MIDDLEFIELD, Conn., May 3, 2012 (GLOBE NEWSWIRE) -- Zygo Corporation(ZIGO - )   today announced its financial results for the third quarter of fiscal   2012 ended on March 31, 2012 and points out the following highlights in   its results:

  • EPS of $0.29 per share is 21% higher than $0.24 for the same quarter prior year. 
  • Gross margin over 50% is the highest since 2001. 
  • Ending backlog of $77 million is the highest in four years. 
  • Several large orders for advanced specialty optics valued at more than $13 million were received during the quarter. 
  • Operating cash flow of more than $31 million for the three quarters   increased cash on hand at March 31, 2012 to nearly $90 million.

Fiscal 2012 third quarter revenues were $38.5 million, about 4% less   than revenues of $40.2 million in the comparable prior year quarter.

Net earnings of $5.4 million, or $0.29 per diluted share,   for the third quarter of fiscal 2012 increased by 21% over net earnings   of $4.5 million, or $0.24 per diluted share, recorded in the third   quarter of fiscal 2011, positively affected by increased gross margin   and control over operating expenses.

Gross margin increased to 50.5% on a lower revenue base in fiscal 2012   third quarter compared with prior year quarter gross margin of 46.9%.

Bookings of $45.6 million for fiscal 2012 third quarter increased 9%   over fiscal 2011 third quarter bookings of $41.7 million. Optical   Systems Division bookings were 56% of the total; Metrology Solutions   Division were 44%. Backlog of $76.8 million at March 31, 2012, increased   $7.1 million over the December 31, 2011 backlog of $69.7 million and   $16.3 million over the March 31, 2011 backlog of $60.5 million.

Revenues of $122.5 million for the first nine months of fiscal 2012   were $15.1 million higher, or a 14% increase over the first nine months   revenues for fiscal 2011.

Net earnings from continuing operationsattributable to Zygo of $18.1 million exceeded prior year first nine   months net earnings from continuing operations attributable to Zygo by   $5.2 million or 40%. Fiscal 2012 first nine months diluted EPS from   continuing operations attributable to Zygo of $0.97 per share was 37%   higher than diluted EPS from continuing operations attributable to Zygo   of $0.71 per share for the first nine months of fiscal 2011.

If the one-time gain on acquisition of $0.11 recorded in the prior year   first nine months is excluded, diluted EPS from continuing operations   attributable to Zygo for fiscal 2012 first nine months would be 62%   higher than prior year adjusted EPS from continuing operations   attributable to Zygo of $0.60.

Commenting on the third quarter results, John P. Jordan, Vice   President, Chief Financial Officer and Treasurer of Zygo Corporation,   said, "In the third quarter, we achieved our previously stated target of   50% gross margin by better loading of manufacturing capacity and   continuing benefit from ongoing process improvement initiatives. We   believe that these process improvements will help us continue to improve   margins in each of our business segments.  Our substantial backlog   includes contracts with deliveries over several quarters, providing a   base for future quarter revenues. Cash flow generation from operations   is healthy, resulting in cash at March 31, 2012 of nearly $90 million,   attributable to strong operating results and our disciplined approach to   working capital management.  Our consistent order flow, manufacturing   process improvement and tight cost control will enable us to maintain   the strength of our operating margins through the end of the fiscal   year."

Dr. Chris Koliopoulos, President and Chief Executive Officer of Zygo   Corporation, commented, "Our leading-edge technology and design and   manufacturing capabilities, including extreme precision optical design   and fabrication, have positioned us to address the strong demand for   custom high precision metrology and optics products. We have capitalized   on the strength of that demand, as evidenced by the Company's strong   backlog at March 31. Going forward, based on our current forecasts, we   expect that timing of certain large orders in the backlog will support   the highest revenue quarter of fiscal 2012."

A reconciliation between GAAP(Accounting Principles Generally Accepted in the United States of   America) operating results and non-GAAP operating results is provided   following the financial statements that are part of this release.

Zygo Corporation is a worldwide supplier of optical metrology   instruments, precision optics and electro-optical design and   manufacturing services serving customers in the semiconductor capital   equipment, bio-medical, scientific and industrial markets.

