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OCTOBER 2000 INDUSTRY NEWS

 

National Instruments Reports 10th Consecutive Quarter of Record Revenue

AUSTIN, Texas -- Oct. 23, 2000 -- National Instruments (NASDAQ:NATI), a leading provider of measurement and automation solutions, today announced record revenue for the third quarter of 2000, as revenue grew by 24 percent and net income climbed 33 percent.

"Record revenue of $102.2 million for the third quarter was fueled primarily by increased demand for our newer products and system solutions based on our PXI platform," said James Truchard, NI President and CEO. "With the launch midquarter of LabVIEW 6i, we were pleased to see our LabVIEW customers upgrade at record levels. This reinforces our vision that Internet technologies will play a leading role in next-generation solutions for measurement and automation."

Quarterly Highlights

  • Third-quarter revenue of $102.2 million marks 10th consecutive quarter of record revenue
  • Revenue from LabVIEW 6i upgrades and development systems for Microsoft Windows set monthly record in September
  • Increased ongoing investment in R&D by 34 percent, excluding acquisition charges
  • Newer product lines, such as PXI, Motion, Vision, and TestStand, have driven growth of the Company

"Thanks to our excellent execution in Q3 2000, we delivered our 10th consecutive quarter of record revenue," said Alex Davern, CFO of NI. "Despite the $1.2 million reduction in gross margins as a result of tight component supply and the $0.6 million loss on foreign exchange, we still delivered 33 percent net income growth."

With the success of LabVIEW 6i and other new NI products, revenue for the third quarter was $102.2 million, up 24 percent from $82.7 million in the third quarter of 1999. Geographically, the breakdown of revenue growth in USD for the quarter as compared to the third quarter of 1999 was as follows: Americas, 22 percent revenue growth; Europe, 20 percent revenue growth; and Asia/Pacific, 40 percent revenue growth.

Net income for the quarter increased by 33 percent to $13.2 million compared to net income of $9.9 million in the third quarter of 1999. NI reported basic earnings per share of $0.26 for the third quarter of 2000 compared to basic earnings per share of $0.20 in the third quarter of 1999. The Company reported diluted earnings per share of $0.25 on 53.6 million weighted average shares outstanding for the third quarter of 2000 compared to diluted earnings per share of $0.19 for the same period last year.

 

GenRad Reports Third-Quarter, Nine-Month Results

WESTFORD, MA, October 23, 2000 ---- GenRad [NYSE: GEN] today reported a third quarter decline in revenue to $78.6 million resulting from anticipated weakness of its Diagnostics business and manufacturing delays associated with implementation of an Enterprise Resource Planning (ERP) system. The company stated, however, that before a reversal of a portion of the deferred tax valuation allowance and before unusual charges and gains, it continues to anticipate diluted earnings per share of $0.40 for the year.

Revenue for the third quarter was down 28% from the $109.2 million reported for the same period in 1999. "In spite of the extremely difficult year-to-year comparisons for Diagnostics Solutions, and the impact of our ERP implementation, our third quarter proved to be robust with orders of $89.1 million, up 16% over a year ago," Robert M. Dutkowsky, chairman, president, and chief executive officer, said. "Given our significant backlog, we expect to achieve our previously announced year-end earnings objective of 40 cents per share."

Strong Q3 demand
The company's backlog at the end of the quarter stood at $49.9 million, a 78% increase over the $27.9 million for the same period last year. Due to exceptionally strong demand, the Process Solutions business unit, which typically enters the quarter with minimal backlog, accounted for 38%, or $18.9 million, of the total backlog.

"Our core businesses, in which we are increasing our investments, are solid -- as exhibited by the strong third-quarter demand --- and promise to get even stronger," stated Mr. Dutkowsky. "In fact, we clearly see revenue growth in excess of 30% for the fourth quarter over the comparable year-ago period."

"The sweeping reorganization that we announced in Q3 is in place and delivering results. Our customer community is starting to realize the true advantage emerging from the new GenRad," he noted.

Net Income
Net income for the third quarter was $0.3 million, versus $12.7 million for the year-ago quarter on a full tax basis of 36 % for both periods. Diluted earnings per share was $0.01 for the third quarter compared with $0.43 a year ago, both on a full tax basis of 36 %.

