ESI receives order from consumer electronics provider, releases 3Q financials

Portland, OR - Electro Scientific Industries Inc. (ESI), a supplier of laser-based manufacturing solutions for the microtechnology industry, has received a multi-unit order for laser systems using its patented esiFIT technology. Introduced in 2012, esiFIT performs in-line inspection of incoming parts and subsequently adjusts the laser cutting path in real time.

“As it represents our first order from this customer, we are excited at the prospect of another long-term relationship with a leading consumer electronics provider,” stated Nick Konidaris, CEO of ESI. “We are pleased to be delivering on our strategy to partner with global leaders in microelectronics and semiconductors and to solve their most pressing manufacturing problems.”

Financial information for 3QFY14
ESI also announced on Feb. 4 the results for its 3QFY14 ended December 28, 2013. Financial measures are provided on both a GAAP and non-GAAP basis, which excludes the impact of purchase accounting, equity compensation, and other items.

Revenue in the third quarter was $38.3 million, compared to $59.6 million in the 2Q14 and $37.9 million in the third quarter of last fiscal year. On a GAAP basis, net loss was $4.6 million or $0.15 per share. On a non-GAAP basis, third quarter net loss was $3.1 million or $0.10 per share.

"Revenue levels were impacted by the timing of orders in microfabrication and by overcapacity in some of our other businesses," said Konidaris. "Our team responded well, driving down manufacturing and operating costs to deliver improved gross margins and bottom line results very near our expected range."

Orders for the third quarter were $35.6 million, compared to $46.2 million in the prior quarter. Konidaris continued, "Customer demand was lower seasonally in our third quarter, especially in our advanced microfabrication business."

GAAP gross margin was 42.5%. Non-GAAP gross margin was 44.6% compared to 43.2% in the prior quarter. Operating expenses were $20.9 million, down from $23.9 million in the prior quarter. On a non-GAAP basis, operating expenses decreased by $1.5 million to $20.6 million. Non-GAAP operating loss was $3.5 million compared to operating income of $3.7 million in the second quarter.

4QFY14 Outlook
Based on recent order levels, ESI expects revenues for the fourth quarter of fiscal 2014 to be around $40 million. Non-GAAP loss per share is expected to be $0.09 to $0.14. Actual results may differ from this forecast and are subject to the company’s Safe Harbor statement under the Private Securities Litigation Reform Act.

Konidaris concluded, "While we experienced seasonal slowness in advanced microfabrication, we are pleased with the progress in our growth strategy. During the quarter we advanced in qualification at a major semiconductor manufacturer for 3D packaging applications, penetrated new customers in flexible circuit drilling, and received our first multi-unit order from a major OEM device manufacturer. These new customer partnerships enable us to leverage our technology and expand our addressable market."
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