ADE Corporation (Nasdaq: ADEX) today reported its financial results
for its fourth quarter and fiscal year ended April 30, 2005.
Revenue for the fourth quarter of fiscal 2005 was $29.8 million, up
slightly from $29.5 million for the third quarter of fiscal 2005
and an increase of 14 percent from $26.2 million for the fourth
quarter of fiscal 2004. ADE posted net income of $23.1 million, or
$1.60 per diluted share, for the fourth quarter of fiscal 2005.
This figure includes approximately $17.2 million for the reversal
of deferred tax asset valuation allowances. Excluding this benefit,
ADE's non-GAAP net income was $5.9 million, or $0.41 per diluted
share. This compares with net income of $6.4 million, or $0.45 per
diluted share, for the third quarter of fiscal 2005 and $3.2
million, or $0.23 per diluted share, for the year-ago fourth
quarter. "ADE Corporation completed an exceptional fiscal year on a
high note, delivering another quarter of strong revenue and
profitability," said Dr. Chris L. Koliopoulos, ADE's president and
chief executive officer. "For the fourth quarter, the Company's
order activity continued to outpace the semiconductor capital
equipment industry as we a posted a book-to-bill ratio of 0.9
compared to the North American Semiconductor Equipment average of
0.81. In addition, ADE delivered another quarter of solid cash flow
as we set a new high water mark for the Company with $72.8 million
in cash and cash equivalents on April 30. For the full fiscal year,
ADE also established new records for profitability and cash
generation while producing an impressive return on equity." "We
continued to generate the majority of our revenue and orders from
our 300mm products while also increasing revenue for 200mm tools
during the fourth quarter," Dr. Koliopoulos continued. "Activity in
Asia-Pacific rose and accounted for nearly half of our quarterly
revenue, while Japan, Europe and the U.S. each contributed a
healthy mix of the remaining sales." "Beyond the bare wafer
activities, ADE also continued to see signs of growth during the
latter part of fiscal 2005 as we pursued our strategy to penetrate
the semiconductor device market. For the fourth quarter, we
generated 17 percent of our revenue from device makers and, for the
full year, 11 percent of sales came from this market. This compares
with nine percent for both the fourth quarter and the full year
fiscal 2004," said Dr. Koliopoulos. ADE's backlog grew eight
percent to $45.0 million on April 30, 2005 from $41.5 million on
April 30, 2004. Gross margin for the fourth fiscal quarter was 55
percent, up from 51 percent in the year-ago quarter. ADE generated
$8.0 million of positive cash flow for the fourth quarter of fiscal
2005. The Company's $72.8 million in cash and cash equivalents on
April 30, 2005 is a new Company record and compares with $41.6
million at the end of fiscal 2004. Fiscal 2005 Results For the
fiscal year ended April 30, 2005, ADE grew revenue by 32 percent to
$116.9 million from $88.6 million for fiscal 2004. For the full
year, ADE's net income was $40.9 million, or $2.86 per diluted
share. Excluding the aforementioned benefit for the reversal of
deferred tax asset valuation allowances, ADE's non-GAAP net income
for full fiscal year 2005 was a record $23.7 million, or $1.66 per
diluted share. This is an increase of 168 percent from $8.8
million, or $0.62 per diluted share, for the full fiscal year 2004.
ADE Chief Financial Officer Brian James said, "Fiscal 2005 was a
stellar year for our Company. Chief among ADE's many noteworthy
financial accomplishments was our record profitability. This was
achieved through a combination of strong revenue and stringent cost
management. For the full year, ADE generated operating margins in
excess of 20 percent, which ranks among the best in our industry.
In addition, our balance sheet strengthened throughout the year."
