Asyst Reports Results for Second Quarter of Fiscal 2008

Asyst Technologies, Inc. (Nasdaq:ASYT), a leading provider of integrated automation solutions that enhance semiconductor and flat panel display manufacturing productivity, today reported financial results for its fiscal second quarter ended Sept. 30, 2007. Net income for the second fiscal quarter according to GAAP was $0.8 million, or $0.02 per share, which compares with a net loss of $0.4 million, or $0.01 per share, in the prior sequential quarter. Non-GAAP net income for the fiscal second quarter was $6.5 million, or $0.13 per share, which compares with $5.3 million, or $0.11 per share, in the prior sequential quarter. Non-GAAP net income for the quarter excludes the amortization of intangibles, restructuring charges, and certain fees, costs, and non-cash foreign currency translation gains related to the company’s previously announced debt refinancing. Net sales for the fiscal second quarter were $134.8 million, which compares with $121.6 million in the prior sequential quarter. Net sales related to automated material handling systems (AMHS) were $86.2 million, which compares with $76.3 million in the prior sequential quarter. Net sales related to tool and fab automation solutions were $48.6 million, which compares with $45.3 million in the prior sequential quarter. Steve Schwartz, chairman and chief executive officer of Asyst, said, "AMHS bookings rebounded from first quarter levels as large flash and raw wafer customers made commitments for future capacity expansion. We expect bookings over the second half of our fiscal year will be stronger than the first half, driven by continued strength in flash memory and incremental investments by a broad range of customers in DRAM, foundry, logic, and flat panel display. We continue to focus resources and energy on new product development and new customer penetrations where we can leverage the valued-added automation capabilities that we bring to the marketplace.” Michael A. Sicuro, chief financial officer, said, "We had a good performance on the top and bottom line, however gross margins in the second quarter were down primarily as a result of higher than expected installation costs that resulted from customer requirements on a large AMHS project, as well as a lower margin mix of projects compared with the prior quarter. This was partially offset by continued material cost reductions in AMHS, where we are just beginning to realize the substantial cost reduction opportunities in our supply chain. Gross margins in tool and fab automation solutions were up, which helped to partially offset the decline in AMHS.” The company provided the following guidance for the fiscal third quarter ending Dec. 31, 2007: Consolidated net sales are expected to be in the range of $100-$110 million. AMHS sales are expected to be in the range of $60 to $70 million, and tool and fab automation sales are expected to be approximately $40 million. Net loss in accordance with GAAP is expected to be in the range of breakeven to $0.03 per share. Non-GAAP net income is expected to be in the range of $0.02-$0.05 per share. In calculating non-GAAP net income per share, the company expects to exclude approximately $2.5 million, net of taxes, related to amortization of intangibles. Note: Prior to the first quarter of fiscal 2008, the company excluded stock-based compensation expense in its calculation of non-GAAP net income per share. Accordingly, comparisons of this guidance to prior period results may not be meaningful. About Asyst Asyst Technologies, Inc. is a leading provider of integrated automation solutions that enable semiconductor and flat panel display (FPD) manufacturers to increase their manufacturing productivity and protect their investment in materials during the manufacturing process. Encompassing isolation systems, work-in-process materials management, substrate-handling robotics, automated transport and loading systems, and connectivity automation software, Asyst’s modular, interoperable solutions allow chip and FPD manufacturers, as well as original equipment manufacturers, to select and employ the value-assured, hands-off manufacturing capabilities that best suit their needs. Asyst’s homepage is http://www.asyst.com Conference Call Details The live conference call discussing these results is available today at 5:00 pm eastern time by dialing 303-262-2075. A live webcast of the conference call is publicly available on Asyst’s website at http://www.asyst.com and accessible by going to the investor relations page and clicking on the "webcast” link. For more information, including this press release, any non-GAAP financial measures that may be discussed on the webcast as well as the most directly comparable GAAP