EX-99.1 2 c54636_ex99-1.htm Untitled Document

Exhibit 99.1


For Further Information Call:
Walter A. Shephard
Vice President Finance, CFO, and Treasurer
Voice: 860-704-3955
inquire@zygo.com

For Immediate Release

ZYGO ANNOUNCES FISCAL 2008 Q4 AND FULL YEAR RESULTS

MIDDLEFIELD, CT, AUGUST 14, 2008 – Zygo Corporation (NASDAQ: ZIGO) today announced net sales of $48.5 million and net earnings of $1.1 million, or $0.06 per diluted share, for the fourth quarter of fiscal 2008, as compared with net sales of $46.5 million and net earnings of $3.8 million, or $0.20 per diluted share, for the fourth quarter in fiscal 2007. The decline in net earnings is the result of higher operating expenses as the Company increased its RD&E and sales and marketing expense for the semiconductor initiatives. In addition, a greater percentage of the Company’s net sales were made through third party distribution channels, with a correspondingly higher sales and marketing expense. For fiscal 2008, the Company recorded net sales of $159.0 million and net earnings of $1.2 million, or $0.07 per diluted share, as compared with fiscal 2007 net sales of $181.0 million and net earnings of $15.1 million, or $0.81 per diluted share. Fiscal 2008 net sales decreased 12% as compared with fiscal 2007 as a result of decreases in sales in our lithography OEM and display system products.

Orders for the fourth quarter of fiscal 2008 were $40.5 million. Orders from the Company’s Metrology Division accounted for 79% of the orders received, with the Optics Division accounting for the remaining 21%. For the full fiscal year, orders were $159.1 million, with the Metrology Division accounting for 76% of the orders received, and the remaining 24% received by the Optics Division.

Bruce Robinson, ZYGO’s Chairman and CEO, stated, “Fiscal 2008 saw continued strength in our instrument and optical component product lines. It was also a year of extensive investment in technology as we continued to execute the strategic shift from OEM products and optical components to higher revenue in-line production metrology tools and electro-optical assemblies. Despite significant progress in this transition, we were negatively impacted by a reduction in capital spending by our customers in the semiconductor manufacturing and display markets. This contributed to a year-over-year revenue decline of $22.0 million in fiscal 2008, adversely affecting earnings, which was clearly a disappointment. Capital spending in the display sector showed a positive recovery in the latter half of fiscal 2008 and we entered fiscal 2009 with a strong backlog in display.”

1

Bruce Robinson continued, “In fiscal 2008 we made several changes. We implemented restructuring programs in the first and fourth quarters as we sized our operations to reflect the changing market conditions. Manufacturing programs aimed at driving down cost and improving productivity continue to be initiated and we are taking additional measures to offset rising costs for raw materials, energy, and transportation.”

Significant events during the fiscal year included:

•  Acquisition of the assets of Solvision, Inc., providing 3D and 2D metrology for semiconductor substrates and packages.
   
•  Introduction of multiple-application single sensor metrology tools for wafer measurements at 45 nanometers and below.
   
•  Commencement of a majority-owned joint venture in China in the latter half of fiscal 2008, to develop and assemble products designed for the local market.
   
•  Continued strong growth in the medical sector driven by ophthalmic applications and state-of-the-art dental device design and manufacturing.
   
•  Development of proprietary, high precision metrology which enables the penetration of lithographic optics markets in Asia.
   
•  The repurchase of 1.6 million shares, representing 9% of outstanding shares through a stock buyback program.

Commenting on fiscal 2009 expectations, Mr. Robinson said, “Despite the current slowdown in the world economy, we expect to achieve sales growth in excess of 10% in fiscal 2009, fueled by increased Metrology sales in our Display Solutions and Vision Systems groups.”

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 and industrial markets.

Note: ZYGO’s teleconference to discuss the results of the fourth quarter of fiscal 2008 and full fiscal year will be held at 6 PM Eastern Time on August 14, 2008 and can be accessed by dialing 800-768-8804. 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.

