Ibis
Tech Q2
| Ibis
Tech Q2
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| (FOOL
CONFERENCE
CALL
SYNOPSIS)* By Debora Tidwell (MF Debit) Ibis Technology Corporation <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: IBIS)") else Response.Write("(NASDAQ: IBIS)") end if %> UNION CITY, Ca., July 30, 1996/FOOLWIRE/ --- Ibis Technology reported Q2 1996 results. Revenues increased 124% to $2,211,000 from $989,000 in Q2 1995. Net loss for the quarter narrowed to $272,000 or -$0.05 per share compared with a net loss of $866,000 or -$0.26 per share for Q2 1995. Net loss per share for Q2 1996 reflect the company's April 1996 public offering of 1,600,000 shares of common stock. The reported results were in line with analyst consensus estimates.
Total revenue more than doubled in Q2 1996 compared with Q2 1995. Total product sales increased 65% in Q2 compared with the same quarter a year ago. Commercial product sales, which is the market segment with the greatest growth potential and, indeed, is Ibis Technology's focus more than doubled during these comparative quarters and currently amounts to 90% of Ibis Technology's total weight of product sales.
They believe that a major factor in this growth is the improved quality of the SIMOX wafers from the new Ibis 1000 implanter which came online late in Q2 1995. They now have a full year's experience with this implanter and the semiconductor community they serve is very excited about the output. A couple of examples of this enthusiasm are the funding of the next Ibis 1000 implanter by Motorola and, more recently, the sale of one of these Ibis 1000s to one of the world's leading semiconductor manufacturers.
In fact, in this quarter, Ibis recognized $1 million of equipment sales revenue on a percentage of completion basis together with the related equipment cost. They anticipate that this Ibis 1000 will ship to the customer early in Q4 1996. (There is still a little less than $3 million remaining in revenue they will recognize from this sale as the equipment is completed and shipped).
The overall gross margin is improved in this quarter from slightly negative last year to 20%. This is primarily due to the 55% increase in product sales, which have come largely from the Ibis 1000, whereas the cost of product sales increased by only 5%. This simply reflects the predominantly fixed cost nature of their operations.
Operating expenses decreased slightly as small increases in marketing, sales, and G&A expenses were more than offset by the decreased expenses for Ibis 1000 development. Basically, the equipment group is now building machines as opposed to doing the development. As a result of these factors, Ibis Technology has been able to reduce their net loss by approximately 30% compared to the same period in the preceding year.
SEQUENTIAL COMPARISONS (Q2 vs Q1 1996)
Total revenue was up 40% to $2.2 million. The actual SIMOX product sales were down slightly by 15% and this reflects the systematic reduction in demand for wafers from the older NV 200 equipment. In fact, wafer sales from the new Ibis 1000 were up 5%. In this quarter, 75% of Ibis' product sales were from the new Ibis 1000 system compared to 60% last quarter.
The shipment of Ibis 1000 wafers has been essentially flat, limited by the capacity of the single machine they have in production. The total sales revenue from this machine depends, more than anything, on the wafer size mix, slicing mix, etc. Whereas demand for the NV 200 wafers is steadily declining. Many customers are moving to larger wafer sizes and really want to move ahead in the program with the improved quality material from the Ibis 1000. Motorola, for example, has been scaling up to the larger wafer sizes, moving to 6 inch from 4 inch. There are many examples of that where they see the future is the Ibis 1000 -- the unit quality of the wafers off the NV 200 is not comparable to the Ibis 1000, so they really want to move to the new Ibis 1000 material.
The company's dependence on a single Ibis 1000 implanter will be rectified as the new Ibis 1000 implanters come online and it is the basis of their production expansion strategy. The company is putting capacity in place because that is their constraint. They recognize that this does not guarantee that there is an infinite demand out there, but they want to get ahead of the current situation they're in now where, because of the variation in wafer size requirements from 6 to 8 inch, it is a nightmare trying to satisfy everyone with the one machine.
Their customers' conversions to specifications requiring the Ibis 1000 implanter -- going from largely R&D to mainstream production requirements -- happened more quickly than Ibis Technology anticipated. It is temporarily a bad thing because of the capacity restraints they are experiencing, but long-term is a good thing because they have firmer demand to justify the capacity increases they have planned for the Ibis 1000 machines.
The company is not throwing in the towel on the NV 200 implanters. They are still looking for other applications, other than the mainstream low-power and high-performance SIMOX stuff. A number of applications have come up, as of late, that could prove to be very interesting and have some heavy volumes associated with them. One is a heads-up display for virtual reality systems. The company has always kind of pushed the material for sensors, pressure sensors, accelerometers for airbags, etc. trying to find a mainstream application for products off the older equipment that require less in terms of specification demand -- uniformities, etc. The micromachining sensor and specialty product applications open up a new market for the NV 200s.
STATUS OF THE EXPANSION PLANS
The have two older NV 200 implanters still in production running somewhere between 1 and 1.5 shifts per week. They have the new Ibis 1000 which has been in production for just over a year now and that is running flat out -- 168 hours per week. In addition to that, they have 4 of the new Ibis 1000 implanters in various stages of completion.
The one funded by Motorola is the next to come online. It is now in its final qualification stage and will be placed in production in the very near future. In fact they've done one single implant on that machine, so it is complete and running and they got some very positive results from that first implant. They do expect to bring that through qualification and into full production this quarter. In the last couple weeks, they have moved into the cleanroom facility. It was put in place shortly after the IPO and has the capacity of housing 4 implanters.
The second machine is the one that they will deliver to the leading semiconductor manufacturer and it is pretty much on schedule. It is, to a large extent, complete now.
In terms of the next two machines, Ibis has placed all the long lead-time parts on order and have some parts assembly for these units which are scheduled for conversion to production in early 1997.
The funding of these and other implanters was the primary reason for the company's recently completed secondary public offering.
GENERAL MARKET UPDATE
The interest in SIMOX silicon-on-insulator (SOI) wafers continues to grow, not only among current significant customers such as Motorola and IBM, but also customers that until recently had not expressed major interest. In other words, the ongoing interest for SOI and the features and advantages it offers does not seem to be diminishing.
They do not disclose backlog amounts but it continues at a very high level for them and their challenge continues to be to match production capacity with the anticipated demand.
The company sees the demand for the Ibis 1000 SIMOX wafers increasing. One barometer was the Semicon show where SEMI had a technical session on SOI that was well attended by significant potential customers. The SEMI Standards Committee is coming out with a SEMI spec for all of SOI, but specifically SIMOX will be the first one. The company thinks that will help to establish a general specification for SIMOX, which Ibis material is the template for. The order activity they are seeing, even from second-tier customers, is above what they had planned and is increasing. * A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. | |
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