Trikon (NASDAQ:TRKN)
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Trikon Technologies, Inc.:
-- Highest Quarterly Bookings since Fourth Quarter 2000
-- Highest Quarterly Revenues since Third Quarter 2001
-- Book to Bill 1.5:1, Positive EBITDA, Net Cash Increased by
$2.6 Million
Trikon Technologies, Inc. (Nasdaq:TRKN) today reported results for
its third quarter and nine months ended September 30, 2005.
Revenues for the third quarter of 2005 were $13.0 million, an
increase of 46 percent over $8.9 million for the second quarter of
2005 and an increase of 32 percent over $9.9 million for the third
quarter of 2004. Revenues for the nine months ended September 30, 2005
were $29.7 million, an increase of 11 percent over revenues of $26.8
million for the prior year nine-month period.
Research and development costs for the third quarter of 2005 were
$1.9 million, a decrease of 14 percent from $2.2 million in the second
quarter of 2005 and a decrease of 18 percent from $2.3 million in the
third quarter of 2004. Research and development costs for the nine
months ended September 30, 2005 were $6.4 million, a decrease of 19
percent from $7.9 million in the prior year nine-month period.
Selling, general and administrative expenses for the third quarter
of 2005 were $3.6 million, which was similar to $3.7 million for the
second quarter of 2005 and down 3 percent from $3.8 million in the
third quarter of 2004. Selling, general and administrative costs for
the nine months ended September 30, 2005 were $11.0 million, down 8
percent from $12.0 million in the prior year nine-month period.
Operating loss for the third quarter of 2005 was $660,000, a
decrease of 83 percent compared to an operating loss of $3.8 million
for the second quarter of 2005 and a decrease of 56 percent from an
operating loss of $1.5 million for the third quarter of 2004.
Operating loss for the nine months ended September 30, 2005 was $6.6
million, down 48 percent compared to an operating loss of $12.5
million for the prior year nine-month period.
Net loss applicable to common shares for the third quarter of 2005
was $1.3 million, or $0.08 per share, compared to a net loss of $5.4
million, or $0.34 per share, in the second quarter of 2005 and a net
loss of $1.7 million, or $0.10 per share, for the third quarter of
2004. Net loss applicable to common shares for the nine months ended
September 30, 2005 was $9.0 million, or $0.57 per share, compared to a
net loss of $12.3 million, or $0.78 per share, in the prior year
nine-month period.
The net loss for the quarter included foreign currency losses of
$246,000, compared to foreign currency losses of $1.6 million in the
second quarter of 2005 and a foreign currency gain of $7,000 in the
third quarter of 2004. The net loss for the nine months included
foreign currency losses of $2.1 million, compared to foreign currency
gains of $400,000 in the prior year nine-month period.
"I am very pleased with our performance this quarter," said Dr.
John Macneil, Chief Executive Officer. "We achieved our highest
quarterly orders since the fourth quarter of 2000 and our highest
quarterly revenues since the third quarter of 2001. The increased
revenue, with tight cost controls, generated a positive EBITDA for the
quarter. Given the generally reported flat market conditions in the
industry, we believe that our order and revenue growth represent
market share gains."
"Cash improved in the quarter by $2.6 million and cash, cash
equivalents and restricted cash increased to a total of $15.6 million
at quarter end," added Martyn Tuffery, acting Chief Financial Officer.
"Revenues relating to system shipments and customer retentions not
recognized under our revenue recognition policy at September 30, 2005
were $5.7 million, compared to $6.1 million at June 30, 2005 and $2.5
million at December 31, 2004. In addition, the book to bill ratio in
the quarter was 1.5:1."
"We continue our tight control of both costs and cash management,
which has led to a reduction in our current working capital
requirements," continued Mr. Tuffery. "Operating costs are less than
in the first two quarters of this year, and, for the nine months ended
September 30, 2005, they are significantly reduced from the same
period in 2004, even after incurring substantial expenses related to
the proposed consolidation by merger."
"Three of the system orders in the quarter were for power device
metallization," continued Dr. Macneil. "Trikon has systems at 7 of the
top 20 power device makers. We believe these customers value our Sigma
system's ability to deposit high quality thick metal, low cost of
ownership and high reliability."
Update on Consolidation of Aviza and Trikon
As Trikon previously announced, the Securities and Exchange
Commission declared effective on October 31, 2005, the registration
statement on Form S-4 filed by New Athletics, Inc. relating to the
proposed consolidation by merger of Trikon and Aviza Technology, Inc.
"We reached an important milestone in the merger transaction on
October 31, 2005," said Dr. Macneil. "We commenced mailing the proxy
statement/prospectus to Trikon's stockholders on November 1, 2005, so
stockholders as of our record date of October 21, 2005 should be
receiving the materials very shortly. In addition, the date of the
special meeting where our stockholders will have the opportunity to
vote on the merger transaction has been set for December 1, 2005. Our
board of directors has determined that this transaction is in the best
interest of our stockholders. We are excited about joining forces with
Aviza to form a better positioned company offering a broader product,
technology and service portfolio to serve our respective customers. We
believe that the increased scale achieved by combining the two
companies will open new opportunities."
