 12,659 17,696 Amortization of intangibles -- 208 104 763 Exit costs for Automation Systems Group 352 (64) 352 1,856 --------- --------- --------- --------- Operating profit (loss) 1,417 120 2,010 (14,774) Gain on sale of Automation Systems Group -- 25 -- 6,142 Other income, net 213 159 650 1,177 --------- --------- --------- --------- Earnings (loss) from continuing operations before income taxes and minority interest 1,630 304 2,660 (7,455) Income tax (expense) benefit (242) 203 (626) 3,652 Minority interest, net of tax (135) (230) (459) (476) --------- --------- --------- --------- Earnings (loss) from continuing operations 1,253 277 1,575 (4,279) --------- --------- --------- --------- Discontinued TeraOptix operations, net of tax (11) (2,898) (2,493) (7,454) Charges and related adjustments on the disposal of TeraOptix, net of tax (573) -- (9,652) -- --------- --------- --------- --------- Loss from discontinued operations (584) (2,898) (12,145) (7,454) --------- --------- --------- --------- Net earnings (loss) $669 $(2,621) $(10,570) $(11,733) ========= ========= ========= ========= Basic - Earnings (loss) per share: Continuing operations $0.07 $0.02 $0.09 $(0.24) ========= ========= ========= ========= Discontinued operations $(0.03) $(0.17) $(0.69) $(0.43) ========= ========= ========= ========= Net earnings (loss) $0.04 $(0.15) $(0.60) $(0.67) ========= ========= ========= ========= Diluted - Earnings (loss) per share: Continuing operations $0.07 $0.02 $0.09 $(0.24) ========= ========= ========= ========= Discontinued operations $(0.03) $(0.17) $(0.69) $(0.43) ========= ========= ========= ========= Net earnings (loss) $0.04 $(0.15) $(0.60) $(0.67) ========= ========= ========= ========= Weighted average number of shares: Basic 17,574 17,441 17,539 17,414 ========= ========= ========= ========= Diluted 17,758 17,739 17,696 17,414 ========= ========= ========= =========
(1) The condensed consolidated statements of operations for the periods ended June 30, 2002 have been reclassified to conform with the fiscal 2003 presentation of the discontinued operations and loss on disposal of TeraOptix. 5 Zygo Corporation and Subsidiaries Condensed Consolidated Balance Sheets
(Thousands of dollars) June 30, 2003 June 30, 2002 ------------- ------------- Assets Current assets: Cash and cash equivalents $ 31,209 $ 28,513 Restricted cash -- 1,225 Marketable securities 14,929 720 Receivables 12,868 21,241 Inventories 18,444 23,612 Prepaid expenses 1,791 1,444 Deferred income taxes 5,179 4,899 Assets from discontinued unit held for sale 11,899 -- -------- -------- Total current assets 96,319 81,654 Marketable securities 6,712 8,014 Property, plant, and equipment, net 26,648 55,045 Deferred income taxes 26,589 19,981 Intangible assets, net 5,025 4,507 -------- -------- Total assets $161,293 $169,201 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ 11,374 $ 837 Accounts payable 5,254 5,020 Accrued expenses and progress payments 11,060 8,951 Income taxes payable 1,750 929 -------- -------- Total current liabilities 29,438 15,737 Long-term debt, excluding current portion -- 11,374 Other long term liabilities 609 1,115 Minority interest 1,161 970 Stockholders' equity 130,085 140,005 -------- -------- Total liabilities and stockholders' equity $161,293 $169,201 ======== ========
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