Q1 2009 Earning Report of Novellus Systems, Inc.

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Q1 2009 Earning Report of Novellus Systems, Inc.

  1. 1. NOVELLUS SYSTEMS INC FORM 8-K (Current report filing) Filed 04/22/09 for the Period Ending 04/22/09 Address 4000 N FIRST ST SAN JOSE, CA 95134 Telephone 4089439700 CIK 0000836106 Symbol NVLS SIC Code 3559 - Special Industry Machinery, Not Elsewhere Classified Industry Semiconductors Sector Technology Fiscal Year 12/31 http://www.edgar-online.com © Copyright 2009, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
  2. 2. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): April 22, 2009 NOVELLUS SYSTEMS, INC. (Exact Name of Registrant as Specified in its Charter) California (State or Other Jurisdiction of Incorporation) 0-17157 77-0024666 (Commission File Number) (I.R.S. Employer Identification No.) 4000 North First Street, San Jose, California 95134 (Address of Principal Executive Offices) (Zip Code) (408) 943-9700 (Registrant’s Telephone Number, Including Area Code) Not Applicable (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)
  3. 3. Item 2.02. Results of Operations and Financial Condition. On April 22, 2009, Novellus Systems, Inc. (the “Company”) announced via press release the Company’s results for its first quarter ended March 28, 2009. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. This Form 8-K and the attached exhibit are provided under Item 2.02 of Form 8-K and are furnished to, but shall not be deemed filed with, the Securities and Exchange Commission or incorporated by reference into the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. Item 9.01. Financial Statements and Exhibits. (d) Exhibits. The exhibit listed below is being furnished with this Form 8-K. Exhibit Number Description 99.1 Financial Press Release, dated April 22, 2009, announcing results for the first quarter ended March 28, 2009.
  4. 4. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NOVELLUS SYSTEMS, INC. By: /s/ Jeffrey C. Benzing Jeffrey C. Benzing Chief Administrative Officer Date: April 22, 2009
  5. 5. EXHIBIT INDEX Exhibit Number Description 99.1 Financial Press Release, dated April 22, 2009, announcing results for the first quarter ended March 28, 2009.
  6. 6. Exhibit 99.1 Contacts: Jeffrey C. Benzing Robin Yim Chief Administrative Officer Investor Relations Novellus Systems, Inc. Novellus Systems, Inc. Phone: (408) 943-9700 Phone: (408) 943-9700 FOR IMMEDIATE RELEASE NOVELLUS SYSTEMS REPORTS FIRST QUARTER RESULTS SAN JOSE, Calif., April 22, 2009—Novellus Systems, Inc. (NASDAQ: NVLS) today reported operating results for its first quarter ended March 28, 2009. Net sales for the first quarter of 2009 were $98.9 million, down $89.5 million or 47.5 percent from fourth quarter 2008 net sales of $188.5 million, and down $215.8 million or 68.6 percent from first quarter 2008 net sales of $314.7 million. The net loss for the first quarter of 2009 was $66.4 million, or $0.69 per diluted share, $63.9 million less than fourth quarter 2008 net loss of $130.3 million, or $1.36 per diluted share, and down $81.9 million from first quarter 2008 net income of $15.5 million, or $0.15 per diluted share. First quarter 2009 results of operations include a $19.4 million charge as a result of a recent California tax law change. We incurred other charges of $2.0 million primarily in connection with our actions, announced in the fourth quarter of 2008, to align our business with the current economic environment. First quarter 2009 net loss without those items was $45.5 million, or $0.47 per diluted share. Excluding certain charges and benefits, fourth quarter 2008 net loss was $20.0 million, or $0.21 per diluted share, and first quarter 2008 net income was $16.0 million, or $0.16 per diluted share. A reconciliation of pro forma operating results to