"It was clear when we reset expectations from 12,000 to 6,000 WDS units back in April that year-to-year comparisons for our Diagnostic Solutions unit would be difficult at best," Mr. Dutkowsky explained. "Q3 '99 was the biggest quarter ever for WDS shipments and revenues. Despite the appearance of the numbers for Q3, 2000, this product line is on-track to achieve our revised forecast."

"Furthermore, as our performance and our backlog clearly demonstrate, our Process Solutions business performance was severely affected during the quarter by the installation of our ERP system," Mr. Dutkowsky said. "This investment in the modernization of GenRad is a critical step for our company, and consistent with our plan to bring GenRad to the next level of consistency and performance."

Nine-Month Results
For the first nine months of fiscal 2000, GenRad reported orders of $248.1 million, an increase of 7 % over the same period in 1999. The nine-month revenue of $232.3 million represents an increase of 3 % over the first nine months of fiscal 1999.

Net income for the first nine months of 2000, before a reversal of a portion of the deferred tax valuation allowance and before unusual charges and gains, was $4.2 million versus $22.4 million for the comparable year-ago period on a full tax basis of 36 %. Diluted earnings per share was $0.15 for the nine months, compared with $0.76 a year ago on a full tax basis of 36 %.

After including a reversal of a portion of the deferred tax valuation allowance and unusual charges and gains, net income for the first nine months of 2000 was $17.3 million, or $0.61 per share on a diluted basis. For the comparable year-ago period, the company reported net income on a full tax basis of 36 % and--including a reversal of a portion of the deferred tax valuation allowance--of $26.9 million, equal to $0.91 per share on a diluted basis.

 

Danaher Corporation's Fluke Networks, Agilent Announce Dissolution of Previously Announced Agreement for NetMetrix Division

WASHINGTON, Oct. 18 - Danaher Corporation (NYSE: DHR) and Agilent Technologies (NYSE:A) announced today the dissolution of a purchase agreement dated September 28, 2000 for the purchase by Fluke Networks of Agilent's NetMetrix division. The decision to terminate the purchase was made by mutual agreement.

Fluke Networks, Inc., is a leading provider of innovative Network SuperVision solutions for ensuring data communications and Internet uptime. The company's award-winning software and hardware products provide professionals with the tools and knowledge needed for the installation, monitoring and maintenance of local- and wide-area networks and the underlying fiber and copper cable infrastructure.

Danaher Corporation is a leading manufacturer of Process/Environmental Controls and Tools and Components.

 

Workshop on ISO 9000 guide for health sector set for January 2001

The ISO (International Organization for Standardization) workshop to develop guidelines for implementing ISO 9000 quality management systems in the health care sector will be held in January 2001.

The exact date and location were expected to be announced during the next two weeks by the Standards Council of Canada (SCC), the ISO member which is hosting the workshop, and the Canadian Standards Association International (CSAI), to which SCC has delegated the detailed organization of the event.

A date in October 2000 had originally been put forward but ISO’s Technical Management Board (TMB) felt that a postponement would allow more time for notifying interested parties and encouraging the widest possible participation.

The workshop is being held to develop health care sector-specific guidelines based on ISO 9004:2000, Quality management systems – Guidelines for performance improvements, and publishing them as ISO’s first Industry Technical Agreement (ITA). The latter is one of the alternatives to fully fledged International Standards offered by ISO for cases where swift development and publication takes priority. A particularity of ITA’s is that they are developed in open workshops rather than through ISO’s technical committee structure.

The proposed guidelines document is not itself intended for use in third party certification, although it is envisaged that it could be used in the design or improvement of quality management systems in the health care sector, themselves certifiable to ISO 9001:2000.

The proposal to develop the guidelines was made jointly by the American Society for Quality (ASQ) and the Automotive Industry Action Group (AIAG), which is an industry association representing US automotive companies, including the "Big Three" – Ford, Chrysler and General Motors. As major employers, the Big Three deal with thousands of health care providers and spend substantial amounts on health care programmes. They see the generalized implementation of ISO 9000 quality management systems by the health care establishments that they deal with as a means of rationalizing client-supplier relationships and improving the quality of health care while reducing the costs.

