We are a leading worldwide provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters to improve process performance and productivity of advanced manufacturing processes.
We are managed as one operating segment. We group our products into three product groups: Instruments and Control Systems, Power and Reactive Gas Products and Vacuum Products. Our products are derived from our core competencies in pressure measurement and control, materials delivery, gas composition analysis, electrostatic charge management, control and information technology, power and reactive gas generation and vacuum technology. Our products are used in diverse markets, applications and processes. Our primary served markets are manufacturers of capital equipment for semiconductor devices, and for other thin film applications including flat panel displays, solar cells, data storage media and other advanced coatings. We also leverage our technology in other markets with advanced manufacturing applications including medical equipment, pharmaceutical manufacturing, and energy generation and environmental monitoring.
We have a diverse base of customers that includes manufacturers of semiconductor capital equipment and semiconductor devices, thin film capital equipment used in the manufacture of flat panel displays, solar cells, data storage media, and other coating applications; and other industrial, medical and manufacturing companies, and university, government and industrial research laboratories. During the years ended December 31, 2007, 2006 and 2005, we estimate that approximately 68%, 70% and 71% of our net sales, respectively, were to semiconductor capital equipment manufacturers and semiconductor device manufacturers. We expect that sales to semiconductor capital equipment manufacturers and semiconductor device manufacturers will continue to account for a substantial majority of our sales.
Revenues for the full year 2007 were comparable with 2006, however quarterly revenues in both years fluctuated significantly as we experienced significant changes in customer orders. We currently expect that our first quarter 2008 net sales could be approximately the same as our fourth quarter 2007 net sales. However, the semiconductor capital equipment industry is subject to rapid demand shifts, which are difficult to predict, and we are uncertain how long these sales levels may be maintained or the timing or extent of any future downturn or upturn in the semiconductor capital equipment industry.
A significant portion of our net sales is to operations in international markets. International net sales include sales by our foreign subsidiaries, but exclude direct export sales. International net sales accounted for approximately 39%, 34% and 37% of net sales for the years ended December 31, 2007, 2006 and 2005, respectively, a significant portion of which were sales in Japan. We expect that international net sales will continue to represent a significant percentage of our total net sales.
Net sales decreased $2.3 million during the year ended December 31, 2007 mainly due to a decrease in worldwide demand from our semiconductor capital equipment manufacturer customers compared to the same period for the prior year. International net sales were $302.7 million for the year ended December 31, 2007 or 38.8% of net sales compared to $266.9 million for the same period of 2006 or 34.1% of net sales.
Net sales increased $273.5 million during the year ended December 31, 2006 mainly due to an increase in worldwide demand from our semiconductor capital equipment manufacturer and semiconductor device manufacturer customers, which increased $188.6 million or 52.3% compared to the same period for the prior year. Additionally, net sales for thin-film and other non-semiconductor manufacturing applications increased $84.9 million or 57.1% compared to the same period for the prior year. During 2006, we acquired three companies. These acquisitions increased our total net sales by approximately $38.5 million for the year ended December 31, 2006 compared to the same period for the prior year. International net sales were $266.9 million for the year ended December 31, 2006 or 34.1% of net sales compared to $188.5 million for the same period of 2005 or 37.0% of net sales.
Our research and development is primarily focused on developing and improving our instruments, components, subsystems and process control solutions to improve process performance and productivity.
We have hundreds of products and our research and development efforts primarily consist of a large number of projects related to these products, none of which is individually material to us. Current projects typically have a duration of 12 to 30 months depending upon whether the product is an enhancement of existing technology or a new product. Our current initiatives include projects to enhance the performance characteristics of older products, to develop new products and to integrate various technologies into subsystems. These projects support in large part the transition in the semiconductor industry to larger wafer sizes and smaller integrated circuit geometries, which require more advanced process control technology. Research and development expenses consist primarily of salaries and related expenses for personnel engaged in research and development, fees paid to consultants, material costs for prototypes and other expenses related to the design, development, testing and enhancement of our products.
Research and development expense increased $2.5 million during the year ended December 31, 2007 mainly due to $1.9 million in increased compensation, resulting from increased headcount, and $1.8 million in consulting expenses, primarily offset by $0.8 million in lower project materials costs as compared to the same period in the prior year.