U.S. generally accepted accounting principles (“GAAP”) is included below. Bookings in the first quarter of 2009 were $77.8 million, down $4.9 million or 5.9 percent from fourth quarter 2008 bookings of $82.7 million. Bookings were net of $10.6 million in backlog adjustments in the first quarter of 2009 compared to adjustments of $44.9 million in the fourth quarter of 2008. First quarter 2009 shipments of $92.1 million were down by $83.5 million or 47.6 percent from $175.6 million reported for the fourth quarter of 2008. Deferred revenue at the end of the first quarter of 2009 was $40.2 million, a decrease of $16.1 million or 28.6 percent from $56.3 million at the end of the fourth quarter of 2008. Cash, cash equivalents, and short-term investments as of March 28, 2009 were $497.7 million, an increase of $26.8 million or 5.7 percent from the fourth quarter 2008 ending balance of $470.9 million. Long-term investments and restricted cash and cash equivalents as of March 28, 2009 were $204.4 million, a decrease of $7.2 million or 3.4 percent from the fourth quarter 2008 ending balance of $211.6 million. Richard S. Hill, Chairman and Chief Executive Officer said, “The economic environment continues to be challenging and we remain disciplined and focused on cash flow and cost containment. We are cautiously optimistic that our customers’ order activity levels have stabilized and are beginning to rebound, although still at relatively low levels compared to our expectations.” Management uses non-GAAP measures to evaluate operating performance. The presentation of net income (loss) excluding certain charges and benefits and the discussion of revenue on a shipments basis are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. We present net income (loss) on a pro forma basis, excluding certain charges and benefits, because we believe this helps both management and investors to assess the operating performance of our business by comparing it to prior periods on a more consistent basis. A reconciliation between our GAAP and non-GAAP results is provided below. Non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the statements regarding (i) our goal to remain disciplined and focused on cash flow and cost containment; (ii) our belief that our customers’ order activity levels have stabilized and are beginning to rebound, although still at relatively low levels; and (iii) other matters discussed in this news release that are not purely historical data. Forward- looking statements involve risks and uncertainties that may cause actual results to differ materially from those contemplated by such statements. These risks and uncertainties include, but are not limited to (i) our inability to sufficiently reduce our cost structure; (ii) our inability to prevent unexpected increases in costs associated with manufacturing our products; (iii) our inability to accurately predict our customers’ capital spending, including any further reductions in capital spending, which could have a material adverse effect on the industry’s demand for semiconductor processing equipment; and (iv) other risks indicated in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2008, our Current Reports on Form 8-K, and amendments to such reports. Forward-looking statements are made and based on information available to us on the date of this press release. We do not assume, and expressly disclaim, any obligation to update this information.
  7. 7. About Novellus: Novellus Systems, Inc. (NASDAQ: NVLS) is a leading provider of advanced process equipment for the global semiconductor industry. The Company’s products deliver value to customers by providing innovative technology backed by trusted productivity. An S&P 500 company, Novellus is headquartered in San Jose, CA with subsidiary offices across the globe. For more information please visit www.novellus.com.
