EX-99.1 3 f98027exv99w1.txt EXHIBIT 99.1 . . . EXHIBIT 99.1 CONTACTS: Kevin S. Royal Robin S. Yim Vice President and Chief Vice President, Treasurer Financial Officer Novellus Systems, Inc. Novellus Systems, Inc. Phone: (408) 943-9700 Phone: (408) 943-9700 FOR IMMEDIATE RELEASE NOVELLUS SYSTEMS REPORTS FIRST QUARTER 2004 RESULTS SAN JOSE, Calif., April 12, 2004 -- Novellus Systems, Inc. (Nasdaq NM: NVLS) today reported the results of operations for its first quarter ended March 27, 2004. First quarter 2004 net sales were $262.9 million, up 16.0 percent from $226.5 million in the previous quarter, and up 10.3 percent from first quarter 2003 net sales of $238.4 million. The net income for the quarter was $16.7 million, or $0.11 per diluted share, compared with fourth quarter 2003 net income of $10.5 million, or $0.07 per diluted share, and first quarter 2003 net income of $11.9 million, or $0.08 per diluted share. The first quarter 2004 results include a $2.5 million pre-tax litigation settlement. Without this charge, the first quarter 2004 net income would have been $18.5 million, or $0.12 per diluted share. The first and fourth quarter 2003 results did not include any unusual charges or benefits. Shipments for the first quarter 2004 were $311.0 million, up $82.9 million, or 36.3 percent, from $228.1 million reported in the prior quarter. Deferred revenue at the end of the first quarter was $153.2 million, an increase of $48.1 million, or 45.8 percent, from $105.1 million at the end of the fourth quarter. The financial measures set forth above, which present net income excluding an unusual charge and revenue on a shipment basis, are not in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP). The Company believes that these non-GAAP financial measures provide further insight into the results of ongoing operations and enhance the comparability of those results to results in prior periods because they assist shareholder understanding -MORE- 1 NOVELLUS SYSTEMS REPORTS FIRST QUARTER 2004 RESULTS PAGE 2 OF 2 of the effect of an unusual charge on the quarter's results and allow comparability to the more traditional shipment method of revenue recognition. Cash, cash equivalents and short-term investments as of March 27, 2004 were $1,032.7 million, an increase of $30.6 million, or 3.1 percent, from the fourth quarter 2003 ending balance of $1,002.1 million. "We experienced another strong quarter in operating results and bookings, as our success in 300 mm continues to propel our business," said Richard S. Hill, chairman and chief executive officer of Novellus Systems, Inc. "We have invested in a new and differentiated atomic layer deposition (ALD) technology targeted at copper barrier applications at the 45 nanometer node and beyond. The acquisition of Angstron provides a key technology that will enable our continued growth in this nanoelectronics era," said Hill. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: The statements regarding (i) Novellus' success in 300 mm propelling its business, and (ii) the key role of the Angstron technology in enabling Novellus to continue its growth in nanoelectronics, as well as other matters discussed in this news release that do not concern purely historical data, are forward-looking statements. The forward-looking statements involve risks and uncertainties, including, but not limited to, a reversal or slowing in the rate of capital investment by semiconductor manufacturers in 300 mm technology, the failure of Angstron's technology to complement or broaden Novellus' current technology, and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission (SEC). Actual results could differ materially. We assume no obligation to update this information. For more details relating to risks and uncertainties that could cause actual results to differ from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2003. ABOUT NOVELLUS: Novellus Systems, Inc., an S&P 500 company, manufactures, markets and services advanced deposition, surface preparation and chemical mechanical planarization equipment for today's advanced integrated circuits. Our products are designed for high-volume production of advanced, leading-edge semiconductor devices at the lowest possible cost. Headquartered in San Jose, Calif., with subsidiaries throughout the United States, as well as in the United Kingdom, France, Germany, the Netherlands, Ireland, Italy, Israel, India, China, Japan, Korea, Malaysia, Singapore and Taiwan, we are a publicly traded company on the Nasdaq stock exchange (Nasdaq: NVLS) and a component of the Nasdaq-100 Index(R). Additional information about Novellus is available on our home page at www.novellus.com 2 NOVELLUS SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts) THREE MONTHS ENDED ------------------ (Unaudited) MARCH 27 DECEMBER 31 MARCH 29 2004 2003 2003 ---- ---- ---- Net sales $262,862 $226,511 $238,410 Cost of sales 138,257 120,424 128,596 -------- -------- -------- Gross profit 124,605 106,087 109,814 % 47.4% 46.8% 46.1% Operating expenses: Selling, general and administrative 42,403 38,422 42,631 Research and development 58,957 54,064 57,006 Legal settlement 2,500 -- -- -------- -------- -------- Total operating expenses 103,860 92,486 99,637 % 39.5% 40.8% 41.8% Income from operations 20,745 13,601 10,177 % 7.9% 6.0% 4.3% Other income, net 2,749 2,356 5,652 -------- -------- -------- Income before income taxes 23,494 15,957 15,829 Provision for income taxes 6,813 5,505 3,957 -------- -------- -------- Net income $ 16,681 $ 10,452 $ 11,872 ======== ======== ======== Net income per share: Basic net income per share $ 0.11 $ 0.07 $ 0.08 ======== ======== ======== Diluted net income per share $ 0.11 $ 0.07 $ 0.08 ======== ======== ======== Shares used in basic per share calculation 152,911 152,057 149,434 ======== ======== ======== Shares used in diluted per share calculation 156,100 156,580 152,229 ======== ======== ========

