Trikon (NASDAQ:TRKN)
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Trikon Technologies, Inc. (Nasdaq: TRKN) today reported
results for its first quarter ended March 31, 2005.
Revenues for the quarter were $7.8 million, an increase of 15
percent on $6.8 million for the first quarter of 2004 and a decrease
of 22 percent on $10.0 million for the fourth quarter of 2004.
Operating loss for the quarter was $2.1 million and net loss
applicable to common shares for the quarter was $2.4 million, or $0.15
per share. (As a result of the pending restatement, Trikon has not
included comparative results.)
"Revenues for the quarter were up on the first quarter of 2004,"
said Martyn Tuffery, acting chief financial officer, "with license
revenue of $2.0 million resulting from a joint development agreement
with Aviza Technology, Inc. The obligations under this agreement are
independent of the obligations under our merger agreement."
"Operating expenses continued at a high level similar to the
fourth quarter of 2004 due to the ongoing legal and accountancy
expenditure, principally related to the consolidation through merger
agreement," continued Mr. Tuffery.
"The quarter's shipments of $12.1 million were our highest since
the third quarter of 2001," said Dr. John Macneil, chief executive
officer. "I believe that this level of shipments, which includes two
evaluation systems to major customers in Asia, is a strong indicator
of revenue growth in 2005. I'm also pleased to report a book to bill
above 1:1 for systems."
"The license revenue from Aviza in the quarter indicates some of
the potential value of Trikon's considerable intellectual property
assets and was received for access to wafer transport and control
technologies," concluded Dr. Macneil.
Restatement of Prior Periods
In the course of preparing the registration statement in
connection with its proposed merger with Aviza, Trikon has concluded
that it will restate its reported results for fiscal years 2000
through 2004 and the interim periods of 2003 and 2004 for the matters
described below. This restatement does not impact revenues, and does
not significantly impact net income/loss, earnings/loss per share or
net assets, although the impact varies from quarter to quarter and may
increase or decrease the reported amounts. These changes have already
been reflected in the results announced today for the quarter ended
March 31, 2005. Trikon will file a Notification of Late Filing on Form
12b-25 for its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2005.
The restatement will be limited to three areas:
-- First, Trikon has previously deferred recognition of costs in
the same proportion as the recognition of revenues on
contracts where a system has been delivered to a customer, but
final payment is not due. For example, if payment terms are 90
percent on shipment and 10 percent on acceptance, Trikon has
deferred recognition of 10 percent of the total cost
attributable to the product. The restated statements of
operations and balance sheets will recognize the majority of
the product's costs (i.e. excluding installation costs) on
shipment. This restatement will have no impact on revenue. It
will affect the timing of recognition of certain costs, which
may move costs from one quarter to another and therefore
change Cost of Goods Sold (COGS) in a given quarter and net
assets at the quarter end. The effect on income/loss from
operations, net income/loss, income/loss per share and net
assets is not significant. For example, although the effect
may be more or less significant in a given interim period,
whilst we have not completed our review nor has the necessary
restatement been audited, we presently believe that the
cumulative effect of this adjustment will be to reduce the
loss from operations and net loss for fiscal 2004 by less than
1%.
-- Second, in its statement of operations, Trikon historically
has allocated substantially all of its facilities costs to
Selling, General and Administrative Cost (SG&A). Trikon has
determined that a portion of those costs should be
re-allocated to COGS and Research and Development (R&D). As a
result, in a given period, SG&A will be reduced and COGS and
R&D together will be increased by the same amount. The
reallocation of overhead relates to one facility with services
shared by administrative, manufacturing and research and
development functions. This reallocation has no impact on
revenues or net income/loss.
-- Third, in its balance sheet, Trikon has previously accounted
for invoiced amounts on contracts by recording the full amount
in accounts receivable and the portion of the contract price
that is withheld until final acceptance as deferred revenue.
The restated balance sheets will offset the portion of the
contract price withheld against accounts receivable, thereby
reducing total liabilities and total assets by the same
amount. This change has no effect on net assets.
"Trikon hopes to complete its restatement in approximately three
to four weeks and immediately thereafter, proceed with the filing by
New Athletics, Inc. of the registration statement in connection with
our proposed merger with Aviza," said Dr. Macneil. "Trikon and Aviza
intend to extend the date on which either party may terminate the
merger agreement to accommodate this delay, and we continue to work
together pursuant to our previously announced joint development
agreement."
Investor Conference Call and Webcast
There will be a conference call at 10:30 am New York time today,
hosted by Dr. John Macneil, to discuss the results for the first
quarter ended March 31, 2005 and the accounting changes discussed
above. A live and subsequently recorded audio webcast of the call will
be available at www.trikon.com.