Note: Zygo's teleconference to discuss the results of the third   quarter and first nine months of fiscal 2012 will be held at 5 PM   Eastern Time on May 3, 2012 and can be accessed by dialing 800-786-5195.   This call is web cast live on Zygo's web site at www.zygo.com.  The call may also be accessed for 30 days following the teleconference.

The Zygo Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10822

Forward-Looking Statements

All statements other than statements of historical fact included in   this news release regarding financial performance, condition and   operations and the business strategy, plans, anticipated revenues,   bookings, market acceptance, growth rates, market opportunities and   objectives of management of the Company for future operations are   forward-looking statements.  Forward-looking statements provide   management's current expectations or plans for the future operating and   financial performance of the Company based upon information currently   available and assumptions currently believed to be valid.    Forward-looking statements can be identified by the use of words such as   "anticipate," "believe," "estimate," "expect," "intend," "plan(s),"   "strategy," "project," "should" and other words of similar meaning in   connection with a discussion of future operating or financial   performance.  Actual results could differ materially from those   contemplated by the forward-looking statements as a result of certain   factors.  Among the important factors that could cause actual events to   differ materially from those in the forward-looking statements are   fluctuations in capital spending of our customers; fluctuations in   revenues to our major customers; manufacturing and supplier risks; risks   of booking cancellations, push-outs and de-bookings; dependence on   timing and market acceptance of new product development; rapid   technological and market change; risks in international operations;   risks related to the reorganization of our business; dependence on   proprietary technology and key personnel; length of the revenue cycle;   environmental regulations; investment portfolio returns; fluctuations in   our stock price; the risk that anticipated growth opportunities may be   smaller than anticipated or may not be realized; risks related to   business acquisitions, including the acquisition of substantially all   the assets of ASML US, Inc.'s Richmond, California facility, and   integration of the business and employees; the risks related to the   Company's recent changes in senior management; and the risks associated   with the recovery from last year's earthquake, tsunami and nuclear   disaster in Japan and their impact on our customers, suppliers, and   operations. Zygo Corporationundertakes no obligation to publicly update or revise forward-looking   statements to reflect events or circumstances after the date of this   news release except as required by law.  Further information on   potential factors that could affect Zygo Corporation's business is   described in our reports on file with the Securities and Exchange   Commission, including our Form 10-K for the fiscal year ended June 30,   2011, filed with the Securities and Exchange Commission on September 13,   2011.


Zygo Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)

(Thousands, except per share amounts)






Three Months Ended
        March 31, 		Nine Months Ended
        March 31,

2012 2011 2012 2011





Net revenues $ 38,472 $ 40,235 $ 122,504 $ 107,440
Cost of goods sold 19,032 21,371 61,805 57,479
Gross profit 19,440 18,864 60,699 49,961





Selling, general and administrative expenses 8,702 9,418 26,272 24,886
Research, development and engineering expenses 4,017 3,739 12,166 10,872
Total operating expenses 12,719 13,157 38,438 35,758
Operating profit 6,721 5,707 22,261 14,203





Other income (expense)



Gain on Acquisition -- -- -- 1,289
Miscellaneous income (expense), net (23) (153) (221) 71
Total other income (expense) (23) (153) (221) 1,360





Earnings from continuing operations before income tax, including noncontrolling interests 6,698 5,554 22,040 15,563
Income tax expense (772) (720) (2,381) (1,474)
Net earnings from continuing operations 5,926 4,834 19,659 14,089





Net earnings from discontinued operations, net of tax -- -- -- 91





Net earnings including noncontrolling interests 5,926 4,834 19,659 14,180
Less: Net earnings attributable to noncontrolling interests 519 361 1,605 1,205
Net earnings attributable to Zygo Corporation $ 5,407 $ 4,473 $ 18,054 $ 12,975





Basic - Earnings per share attributable to Zygo Corporation



Continuing operations $ 0.30 $ 0.25 $ 1.01 $ 0.73
Discontinued operations -- -- -- 0.01
Net earnings per share $ 0.30 $ 0.25 $ 1.01 $ 0.74





Diluted - Earnings per share attributable to Zygo Corporation



Continuing operations $ 0.29 $ 0.24 $ 0.97 $ 0.71
Discontinued operations -- -- -- 0.01
Net earnings per share $ 0.29 $ 0.24 $ 0.97 $ 0.72
Weighted average shares outstanding