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 third
quarter ended September 30, 2005. A live audio webcast of the call
will be available at www.trikon.com.
Additional Information and Where to Find It
In connection with the proposed consolidation through merger
involving Trikon Technologies, Inc. and Aviza Technology, Inc., New
Athletics, Inc. filed with the Securities and Exchange Commission a
registration statement and other relevant documents. This registration
statement was declared effective by the Securities and Exchange
Commission on Monday, October 31, 2005. Security holders of Trikon are
urged to read the proxy statement/prospectus that is contained in the
registration statement and the other relevant documents because they
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/prospectus and
the other relevant documents filed with the Securities and Exchange
Commission at the Securities and Exchange Commission's website at .
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 stockholders of Trikon in
connection with the proposed merger transaction, and their interests
in the solicitation is contained in the registration statement filed
by New Athletics with the Securities and Exchange Commission.
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 by Dr. Macneil and Martyn
Tuffery about Trikon's business strategy, its cost control and cash
management policies, Trikon's business prospects in the power device
metallization market and the anticipated benefits of the proposed
merger transaction with Aviza Technology, Inc. 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, Trikon's failure to comply with customary
closing conditions or to otherwise complete the merger transaction
with Aviza, and the potential failure of Trikon and Aviza to realize
the expected benefits of the merger transaction. 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.
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CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30, December 31,
2005 2004
------------- ------------
(Unaudited)
Assets
Current assets:
Restricted cash $ 8,850 $ -
Cash and cash equivalents 6,772 21,202
Accounts receivable, net 7,905 6,654
Inventories, net 14,442 16,543
Prepaid and other current assets 1,764 2,203
------------- ------------
Total current assets 39,733 46,602
Property, equipment and leasehold
improvements, net 9,079 13,597
Demonstration systems, net 2,890 551
Other assets 255 391
------------- ------------
Total assets $ 51,957 $ 61,141
============= ============
Liabilities and shareholders' equity
Current liabilities:
Short term borrowing $ 8,850 $ 9,600
Accounts payable 5,697 5,709
Accrued expenses 1,665 1,453
Deferred revenue 391 541
Warranty & related expenses 1,377 1,171
Current portion of long-term debt and
capital lease obligations 100 281
Other current liabilities 2,257 971
------------- ------------
Total current liabilities 20,337 19,726
Long-term debt and capital lease
obligations less current portion 32 91
Other non-current liabilities 620 782
------------- ------------
$ 20,989 $ 20,599
------------- ------------
Shareholders' equity:
Preferred stock:
Authorized shares -- 20,000,000
Issued and outstanding -- nil at September
30, 2005 and December 31, 2004 - -
Common stock, $0.001 par value:
Authorized shares -- 50,000,000
Issued and outstanding -- 15,754,985 at
September 30, 2005 and at December 31, 2004 261,416 261,416
Accumulated other comprehensive loss 2,315 2,886
Accumulated deficit (232,763) (223,760)
--------- ---------
Total stockholders' equity 30,968 40,542
--------- ---------
Total liabilities and stockholders'
equity $ 51,957 $ 61,141
========= =========
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
----------------------- -----------------------
September September September September
30, 2005 30, 2004 30, 2005 30, 2004
(As restated) (As restated)
---------- ----------- --------- -----------
Revenues:
Product revenues $ 10,812 $ 9,858 $ 25,422 $ 26,702
License revenues 2,190 17 4,275 126
---------- ----------- --------- -----------
13,002 9,875 29,697 26,828
---------- ----------- --------- -----------
Costs and expenses:
Cost of goods sold 8,107 6,528 18,828 20,617
Research and
development 1,909 2,314 6,406 7,921
Selling, general
and administrative 3,646 3,756 11,015 12,038
Restructuring cost - (1,200) - (1,200)
---------- ----------- --------- -----------
13,662 11,398 36,249 39,376
---------- ----------- --------- -----------
Loss from operations (660) (1,523) (6,552) (12,548)
Foreign currency
(losses) gains (246) 7 (2,069) 366
Interest
(expenditure)
income, net (83) (92) 5 37
---------- ----------- --------- -----------
Loss before income
tax charge (989) (1,608) (8,616) (12,145)
Income tax charge 286 45 387 165
---------- ----------- --------- -----------
Net loss $ (1,275) $ (1,653) $ (9,003) $ (12,310)
---------- ----------- --------- -----------
Loss per share data:
Basic: $ (0.08) $ (0.10) $ (0.57) $ (0.78)
Diluted: $ (0.08) $ (0.10) $ (0.57) $ (0.78)
Weighted average
common shares used
in the calculation:
Basic: 15,755 15,752 15,755 15,733
Diluted: 15,755 15,752 15,755 15,733
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