-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D58Ltp+FHC7sgKFaYd6ohUohKYbRJIvyd2KbVW3JG0EfQWCF3D8f0cdY6JHTjgBm yBeNEWAIjp+63N64CoOM1w== 0001157523-04-000098.txt : 20040108 0001157523-04-000098.hdr.sgml : 20040108 20040108094403 ACCESSION NUMBER: 0001157523-04-000098 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040108 ITEM INFORMATION: FILED AS OF DATE: 20040108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELECTRO SCIENTIFIC INDUSTRIES INC CENTRAL INDEX KEY: 0000726514 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 930370304 STATE OF INCORPORATION: OR FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12853 FILM NUMBER: 04514491 BUSINESS ADDRESS: STREET 1: 13900 NW SCIENCE PARK DR CITY: PORTLAND STATE: OR ZIP: 97229 BUSINESS PHONE: 5036414141 MAIL ADDRESS: STREET 1: 13900 NW SCIENCE PARK DRIVE CITY: PORTLAND STATE: OR ZIP: 97229-5497 8-K 1 a4545458.txt ESI 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 8, 2004 ELECTRO SCIENTIFIC INDUSTRIES, INC. (Exact name of registrant as specified in its charter) OREGON 0-12853 93-0370304 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 13900 NW Science Park Drive, Portland, Oregon 97229 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (503) 641-4141 No Change (Former name or former address, if changed since last report) Item 12. Results of Operations and Financial Condition. On January 8, 2004, Electro Scientific Industries, Inc. (the "Company") announced its financial results for the second quarter of fiscal 2004. The Company's press release announcing this event is attached hereto as Exhibit 99.1 and incorporated herein by reference. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 8, 2004. Electro Scientific Industries, Inc. By /s/ J. Michael Dodson ---------------------------------------- J. Michael Dodson Senior Vice President of Administration, Chief Financial Officer and Secretary 3 EXHIBIT INDEX Exhibit Description - ------- ----------- 99.1 Press release dated January 8, 2004. EX-99 3 a4545458ex991.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 ESI Announces Fiscal 2004 Second Quarter Results PORTLAND, Ore.--(BUSINESS WIRE)--Jan. 8, 2004--Electro Scientific Industries, Inc. (Nasdaq:ESIO) announced results for its fiscal 2004 second quarter ended November 29, 2003. Second quarter sales were $45.8 million, compared to first quarter sales of $20.9 million and prior year second quarter sales of $43.4 million. Net loss for the quarter was $4.9 million or $0.17 per share, compared with a net loss of $9.4 million or $0.34 per share in the first quarter and a net loss of $12.9 million or $0.47 per share in the second quarter a year ago. Net orders for the second quarter were $64.9 million, an increase of 52 percent compared with $42.7 million in the first quarter and an increase of 46 percent compared with $44.4 million in the second quarter of 2003. Backlog increased to $45.1 million at November 29, 2003 compared to $23.9 million at August 30, 2003. Deferred revenue decreased this quarter to $19.9 million compared to $21.7 million at August 30, 2003. "It is clear that ESI is experiencing a widespread recovery in the markets that are served," said Nick Konidaris, ESI's newly appointed president and chief executive officer. "Orders were at a 3-year high and increased 52% from an already strong first quarter and sequential order growth exceeded 40% in all three of our business units. Revenues more than doubled from the prior quarter, largely driven by our Semiconductor Group." As announced yesterday, Nick Konidaris succeeded Barry Harmon, who will continue to serve as a member of the board of directors and will work full-time over the next month to facilitate the transition. Mike Dodson, ESI's chief financial officer noted, "We are continuing to realize the benefits of our cost containment programs. Operating expenses decreased $1.7 million from the first quarter, primarily due to a reduction in severance costs and incremental legal fees. Our balance sheet remained strong ending the quarter with cash and investments of $294 million. Working capital management strengthened as both day's sales outstanding and inventory turns improved during the quarter." Dodson continued, "The income tax provision required in the quarter is unusual. It results from the necessity to adjust on a quarterly basis our year-to-date effective tax rate to our best estimate of the company's annual effective tax rate. Despite recording a pre-tax loss of $3.1 million for the quarter, the company recorded a $1.7 million tax expense during the quarter. The year-to-date tax benefit for the current fiscal year is $4.3 million on a loss before tax of $18.5 million. This results in a 23% effective tax rate