Trikon Technologies Reports Results for First Quarter Ended March 31, 2005; Company to Restate Certain Deferred Cost and Balance
May 09 2005 - 7:00AM
Business Wire
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. -0- *T 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 *T 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.
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