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Staff Cuts Imminent as Cymer Posts Another Loss

Staff Cuts Imminent as Cymer Posts Another Loss

Technology: Laser Maker Also Vacating Some Space After a ‘Difficult’ Quarter

BY BRAD GRAVES

With slack demand for its products and another quarterly loss, Cymer Inc. last week announced it would cut staff by 15 percent, vacate part of its Rancho Bernardo campus and push ahead with next-generation products.

The stock market responded positively, sending Cymer’s share price up almost 2 percent the day after the announcement.

Cymer plans to cut 130 people from its work force of 848 on April 29. It is the third wave of layoffs at Cymer since the fall of 2001. Most cuts will come in San Diego.

Cymer, which makes lasers that are at the heart of the microchip-etching process, also said it would reduce floor space at its San Diego headquarters by 30 percent, to 400,000 square feet. It will move into a new building, one of two that it owns, and vacate three leased buildings.

The company reported a net loss of $3.36 million, or 10 cents per diluted share, on revenue of $67.6 million in the quarter ended March 31. The company had predicted revenue of at least $71 million during the period. Analysts had expected a loss of 21 cents per share.

Cymer released its quarterly results after the market closed April 22. Its stock price fell from its $25.82 closing price during after-hours trading, but it rose the following day. Cymer trades on the Nasdaq as CYMI.

The first quarter “was a difficult one to predict and to manage,” said Bob Akins, Cymer’s chief executive. Though the company came out with a new-generation product in the first quarter, two of its three customers delayed deliveries until the current quarter.

The average selling price for a Cymer light source was $776,000 during the period. One executive warned during a conference call that shifts in orders can easily sway a quarter’s results.

In the year-ago quarter, Cymer had income of $4.09 million, or 12 cents per diluted share, on revenue of $62 million.

In the fourth quarter of 2002, Cymer reported a loss of $3.9 million, or 11 cents per share, on revenue of $70 million.

The company said revenue for the current quarter would be flat. It also said the just-implemented cost reductions would cost $2.4 million and cut into the current quarter’s gross margin.

Contact Brad Graves via e-mail at

bgraves@sdbj.com

or call him at (858) 277-6359, Ext. 115.

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