INFICON has announced financial results for the third quarter ended September 30, 2007. Revenues for the third quarter of 2007 totaled USD 58.2 million compared to USD 54.4 million for the third quarter of 2006, representing a 6.8 percent increase. On a constant dollar basis, revenues for the quarter increased 4.8 percent. INFICON reported net income of USD 4.9 million, or USD 2.13 per diluted share, including a one-time, non-cash charge related to a reduction in Germany's corporate tax rate beginning in 2008 that, under US GAAP accounting, required a write-down of the company's tax asset by USD 1.2 million, resulting in an EPS impact of USD 0.54. These results compared to net income of USD 5.9 million, or USD 2.49 per diluted share, for the third quarter of 2006. Excluding the one-time charge, the company would have earned net income of USD 6.1 million in the third quarter of 2007. Cash provided by operating activities was USD 9.7 million compared to USD 13.1 million in the same quarter last year.
Revenues for the nine months ended September 30, 2007 were USD 173.1 million compared to USD 155.9 million for the same period in 2006, representing an 11.1 percent increase. On a constant dollar basis, revenues increased 9.0 percent. Net income for the period increased 13.8 percent to USD 17.3 million, or USD 7.32 per diluted share, compared to net income of USD 15.2 million, or USD 6.41 per diluted share, the previous year. Excluding the above mentioned one-time charge in the third quarter, the company would have earned net income of USD 18.5 million in the first nine months of 2007.
"INFICON delivered another quarter of solid results with growth in different product lines and regions," commented Lukas Winkler, president and chief executive officer. "In the semiconductor and vacuum coating markets, sales increased year over year, including orders for Stiletto Scanning-Laser Particle Detector, the newly introduced Sion RF Detector, for our whole suite of in situ sensors, and for FabGuard fault detection and analysis software. Our sales to vacuum coating OEMs also contributed to a good third-quarter performance, validating our recent acquisition of Maxtek, a developer and manufacturer of high-quality thin film measurement instruments.
"As a result of another quarter of solid execution across our markets, we remain on track to meet the financial goals we set for 2007. For the year, we expect to achieve revenue growth of close to 10 percent and an operating margin of approximately 14 percent - compared to the 13-14 percent range we originally targeted. We believe INFICON is also well-positioned to grow in 2008. Based on our innovative technologies and pipeline of new products, combined with the many operational improvements we have made, we are targeting revenues for next year in the range of USD 250-260 million, including acquisitions, and an operating margin in the range of 14.5-15.5 percent."
As a result of a reduction in the corporate tax rate in Germany starting in 2008, the company remeasured the deferred tax assets in its German subsidiary in the period for which the change was enacted into law. This resulted in a one-time, non-cash charge of USD 1.2 million in the third quarter of 2007. INFICON expects this tax law change to result in a significantly lower effective tax rate for its German subsidiary going forward and to recover the amount of the charge within the next few years.
