-----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, A1932Avtc4cIkDnmzg4h9PHYXgjoy/6rSxeu7mmMmLy8ZB+n8HkNmkF3oFdJ9IdS 52d7sXoSAsKkC+P7W3C61g== 0001157523-05-008312.txt : 20050922 0001157523-05-008312.hdr.sgml : 20050922 20050922163303 ACCESSION NUMBER: 0001157523-05-008312 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050922 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050922 DATE AS OF CHANGE: 20050922 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: 051098452 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 a4979531.txt ELECTRO SCIENTIFIC INDUSTRIES, INC. 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): September 22, 2005 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] 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)) Item 2.02. Results of Operations and Financial Condition. On September 22, 2005, Electro Scientific Industries, Inc. (the "Company") announced its financial results for the first quarter of fiscal 2006. The Company's press release announcing this event is attached hereto as Exhibit 99.1 and incorporated herein by reference. Item 9.01. Financial Statements and Exhibits (c) Exhibits ------------- 99.1 Press release dated September 22, 2005 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: September 22, 2005 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 September 22, 2005. EX-99.1 2 a4979531-ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 ESI Announces Fiscal 2006 First Quarter Results PORTLAND, Ore.--(BUSINESS WIRE)--Sept. 22, 2005--ESI (Nasdaq:ESIO) today announced results for its fiscal 2006 first quarter ended August 27, 2005. First quarter sales were $44.5 million, down 3% compared to fourth quarter sales of $45.7 million and down 39% compared to prior year first quarter sales of $72.6 million. Operating income for the quarter was $0.7 million, compared with operating income of $2.0 million in the fourth quarter and operating income of $15.4 million in the first quarter a year ago. Net income for the quarter was $1.3 million, or $0.05 per basic and diluted share, compared with a net loss of $0.8 million, or $0.03 per basic and diluted share, in the fourth quarter and net income of $10.6 million, or $0.38 per basic share and $0.36 per diluted share, in the first quarter a year ago. Included in the fourth quarter 2005 results was a $4.1 million charge resulting from the redemption of all of the outstanding 4 1/4% Convertible Notes, which eliminated all of ESI's long-term debt. Net orders for the first quarter were $34.8 million, a decrease of 33% compared with $52.0 million in the fourth quarter and a decrease of 49% compared with $67.6 million in the first quarter of 2005. Deferred revenue remained flat, ending the quarter at $13.1 million. "The company continued to operate effectively despite uncertain industry conditions," noted Nick Konidaris, ESI's president and chief executive officer. "During the first quarter we met our revenue target and exceeded our earnings target, delivered a seventh consecutive quarterly operating profit, generated cash, and continued to position the company for the future." Konidaris continued, "Although the order rate declined in the first quarter, we believe it was largely influenced by the timing of semiconductor orders." Mike Dodson, ESI's chief financial officer added, "Gross margin of 44 percent during the quarter was down from 45 percent in the prior quarter, but higher than the guidance we provided. The sequential decrease in gross margin was primarily due to lower overhead absorption on reduced production levels. Gross margin exceeded guidance due to both a higher margin sales mix than expected and a delay in the sale of previous generation Interconnect product with less favorable margins." "Operating expenses were $19 million in the first quarter, flat with the prior quarter. Within the operating expense total, research and development spending increased to $8 million, representing its highest level over three years. This planned increase in research and development spending is to fund the development of new products in existing and emerging markets," added Dodson. "Our balance sheet remained strong during the quarter. Cash and investments at the end of the quarter were $221 million as compared to $219 million at the end of the prior quarter. Cash increased primarily due to a decrease in inventory from the prior quarter," concluded Dodson. Konidaris added, "Although visibility beyond the current quarter remains limited, we believe second quarter shipments and revenue will increase from the first quarter and be in the range of $45 million to $55 million. As the result of the anticipated sale of previous generation Interconnect product, we expect margins in the second quarter to be in the low to mid-40% range. We expect operating expense to be in the range of $19 million to $20 million. The effective tax rate for the second quarter is expected to be approximately 25%, excluding an income tax charge of approximately $1.1 million related to a recent change in Oregon tax law." The company will hold a conference call today at 5:00 p.m. Eastern Time. The session will include a review of the financial results, operational performance, business outlook, and a question and answer period. The conference call can be accessed by calling 800-374-2470 (domestic participants) or 706-634-5108 (international participants). A live audio webcast can be accessed at www.esi.com. Upon completion of the call, an audio replay will be accessible through October 6, 2005 at 800-642-1687 (domestic participants) or 706-645-9291 (international participants), with conference ID number 9540645. The audio replay will also be available on the ESI website. Forward-Looking Statements This press release includes forward-looking statements concerning the markets we serve, shipments and revenues, gross margins, operating expenses, and tax rates. 