U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended April 3, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
COMMISSION FILE NUMBER 001-16611
Mykrolis Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
04-3536767
(I.R.S. Employer Identification No.)
129 Concord Road
Billerica, Massachusetts 01821
(Address of principal executive offices)
Registrant’s telephone number, include area code (978) 436-6500
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The Company had 41,254,179 shares of common stock outstanding as of April 15, 2004.
Mykrolis Corporation
2
PART I - FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Mykrolis Corporation
Consolidated Statements of Operations
(In thousands except per share data)
(Unaudited)
| Three Months Ended |
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| April 3, 2004 |
March 29, 2003 |
||||||
| Net sales |
$ | 70,515 | $ | 40,508 | |||
| Cost of sales |
36,446 | 23,976 | |||||
| Gross Profit |
34,069 | 16,532 | |||||
| Research and development expenses |
6,297 | 4,484 | |||||
| Selling, general and administrative expenses |
19,669 | 16,352 | |||||
| Operating income (loss) |
8,103 | (4,304 | ) | ||||
| Other income, net |
474 | 660 | |||||
| Income (loss) before income taxes |
8,577 | (3,644 | ) | ||||
| Income tax expense |
1,590 | 1,713 | |||||
| Net income (loss) |
$ | 6,987 | $ | (5,357 | ) | ||
| Basic income (loss) per share |
$ | 0.17 | $ | (0.13 | ) | ||
| Shares used in computing basic income (loss) per share: |
41,001 | 39,725 | |||||
| Diluted income (loss) per share |
$ | 0.16 | $ | (0.13 | ) | ||
| Shares used in computing diluted income (loss) per share: |
43,430 | 39,725 | |||||
The accompanying notes are an integral part of the consolidated financial statements.
3
Mykrolis Corporation
(In thousands except share data)
| April 3, 2004 |
December 31, 2003 |
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| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 74,665 | $ | 70,503 | ||||
| Marketable securities |
4,995 | — | ||||||
| Accounts receivable (less allowance for doubtful accounts of $499 at April 3, 2004 and $559 at December 31, 2003) |
55,862 | 46,698 | ||||||
| Inventories |
41,363 | 38,771 | ||||||
| Deferred income taxes |
664 | 664 | ||||||
| Other current assets |
7,318 | 5,726 | ||||||
| Total current assets |
184,867 | 162,362 | ||||||
| Marketable securities |
9,262 | 14,266 | ||||||
| Restricted cash |
1,431 | 1,782 | ||||||
| Property, plant and equipment, net |
69,528 | 71,033 | ||||||
| Deferred income taxes |
3,411 | 3,411 | ||||||
| Goodwill, net |
17,297 | 17,317 | ||||||
| Other intangible assets (less accumulated amortization of $22,932 at April 3, 2004 and $22,490 at December 31, 2003) |
7,182 | 7,622 | ||||||
| Other assets |
6,089 | 5,962 | ||||||
| Total assets |
$ | 299,067 | $ | 283,755 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Current portion of capital lease obligation |
$ | 78 | $ | 78 | ||||
| Accounts payable |
17,458 | 12,613 | ||||||
| Accrued income taxes |
11,878 | 11,227 | ||||||
| Accrued expenses |
18,649 | 24,781 | ||||||
| Total current liabilities |
48,063 | 48,699 | ||||||
| Long-term portion of capital lease obligation |
35 | 55 | ||||||
| Other liabilities |
12,763 | 11,912 | ||||||
| Minority interest |
89 | 61 | ||||||
| Commitments and contingencies (note 13) |
||||||||
| Shareholders’ equity: |
||||||||
| Preferred stock, par value $.01 per share, 5,000,000 shares authorized; no shares issued and outstanding |
— | — | ||||||
| Common stock, par value $.01 per share, 250,000,000 shares authorized; 41,242,527 and 40,648,773 shares issued and outstanding, respectively |
412 | 406 | ||||||
| Additional paid-in capital |
336,207 | 330,515 | ||||||
| Accumulated deficit |
(94,468 | ) | (101,455 | ) | ||||
| Accumulated other comprehensive loss |
(4,034 | ) | (6,438 | ) | ||||
| Total shareholders’ equity |
238,117 | 223,028 | ||||||
| Total liabilities and shareholders’ equity |
$ | 299,067 | $ | 283,755 | ||||
The accompanying notes are an integral part of the consolidated financial statements.