Looking Ahead "With strong market share, new tools coming into the
market and an organization that is committed to excellence, ADE has
the ingredients to out-perform the industry in fiscal 2006," added
Dr. Koliopoulos. "The expansion of 300mm wafer production provides
us with confidence that sales will remain strong in the years
ahead. Our optimism is further bolstered by the launch of our yield
management and data mining system for wafer manufacturers as well
as our surface topography tools for copper CMP monitoring of
patterned wafers. These products are each currently in the advanced
stage of beta testing and should help ADE gain a greater share of
the device and wafer markets in fiscal 2006. We look forward to
displaying these products, as well as introducing our
next-generation particle inspection and defect classification tool,
WaferXam, at Semicon West in July." "We anticipate that
first-quarter revenue will decline on a sequential basis due to an
anticipated shipment delay of a multi-million dollar order
associated with a temporary supply issue," concluded Dr.
Koliopoulos. "We expect that our profits will remain solid and that
sales will strengthen later in the fiscal year as the industry
strengthens and our new products gain acceptance." For the first
quarter of fiscal 2006, the Company anticipates that revenue will
be in the range of $24 million to $25 million. Gross margins are
expected to be in the range of 53 percent to 54 percent. As a
result of the aforementioned reversal of ADE's tax valuation
allowance, the Company expects to begin recognizing a tax rate of
33% in the first quarter of fiscal 2006. Based on these factors,
the Company anticipates pre-tax income in the range $3.0 million to
$3.8 million and after-tax net income ranging from $2.0 million to
$2.5 million, representing earnings per share of $0.14 to $0.17 for
the first quarter of fiscal 2006. This guidance assumes 14.5
million weighted average shares outstanding for the period ending
July 31, 2005. Non-GAAP Financial Results In an effort to provide
investors with additional information regarding the Company's
results, this news release presents certain figures that exclude
the impact of the Company's reversal of deferred tax asset
valuation allowances in the fourth quarter of fiscal 2005. The
figures may be deemed to be "non-GAAP financial measures." ADE's
non-GAAP financial measures are a supplement to financial
statements prepared based on generally accepted accounting
principles ("GAAP"). The Company believes this presentation
provides investors and ADE management with additional useful
insights into its underlying results because of the materiality of
the reversal of its deferred tax asset valuation allowances on its
fourth-quarter and full-year fiscal 2005 net income. Management
believes that presenting results that exclude the impact of this
reversal facilitates period-to-period comparisons of the Company's
growth on a more consistent basis that better reflects actual
trends. A reconciliation of the non-GAAP financial measures to the
most directly comparable GAAP financial results is included in the
table titled "Non-GAAP to GAAP Reconciliation" in this news
release. These non-GAAP financial measures should not be considered
in isolation from the comparable GAAP measures nor considered a
substitute therefor. Conference Call Reminder ADE will host a
conference call and webcast on July 6, 2005 at 8:30 a.m. Eastern
Time (ET) to discuss these financial results. To participate in the
webcast, please visit the "Investor Relations" section of the ADE
website, located at www.ade.com. A replay of the call will be
available on the website two hours after the completion of the
conference call and will continue to be available for a period of
one year. About ADE Corporation ADE Corporation is a leading
supplier of metrology and inspection systems for the semiconductor
wafer, semiconductor device, magnetic data storage and optics
manufacturing industries. The Company's systems analyze and report
product quality at critical manufacturing steps for yield
enhancement, providing quality certification data that is relied
upon by semiconductor wafer, device and computer disk
manufacturers. The Company's systems also are used for production
measurements in the semiconductor chip fabrication process. To
learn more about ADE, visit the Company's Web site at www.ade.com.
This news release contains certain forward-looking statements that
are subject to known and unknown risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied by such statements. Those statements that make reference to
the Company's expectations, predictions, assumptions, plans and
anticipations should be considered forward-looking statements.
These statements include, but are not limited to, those associated
with the Company's ability to launch its new products, the strength
of the Company's balance sheet and the Company's financial
performance for the first quarter and full fiscal year 2006, as
well as other statements under "Looking Ahead" in the news release.