3 NOVELLUS SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (EXCLUDING CERTAIN UNUSUAL CHARGES AND BENEFITS) (1)

THREE MONTHS ENDED (In thousands, except per share amounts) --------------------------------------- (Unaudited) MARCH 27 DECEMBER 31 MARCH 29 2004 2003 2003 Net sales $262,862 $226,511 $238,410 Cost of sales 138,257 120,424 128,596 -------- -------- -------- Gross profit 124,605 106,087 109,814 % 47.4% 46.8% 46.1% Operating expenses: Selling, general and administrative 42,403 38,422 42,631 Research and development 58,957 54,064 57,006 -------- -------- -------- Total operating expenses 101,360 92,486 99,637 % 38.6% 40.8% 41.8% Income from operations 23,245 13,601 10,177 % 8.8% 6.0% 4.3% Other income, net 2,749 2,356 5,652 -------- -------- -------- Income before income taxes 25,994 15,957 15,829 Provision for income taxes 7,538 5,505 3,957 -------- -------- -------- Net income $ 18,456 $ 10,452 $ 11,872 ======== ======== ======== Net income per share: Basic net income per share $ 0.12 $ 0.07 $ 0.08 ======== ======== ======== Diluted net income per share $ 0.12 $ 0.07 $ 0.08 ======== ======== ======== Shares used in basic per share calculation 152,911 152,057 149,434 ======== ======== ======== Shares used in diluted per share calculation 156,100 156,580 152,229 ======== ======== ========

A reconciliation of our net income excluding certain unusual charges to our net income under accounting principles generally accepted in the United States of America is presented below: NET INCOME EXCLUDING UNUSUAL CHARGES AND BENEFITS $ 18,456 $ 10,452 $ 11,872 UNUSUAL (CHARGES) AND BENEFITS: Legal settlement (2,500) -- -- Adjustment on provision for income taxes 725 -- -- -------- -------- -------- NET INCOME $ 16,681 $ 10,452 $ 11,872 ======== ======== ======== (1) The condensed consolidated statements of operations (excluding certain unusual charges) are intended to present our operating results, excluding certain unusual charges, benefits and related adjustments on provisions for income taxes. These condensed consolidated statements of operations are not in accordance with or an alternative for accounting principles generally accepted in the United States of America and may be different from similar measures presented by other companies. 4 NOVELLUS SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands) MARCH 27 DECEMBER 31 2004 2003 (Unaudited) * ASSETS CURRENT ASSETS: Cash and short-term investments $1,032,737 $1,002,132 Accounts receivable, net 285,981 231,760 Inventories 213,409 199,100 Deferred taxes and other current assets 150,818 138,996 ---------- ---------- Total current assets 1,682,945 1,571,988 Property and equipment, net 492,481 506,567 Goodwill 173,267 173,267 Intangible and other assets 87,983 87,078 ---------- ---------- TOTAL ASSETS $2,436,676 $2,338,900 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued liabilities $ 195,473 $ 150,945 Deferred profit 63,974 46,821 Income taxes payable 20,047 10,293 Short-term obligations 21,669 13,023 ---------- ---------- Total current liabilities 301,163 221,082 Other liabilities 46,063 45,958 ---------- ---------- Total liabilities 347,226 267,040 ---------- ---------- SHAREHOLDERS' EQUITY: Common stock 1,575,753 1,565,926 Retained earnings and accumulated other comprehensive income 513,697 505,934 ---------- ---------- Total shareholders' equity 2,089,450 2,071,860 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,436,676 $2,338,900 ========== ==========

* The December 31, 2003 condensed consolidated balance sheet was derived from our audited consolidated financial statements. 5