SAN JOSE, Calif. -- It was a horrible week for semiconductor equipment.
Earlier this week, FormFactor, Lam and other fab-tool vendors posted losses amid a major downturn. ESI, K&S, Zygo and others also separately posted losses and announced layoffs.
Ultratech posted a profit, but it also disclosed a layoff. Varian posted poor results, but it did not announce a layoff.
For the fourth quarter of fiscal 2008, San Jose-based Ultratech Inc. reported net sales of $34.1 million, as compared to $29.7 million during the fourth quarter of fiscal 2007. Ultratech's net income for the fourth quarter of 2008 was $3.9 million, or $0.17 per share, as compared to net income of $2.1 million, or $0.09 per share for the same quarter last year.
Ultratech's net sales for the year ended Dec. 31, 2008 were $131.7 million, as compared to $112.3 million for fiscal 2007. Ultratech posted a net income for the year ended Dec. 31, 2008 of $11.8 million, or $0.50 per share, as compared to a net loss of $1.0 million, or $0.04 per share in fiscal 2007.
Arthur Zafiropoulo, chairman and CEO of Ultratech, was upbeat. ''Ultratech's performance in the fourth quarter was exemplary. The advanced packaging area supplied over one-half of the revenue for the quarter and, in the laser processing area, orders increased over the previous quarter as our customer base continued to expand,'' he said in a statement.
Like most fab-tool vendors, however, Ultratech is cutting jobs and taking other actions to cut costs. ''Some of the actions taken include a salary cut from 20 percent to 5 percent for most of the workforce. Reduction of material and subassembly cost from our suppliers, reduction of air travel and a reduction of about 9 percent of our current workforce,'' he said, as reported on the Seeking Alpha Web site.
Meanwhile, laser-marking specialist Electro Scientific Industries Inc. (ESI) plans to reduce headcount by a further 12 percent in the current quarter and has implemented several temporary cost reduction measures. This includes the suspension of its 401k match, executive pay reductions, company-wide furloughs and plant shutdowns.
ESI said third quarter revenues were $25.6 million, representing a 48 percent decrease from the second quarter. Net loss on a GAAP basis was $29.3 million, or minus $1.08 per share, compared to a net loss of $4.1 million, or minus $0.15 per share in the prior quarter.
The GAAP net loss included non-cash charges of $17.4 million for goodwill impairment related to the reduction in the company's stock price, $2.0 million for additional write-down in the value of auction rate securities (ARS), and $4.5 million for a valuation allowance against deferred tax assets related to the ARS write-downs.
"The global recession has severely impacted the activity in most of our markets,'' noted Nick Konidaris, ESI president and CEO, in a statement. ''The combination of falling consumer demand for electronics, weak memory prices, and the impact of the global credit crisis on both consumers and our customers weighed on the demand for our products.''
ESI is targeting shipments and revenues for the fourth quarter between $20 to $25 million and non-GAAP loss per share of between $0.20 and $0.30 excluding the impact of purchase accounting, equity compensation, restructuring costs, and non-recurring items.
In another setback, as reported, Zygo Corp. notified ESI that it was withdrawing its recommendation in favor of the proposed merger. Last year, ESI and Zygo announced they entered into a definitive agreement under which the companies will merge in an all stock transaction.
''We are disappointed by the decision of Zygo's board, and we do not agree with their conclusion,'' stated Konidaris. ''In our view, the strategic rationale for this merger remains intact, and the structure of the transaction reflects the long-term relative value of the two companies. We are considering our alternatives under the merger agreement, which include terminating the agreement and demanding the breakup fee of $6.6 million as provided in the contract. Regardless of the outcome, we intend to pursue our growth strategy of expanding into adjacent markets and applications.''
According to Zygo, the board submitted a proposal to ESI to modify the terms of the merger agreement to increase the existing merger consideration by $4.00 per share of Zygo stock, payable in cash, and to increase from 3 to 4 the number of ESI board seats held by Zygo designees after the closing of the merger.
On Jan. 20, ESI informed Zygo that ESI was not prepared to adjust the existing merger consideration and reiterated its belief that the existing merger consideration continued to be appropriate. Later that day, the Zygo board announced the withdrawal of its recommendation in favor of the proposed merger.
Separately, Zygo also cut 7 percent of its workforce and posted a loss. It also took pay reductions beginning in January of between 10-to-15 percent for executive
officers and 3-to-8 percent for certain other personnel.
The company will also take unpaid furloughs during the first quarter of calendar 2009.
Zygo announced net sales of $33.5 million and a net loss of $4.0 million, or a loss of $0.24 per diluted share, for the second quarter of fiscal 2009 as compared with net sales of $40.4 million and net income of $1.2 million, or $0.07 per diluted share, for the second quarter of fiscal 2008.
Following a loss in the quarter, Kulicke & Soffa Industries Inc. plans to implement more layoffs amid a severe drop in its fab-tool business.
K&S reported net revenue from continuing operations of $37.4 million, and a loss from continuing operations of $18.2 million, or minus $0.30 per share.
K&S' sales are down 70 percent year-over-year and down 39 percent from the previous period. In the like period a year ago, K&S posted a profit from continuing operations of $7 million.
''In response to the industry's present weakness, we have taken aggressive action,'' said Scott Kulicke, chairman and CEO, in a statement. ''In November, we announced a headcount reduction of 240 positions and the cancellation of annual salary increases. In January, we initiated reductions in weekly hours for our direct labor force and significant wage cuts for all other employees. We also announced to our employees that further workforce reductions were forthcoming.''
In the current quarter, net revenue is expected to be approximately $30 million, although with a larger than normal range of possible results because of unusually low visibility.
''The rapid deterioration of the global economy last year had a dramatic effect on our first quarter 2009 results. Demand fell across the entire semiconductor industry during the quarter as customers reduced capital equipment purchases to what we believe are below maintenance levels. Visibility into the timing and extent of any upturn remains extremely poor and challenging conditions are expected to persist at least through calendar 2009,'' according to the K&S CEO.
Varian Semiconductor Equipment Associates Inc. said revenue for the first quarter of fiscal 2009 totaled $107.4 million, compared to revenue of $254.1 million for the same period a year ago. Varian Semiconductor recorded a net loss of $13.6 million, or minus $0.19 per diluted share during the first quarter of fiscal 2009, compared to net income of $43.7 million, or $0.57 per diluted share for the same period a year ago.
Bob Halliday, chief financial officer, provided forward guidance for the second quarter of fiscal year 2009 by stating, "Second quarter revenue should be between $60 and $70 million. We expect to lose between approximately $21 and $25 million before taxes in the second quarter. That loss includes a restructuring charge of approximately $2 million. We expect to reduce second quarter operating expenses by approximately $10 million from the first quarter, including a $4.2 million reduction in restructuring expense."