Against this background, an AIAG working group was set up earlier this year to begin work on health care sector implementation guidance based on the ISO 9000:2000 revised standards now under development and due for publication in December. An ASQ working group had been set up for a similar purpose and once the two groups became aware of their common focus, agreement was reached to work together towards a single document. Since then, interest from other countries has led the combined group to request that the proposed document should be developed and published within the ISO system.

 

MKS Instruments Posts Record Revenues and Net Income for Third Quarter of 2000

ANDOVER, Mass., Oct. 17-- MKS Instruments, Inc. (Nasdaq: MKSI), a leading supplier of gas measurement, control and analysis products used in semiconductor and other advanced thin-film manufacturing processes, today reported record financial results for the third quarter ended September 30, 2000.

Third quarter 2000 sales rose 73 percent to $87,636,000 compared with $50,621,000 for the third quarter of 1999, and grew 13 percent from second quarter 2000 sales of $77,701,000. Net income for the third quarter of 2000 increased sequentially 10 percent to $12,436,000 or $0.47 per diluted share compared with second quarter 2000 net income of $11,286,000 or $0.43 per diluted share. Net income for the third quarter of 2000 was 119 percent higher than pro forma net income of $5,677,000 or $0.22 per diluted share in the same quarter in 1999. Intangible costs related to our acquisitions this year, including amortization of intangibles and purchase of in-process technology were $1,753,000 or $ 0.041 per share in the third quarter of 2000 compared to $466,000 or $ 0.016 per share in the second quarter of 2000.

For the first nine months of 2000, MKS reported net income of $33,053,000, or $1.26 per diluted share, on sales of $230,893,000. These results compare to pro forma net income of $11,633,000 or $0.50 per diluted share, on sales of $132,740,000 for the nine months ended September 30, 1999.

"Eight consecutive quarters of revenue and earnings growth is a strong validation of our business strategy," said John R. Bertucci, chairman and chief executive officer of MKS Instruments. "During the third quarter and the first nine months of 2000, we continued our efforts to surround advanced process chambers with MKS products, both through strategic acquisitions and targeted product development initiatives. Our one-stop, value-added approach, as well as commitment to leading-edge technology, has solidified our working relationships with OEMs that I believe will result in significant design wins and continued sales growth." Industry analysts forecast 25-30% growth for 2001 over 2000 for the semiconductor equipment industry, which based on recent industry revenue levels, implies mid single-digit sequential quarterly increases in 2001. MKS' objective continues to be to grow faster than the industry.

During the third quarter MKS closed two acquisitions: D.I.P. Inc. and Spectra International. D.I.P., a privately held company based in Riverside, CA, designs and manufactures digital control network products used in the semiconductor, commercial vehicle, oil and gas, and chemical processing industries, and will expand MKS' portfolio of process control tools. Spectra, based in Morgan Hill, CA, designs and manufactures mass spectrometer and optical spectrometer based process monitoring products used in the semiconductor, thin-film coatings and advanced materials processing industries, and that will complement MKS' gas analysis product line by adding strengths in PVD process monitoring and modular process monitoring software products.

Two days subsequent to the close of the third quarter, MKS also announced a definitive agreement to acquire Applied Science and Technology, Inc, known as ASTeX. Based in Wilmington, MA, ASTeX offers a broad product line based on its core technologies, which include reactive gas generation, power sources, and subsystem integration. The planned merger combines MKS, as a leading supplier of gas process control instruments, with ASTeX, a leading supplier of reactive gas solutions, and will expand MKS' manufacturing capabilities with facilities in Massachusetts, Colorado, Germany, and Korea. MKS will issue approximately 11.2 million common shares in exchange for the 14.6 million outstanding ASTeX shares, so that after closing, the ASTeX shareholders will own 30% and the MKS shareholders 70% of the combined company.

