Genus Reports Second Quarter 2004 Results SUNNYVALE, Calif., July
26 /PRNewswire-FirstCall/ -- Genus, Inc. (NASDAQ:GGNS) today
reported financial results for its second quarter and six months
ended June 30, 2004. Senior management will conduct an investor
conference call to discuss these results and the company's
financial outlook in more detail at 6 a.m. pacific time tomorrow,
Tuesday, July 27, 2004. Access information is provided below. Net
sales for the second quarter of 2004 were $8.8 million compared to
net sales of $14.7 million for the same quarter of 2003. Net sales
for the six months ended June 30, 2004 were $21.0 million down from
$32.4 million for the six months ended June 30, 2003. The net loss
for the second quarter 2004 was $2.9 million or ($0.07) per diluted
share compared to net loss of $1.4 million or ($0.05) per share in
the same quarter of 2003. Net loss in the second quarter of 2004
included $821,000 of expenses related to our previously announced
proposed merger with Aixtron. The net loss for the six months ended
June 30, 2004 was $4.6 million or ($0.11) per diluted share
compared to a net loss of $950,000 or ($0.03) per share for the six
months ended June 30, 2003. "Although the quarter was disappointing
from a P&L point of view, customer activity is strong in both
our CVD and ALD segments and, as indicated in our prior conference
calls, we expect the second half to be better than the first half
for both bookings and revenues. Our balance sheet also remains
strong," commented Bill Elder, Genus chairman and CEO. Gross margin
as a percentage of revenues was 38 percent for the second quarter
of 2004 compared to 27 percent for the same quarter of 2003,
resulting mainly from a favorable product mix caused by a higher
proportion of spares and services in the second quarter of 2004,
which generally have higher margins as compared with system sales.
Gross margin as a percentage of revenues was 33 percent for the six
months ended June 30, 2004 compared to 31 percent for the six
months ended June 30, 2003. The total of research and development,
sales, general and administrative expenses was $4.8 million in the
second quarter of 2004, almost the same level as the second quarter
of 2003. In addition, in the second quarter of 2004, Genus incurred
merger related expenses of $821,000. Operating expenses, including
research and development, sales, general and administrative
expenses and merger related expenses were $10.6 million for the six
months ended June 30, 2004, approximately $500,000 higher than the
level recorded for the six months ended June 30, 2003. Genus ended
the second quarter of 2004 with cash, cash equivalents and
short-term investments, net of short-term debt of $35.7 million, up
from a balance of $34.9 million at December 31, 2003. Conference
Call Information Genus plans to host an investor conference call on
Tuesday, July 27, 2004, at 6 a.m. pacific time, featuring remarks
by Bill Elder, chairman and CEO, and Shum Mukherjee, executive vice
president finance and CFO, followed by a live question and answer
session. The conference call will be accessible by dialing
888-803-6692 or 706-634-1030 and referencing call number 8959586.
It will also be broadcast live over the Internet at
http://www.genus.com/. About Genus Genus, Inc. manufactures
critical deposition processing products for the global
semiconductor industry and the data storage industry. To enable the
production of intricate micro computer chips and electronic storage
devices, Genus offers its StrataGem and LYNX series
production-proven equipment for 200mm and 300mm semiconductor
production, and offers thin film deposition products for chemical
vapor deposition (CVD), atomic layer deposition (ALD), and
pre-clean capabilities. Genus is at the forefront of market and
technology developments in the ALD marketplace, which is gaining
acceptance worldwide as a critical technology for sub 0.13-micron
production of computer chips and electronic storage devices. Genus'
customers include semiconductor and data storage manufacturers
located throughout the United States, Europe and the Pacific Rim
including Korea, Japan and Taiwan. Founded in 1981, the company is
headquartered in Sunnyvale, California. For additional information
visit Genus' web site at http://www.genus.com/. LYNX2(R) and
LYNX3(TM) are trademarks of Genus, Inc. Forward-Looking Statements
This press release contains forward-looking statements regarding
the company's future financial and business performance. These
forward-looking statements are subject to a number of risks and
uncertainties. These contingencies include but are not limited to:
actual customer orders received by the company, the extent to which
ALD technology is demanded by the marketplace, the actual number of
customer orders received by the company, the timing of final
acceptance of products by customers, the financial climate and
accessibility to financing, general conditions in the thin film
equipment market and in the macro-economy, and the influence of
global political events. Genus assumes no obligation to update this
information. Additional risks and uncertainties are discussed in
the Management's Discussion and Analysis of Results of Operations
contained in Genus' Annual Report on Form 10-K for the fiscal year
ended December 31, 2003 filed with the Securities and Exchange
Commission. GENUS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per
share data) Three Months Ended Six Months Ended June 30, June 30,
2004 2003 2004 2003 Net sales $8,757 $ 14,739 $20,964 $32,434 Costs
and expenses: Cost of goods sold 5,406 10,813 13,956 22,390
Research and development 1,678 1,981 3,672 4,094 Selling, general
and administrative 3,133 2,868 6,151 6,042 Expenses related to
proposed merger 821 0 821 0 Loss from operations (2,281) (923)
(3,636) (92) Other expenses, net (411) (435) (715) (858) Loss
before income taxes (2,692) (1,358) (4,351) (950) Provision for
income taxes 181 0 199 0 Net loss $(2,873) $(1,358) $(4,550) $(950)
Net loss per share: Basic $(0.07) $(0.05) $(0.11) $(0.03) Diluted
$(0.07) $(0.05) $(0.11) $(0.03) Shares used in per share
calculation - basic 39,664 29,313 39,628 29,114 Shares used in per
share calculation - diluted 39,664 29,313 39,628 29,114 GENUS, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands) June 30, December 31, 2003 2004 ASSETS Current
Assets: Cash and cash equivalents $23,585 $41,608 Short term
investment 12,249 -- Accounts receivable, net 6,672 9,606
Inventories 12,469 9,783 Other current assets 808 854 Total current
assets 55,783 61,851 Equipment, furniture and fixtures, net 10,693
8,748 Other assets 1,041 1,169 Total assets $67,517 $71,768
LIABILITIES Current Liabilities: Short-term bank borrowings $ --
$6,500 Accounts payable 5,257 4,956 Accrued expenses 4,512 4,130
Deferred revenue 2,208 331 Customer advances 3,820 372 Long term
liabilities, current portion 116 249 Total current liabilities
15,913 16,538 Convertible notes 6,139 5,806 Total liabilities
22,052 22,344 SHAREHOLDERS' EQUITY Common stock, no par value:
Authorized 100,000 shares; Issued and outstanding 39,759 shares at
June 30, 2004 and 39,554 at December 31, 2003 163,408 163,061
Accumulated deficit (115,878) (111,328) Note receivable from
shareholder -- (187) Accumulated other comprehensive loss (2,065)
(2,122) Total shareholders' equity 45,465 49,424 Total liabilities
and shareholders' equity $67,517 $71,768 DATASOURCE: Genus, Inc.
CONTACT: Trine Pierik of Positio Public Relations, Inc.,
+1-408-453-2400, or , for Genus, Inc.; or Shum Mukherjee of Genus,
Inc., +1-408-747-7120, ext. 1311, or Web site:
http://www.genus.com/
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