financial measures and a reconciliation of the difference between those GAAP and non-GAAP financial measures, as well as any other material financial and other statistical information contained in the webcast, please visit Asyst’s website at www.asyst.com. A replay of the Webcast may be accessed via the same procedure. In addition, a standard telephone instant replay of the conference call is available by dialing (303) 590-3000, followed by the passcode 11100080#. The audio instant replay is available from Oct. 30 at 7:00 pm Eastern Time through Nov. 13 at 2:59 a.m. Eastern Time. About Our Non-GAAP Financial Measures In addition to disclosing financial results calculated in accordance with GAAP, Asyst also reports adjusted net income and net income per share, referred to respectively as "non-GAAP net income” and "non-GAAP net income per share.” Non-GAAP measures exclude the effect of amortization of intangible assets, restructuring charges associated with building consolidation and severance benefits associated with headcount reductions, stock option investigation expenses, acquisition expenses related to the AMHS segment, write-off of fees from the early extinguishment of debt, fees related to the early redemption of convertible debentures, non-recurring foreign currency translation gains (losses) from inter-company loans , and the associated income tax effect related to these non-GAAP adjustments. Non-GAAP net income per share is calculated by dividing non-GAAP net income by non-GAAP weighted average shares — diluted. Asyst’s management believes the non-GAAP information is useful because it can enhance the understanding of the company’s ongoing operating performance; Asyst also uses non-GAAP reporting internally to evaluate and manage its operations. Asyst has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how Asyst analyzes its operating results internally. Management also believes that these non-GAAP financial measures may be used to facilitate comparisons of our results with those of other companies in our industry. The non-GAAP net income and non-GAAP net income per share should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of our business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of Asyst’s results as reported under GAAP. Forward Looking Statements Except for statements of historical fact, the statements in this release are forward-looking. The forward-looking statements include statements regarding future financial results; and other factors more fully detailed in the company's annual report on Form 10-K for the year ended March 31, 2007, and other reports filed with the Securities and Exchange Commission. Such statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include, but are not limited to: uncertainties whether the results discussed above will change as Asyst finalizes and files its financial statements; uncertainties arising from our inability to maintain effective internal control over financial reporting; the impact of lawsuits or other proceedings initiated in relation to the company's prior stock option grant practices; the volatility of semiconductor industry cycles; our ability to achieve forecasted revenues, margins and profits; failure to respond to rapid demand shifts; dependence on a few significant customers; the timing and scope of decisions by customers to transition and expand fabrication facilities and investment in fab automation equipment; our ability to maintain or expand market share in our product segments; our ability to improve gross margins through product cost reduction and supply chain initiatives; continued risks associated with the acceptance of new products and product capabilities; the risk that customers will delay, reduce or cancel planned projects or bookings and thus delay recognition or the amount of our anticipated revenue; competition in the semiconductor equipment industry and specifically in AMHS; failure to retain and attract key employees; and other factors more fully detailed in the company's annual report on Form 10-K for the year ended March 31, 2007, and other reports filed with the Securities and Exchange Commission. "Asyst” is a registered trademark of Asyst Technologies, Inc. Copyright 1993-2007, Asyst Technologies, Inc. All Rights Reserved. ASYST TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)   (Unaudited)   (Audited) Sept. 30, March 31, 2007 2007 Assets Current assets: Cash and cash equivalents $ 64,643 $ 99,701 Accounts receivable, net 161,487 125,889 Inventories 36,323 51,797 Prepaid expenses and other   21,671   27,888   Total current assets   284,124   305,275   Long-term Assets: Property and equipment, net 25,301 25,138 Goodwill 85,373 83,723 Intangible assets, net 31,339 41,994 Other