Basic shares 18,116 17,693 17,948 17,600
Diluted shares 18,883 18,304 18,640 18,056





Net earnings from continuing operations attributable to Zygo Corporation $ 5,407 $ 4,473 $ 18,054 $ 12,884


Zygo Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)



(Thousands)





March 31, 2012 June 30, 2011
Assets

Current assets:

Cash and cash equivalents $ 89,300 $ 60,039
Marketable securities -- 1,000
Receivables, net 23,456 31,424
Inventories 27,648 28,379
Prepaid expenses and other current assets 2,076 1,745
Total current assets 142,480 122,587



Marketable securities 818 980
Property, plant and equipment, net 28,918 30,195
Intangible assets, net 5,393 5,842
Total assets $ 177,609 $ 159,604



Liabilities and Equity

Current liabilities:

Accounts payable $ 8,215 $ 7,120
Accrued expenses, progress payments and other 16,418 19,435
Income tax payable 26 550
Current liabilities of discontinued operations -- 281
Total current liabilities 24,659 27,386



Other long-term liabilities 2,590 4,131
Total liabilities 27,249 31,517



Commitments and contingencies

Total stockholders' equity - Zygo Corporation 147,739 124,720
Noncontrolling interests 2,621 3,367
Total equity 150,360 128,087
Total liabilities and equity $ 177,609 $ 159,604


Zygo Corporation and Subsidiaries
Reported Results to Non-GAAP Results
(Unaudited)





(Thousands, except per share amounts)









Three Months   Ended
        March 31, 		Nine Months Ended
        March 31,

2012 2011 2012 2011





GAAP operating profit (as reported) $ 6,721 $ 5,707 $ 22,261 $ 14,203





GAAP other income (expense) (as reported) $ (23) $ (153) $ (221) $ 1,360
Adjustments to other income (expense) - acquisition gain -- -- -- (1,289)
Total non-GAAP other income (expense) $ (23) $ (153) $ (221) $ 71





Net earnings attributable to noncontrolling interests (as reported) 519 361 1,605 1,205





GAAP income tax expense  (as reported) (772) (720) (2,381) (1,474)
Adjustment to income taxes: valuation allowance (Note 1) -- -- -- (725)
Total non-GAAP income tax expense $ (772) $ (720) $ (2,381) $ (2,199)





Non-GAAP net earnings - continuing operations attributable to Zygo Corporation (as adjusted) $ 5,407 $ 4,473 $ 18,054 $ 10,870





GAAP earnings per diluted share - continuing operations attributable to Zygo Corporation (as reported) $0.29 $0.24 $0.97 $0.71
Non-GAAP net earnings per diluted share - continuing operations attributable to Zygo Corporation (as adjusted) $0.29 $0.24 $0.97 $0.60





Weighted average shares used in diluted shares calculation 18,883 18,304 18,640 18,056

Note 1 - The Company's reported results for fiscal   2012 and 2011 include a full valuation allowance on its deferred tax   assets. The adjustment in fiscal 2011 reflects the removal of the tax   benefit associated with the change in the valuation allowance due to the   effect of the acquisition.

Non-GAAP net earnings, as adjusted, and non-GAAP net earnings per   diluted share, as adjusted, are operating performance measures defined   by the Company and used by the Company's management to evaluate its   operating activities, and a reconciliation of such amounts to reported   results is presented above. These non-GAAP financial measures are not   intended to replace reported amounts of net earnings or net earnings per   diluted share, which  are the most directly comparable GAAP financial   measures. The Company believes that providing such non-GAAP measures and   reconciliation is useful to users of the financial statements, since   such measures involve certain significant and unusual adjustments to the   Company's results, thus enhancing comparability of the Company's   results between periods presented. These non-GAAP measures are not   alternatives to, and are not intended to replace, the most directly   comparable reported measures under GAAP and should not be considered as   alternatives to net earnings and net earnings per diluted share, or any   other measure of consolidated operating results, under GAAP.

Contact:

John P. Jordan
Vice President, Chief Financial Officer & Treasurer
Voice:  860-347-8506
inquire@zygo.com

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