ANDOVER, MA – MKS Instruments reported first quarter net revenues were $536 million, up 16% year-over-year and 7% sequentially. The increase was driven largely by increased demand from customers in the semiconductor market.
Net income in the first quarter was $69 million, an increase of 431% year-over-year and 60.5% sequentially. Net income included acquisition and integration costs of $2 million associated with the acquisition of Electro Scientific Industries, $400,000 of restructuring and other costs, and $1.2 million of an asset impairment charge.
Net revenues in the semiconductor market were $313 million, a sequential increase of 15%. Net revenues in advanced markets were $223 million, down 2% sequentially, adversely affected by university and research lab closures caused by Covid-19.
At Mar. 31, the company had $503 million in cash and short-term investments, $840 million of secured term loan principal outstanding, and $100 million of incremental borrowing capacity under an asset-based line of credit, subject to certain borrowing base requirements.
“I could not be prouder of the dedication, resilience and hard work of the MKS team during such a challenging time,” said John TC Lee, president and CEO. “From the onset of the global Covid-19 crisis, our team took swift action to ensure the safety and well-being of our global workforce, which remains our top priority. We also remained steadfast in delivering on our customer commitments and overcoming the disruptions across our factories and global supply chain.
“Our first quarter outlook did not factor in any disruptions from the Covid-19 pandemic, and yet we were still able to deliver quarterly revenue at the high-end of our guidance range. This is a testament to our broad and differentiated portfolio, the diverse and essential markets we serve, and our world-class operational execution. Order rates remain strong in the second quarter; however, the impact of shelter-in-place directives at our facilities and those of our suppliers around the world are expected to impact our second quarter revenue. We remain excited about the long-term opportunity in the markets we serve, and our role as a critical technology enabler.”
“Our top-line growth exceeded our expectations, driven by strong sequential revenue growth of 15% in our semiconductor market, while revenue in our advanced markets declined a modest 2%. Excluding our research market, which was negatively impacted by university and research lab closures caused by Covid-19, our advanced markets revenue would have grown sequentially,” said Seth H. Bagshaw, senior VP and CFO.
“Our balance sheet and liquidity position remain strong. We ended the quarter with cash and short-term investments of $503 million, which reflects the previously announced $50 million voluntary debt prepayment on Jan. 24, and our net leverage ratio exiting the quarter reduced further to 0.8 times. Moreover, we have an additional $100 million available to us under an asset-backed line of credit, subject to certain borrowing base requirements.”
Based on current business levels, the company expects revenue in the second quarter could range from $450 million to $520 million.
