Ultratech 2Q sales up 43%

Electronic News, August 12, 1996

San Jose, Calif.--Ultratech Stepper Inc. reported 2Q96 net sales rose 43 percent to $51.8 million from $36.3 million in 2Q95. Net income for the quarter ended June 30, 1996 rose to $9.3 million, or 44 cents per share (on 21,300,000 weighted average shares outstanding); this compares to net income of $5.3 million, or 27 cents per share, on 19,500,000 shares, in the year-ago quarter.

Earnings per share for the prior period reflect a two-for-one stock split effective May 1995. The period-to-period increase in shares outstanding is primarily due to shares sold in a follow-on offering in May 1995.

Six-month revenue reached $103.5 million, up 51 percent from the year-ago period. Net income was up 91 percent to $17.9 million.

"Ultratech's diversification strategy allowed...good results this quarter, despite weakness in the semiconductor area," noted CEO Arthur W. Zafiropoulo. "While our scanner replacement segment continued to be a steady contributor to revenue and earnings, we are encountering weakness in demand principally for our mix-and-match products, which generally serve newer fabs. At the same time, sales into the thin-film head segment were strong during the quarter."

Mr. Zafiropoulo continued, "We believe Ultratech can continue to develop the thin-film head business, and maintain our leading market share position with manufacturers of disk drives. The available market for Ultratech's thin-film head products has increased over the past year, as we are selling into both the back end and the front end of the thin-film head manufacturing process. A year ago, we were selling equipment only into the front end. Through this period of uncertainty in the semiconductor market, we will continue to focus sales efforts on our thin-film head products...."

Ultratech's gross margin climbed to 54.3 percent in 2Q96 primarily as a result of favorable product mix and higher domestic sales. Total operating expenses declined sequentially from $16.1 million in 1Q96 to $15.6 million in 2Q96. The higher percentage of domestic sales also influenced this reduction, as the contribution of Ultratech's direct sales force led to lower commission payments than in 1Q96. In addition, operating expense control measures were implemented as the quarter progressed.