2

All statements other than statements of historical fact included in this news release regarding our financial position, business strategy, plans, anticipated sales, orders, profits, market acceptance, growth rates, market opportunities, 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 of our customers, fluctuations in net sales to our major customer, manufacturing and supplier risks, dependence on timing and market acceptance of new product development, rapid technological and market change, risks in international operations, dependence on proprietary technology and key personnel, length of the sales cycle, environmental regulations , investment portfolio returns, and fluctuations in our stock price. 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. 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, 2007.

3

     Zygo Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)

(Thousands, except per share amounts)

Three Months Ended
Twelve Months Ended
June 30, 
June 30, 
2008
2007
2008
2007
 
Net sales 
$
48,497    
$
46,544    
$
159,036    
$
180,988  
Cost of goods sold 
 
 26,921    
 
 27,330    
 
 94,213    
 
 103,805  
      Gross profit 
21,576    
19,214    
64,823    
77,183  
 
Selling, general, and administrative expenses 
12,401    
8,201    
38,501    
32,876  
Research, development, and engineering expenses 
 
 6,922    
 
 5,399    
 
 24,275    
 
 22,038  
      Operating profit 
 
 2,253    
 
 5,614    
 
 2,047    
  
 22,269  
                               
Other income 
     
     
     
   
      Interest income 
369    
816    
2,367    
2,990  
      Miscellaneous expense 
 
 (317 )   
 
 (187 )   
 
 (235 )   
 
 (9 ) 
      Total other income 
 
 52    
 
 629    
 
 2,132    
 
 2,981  
      Earnings before income taxes 
     
     
     
   
         and minority interest 
2,305    
6,243    
4,179    
25,250  
                               
Income taxes 
(900 )   
(2,229 )   
(1,542 )   
(9,132 ) 
Minority interest 
 
 (352 )   
 
 (204 )   
 
 (1,398 )   
 
 (976 ) 
      Net earnings 
$
1,053    
$
3,810    
$
1,239    
$
15,142  
                               
 
Basic - Earnings per share 
$
0.06    
$
0.21    
$
0.07    
$
0.83  
Diluted - Earnings per share 
$
0.06    
$
0.20    
$
0.07    
$
0.81  
                               
Weighted average shares outstanding: 
     
     
     
   
      Basic 
 
 16,730    
 
 18,217    
 
 17,295    
 
 18,156  
      Diluted 
 
 17,131    
 
 18,677    
 
 17,648    
 
 18,601  

4

Zygo Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)

(Thousands of dollars) 
June 30, 2008 
June 30, 2007 
Assets   
   
 
Current assets:   
   
 
      Cash and cash equivalents  
$
26,421   
$
17,826 
      Marketable securities   
17,639   
29,453 
      Receivables, net   
31,036   
32,476 
      Inventories   
37,542   
43,048 
      Prepaid expenses   
2,230   
2,240 
      Income tax receivable   
241   
- 
      Deferred income taxes   
 
 12,143   
 
 15,077 
            Total current assets 
 
127,252   
140,120 
 
Marketable securities   
6,963   
22,879 
Property, plant, and equipment, net   
36,371   
36,349 
Deferred income taxes   
8,904   
5,700 
Intangible assets, net   
9,522   
6,110 
Long term income tax receivable   
616   
- 
Other assets   
 
 380   
 
 436 
Total assets   
$
190,008   
$
211,594 
 
 
Liabilities and Stockholders' Equity   
   
 
Current liabilities:   
   
 
      Payables   
$
7,955   
$
8,720 
      Accrued expenses   
14,414   
22,463 
      Income taxes payable   
-   
1,103 
      Deferred income taxes   
 
 32   
 
 - 
            Total current liabilities   
22,401   
32,286 
 
Other long-term liabilities   
844   
555 
Long term income tax payable   
1,973   
- 
Minority interest   
1,844   
976 
Stockholders' equity   
 
 162,946   
 
 177,777 
Total liabilities and stockholders' equity   
$
190,008   
$
211,594 

5