Volume: 704,500
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EPS: +3.10
P/E Ratio: 11.27
Second quarter revenue totaled $173 million, up 11 percent from $156 million in the previous year's same quarter, and net income was $18 million, or $0.53 per diluted share, compared with $21 million, or $0.61 per diluted share for the same quarter of the previous fiscal year. Revenue for the first half of fiscal 2001 totaled $401 million, up 51 percent from $266 million in fiscal 2000's first half. Net income for the first half reached $58 million, or $1.73 per diluted share, compared with $26 million, or $0.78 per diluted share in the first half of the previous fiscal year.
Gross margin in the second quarter was 37 percent, compared with 40 percent in fiscal 2000's second quarter (see note at end of this release), reflecting the rapid deterioration in the market and transition costs associated with new product introductions.
Richard A. Aurelio, Varian Semiconductor's chairman and chief executive, said, Based on information just released by Dataquest, we are both the fastest growing major semiconductor capital equipment company and the leading ion implantation supplier. We lead the industry with overall market share in ion implant of 42 percent on a unit basis in calendar 2000, up 11 percentage points.
Aurelio continued, Despite the current downturn the industry continues its shift to single-wafer platforms, which is transitioning the majority of our business to technology sales. Today, the latest generation VIISta common platform, single-wafer ion implanters represent 45 percent of our systems orders.
Robert J. Halliday, chief financial officer, further commented, In response to the industry slowdown, we implemented concrete steps to control expenses, including the reduction of about 10 percent of our headcount, with the majority of that reduction coming from contract workers; the elimination of significant overtime; a reduction in officers' salaries; and stringent expense controls across the company. In the quarter we generated $38 million in cash from earnings and reduced receivable and inventory levels.
Looking forward, Halliday said, Our short-term expectations reflect industry uncertainty, and in these unsettled times we believe that a conservative stance is best. We anticipate that third quarter revenue will decline approximately 25 percent from the level of the same quarter last year. In addition, given the declining volume, we expect continuing pressure on our gross margin.
Note: On September 30, 2000, the company changed its accounting for domestic inventories from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method to conform to industry practice. A table highlighting what quarterly results would have been had the company's prior year been reported on FIFO is attached to the company's first quarter earnings release of January 25, 2001, and is available in the news release section of the company's web site at
www.vsea.com. Varian Semiconductor will hold a conference call, broadcast over the Internet, at 5 p.m. Eastern Time today for interested analysts, investors and media, to discuss the company's operating results and outlook for the third fiscal quarter of 2001. Access to the call is available through the company's web site at
www.vsea.com, and replays will be available for two weeks after the call.
