Asyst posts $59.6 M net sales, to prune workforce
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Asyst posts $59.6 M net sales, to prune workforce

By SiliconIndia   |   Wednesday, 30 April 2003, 07:00 Hrs
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FREMONT: Asyst Technologies, Inc., (Nasdaq:ASYT) posted fourth quarter consolidated net sales of $59.7 million, compared with $75.6 million in the prior sequential quarter and $35.8 million in the same quarter a year ago.

The company attributed the sequential sales decline to the sale of the company's wafer and reticle carrier (WRC) product lines, the protracted industry downturn, and delays of expected 200mm SMIF upgrade projects and AMHS implementations.

The increase over the prior year is primarily attributable to the October 2002 acquisition of a 51% interest in Asyst-Shinko, Inc. (ASI), a joint venture company whose operating results are fully consolidated with Asyst Technologies, Inc. Excluding the impact of Asyst-Shinko and WRC, net sales for the fourth quarter were $35.4 million, compared with $44.3 million in the prior sequential quarter and $31.1 million in the same quarter a year ago.

Consolidated GAAP gross margin from continuing operations was 19%, compared with 25% in the prior sequential quarter, company officials said. The sequential decline is attributable to lower sales volumes in Asyst's base business, which also resulted in an additional inventory reserve of approximately $4.5 million, as well as accelerated depreciation of manufacturing assets and other costs related to the company's transition to outsourced production. Excluding the impact of the inventory reserve, the company's pro forma gross margin for the quarter was 26%. The company believes this pro forma presentation of gross margin is more useful for analyzing the business because it removes the effects of inventory adjustments.

Consolidated GAAP operating expenses were $33.2 million, compared with $54.0 million in the prior sequential quarter. Pro forma operating expenses, which excludes the amortization of intangibles, restructuring and other charges, were $27.4 million, compared with $31.6 million in the prior sequential quarter, and below guidance of $29-$30 million. This reflects continuing cost control and cost-cutting efforts in response to challenging market conditions. The company believes this pro forma presentation of operating expenses is more meaningful for comparative purposes because it removes the effects of amortization of acquisition-related intangibles, restructuring and other charges, and presents a clearer picture of ongoing expense levels. A reconciliation of GAAP operating expenses to pro forma operating expenses is presented in a table later in this release.

GAAP net loss of $(1.8 million), or $(0.04) per diluted share, includes a gain on the sale of the company's WRC product lines of $28.4 million and a net loss from discontinued operations of $(7.7 million), reflecting the sale of the company's AMP and SemiFab manufacturing subsidiaries and fourth quarter operating losses. This compares with a net loss of $(40.9 million) or $(1.08) per share in the prior sequential quarter and a net loss of $(13.2 million), or $(.37) per share in the same quarter a year ago. Pro forma net loss from continuing operations was $(12.3 million), or $(0.30) per share. The company believes this pro forma presentation of operating results is more useful for analyzing the business because it removes the effects of gains and losses related to the divestiture of product lines and subsidiaries as well as amortization of acquisition-related intangibles and other items that are presented in a reconciliation of GAAP results to pro forma results later in this release.

"Our served market continues to be characterized by rapid demand shifts, evidenced by the near-doubling of sales we experienced over a two-quarter period last year, followed by a contraction of similar magnitude over the most recent two quarters," said Steve Schwartz, chairman and CEO.

"During this downturn we are continuing to focus on the things we can control, namely product development, design wins, and our cost structure. We are well positioned and are improving our position in all three areas, and are poised to return to profitability at much lower sales levels than at any point in the past three years."

Schwartz continued, "We have initiated a restructuring program that is designed to reduce operating expenses in the base business by approximately 30% from last quarter's levels, while leaving Asyst-Shinko, which is profitable, fully intact. This involves a workforce reduction of approximately 250 of our 760 worldwide employees, primarily in sales, general and administrative functions, as well as cuts to discretionary spending. Our outsourced manufacturing model will provide margin improvements over the next several quarters. We believe that this progress, combined with the operating expense reductions, positions Asyst to achieve cash breakeven with consolidated net sales in the range of $65 million, versus the $85 million level we are at today."

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