New products introduced during the third quarter by MKS include a line of automatic control valves that control pressure over a wide range of vacuum conditions associated with CVD and RTP applications, as well as a dual range manometer that provides an extended pressure measurement capability for both high and low pressure measurement in a single instrument. A new Integrated Process Solution using the patented Virtual Wall(TM) technology to improve uptime in Tungsten CVD processes was also introduced in the quarter.

Underscoring the company's continued technological leadership, MKS was issued two new patents during the third quarter -- one for a new automatic pressure control valve and the other for high resolution pressure transducers. Total U.S. patents currently in effect for MKS are 54, and there are 23 patent applications currently being examined by the patent office.

 

Honeywell’s Ongoing 3rd-Quarter EPS Up 10% To $0.76; Operating Margin Increases To A Third-Quarter Record Of 15.1%

MORRIS TOWNSHIP, New Jersey, October 17, 2000 – Honeywell [NYSE: HON] said today that its ongoing third-quarter earnings per share (EPS) were $0.76, up 10% compared to the third quarter of 1999. Ongoing third-quarter earnings per share include a charge for costs related to a product recall in its Truck Brakes business and a gain from the sale of its minority interest in an automotive aftermarket venture.

One-time items in the third quarter include $344 million (pre-tax) in charges related to portfolio changes, including the planned sale of the company’s Friction Materials business and the exiting of its minority interest in a basic chemical manufacturer. An additional $116 million (pre-tax) in net repositioning and other charges were incurred in the quarter, primarily related to the company’s cost-reduction activities. Including these one-time items, third-quarter earnings per share were $0.35.

Operating margin grew to a third-quarter record of 15.1%. Productivity in the third quarter was 5%, driven by continued aggressive cost-reduction activities, portfolio changes and Six Sigma Plus initiatives. Third-quarter free cash flow before dividends was $337 million.

Sales in the third quarter increased 3%, driven primarily by growth in Fire & Security, Electronic Materials, Turbochargers, Sensing & Control products, CFC-free refrigerants and Aerospace repair and overhaul. Sales growth was partially offset by lower sales in Commercial-Vehicle Braking Systems, Industrial Automation & Control, Home & Building Control products and Carpet Fibers. Sales continue to be negatively affected by a weakened Euro and a supplier issue in the Aerospace Electronics business, which is improving and expected to be substantially resolved by the end of the year.

The company said it expects fourth-quarter EPS to range from $0.86 to $0.88, with full-year 2000 EPS expected to range from $3.00 to $3.02.

"Honeywell met its income and free-cash-flow commitments in the third quarter despite a challenging operating environment," said Michael R. Bonsignore, Honeywell’s Chairman and CEO. "Our third-quarter sales growth of 3% was below our expectations, but we are encouraged by the recent favorable customer response to our broad product and service offerings, particularly in Aerospace and Industrial Control. Their renewed commitments to us represent new sources of valuable future revenue growth.

"Like other companies, we are confronting the effects of surging raw material prices, a weakened Euro and pockets of slow economic activity," Bonsignore continued. "But I have great confidence in Honeywell’s long-term potential. We have a focused productivity culture across the company, which is enabling us to aggressively reduce our costs. We are moving swiftly in directing our resources to our most valuable core global franchises. And, in this quarter, we saw significant contract wins, exciting new product launches and the acceleration of our e-business initiatives."

 

The National Cooperation for Laboratory Accreditation has announced its formal recognition of three US accrediting bodies

The National Cooperation for Laboratory Accreditation has announced its formal recognition of three US accrediting bodies: the American Association for Laboratory Accreditation (A2LA); the International Council of Building Officials Evaluation Service (ICBO ED); and the National Voluntary Laboratory Accrediation Program (NVLAP).

The basis for NACLA recognition was a three step process: careful review of the accrediting bodies (AB's) documents and procedures; a thorough on-site evaluation by a team of NACLA experts to determine the AB's compliance with NACLA recognition procedures and the international standard for accrediting bodies (ISO/IEC 58); and review of the evaluation team's report and recommendation by representatives of peer ABs and interested NACLA-member specifiers at a September 29 meeting of NACLA's Acceptance Panel.

When the Acceptance Panel judged each of the applicant ABs to be competent, the three were invited to become charter signatories of the NACLA mutual recognition arrangement (MRA). Under the MRA, each AB will treat the accreditations, test reports and certificated of the other signatories as technically equivalent.