assets   10,502   9,556   Total long-term assets   152,515   160,411   Total assets $ 436,639 $ 465,686   Liabilities, minority interest & shareholders' equity Current liabilities: Short-term loans and notes payable $ 28,435 $ 1,453 Current portion of long-term debt and capital leases 4,280 58,949 Accounts payable 99,324 101,287 Accrued liabilities 71,324 83,211 Deferred revenue   5,863   10,880   Total current liabilities   209,226   255,780   Long-term liabilities: Convertible notes - 86,250 Long-term debt and capital leases, net of current portion 100,569 162 Deferred tax and other long-term liabilities   28,243   28,683 Total long-term liabilities   128,812   115,095   Minority interest   133   130   Shareholders' equity   98,468   94,681   Total liabilities, minority interest and shareholders' equity $ 436,639 $ 465,686     ASYST TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data)         Three Months Ended Six Months Ended Sept. 30, 2007   Sept. 30, 2006   Sept. 30, 2007   Sept. 30, 2006   Net sales $ 134,836 $ 122,649 $ 256,456 $ 239,630 Cost of sales 95,973   88,139   177,430   164,063   Gross profit 38,863   34,510   79,026   75,567   Operating expenses Research and development 9,075 9,402 17,374 17,989 Selling, general and administrative 23,485 20,434 45,153 41,838 Amortization of acquired intangible assets 5,121 5,225 10,928 8,549 Restructuring charges 436   (28 ) 981   1,784   Total operating expenses 38,117   35,033   74,436   70,160     Income (loss) from operations 746 (523 ) 4,590 5,407   Write-off of fees related to early extinguishment of debt and early redemption of convertible securities (3,135 ) - (3,135 ) - Other income (expense), net 2,071   (770 ) (1,680 ) (874 ) Income (loss) before income taxes and minority interest (318 ) (1,293 ) (225 ) 4,533 Benefit from (provision for) income taxes 1,115 (1,770 ) 641 (6,092 ) Minority interest (8 ) 338   (13 ) (1,749 ) Net income (loss) prior to comulative effect ofchange in accounting priciple 789 (2,725 ) 403 (3,308 ) Cumulative effect of change in accounting principle -   -   -   103   Net income (loss) $ 789   $ (2,725 ) $ 403   $ (3,205 )   Net income (loss) per share prior to cumulative effect of change in accounting principle -basic   $ 0.02 $ (0.06 ) $ 0.01 $ (0.07 ) Cumulative effect of change in accounting principle -   -   -   0.00   Net income (loss) per share - basic $ 0.02   $ (0.06 ) $ 0.01   $ (0.07 ) Shares used in the per share calculation -basic 49,663   48,854   49,555   48,723     Net income (loss) per share prior to cumulative effect of change in accounting principle - diluted   $ 0.02 $ (0.06 ) $ 0.01 $ (0.07 ) Cumulative effect of change in accounting principle -   -   -   0.00   Net income (loss) per share - diluted $ 0.02   $ (0.06 ) $ 0.01   $ (0.07 ) Shares used in the per share calculation - diluted 50,170   48,854   50,230   48,723   ASYST TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited, in thousands, except per share data)         Three Months Ended Six Months Ended Sept. 30,2007 Sept. 30,2006 Sept. 30, 2007 Sept. 30,2006   GAAP net income (loss) $ 789 $ (2,725 ) $ 403 $ (3,205 )   Non-GAAP adjustments: Amortization of acquired intangible assets 5,121 5,225 10,928 8,549 Restructuring and severance charges 436 (28 ) 981 2,101 Stock option investigation expenses - 2,750 - 2,750 Acquisition expenses related to AMHS segment - 4,392 - 4,392 Write-off of fees related to early extinguishment of debt and early redemption of convertible debentures 3,135 - 3,135 - Foreign currency translation (1,182 ) - 1,386 - Income tax effect of non-GAAP adjustments (1,798 ) (3,116 ) (5,014 ) (4,207 )       Non-GAAP net income $ 6,501   $ 6,498   (1) $ 11,819   $ 10,380   (1)     Diluted net income (loss) per share GAAP $ 0.02 $ (0.06 ) $ 0.01 $ (0.07 ) Non-GAAP $ 0.13 $ 0.13 $ 0.24 $ 0.21   Weighted shares used in the per share calculation - diluted (GAAP) 50,170 48,854 50,230 48,723 Non-GAAP adjustment -   795   -   943   Weighted shares used in the per share calculation - diluted (Non-GAAP) 50,170   49,649   50,230   49,666     (1) For the three-month and six-month periods ended September 30, 2006, non-GAAP net income did not include $1.7M and $3.2M of stock-based compensation expense and $0.1M and $0.9M in minority interest adjustments, respectively. These amounts were previously identified as non-GAAP adjustments in the Form 8-K earnings press release for the second quarter of fiscal 2007 filed on November 13, 2006. We are no longer adjusting stock-based compensation expense as we are past the initial year of adoption. In addition, we have eliminated the minority interest adjustment as a result of the purchase of most of the remaining interest in the AMHS segment during the second quarter of fiscal 2007.