Pfeiffer Vacuum Q1/2003 Earnings

06.05.2003

Weak dollar impacts sales, solid 7.8 % after-tax return on sales

Pfeiffer Vacuum, a leading manufacturer of high-quality vacuum pumps, vacuum gauges and mass spectrometers, as well as complete vacuum systems, announces its results for the 1st quarter of 2003.

Highlights at a glance:

 Q1 / 2003Q1 / 2002Change
Sales€ 35.1 million€ 37.0 million-5.0%
Operating profit (EBIT)€ 3.4 million€ 4.6 million-25.5%
After-tax income€ 2.7 million€ 2.9 million-7.3%
Earnings per share€ 0.31€ 0.33-6.1%
New orders€ 34.3 million€ 35.4 million-3.1%
Orders on hand€ 20.2 million€ 25.0 million-19.2%

The global economy again remained sluggish during the 1st quarter of 2003. This also impacted the market for vacuum components and systems, with sales worldwide falling by € 1.9 million. The United States accounted for the lion's share (€ 1.8 million) of this decline, with the weak dollar playing a major role in this connection. In fact, € 1.7 million, or 90 percent, of the decline in sales resulted from this foreign exchange effect.

Other key markets were less seriously affected: In Europe as a whole, sales slumped by € 1.2 million, form € 23.1 million in Q1/2002 to € 21.9 million in Q1/2003. This was offset by a € 1.2 million rise in sales in the Asian region and the rest of the world.

Although new orders edged downward, the development of the company's core business is encouraging: New orders for the company's most important product, turbopumps, advanced from € 13.0 million in Q1/2002 to € 14.9 million in Q1/2003. New orders in the service segment also rose, from € 6.4 million to € 6.7 million.

At 43.3 percent, quarterly gross margin was down year on year (45.3 percent), resulting first and foremost from a less favorable product mix. During the 1st quarter of 2003, higher sales were generated with leak detection systems and the company's first DVD system.

Costs developed on a largely constant note. This resulted in an operating profit (EBIT) of € 3.4 million in Q1/2003, as opposed to € 4.6 million in Q1/2002. Financial income and a more favourable tax rate than in Q1/2002 produced after-tax income of € 2.7 million, only marginally lower than during the same quarter the year before (€ 2.9 million).

The company's financial data are rock solid: During the 1st quarter of 2003, accounts receivable declined from € 21.9 million, while inventories were able to be lowered from € 22.4 million to € 21.5 million. Cash and cash equivalents rose from € 72.3 million to € 76.4 million.

Chief Executive Officer Wolfgang Dondorf: "As announced in our ad-hoc press release on April 30, 2003, the company will be utilizing its high level of cash on hand to acquire treasury stock. Even in these difficult times, we are operating highly profitably and are continuing to invest heavily in products and markets. Although there are still no clear signs that the economic sky is brightening, we are cautiously optimistic about the future. At the major trade showes throughout the world for our markets, we are showcasing new products this spring that are already meeting with keen interest. With these products, we will be able to expand our technology market leadership, especially in connection with turbopumps. This April, we succeeded in posting our first success in China, where one of the largest manufacturers of architectural glazing is equipping its coating systems with Pfeiffer pumps."

For more information visit Pfeiffer's homepage.

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