These statements involve risks and uncertainties including those
associated with the strength of the semiconductor, data storage and
device markets; wafer pricing and wafer demand; the results of its
product development efforts; the success of ADE's product offerings
to meet customer needs within the timeframes required by customers
in these markets; the Company's growth in backlog and enhanced
operating leverage; the Company's ability to generate strong gross
margins; the potential of rapidly slowing order flow; and
Sarbanes-Oxley compliance efforts underway. ADE disclaims any
intent or obligation to update publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise. Further information on potential factors that could
affect ADE'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 April 30, 2004. -0- *T ADE
CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (In thousands, except per share amounts) Three months
Twelve months ended ended April 30 April 30 -----------------
------------------ 2005 2004 2005 2004 -------- -------- ---------
-------- Revenue $29,794 $26,184 $116,901 $88,585 Cost of revenue
13,390 12,858 54,294 45,043 -------- -------- --------- --------
Gross profit 16,404 13,326 62,607 43,542 -------- --------
--------- -------- Operating expenses: Research and development
4,106 3,995 15,519 15,085 Marketing and sales 4,045 3,015 13,044
10,435 General and administrative 2,464 2,915 10,404 11,009
Restructuring charges - - - 393 -------- -------- ---------
-------- Total operating expenses 10,615 9,925 38,967 36,922
-------- -------- --------- -------- Income from operations 5,789
3,401 23,640 6,620 Gain on sale of long-term investment - - - 1,729
Gain on sale of marketable securities - - - 398 Interest and other
income, net 279 66 668 24 -------- -------- --------- --------
Income before provision for (benefit from) income taxes and equity
in net earnings of affiliated companies 6,068 3,467 24,308 8,771
Provision for (benefit from) income taxes (17,077) 220 (16,633) 46
-------- -------- --------- -------- Income before equity in net
earnings of affiliated companies 23,145 3,247 40,941 8,725 Equity
in net earnings of affiliated companies - - - 48 -------- --------
--------- -------- Net income $23,145 $3,247 $40,941 $8,773
======== ======== ========= ======== Basic earnings per share $1.63
$0.23 $2.91 $0.63 Diluted earnings per share $1.60 $0.23 $2.86
$0.62 Weighted average shares outstanding - basic 14,166 13,972
14,069 13,887 Weighted average shares outstanding - diluted 14,436
14,288 14,312 14,127 ADE CORPORATION UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEET (In thousands) April 30, April 30, 2005
2004 Assets Cash and cash equivalents $72,841 $41,560 Marketable
securities 836 1,084 Accounts receivable, net 18,499 13,604
Inventories 30,764 32,745 Other current assets 1,373 1,068 Deferred
income taxes 10,601 - ---------- ---------- Total current assets
134,914 90,061 Fixed assets, net 9,241 10,829 Deferred income taxes
6,616 - Investments 499 499 Restricted cash - 637 Other assets
1,956 6,449 ---------- ---------- Total assets $153,226 $108,475
========== ========== Liabilities and Stockholders' Equity Total
current liabilities $18,273 $17,089 Deferred gain on sale-leaseback
1,496 1,609 Long-term debt 3,431 3,608 Total stockholders' equity
130,026 86,169 ---------- ---------- Total liabilities and
stockholders' equity $153,226 $108,475 ========== ========== ADE
CORPORATION NON-GAAP to GAAP RECONCILIATION (In thousands, except
per share amounts) Three months Twelve months ended ended April 30
April 30 ---------------- ---------------- 2005 2004 2005 2004
-------- ------- -------- ------- Net income - GAAP $23,145 $3,247
$40,941 $8,773 Less: Reversal of income tax valuation allowance
(17,217) - (17,217) - -------- ------- -------- ------- Net income
- non-GAAP $5,928 $3,247 $23,724 $8,773 ======== ======= ========
======= Diluted earnings per share - GAAP $1.60 $0.23 $2.86 $0.62
Less: Reversal of income tax valuation allowance (1.19) - (1.20) -
-------- ------- -------- ------- Diluted earnings per share -
non-GAAP $0.41 $0.23 $1.66 $0.62 ======== ======= ======== =======
*T
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