Fourth Quarter Results

Net revenue for fiscal 2012 fourth quarter of $44.3 million increased 4% over net revenue of $42.7 million in the comparable prior year period and 15% over net revenue for third quarter fiscal 2012 of $38.5 million.

Net earnings for the fiscal 2012 fourth quarter were $25.0 million, or $1.32 per share (diluted), compared with net earnings for the comparable prior year period of $6.1 million, or $0.33 per share (diluted). Net earnings for the fiscal 2012 fourth quarter included a tax benefit of $18.9 million, or $1.00 per share (diluted), which resulted from the reversal of valuation allowances related to deferred tax assets, partially offset by costs incurred for an acquisition effort of $0.04 per share (diluted). Fiscal 2012 net earnings adjusted for those items were $6.8 million, or $0.36 per share (diluted), an increase in EPS of 9% over the comparable prior year quarter. (Refer to “Reconciliation of Reported Results to Non-GAAP Results” included in this Press Release for details of the adjustments.)

Bookings for the fourth quarter of fiscal 2012 were $35.5 million, compared to bookings of $44.2 million in the fourth quarter of fiscal 2011. Bookings for the Metrology Solutions Division were 60% of the total; Optical Systems Division bookings were 40%.

Commenting on the fourth quarter results, John P. Jordan, Vice President, Chief Financial Officer and Treasurer of Zygo Corporation, said, “Zygo has continued to perform in what we observe to be a flat market. Our operations continue to drive process improvements for increased margins, and we have successfully controlled operating costs to improve operating margin at these revenue levels. Reversal of the deferred tax asset valuation allowance results from the profitable performance of the last 12 quarters and the long-term forecast of continued profitability. The 3-year Retained Earnings accumulated deficit was restored to a positive Retained Earnings balance of $22.3 million. Stockholder’s Equity increased to $173.6 million from $124.7 million, and return on equity using adjusted Net Earnings improved to 16.7% from 15.2% in fiscal 2011. Cash flow from operations was more than $32 million compared to $20.6 million in fiscal 2011.”

Dr. Chris Koliopoulos, President and Chief Executive Officer of Zygo Corporation, commented, “This was Zygo’s second consecutive year of strong revenue and earnings growth. While the demand in some markets has lagged expectations, we are improving our ability to increase market share by expanding presence in our existing geographic markets, increasing our presence in new markets and partnering with leaders in the semiconductor industry to support the leading edge of new technology. Our superior know-how and advanced manufacturing capabilities enabled us to secure technology-driven contracts that helped our business generate healthy revenues and earnings for the year. In our effort to augment our organic growth and profitability, we also spent considerable effort and resources on a substantial acquisition target intended to expand capacity and capabilities in our existing business, but over time, the fundamentals of the target deteriorated from expectations, and we were compelled to terminate the effort. We will continue to target opportunistic acquisitions that increase our capacity, capabilities and customer base to further our organic growth and profitability.”

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