MKS Instruments, Inc. (NASDAQ:MKSI) Q4 2014 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 08:30 am ET


MKS Instruments, Inc. (NASDAQ:MKSI) Q4 2014 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the MKS Instruments Fourth Quarter 2014 Earnings Conference Call. At this time all participant lines are in a listen-only mode, but later, we will be conducting a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder today's program is being recorded.

I would now like to introduce your host for today Seth Bagshaw, Vice President and CFO. Please go ahead sir.

Seth Bagshaw

Great, thank you. Good morning everyone. I am Seth Bagshaw, VP and CFO, and I'm joined this morning by Jerry Colella, our CEO and President. Thank you for joining our earnings conference call. Yesterday, after market closed, we released our financial results for the fourth quarter and full year 2014 as well as our improved 2015 operating model. You can access these releases at our website, (Forward-looking Cautionary Statements).

Now I'll turn the call over to Jerry.

Jerry Colella

Thanks, Seth. Good morning everyone and thank you for joining us on the call today. This morning, I'll start with a recap of our results for the full year as well as the fourth quarter of 2014. Following that, I'll give an update on our progress towards the strategic initiatives my team has been pursuing during 2014. And finally I'll provide our outlook for the first quarter. Seth will follow me with further details on our financial results and then we'll open the call for your questions.

Starting with our 2014 results, our year-over-year business was up considerably from 2013 with annual revenue increasing 17% to $781 million, while non-GAAP net earnings more than doubled. Sales to the semiconductor market increased 19%, exceeding the recent industry projections of approximately 12%. The semiconductor wafer fab equipment market, reflecting the increased importance of etch and deposition processes and our leadership position with our customers.

Sales to other markets combined were also strong, increasing 12% from 2013. Fourth quarter revenue was above guidance at $203 million, up 9% in the third quarter, driven primarily by a 13% increase in the semiconductor market. I am fortunate to be supported by a strong management team and highly dedicated and hard working employees.

Looking back at 2014, I am proud of the progress we have made against the goals we set for the company. The team and I have focused on strategic initiatives with specific goals to continue to broaden our leadership vacuum processing measurably improve our profitability through the cycle, efficiently deploy capital to increase shareholder value and aggressively pursue opportunities created by current technology inflections. I am pleased to report that in 2014, we made significant progress towards achieving these goals with a successful acquisition and integration of Granville-Phillips with increased our leadership in vacuum processing and we are now the worldwide market leader for both direct and indirect gauges of the semiconductor and related vacuum markets.

In the most recent critical subsystems market share report MKS products gained nearly 2% market share in our served markets and we anticipate this trend to