MKS Instruments Inc. (MKSI) Q1 2010 Earnings Call April 22, 2010 8:30 am ET Executives Ron Weigner - VP, Financial & Treasurer Leo Berlinghieri - President & CEO Seth Bagshaw - VP & CFO Analysts Jim Covello - Goldman Sachs Krish Sankar - Banc of America Srini Kopparapu - Barclays Michael Bertz – Kennedy Capital Presentation Operator
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» MKS Instruments Inc. Q1 2009 Earnings Call Transcript
Now, I'll turn the call over to Leo.Leo Berlinghieri Thanks, Ron. Good morning everyone and thank you for joining us on the call today. I'll give an overview of the first quarter 2010 as well as our outlook. Following me, Seth will review our financial results and guidance, and then we'll open the call for your questions. As we exceeded the second half of 2009 we reported same signs of rapid recovery in our business and these conditions continue to accelerate in the first quarter of 2010. We saw substantial growth in many of the markets reserve and I am please to report today that our Q1 revenue increase 33% to nearly $200 million which approaches our peak 2006 and 2007 quarterly revenues levels. I am also please to report that due to improved operating leverage and continued cost control. We achieved operating profit of approximately 22% and sequentially our non-GAAP earnings increased 87% to $0.58 per share. As a result of continued focus on working capital management or cash and short-term investments net of debt increase $16.6 million to $275.5 million. As we have said on previous calls we have taken a number of actions to improve our financial performance during both the downturn and this upturn and as a result we are please to report the strong level of performance for our first quarter and are optimistic that business will remain robust in 2010. As I have communicated a number of times before our broad technology portfolio opens opportunities for us in many advance in growing markets, including LEDs, medical, biopharm, environmental, thin films, solar and more. I’m pleased to report, this quarter we’ve reached $75 million in sales to these additional markets, a 34% raise quarter-over-quarter increasing even more than the fast ramping semiconductor segment. Our long term goal is to achieve at least 58% compounded annual growth rate in these advanced and growing applications. Our strong growth in the quarter reflects our success and applying our technology portfolio in these markets.
Now, I’ll share some examples of our recent successes with you. Let’s start with the emerging new market, light emitting diodes or LEDs, which are electronic components, which produce light because they have High-Reliability, long life and environmentally friendly benefits such as low power consumption. LEDs are experiencing rapid acceptance in Solid-State lighting of flat screen TV displays.This market is a great opportunity for us, since LEDs are may using back in processes similar to semiconductor manufacturing and many of our Vacuum products including pressure inflow have been designed in on debt position equipment. Orders increased in Q1 for the fifth consecutive quarter. Recent industry forecast project the 2010 was a 53% surge in LED demand and 30% plus compound annual growth rate through 2014. Moving to medical related markets, our technologies are applied in a number of applications. The two largest of these are diagnostic imaging equipment and plasma based medical sterilization. In the quarter, we saw increases in sales to these markets driven primarily by increased demand for MRI equipment in North America and increased orders from medical sterilization instrument customers. We attribute these increases to the freeing up a hospital and medical budgets, which may have been constrain during the recent economic crisis. Another recent medical application for our technology is the selection of our gas analyzers to monitor the Ambient year in hospitals during low temperatures sterilization of medical devices. Many modern medical devices as well as consumable medical supplies cannot be sterilized with steam for high temperatures due to potential damage from the heat. Instead when temperatures reactive gases are use for sterilization. Read the rest of this transcript for free on seekingalpha.com