for the year due to an improvement in our expected annual results, versus the 39% estimate used in the prior quarter. When pre-tax results move between loss and profit positions, the effective income tax rate can change significantly given the relationship between various fixed-dollar tax deductions and the pre-tax results." Konidaris added, "Going forward, I plan to work with the management team to strengthen and expand the relationships with our customers, drive operational efficiencies in all areas of the business, and leverage our core competencies to develop additional business opportunities." The company will hold a conference call today at 8:30 a.m. eastern time. The session will include a review of the financial results, business outlook, and a question and answer period. The conference call can be accessed by calling 888-273-9885 (domestic participants) or 651-291-0618 (international participants). The confirmation number is 714663. A live audio webcast can be accessed at www.esi.com. Upon completion of the call, an audio replay will be accessible at 800-475-6701 (access code is 714663) or on the ESI website. In conjunction with the filing of a current report on Form 8-K, which includes this press release, ESI also filed with the Securities and Exchange Commission a Form 10-Q for the second quarter of fiscal 2004. Forward-Looking Statements This press release includes forward-looking statements concerning customer orders, sales, and cost containment measures. Actual results may differ materially from those in the forward-looking statements. Risks and uncertainties that may affect the forward-looking statements include: the relative strength and volatility of the electronics industry -- which is dependent on many factors including component prices, global economic strength and political stability, and overall demand for electronic devices (such as capacitors, semiconductor memory devices and advanced electronic packages) used in wireless telecommunications equipment, computers and consumer and automotive electronics; the ability of the company to respond promptly to customer requirements; the ability of the company to develop, manufacture and successfully deliver new products and enhancements; the company's need to continue investing in research and development; and the company's ability to create and sustain intellectual property protection around its products. About ESI Electro Scientific Industries, Inc. (ESI) is a global supplier of manufacturing equipment to increase productivity for customers in the semiconductor, passive components and electronic equipment markets. Our strategy is simple: Design great products, delight our customers and deliver solid financial results. As an innovator in the electronics industry, ESI has a legacy of technology firsts and customer recognition for product excellence. The advanced electronic devices you see and use around the world today -- cell phones, personal computers, digital cameras, PDAs, even automotive electronics - -- contain components that were likely manufactured with ESI equipment. The company was founded in 1944 and is headquartered in Portland, Oregon. ESI's web site is http://www.esi.com. Electro Scientific Industries, Inc. FY 2004 Results (In thousands, except per share data) (Unaudited) Operating Results: Three Months Ended Six Months Ended ------------------- ------------------- Nov. 29, Nov. 30, Nov. 29, Nov. 30, 2003 2002 2003 2002 --------- --------- --------- --------- Net sales $ 45,753 $ 43,416 $ 66,629 $ 82,776 Cost of sales 30,090 40,456 46,126 63,959 -------- -------- -------- -------- Gross profit 15,663 2,960 20,503 18,817 Operating expenses: Selling, service and administrative 13,281 16,551 27,906 31,121 Research, engineering and development 5,416 7,267 11,164 14,912 -------- -------- -------- -------- Total operating expenses 18,697 23,818 39,070 46,033 -------- -------- -------- -------- Operating loss (3,034) (20,858) (18,567) (27,216) Net interest income (expense) 8 907 83 1,541 Other income (expense) (112) 829 (10) 695 -------- -------- -------- -------- Loss before income taxes (3,138) (19,122) (18,494) (24,980) Provision (Benefit) for income taxes 1,737 (6,214) (4,252) (8,678) -------- -------- -------- -------- Net loss $ (4,875) $(12,908) $(14,242) $(16,302) ======== ======== ======== ======== Net loss per share - - basic $ (0.17) $ (0.47) $ (0.51) $ (0.59) ======== ======== ======== ======== Net income loss per share - - diluted $ (0.17) $ (0.47) $ (0.51) $ (0.59) ======== ======== ======== ======== Electro Scientific Industries, Inc. Analysis of FY 2004 Results (Dollars in thousands) (Unaudited) Three Months Six Months Ended Ended ----------------- ----------------- Nov. 29, Nov. 