SpeedFam 3Q results grow as venture equity rises

Electronic News, April 8, 1996

Chandler, Ariz.--SpeedFam International Inc. reported 3Q96 revenues rose to $33.1 million from $13.0 million in 3Q95. Net earnings for the quarter ended Feb. 29, 1996 were $4.4 million, or 13.2 percent of revenue, versus $0.4 million, or 3.1 percent, in the year-earlier period. Net earnings per share were 39 cents versus 5 cents.

Common and common equivalent shares outstanding rose 37.7 percent to 11,200,000 from an initial public offer in October 1995.

Backlog at the end of the quarter was $67.8 million, up 77.5 percent from $38.2 million at the end of the year-earlier period.

Meanwhile, nine-month revenues rose 90.8 percent to $76.4 million from $40.0 million for the year-ago period. Net earnings were $6.7 million, or 68 cents per share, versus $0.1 million, or 1 cent per share.

Pro forma net earnings for the nine-month period ended Feb. 29, 1996 were $6.9 million, or 62 cents per share, versus $0.4 million, or 3 cents per share, for the similar period a year earlier.

"We are pleased with the balance and momentum of our overall business mix," said COO Makoto Kouzuma. "Our emerging business in chemical mechanical polishing for semiconductor devices is accelerating on a global scale, while our core business in thin-film memory disk media and semiconductor wafers continues strong."

In the third quarter, SpeedFam's equity in the net earnings of its joint ventures, SpeedFam Co. Ltd. and Fujimi Corp., was $1.7 million, up from $0.3 million in the year-earlier period. The joint ventures' net earnings contribution for the quarter was 15 cents per share.

"Our business in the Far East is particularly robust, and the outlook for continued growth is positive," added Mr. Kouzuma.

SpeedFam said CMP-V systems for semiconductor devices contributed 32.6 percent of total revenue, or $10.8 million, compared with $1.3 million the same quarter a year ago. Thin film memory disk media equipment accounted for 33.8 percent of total revenue.

In terms of product mix, equipment, parts and expendables generated 77.4 percent of net sales, up from 50.6 percent a year earlier, while slurries (polishing liquids and abrasives) accounted for the remaining 22.6 percent, down from 49.4 percent in 3Q95.

In 3Q96, SpeedFam's commissions on sales of Far East joint venture equipment in the U.S. and Europe totaled $3.1 million, or 9.2 percent of total revenue, compared with $0.7 million, or 5.2 percent of total revenue, in 3Q95. Gross margin for the latest quarter improved to 38.8 percent from 25.4 percent a year earlier, primarily due to the shift in product mix from lower-margin slurries to higher-margin equipment, parts and expendables, and to continuing cost reduction efforts.

Research, development and engineering expenses for 3Q96 were $3.5 million, or 10.5 percent of total revenue, versus $0.7 million, or 5.4 percent, a year ago. The growth reflects increased investment in the CMP-V system and improvement in chemical mechanical polishing process technology for all business segments, it was said. Selling, general and administrative expenses for the third quarter were $5.2 million, or 15.6 percent of total revenue, compared with $2.4 million, or 18.5 percent, in the year-earlier period.

As a result of the year-over-year increases in revenue and gross margin, plus controlled operating expenses, operating profit for the third quarter was $4.2 million, or 12.6 percent of total revenue, up from $0.2 million, or 1.5 percent, in 3Q95.

SpeedFam supplies high-throughput chemical mechanical polishing systems for the semiconductor and disk media industries.