About Trikon Technologies
Trikon Technologies is a technology leader in wafer fabrication
equipment to the global semiconductor industry. Trikon develops and
manufactures advanced capital equipment for plasma etching and
chemical and physical vapor deposition (CVD and PVD) of thin films for
use in the production of semiconductor devices. These are key
components in all electronic products, such as telecommunication
devices, consumer and industrial electronics and computers. More
information is available on Trikon's Web site at: www.trikon.com.
"Safe Harbor" Statement Under the Private Securities Litigation
Act of 1995:
This news release contains certain forward-looking statements that
include, without limitation, statements in the news release and
comments by Dr Macneil and Martyn Tuffery about Trikon's shipments,
revenue growth, sales prospects in Asia, the value of Trikon's
intellectual property, the timing and contents of Trikon's anticipated
restatement, and the timing of filing the New Athletics Registration
Statement. These forward-looking statements are subject to various
risks and uncertainties that could cause actual results to differ
materially, including, but not limited to the economic conditions
within the semiconductor capital equipment industry; demand for
Trikon's products and services; possible changes in the company's
strategy; and potential internal, regulatory and third-party scrutiny
of Trikon's financial statements that may necessitate further
restatements. Additional factors that may cause actual results to
differ are included in the more detailed cautionary statements
included in the company's SEC reports, including, without limitation,
its annual report on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K.
Additional Information and Where to Find It:
New Athletics, Inc. intends to file with the Securities and
Exchange Commission a registration statement and other relevant
documents in connection with the proposed merger transaction involving
Aviza and Trikon. Investors and security holders of Trikon are urged
to read the proxy statement that will be contained in the registration
statement filed by New Athletics and the other relevant documents when
they become available because they will contain important information
about New Athletics, Aviza and Trikon and the proposed merger
transaction. Investors and security holders of Trikon may obtain free
copies of the proxy statement and the other relevant documents filed
with the Securities and Exchange Commission (when they become
available) at the Securities and Exchange Commission's website at
http://www.sec.gov and may also obtain free copies of the proxy
statement (when it becomes available) by writing to Trikon
Technologies, Inc., Ringland Way, Newport, South Wales NP18 2TA,
United Kingdom, Attention: Investor Relations. Information regarding
the identity of persons who may, under the Securities and Exchange
Commission's rules, be deemed to be participants in the solicitation
of shareholders of Trikon in connection with the proposed transaction,
and their interests in the solicitation, will be set forth in the
proxy statement that will be filed by Trikon with the Securities and
Exchange Commission and contained in the registration statement that
will be filed by the new company with the Securities and Exchange
Commission.
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Trikon Technologies, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In thousands, except share data)
March 31,
2005
--------------
Assets
Current assets:
Cash and cash equivalents $ 18,489
Accounts receivable, net 6,008
Inventories, net 18,544
Prepaid and other current assets 1,258
--------------
Total current assets 44,299
Property, equipment and leasehold improvements, net 11,446
Demonstration systems, net 4,009
Other assets 366
--------------
Total assets $ 60,120
==============
Liabilities and shareholders' equity
Current liabilities:
Short term borrowing $ 9,450
Accounts payable 7,713
Accrued expenses 1,315
Warranty and related expenses 1,038
Current portion of long-term debt 220
Deferred revenue -
Other current liabilities 1,620
--------------
Total current liabilities 21,356
Long-term debt less current portion 81
Other non-current liabilities. 734
--------------
$ 22,171
--------------
Shareholders' equity:
Preferred Stock:
Authorized shares -- 20,000,000
Issued and outstanding -- Nil --
Common Stock, $0.001 par value:
Authorized shares -- 50,000,000
Issued and outstanding -- 15,754,985 261,416
Accumulated other comprehensive loss 2,667
Accumulated deficit (226,134)
--------------
Total shareholders' equity 37,949
--------------
Total liabilities and shareholders' equity $ 60,120
==============
See Note A
Trikon Technologies, Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
Three Months
Ended
March 31,
2005
--------------
Revenues:
Product revenues $ 5,796
License revenues 2,015
--------------
7,811
--------------
Costs and expenses:
Cost of goods sold 3,922
Research and development 2,277
Selling, general and administrative 3,696
--------------
9,895
--------------
Loss from operations (2,084)
Foreign currency losses (260)
Interest income, net 26
--------------
Loss before income tax charge (2,318)
Income tax charge 56
--------------
Net loss $ (2,374)
--------------
Loss per share data:
Basic: $ (0.15)
Diluted: $ (0.15)
Weighted average common shares used in the calculation:
Basic: 15,755
Diluted: 15,755
See Note A
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NOTE A BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements include the accounts of Trikon Technologies, Inc. (the
"Company") and its subsidiaries. All material intercompany balances
and transactions have been eliminated.
The condensed consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all
the information and footnotes required by generally accepted
accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair
presentation have been included. The operating results for the three
months ended March 31, 2005 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2005. As
a result of the pending restatement discussed above, we have not
included a comparative condensed consolidated statement of operations
for the three months ended March 31, 2004 or a comparative condensed
consolidated balance sheet as at December 31, 2004.