30, Nov. 29, Nov. 30, 2003 2002 2003 2002 -------- -------- -------- -------- Sales detail: Electronic Interconnect Group $ 8,667 $ 9,243 $14,201 $12,975 Semiconductor Group 28,137 20,722 33,873 41,675 Passive Components Group 8,949 13,451 18,555 28,126 ------- ------- ------- ------- Total $45,753 $43,416 $66,629 $82,776 ======= ======= ======= ======= Gross margin % 34.2% 6.8% 30.8% 22.7% Selling, service and administrative expense % 29.0% 38.1% 41.9% 37.6% Research, engineering and development expense % 11.8% 16.7% 16.8% 18.0% Operating loss % -6.6% -48.0% -27.9% -32.9% Effective tax rate % -55.4% 32.5% 23.0% 34.7% Average shares outstanding - - basic 27,931 27,714 27,885 27,682 Average shares outstanding - - diluted 27,931 27,714 27,885 27,682 End of period employees 592 778 592 778 Electro Scientific Industries, Inc. FY 2004 Results (Amounts in thousands) (Unaudited) Financial Position As Of: Nov. 29, Aug. 30, May 31, 2003 2003 2003 -------- -------- -------- Assets Current assets: Cash and cash equivalents $ 10,812 $ 7,821 $ 18,270 Marketable securities 245,023 230,690 224,090 Restricted securities 9,329 6,208 9,422 -------- -------- -------- Total cash and securities 265,164 244,719 251,782 Trade receivables 36,999 32,103 37,160 Income tax refund receivable 26,343 22,049 16,499 Inventories,net 49,053 42,427 42,067 Shipped systems pending acceptance 10,014 12,221 7,058 Deferred income taxes 14,794 14,794 14,794 Assets held for sale 8,842 8,842 6,451 Other current assets 2,852 4,052 3,445 -------- -------- -------- Total current assets 414,061 381,207 379,256 Long-term marketable securities 29,128 49,897 53,452 Long-term restricted securities - 3,047 3,018 -------- -------- -------- Total long-term securities 29,128 52,944 56,470 Property and equipment, net 35,033 36,241 36,592 Deferred income taxes 6,115 6,183 5,188 Other assets 8,824 10,970 13,796 -------- -------- -------- Total assets $493,161 $487,545 $491,302 ======== ======== ======== Liabilities and shareholders' equity Current liabilities: Accounts payable $ 11,457 $ 4,794 $ 4,395 Accrued liabilities 22,375 19,129 21,477 Deferred revenue 19,877 21,684 13,222 -------- -------- -------- Total current liabilities 53,709 45,607 39,094 Convertible subordinated notes 142,325 142,108 141,891 -------- -------- -------- Total liabilities 196,034 187,715 180,985 Shareholders' equity: Preferred and common stock 142,800 140,696 140,231 Retained earnings 155,233 160,108 169,475 Accumulated other comprehensive income (loss) (906) (974) 611 -------- -------- -------- Total shareholders' equity 297,127 299,830 310,317 -------- -------- -------- Total liabilities and shareholders' equity $493,161 $487,545 $491,302 ======== ======== ======== End of period shares outstanding 27,954 27,858 27,843 ======== ======== ======== Total cash and investments $294,292 $297,663 $308,252 ======== ======== ======== Electro Scientific Industries, Inc. FY2004 Results (Amounts in thousands) (Unaudited) Consolidated Statements of Cash Flows: Six Months Ended ------------------- Nov. 29, Nov. 30, 2003 2002 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(14,242) $(16,302) Adjustments to reconcile net loss to cash provided by (used in) operating activities: Depreciation and amortization 4,607 5,096 Provision for doubtful accounts - 129 Loss on disposal of property and equipment 4 260 Deferred income taxes (919) 174 Tax benefit of stock options exercised 218 181 Changes in operating accounts: Decrease in trade receivables 440 4,623 Increase in income tax receivable (9,844) (3,142) (Increase) decrease in inventories (5,051) 18,009 Increase in shipped systems pending acceptance (2,956) (2,532) (Increase) decrease in other current assets 617 (2,101) Increase in other current liabilities 7,552 5,389 Increase in deferred revenue 6,655 3,440 -------- -------- Net cash provided by (used in) operating activities (12,919) 13,224 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (1,912) (6,148) Proceeds from the sale of property, plant and equipment 9 45 Change in investments, net 5,004 (7,240) Increase in other assets 9 (1,381) -------- -------- Net cash provided by (used in) investing activities 3,110 (14,724) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from exercise of stock options and stock plans 2,351 1,217 -------- -------- Net cash provided by financing activities 2,351 1,217 -------- -------- NET CHANGE IN CASH AND CASH EQUIVALENTS $ (7,458) $ (283) CASH AND CASH EQUIV. AT BEGINNING OF PERIOD $ 18,270 $ 29,435 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,812 $ 29,152 ======== ======== CONTACT: Electro Scientific Industries, Inc. Mike Dodson, 503-671-7028 Craig Stoehr, 503-671-7061 -----END PRIVACY-ENHANCED MESSAGE-----