World Standards Week

October 6, 2000 (Source: ANSI) World Standards Day is a celebration of the voluntary consensus standards system. This year’s theme, "Peace and Prosperity," will be the focus an exciting and varied mix of meetings, events and ceremonies to be held during the U.S. Celebration of World Standards Week 2000. The activities will begin on Tuesday, October 17, 2000, in Washington, DC.

The ANSI Federation has much to celebrate this year! One of our major successes is the recent approval of a National Standards Strategy for the United States. Approved by the ANSI Board of Directors on August 31, 2000, the NSS will help strengthen U.S. competitiveness abroad while continuing to provide support for domestic markets and, at the same time, addressing key quality-of-life issues such as the environment. In recognition of this accomplishment, ANSI has scheduled an official “launch” of the strategy during the World Standards Week 2000 events.

Several of the week’s highlights are listed below:

  • ANSI Annual Banquet and Ceremony 2000 On Tuesday evening, October 17, twelve outstanding individuals will receive ANSI’s leadership and service awards.The banquet, which will be held at the Ronald Reagan Building and International Trade Center (1300 Pennsylvania Avenue, NW), will showcase these individuals and recognize the efforts of thousands of participants in our community.
  • Celebratory Launch of the National Standards Strategy for the United States Wednesday, October 18 will be a day of celebration as we officially launch the U.S. National Standards Strategy at a joint meeting and luncheon of ANSI’s member councils. Mr. Edward D. Barlow, Jr, one of America's top futurists, has been confirmed as our keynote speaker for the day.
  • U.S. Celebration of World Standards Day 2000 World Standards Day is supported annually by businesses, organizations and government agencies in joint recognition of the importance of standardization to the U.S. economy and in the protection of the safety and health of all Americans. This year’s celebration will be held at the National Geographic Museum (1145 17th Street, NW). Please join us for the reception, dinner and presentation of the Ronald H. Brown Standards Leadership Award to Mr. J. W. Marriott, Jr., Chairman and CEO of Marriott International, Inc.

For additional information please contact ANSI’s membership services staff via phone (212.642.4900); fax (212.398. 0023), or e-mail (membership@ansi.org).

 

ISO/IEC 17025 Transition Plan

October 3, 2000 (Source: A2LA) - The American Association for Laboratory Accreditation (A2LA) has published an update to their ISO/IEC 17025 Transition Plan. The updates describes the options laboratories have to transition to ISO 17025 compliance, with all labs demonstrating compliance by July 2002. The 17025 Transition Plan has been updated to reflect new documents and to clarify that depending on the number and nature of the gaps identified during an ISO/IEC 17025 gap analysis, a laboratory may be required to have a reassessment. For further information visit their website at http://www.a2la.org.

 

Two Maryland Firms Will Team to Construct World's Premier Measurement Research Facility

The National Institute of Standards and Technology, an agency of the Commerce Department's Technology Administration, today announced that Clark/Gilford, a joint venture partnership between The Clark Construction Group Inc., of Bethesda, Md., and Gilford Corp., of Beltsville, Md., has been awarded the $174 million contract to construct one of the most technologically advanced buildings in the world, the NIST Advanced Measurement Laboratory, in Gaithersburg, Md.

"The AML will give NIST and its partners in U.S. industry access to research and development capabilities not available anywhere else in the world," said Secretary of Commerce Norman Mineta. "This selection underscores the Department's commitment to providing opportunities to small businesses, especially those that are disadvantaged or minority-owned."

"With its state-of-the-art stringent controls on particulate matter, temperature, vibration and humidity, the AML will allow NIST to provide U.S. industry and science with improved measurements and standards, and together, speed the development of research advances," said NIST Director Ray Kammer.

When it is ready for occupancy in 2004, the 47,480-square-meter (511,070-square-foot) laboratory will house the institute's most advanced metrology, physics, chemistry, electronics, engineering and materials science research, and will enable NIST to keep pace with rapid developments in semiconductors, industrial robots, computers, pharmaceuticals and emerging technologies requiring molecular and atomic-level precision.

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