  8. 8. NOVELLUS SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended December 31, (In thousands, except per share amounts) March 28, March 29, (Unaudited) 2009 2008 2008 Net sales $ 98,913 $ 188,453 $314,713 Cost of sales 73,175 119,936 169,773 Gross profit 25,738 68,517 144,940 % 26.0 % 36.4 % 46.1 % Selling, general and administrative 43,102 52,061 60,329 Research and development 36,015 50,856 57,340 Impairment of goodwill — 99,522 — Total operating expenses 79,117 202,439 117,669 % 80.0 % 107.4 % 37.4 % Income (loss) from operations (53,379) (133,922) 27,271 % -54.0 % -71.1 % 8.7 % Other income (expense), net 1,296 (4,160) 1,109 Income (loss) before income taxes (52,083) (138,082) 28,380 Provision for (benefit from) income taxes 14,309 (7,831) 12,851 Net income (loss) $(66,392) $ (130,251) $ 15,529 Net income (loss) per share: Basic $ (0.69) $ (1.36) $ 0.15 Diluted $ (0.69) $ (1.36) $ 0.15 Shares used in basic per share calculation 96,193 96,016 100,683 Shares used in diluted per share calculation 96,193 96,016 101,375
  9. 9. NOVELLUS SYSTEMS, INC. RECONCILIATION OF NET INCOME (LOSS), EXCLUDING CERTAIN CHARGES AND BENEFITS (1) Three Months Ended December 31, March 29, (In thousands, except per share amounts) March 28, (Unaudited) 2009 2008 2008 Net income (loss) excluding certain (charges) benefits (2): $(45,515) $ (19,986) $ 16,035 Impairment of goodwill — (99,522) — Other-than-temporary impairment of auction-rate securities — (3,491) — Reductions in workforce (1,731) (6,947) (618) Impairment of inventory and evaluation systems — (2,628) — Write down of certain research and development assets — (1,534) — Restructuring and other charges (313) (1,683) — Reversal of stock-based compensation expense — 545 — Total (charges) benefits (2,044) (115,260) (618) Tax effect of the above (charges) benefits 602 4,995 112 Charge due to California tax law change (19,435) — — Net income (loss) $(66,392) $ (130,251) $ 15,529 Net income (loss) per diluted share excluding certain (charges) benefits: $ (0.47) $ (0.21) $ 0.16 Impairment of goodwill — (1.04) — Other-than-temporary impairment of auction-rate securities — (0.04) — Reductions in workforce (0.02) (0.07) (0.01) Impairment of inventory and evaluation systems — (0.03) — Write down of certain research and development assets — (0.01) — Restructuring and other charges (0.01) (0.02) — Reversal of stock-based compensation expense — 0.01 — Tax effect of the above (charges) benefits 0.01 0.05 0.00 Charge due to California tax law change (0.20) — — Net income (loss) per diluted share $ (0.69) $ (1.36) $ 0.15 (1) The reconciliation of net income (loss), excluding certain charges and benefits is intended to present our operating results, excluding certain charges and benefits. The reconciliation of net income (loss) is not in accordance with or an alternative for GAAP and may be different from similar measures presented by other companies. (2) For the three months ended March 28, 2009, there are charges of $0.1 million in cost of sales, $1.8 million in selling, general and administrative, $0.1 million in research and development and $19.4 million in the provision for (benefit from) income taxes. For the three months ended December 31, 2008, there are net charges of $4.0 million in cost of sales, $4.4 million in selling, general and administrative, $3.8 million in research and development, $99.5 million in impairment of goodwill and $3.5 million in other income (expense), net. For the three months ended March 29, 2008, there are charges of $0.1 million in selling, general and administrative and $0.5 million in research and development.
  10. 10. NOVELLUS SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 28 December 31 (In thousands) 2009 2008 (Unaudited) ASSETS Current assets: Cash, cash equivalents and short-term investments $ 497,722 $ 470,888 Accounts receivable, net 72,327 144,330 Inventories 193,432 213,305 Restricted cash and cash equivalents 112,724 116,819 Deferred taxes and other current assets 84,114 97,260 Total current assets 960,319 1,042,602 Property and equipment, net 261,218 271,866 Non-current restricted cash and cash equivalents 3,075 2,883 Long-term investments 88,584 91,873 Goodwill 125,474 126,073 Intangible and other assets 86,172 102,230 Total assets $1,524,842 $1,637,527 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 134,981 $ 177,531 Deferred profit 8,085 14,784 Current debt obligations 110,497 112,907 Total current liabilities 253,563 305,222 Long-term income taxes payable 29,418 29,778 Other liabilities 49,949 55,745 Total liabilities 332,930 390,745 Shareholders’ equity: Common stock 1,169,117 1,158,637 Retained earnings and accumulated other comprehensive loss 22,795 88,145 Total shareholders’ equity 1,191,912 1,246,782 Total liabilities and shareholders’ equity $1,524,842 $1,637,527

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