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 ability of the company to achieve anticipated cost reductions and savings; the company's need to continue investing in research and development; the company's ability to hire and retain key employees; the company's ability to create and sustain intellectual property protection around its products; the company's 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. About ESI ESI is a global supplier of manufacturing equipment to increase productivity for customers in the semiconductor, passive components and electronic equipment markets. 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 2006 Results (In thousands, except per share data) (Unaudited) Operating Results: Three Months Ended ------------------------ August 27, August 28, 2005 2004 ------------ -------- Net sales $44,508 $72,620 Cost of sales 24,861 35,734 ------------ -------- Gross profit 19,647 36,886 Operating expenses: Selling, service and administration 11,077 14,878 Research, development and engineering 7,829 6,560 ------------ -------- Total operating expenses 18,906 21,438 ------------ -------- Operating income 741 15,448 Net interest income (expense) 1,454 (236) Other expense, net (213) (133) ------------ -------- Income before income taxes 1,982 15,079 Provision for income taxes 635 4,433 ------------ -------- Net income $1,347 $10,646 ============ ======== Net income per share - basic $0.05 $0.38 ============ ======== Net income per share - fully diluted $0.05 $0.36 ============ ======== Electro Scientific Industries, Inc. Analysis of FY 2006 Results (Dollars in thousands) (Unaudited) Three Months Ended ------------------------- August 27, August 28, 2005 2004 ------------ -------- Sales detail: Semiconductor Group $27,901 $44,013 Passive Components Group 11,049 20,603 Electronic Interconnect Group 5,558 8,004 ------------ -------- Total $44,508 $72,620 ============ ======== Gross margin % 44% 51% Selling, service and administrative expense % 25% 20% Research, development and engineering expense % 18% 9% Operating income % 2% 21% Effective tax rate % 32% 29% Average shares outstanding - basic 28,642 28,216 Average shares outstanding - fully diluted 28,799 32,279 End of period employees 563 628 Electro Scientific Industries, Inc. FY 2006 Results (Amounts in thousands) (Unaudited) Financial Position As Of: August 27, May 28, 2005 2005 ------------ -------- Assets Current assets: Cash and cash equivalents $ 88,144 $ 61,314 Marketable securities 120,421 137,753 ------------ -------- Total cash and securities 208,565 199,067 Trade receivables 37,177 36,163 Income tax refund receivable 7,977 9,227 Inventories 53,728 59,533 Shipped systems pending acceptance 4,498 4,014 Deferred income taxes 13,439 10,930 Prepaid and other current assets 3,322 3,169 ------------ -------- Total current assets 328,706 322,103 Long-term marketable securities 12,830 19,834 Property, plant and equipment, net 35,658 32,959 Deferred income taxes 15,112 16,955 Other assets 12,827 11,706 ------------ -------- Total assets $ 405,133 $403,557 ============ ======== Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 4,019 $ 3,961 Accrued liabilities 27,512 29,455 Deferred revenue 13,118 12,986 ------------ -------- Total current liabilities 44,649 46,402 Shareholders' equity: Preferred and common stock 158,642 156,367 Retained earnings 202,546 201,199 Accumulated other comprehensive loss (704) (411) ------------ -------- Total shareholders' equity 360,484 357,155 ------------ -------- Total liabilities and shareholders' equity $ 405,133 $403,557 ============ ======== End of period shares outstanding 28,672 28,615 ============ ======== Total cash and investments $ 221,395 $218,901 ============ ======== Electro Scientific Industries, Inc. FY2006 Results (Amounts in thousands) (Unaudited) Consolidated Statements of Cash Flows: Three Months Ended ------------------------- August 27, August 28, 2005 2004 ------------ -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $1,347 $10,646 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 2,602 2,255 Tax benefit of stock options exercised 727 503 Provision for doubtful accounts (144) 99 Loss on disposal of property and equipment 7 54 Deferred income taxes (558) 4,303 Changes in operating accounts: Increase in trade receivables (1,336) (9,734) Decrease in income tax refund receivable 1,250 55 (Increase) decrease in inventories 5,097 (7,077) Increase in shipped systems pending acceptance (484) (2,778) Increase in other current assets (168) (1,855) Decrease in other current liabilities (1,711) (1,041) Increase in deferred revenue 132 5,202 ------------ -------- Net cash provided by operating activities 6,761 632 ------------ -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (4,645) (882) Proceeds from sale of property and equipment - 76 Proceeds from sale of assets held for sale - 2,361 Change in investments, net 24,269 4,547 Increase in other assets (425) (582) ------------ -------- Net cash provided by investing activities 19,199 5,520 ------------ -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from stock plans 870 2,219 ------------ -------- Net cash provided by financing activities 870 2,219 ------------ -------- NET CHANGE IN CASH AND CASH EQUIVALENTS $26,830 $8,371 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD $61,314 $80,358 ------------ -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $88,144 $88,729 ============ ======== CONTACT: ESI Mike Dodson, 503-671-7028 Craig Stoehr, 503-671-7061 -----END PRIVACY-ENHANCED MESSAGE-----