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ESI Announces Second Quarter Fiscal 2015 ResultsPORTLAND, Ore. --(Business Wire)-- Electro Scientific Industries, Inc. (NASDAQ:ESIO), the premier source for innovative laser-based manufacturing solutions for the microtechnology industry, today announced results for its fiscal 2015 second quarter ended September 27, 2014. Financial measures are provided on both a GAAP and a non-GAAP basis, which excludes the impact of purchase accounting, equity compensation, and other items. Revenue in the second quarter was $42.9 million, compared to $35.0 million in the first quarter of 2015 and $59.6 million in the second quarter of last fiscal year. GAAP net loss was $6.2 million or $0.20 per share. Non-GAAP second quarter net loss was $4.9 million or $0.16 per share. "Our second quarter reflected sequential growth in sales and gross profit, combined with sequentially lower operating expenses," stated Ed Grady, president and CEO of ESI. "The result was a 40% decrease in our non-GAAP operating loss versus the prior quarter." Bookings for the second quarter were $43.0 million, compared to $47.3 million in the prior quarter. Grady continued, "Demand for our flex via drilling products remained strong, as did demand for after-sales service and support. In addition, we executed well against our milestones to set the foundation for growth and profitability, with the announcement and shipment of the first multi-unit order for our new mid-range platform with an internally-developed laser, and the securing of new agreements with industry-leading channel partners to extend our reach in Asia." GAAP gross margin was 36.8%. Non-GAAP gross margin was 37.7% compared to 39.5% in the prior quarter. Operating expenses were $21.3 million, down from $22.2 million in the prior quarter. On a non-GAAP basis operating expenses decreased to $20.4 million from $21.0 million last quarter. Non-GAAP operating loss was $4.2 million compared to $7.1 million in the first quarter. Balance Sheet and Cash Flow At quarter end, cash and investments were $98 million. The company used $3.8 million in cash from operations during the quarter and paid $2.4 million for the quarterly dividend of $0.08 per share. Inventories decreased by $4.6 million and trade receivables increased by $6.4 million on higher shipments. Third Quarter 2015 Outlook Based on recent order levels, ESI expects revenues for the third quarter of fiscal 2015 to be around $40 million. Non-GAAP loss per share is expected to be $0.16 to $0.21. Grady concluded, "We are changing our processes and approach in order to better connect our core competencies to large and growing markets. As we execute our plans to revitalize ESI we expect to begin seeing results over the next several quarters that will lead to top line growth and a return to profitability." The company will hold a conference call today at 5:00 p.m. ET. The session will include a review of the financial results, operational performance and business outlook, and also a question and answer period. The conference call can be accessed by calling 888-339-2688 (domestic participants) or 617-847-3007 (international participants). The conference ID number is 44681861. A live audio webcast can be accessed at www.esi.com. Upon completion of the call, an audio replay will be accessible through November 9, 2014, at 888-286-8010 (domestic participants) or 617-801-6888 (international participants), passcode 45623341. The webcast will be available on ESI's website for one year. Discussion of Non-GAAP Financial Measures In this press release, we have presented financial measures which have not been determined in accordance with generally accepted accounting principles (GAAP) and are therefore non-GAAP financial measures. Non-GAAP financial measures exclude the impact of purchase accounting, equity compensation, restructuring charges and other items. We believe that this presentation of non-GAAP financial measures allows investors to better assess the company's operating performance by comparing it to prior periods on a more consistent basis. We have included a reconciliation of various non-GAAP financial measures to those measures reported in accordance with GAAP. Because our calculation of non-GAAP financial measures may differ from similar measures used by other companies, investors should be careful when comparing our non-GAAP financial measures to those of other companies. About ESI ESI's integrated solutions allow industrial designers and process engineers to control the power of laser light to transform materials in ways that differentiate their consumer electronics, wearable devices, semiconductor circuits and high-precision components for market advantage. ESI's laser-based manufacturing solutions feature the micro-machining industry's highest precision and speed, and target the lowest total cost of ownership. ESI is headquartered in Portland, Ore., with global operations from the Pacific Northwest to the Pacific Rim. More information is available at www.esi.com. Forward-Looking Statements This press release includes forward-looking statements about the markets we serve, growth, revenue, profitability and earnings per share. These forward-looking statements are based on information available to us on the date of this release and we assume no obligation to update these forward-looking statements for any reason. Actual results may differ materially from those in the forward-looking statements. Risks and uncertainties that may affect the forward-looking statements include: the risk that anticipated growth opportunities may be smaller than anticipated or may not be realized; risks related to the relative strength and volatility of the electronics industry-which is dependent on many factors, including component prices, global economic strength and political stability, timing of consumer product introductions and overall demand for electronic devices (such as semiconductors, printed circuit boards, displays, LEDs, capacitors and other components) used in wireless telecommunications equipment, computers and consumer and automotive electronics; the health of the financial markets and availability of credit for end customers and related effect on the global economy; the volatility associated with the industries we serve which includes the relative level of capacity and demand, and financial strength of the manufacturers; the risk that customer orders may be canceled or delayed; the ability of the company to respond promptly to customer requirements; the risk that the company may not be able to ship products on the schedule required by customers, whether as a result of production delays, supply delays, or otherwise; the ability of the company to develop, manufacture and successfully deliver new products and enhancements; the risk that customer acceptance of new or customized products may be delayed; the risk that large orders and related revenues may not be repeated; 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 risk that competing or alternative technologies could reduce demand for our products; the risk that we may not be successful in penetrating new or adjacent markets; foreign currency fluctuations; 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.
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