Research and development expense increased $13.8 million during the year ended December 31, 2006 mainly due to expenses of $5.4 million from the companies acquired in 2006, $4.9 million in increased compensation, resulting from increased incentive compensation, headcount and salaries, and $3.3 million in stock-based compensation expenses recorded during the current year.
We believe that the continued investment in research and development and ongoing development of new products are essential to the expansion of our markets, and expect to continue to make significant investment in research and development activities. We are subject to risks if products are not developed in a timely manner, due to rapidly changing customer requirements and competitive threats from other companies and technologies. Our success primarily depends on our products being designed into new generations of equipment for the semiconductor industry. We develop products that are technologically advanced so that they are positioned to be chosen for use in each successive generation of semiconductor capital equipment. If our products are not chosen to be designed into our customers' products, our net sales may be reduced during the lifespan of those products.
MKS Instruments Inc.
2 Tech Drive
Andover, MA 01810
United States - Map
Web Site: http://www.mksinst.com
Computershare Investor Services LLC,
P.O. Box 43010
(150 Royall St. (Mail Stop 45-02-80))
Canton, MA 02021)
Providence, RI 02940-3010
MKS Instruments, Inc. provides instruments, components, subsystems, and process control solutions that measure, control, power, and monitor parameters of semiconductor and other advanced manufacturing processes. It offers instruments and control systems, including pressure measurement and control, materials delivery, gas and thin film composition analysis, electrostatic charge control, and control and information technology products. The company also offers power and reactive gas products; power and reactive gas products, such as power delivery products and reactive gas generation products; vacuum products, such as vacuum gauging products and vacuum valves and components; and application-specific integrated subsystems. Its products are used in semiconductor devices for various electronics applications; flat panel displays for hand-held devices, laptop computers, desktop computer monitors, and television sets; magnetic and optical storage media; optical filters and fiber optic cables for data and telecommunications; optical coatings for eyeglasses and architectural glass; magnetic resonance imaging medical equipment; and energy generation and energy conservation processes. The company's customers primarily include manufacturers of semiconductor capital equipment and semiconductor devices; capital equipment manufacturers of thin-film coatings used in flat panel displays, optical and magnetic data storage equipment, architectural glass, solar panels, and electro-optical products; industrial and manufacturing companies; medical equipment manufacturers; and university, government, and industrial research laboratories. MKS Instruments, Inc. has operations primarily in the United States, Europe, and Japan and other parts of Asia. The company was founded in 1961 and is headquartered in Andover, Massachusetts.
Mr. Leo Berlinghieri, 54
Chief Exec. Officer, Pres
Mr. Ronald C. Weigner , 62
Chief Financial Officer, Principal Accounting Officer and VP
Estimated Market Cap
1,046,976,935 as of Mar 7, 2008
52,062,503 as of Feb 15, 2008
Number of Share Holders of Record
196 as of Feb 28, 2008
MKS Instruments Director Sells Shares
Tuesday March 11, 3:41 pm ET
MKS Instruments Director Robert R. Anderson Sells 10,000 Shares
NEW YORK (AP) -- A director of MKS Instruments Inc., which makes analysis and processing equipment for semiconductor companies, sold 10,000 shares of stock, according to a Securities and Exchange Commission filing.
In a Form 4 filed with the SEC Monday, Robert R. Anderson reported he sold the shares May 8 for $27.45 apiece.
Insiders file Form 4s with the SEC to report transactions in their companies' shares. Open market purchases and sales must be reported within two business days of the transaction.
MKS Instruments is based in Andover, Mass.
Annual shareholder meeting
Monday, May 5, 2008
Wyndham Boston Andover Hotel
123 Old River Road
King Capital Investment Group
Stock Repurchase Program
On February 12, 2007, MKS’ Board of Directors approved a share repurchase program (the “Program”) for the repurchase of up to $300.0 million of its outstanding stock over the subsequent two years. The repurchases may be made from time to time on the open market or through privately negotiated transactions. The timing and amount of any shares repurchased under the Program will depend on a variety of factors, including the price of our common stock, corporate and regulatory requirements, capital availability, and other market conditions. The Program may be discontinued at any time at the discretion of the Company and its Board of Directors. During the three months ended March 31, 2008, we repurchased 3,469,000 shares of common stock for $65,272,000 for an average price of $18.81 and during the three months ended March 31, 2007, we repurchased 510,000 shares of common stock for $12,875,000 for an average price of $25.24.