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Constituent Review
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J. Andrew Braswell, Equity Analyst
Newbridge Institutional Research
Data as of 3-30-07 |
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Nanotech
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Review
1/25/07- KEI reported earnings for the December quarter, its fiscal Q1, pre-open. Total revenue for the quarter was $41.0M (+15% Y/Y) and orders were $36.9M (+9% Y/Y), for a book/bill of 0.90. Net income was $3.1M (+60% Y/Y), or $0.19 per share, up from $0.12 per share in Q1FY06. Reported net income was reduced by $0.04 per share in non-cash options expense, offset by a $0.05 per share non-recurring gain on a favorable tax adjustment. KEI ended the period with $49.3M in cash. For the March quarter, the company projects revenue of $37M-$41M with a pre-tax profit margin in the single digits. It also sees a slight sequential rise in product development costs.
2/12/07- Said that its board had approved a new share repurchase program, replacing that which expired on 12/31/06. The plan authorizes the buyback of up to 2M shares over a two-year period.
2/13/07- Announced the winners of its Nanotechnology Test & Measurement Contest. Top finishers were selected by the editors of R&D Magazine, and share in a total $5K cash prizes. First prize went to Dr. Simon Prussin and Jason Reyes of the UCLA Department of Electrical Engineering for their rapid, accurate and non-destructive measurement of resistivity and activated dopant profiles in junctions as shallow as 3 angstrom, or one atomic layer of silicon. Rahul Gupta of the University of Delaware received second place for his measurement and control of nanoamp level currents in the formation of nanoscale device electrodes using atomic layer deposition. Third prize went to Ryan Major and David Vodnick of Hysitron, Inc., who developed in situ I-V and electrical contact resistance measurements for nanoscale devices.
3/27/07- Announced that it would host Nano Days, an online educational event, featuring six live, audio/visual sessions.
03/29/07- Released hardware and software enhancements to its Model 4200-SCS Semiconductor Characterization System. Advanced DC and pulse measurement capabilities suited for Flash memory testing, high-power RF device testing, and pulse testing for advanced semiconductor materials. Existing Model 4200 users can easily upgrade to the new application solutions, with packages ranging from $10,400 to $41,600.
Commentary
KEI was middle-of-the-pack among NNIX constituents for share price performance both in Q4 (+3%) and 2006 (-6%), though it seemed to be gaining strength as the period came to a close. This strength should be augmented by the relatively benign outcome of the options investigation, which will allow management and investors alike to once again focus on the business at hand. We saw order growth lag revenue growth in the September quarter for the first time this year, which the company attributed to sequential decrease in demand for parametric testing equipment from semiconductor companies. Nonetheless, the midpoint of the guidance range for December quarter revenue implies 9% Y/Y growth. We also will be interested to know if the stock buyback program, which ends 12/31/06, will be continued with a new plan. |