4
Mykrolis Corporation
Consolidated Statements of Shareholders’ Equity
and Comprehensive Income (Loss)
(In thousands)
| Common Shares |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Total Shareholders’ Equity |
Comprehensive |
|||||||||||||||||||
| Shares |
Amount |
|||||||||||||||||||||||
| Balance December 31, 2002 |
39,724 | $ | 397 | $ | 320,061 | $ | (93,351 | ) | $ | (14,463 | ) | $ | 212,644 | |||||||||||
| Issuance of common stock-employee stock purchase plan and exercise of stock options |
592 | 6 | 5,534 | — | — | 5,540 | ||||||||||||||||||
| Issuance of common stock for acquisition |
333 | 3 | 4,903 | — | — | 4,906 | ||||||||||||||||||
| Stock based compensation |
— | 17 | — | — | 17 | |||||||||||||||||||
| Comprehensive income (loss) : |
||||||||||||||||||||||||
| Net loss |
— | — | (8,104 | ) | — | (8,104 | ) | (8,104 | ) | |||||||||||||||
| Foreign currency translations |
— | — | — | 8,333 | 8,333 | 8,333 | ||||||||||||||||||
| Additional minimum pension liability |
— | — | — | (221 | ) | (221 | ) | (221 | ) | |||||||||||||||
| Unrealized loss on marketable securities |
— | — | — | — | (87 | ) | (87 | ) | (87 | ) | ||||||||||||||
| Comprehensive loss |
$ | (79 | ) | |||||||||||||||||||||
| Balance December 31, 2003 |
40,649 | $ | 406 | $ | 330,515 | $ | (101,455 | ) | $ | (6,438 | ) | $ | 223,028 | |||||||||||
| Issuance of common stock-employee stock purchase plan and exercise of stock options * |
593 | 6 | 4,425 | — | — | 4,431 | ||||||||||||||||||
| Stock based compensation* |
12 | 12 | ||||||||||||||||||||||
| Proceeds under tax sharing agreement with Millipore* |
1,255 | 1,255 | ||||||||||||||||||||||
| Comprehensive income (loss) : |
||||||||||||||||||||||||
| Net income * |
— | — | 6,987 | — | 6,987 | 6,987 | ||||||||||||||||||
| Foreign currency translations * |
— | — | — | 2,344 | 2,344 | 2,344 | ||||||||||||||||||
| Unrealized gain on marketable securities* |
— | — | — | — | 60 | 60 | 60 | |||||||||||||||||
| Comprehensive income * |
$ | 9,391 | ||||||||||||||||||||||
| Balance April 3, 2004* |
41,242 | $ | 412 | $ | 336,207 | $ | (94,468 | ) | $ | (4,034 | ) | $ | 238,117 | |||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| * | unaudited |
5
Mykrolis Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three months ended |
||||||||
| April 3, 2004 |
March 29, 2003 |
|||||||
| (In thousands) | ||||||||
| Cash flows from operating activities: |
||||||||
| Net income (loss) |
$ | 6,987 | $ | (5,357 | ) | |||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
||||||||
| Income from equity method investments |
(199 | ) | (132 | ) | ||||
| Amortization of premium on available for sale securities |
69 | — | ||||||
| Depreciation |
2,372 | 2,474 | ||||||
| Amortization |
442 | 374 | ||||||
| Stock based compensation |
12 | — | ||||||