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JANUARY 2002 INDUSTRY NEWS
LeCroy Corporation Announces Second Quarter Report LeCroy Corp., which makes high-performance digital oscilloscopes used in the design of electronics and computers, posted a fiscal second-quarter net loss, weighed down by charges on cost-cutting measures. For the quarter, ended Dec. 31, LeCroy posted a net loss of $3.2 million, or 36 cents per share, compared with earnings of $2.0 million, or 18 cents per share, a year ago. The company took a previously announced one-time charge of $5.5 million in the latest quarter, which included severance expenses and the cost of discontinued product line inventory levels. Earnings before unusual items totaled $248,000, or a loss of 2 cents per share after preferred stock charges, compared with earnings of $2.0 million, or 18 cents per share, a year ago. LeCroy said second-quarter revenues fell 19 percent to $28.4 million from $35.0 million a year ago. For the second half of fiscal 2002, the company said it expects revenues of $65.0 million, operating income of $3.5 million, and earnings of about 14 cents per diluted share. For the third quarter it sees revenues of $29.0 to $30.0 million, operating income of $1.0 million, and earnings of about 2 cents per diluted share. For the full year, the company reaffirmed its previous guidance of about $125 million in revenues. Josephson Synthesizer Circuit Demonstrated NIST researchers recently demonstrated sine-wave synthesis on three superconducting integrated circuit chips using palladium-gold barrier junctions. The demonstration chips were used to make comparisons with conventional alternating current (AC) voltage standards at the part-per-million level, and provided 0.1 volt and 5 megahertz sine-wave outputs. This is a major step toward the goal of developing a waveform synthesizer-using Josephson junctions-which would provide precisely defined output voltages (up to one volt), frequencies (up to one gigahertz) and waveforms of any arbitrary shape. Such a system would have practical application as an AC voltage standard source and for calibrating high-performance test and measurement instruments. The research so far has led to a circuit with the largest direct current (DC) output voltage per junction to date using two series-coupled 3,750-junction arrays (for a total of 7,500 junctions). Constant voltage steps were measured on this circuit across a broad range of frequencies from 3 to 18 gigahertz. Also, due to the improved microwave filters incorporated in the circuits, a different circuit with 1,000 junctions was driven at bit stream drive frequencies more than a factor of two higher than any previous Josephson array circuit. This is significant because higher drive frequency directly corresponds to higher output voltage. This progress has provided confidence that circuits can be fabricated for use with a fixed-speed, 10 gigabits-per-second, low-cost bit stream generator that is under construction. For technical information, contact Sam Benz, (303) 497-5258; and Paul Dresselhaus, (303) 497-5211. FARO Technologies Completes Acquisition Of SpatialMetrix Corporation FARO Technologies, Inc., a leading provider of computer-aided manufacturing measurement (CAM2) solutions, has completed the acquisition of privately held SpatialMetrix Corporation ("SMX") for $1.9 million comprised of 850,000 shares of FARO common stock at $2.25 per share. Faro also assumed and/or repaid $4.9 million of SMX debt. The acquisition will be treated as a purchase for accounting purposes. SMX, which is headquartered in Kennett Square, PA, is a leading manufacturer and supplier of laser trackers, metrology software and contract inspection services, had revenues of approximately $12 million in 2001. SMX has completed the development of a new generation laser tracker product, which is expected to start shipping in the first quarter of 2002. FARO expects increased sales of SMX products and services outside of North America through FARO's existing sales channels in Europe and Asia. "This acquisition provides FARO an excellent opportunity to expand our product line with a complementary technology for our existing worldwide customer base," said Simon Raab, FARO's President and CEO. ISA Announces 2002 South American Trade Show ISA, The Instrumentation, Systems, and Automation Society announced that the expanded ISA Show South America 2002 will take place at the ITM EXPO Fairs & Convention Center in São Paulo, Brazil, November 19-22, 2002. Previously called ISA Show Brazil, the international conference and exhibition will feature approximately 100 international exhibitors with an estimated attendance of nearly 10,000, based on attendance at past shows. ISA's District Four, based in South America, will work in conjunction with ISA's division of Meetings, Exhibits, and Corporate Services to organize and execute plans for the show. Several new programs have been added to enrich the event experience, including the New Product Showcase featuring the latest product introductions from exhibiting companies, and the Innovators Center, which recognizes new technology, applications, and products for instrumentation, systems, and industrial automation users. Running parallel with ISA Show South America 2002 is the International Congress on Automation, Systems and Instrumentation. ISA will issue the call for papers in early January. This event will feature the National Show on Building Automation, which is a collaborative project between ISA and the Brazilian Association for Automation and Intelligent Buildings (ABRAPI). Official sponsors for ISA Show South America 2002 include The Ministry of Science and Technology/Agency for Policies on Information Technology and Automation; Brazilian Association for Non-Destructive Tests; Brazilian Technical Association for Pulp and Paper; and Brazilian Institute for Oil and Gas. For more information about ISA Show South America 2002, please visit www.isa.org/events or call +55 11 5686-3906 or 5521-0296 in Brazil or (919) 990-9281 within the U.S. National Instruments Delivers 11 Percent Sequential Revenue Growth in Q4 National Instruments announced revenue of $94.4 million for the fourth quarter of 2001 -- up 11 percent from the third quarter of 2001 -- with diluted earnings per share (EPS) of 14 cents. Operating income for the quarter was $10.0 million, up 53 percent from $6.5 million in the previous quarter. "We managed our business very effectively throughout 2001, successfully adjusting our expenses to reflect our revenue, " said Alex Davern, CFO of NI. "This enabled us to deliver solid profitability and record annual cash flow from operations of $57 million." Q4 2001 Highlights
During Q4, NI's revenue from instrument control products showed signs of stabilization while revenue from the company's computer-based measurement and automation products increased 14 percent from Q3 2001 and now represents 82 percent of revenue. Geographically, the breakdown of revenue in U.S. dollar terms for Q4 2001 as compared to Q4 2000 was as follows: Americas, down 23 percent; Europe, down 14 percent; Asia, down 8 percent; and down 17 percent worldwide. In local currency terms, revenue was down 9 percent in Europe, down 6 percent in Asia, and down 16 percent worldwide. "While 2001 proved very challenging, we continued to aggressively invest in our key strategic initiatives and started 2002 with the introduction of LabVIEW 6.1, the latest-generation of our flagship software product," said James Truchard, NI President and CEO. "In addition, we recently held our worldwide sales conference here in Austin where we previewed many of the exciting new products we are working on for the coming year. Feedback from our sales force affirmed these new product initiatives are right on track." While the company still has a relatively difficult compare in the first quarter of 2002, the compares will ease significantly in the second and third quarters. Through Jan. 22, NI's daily order rate for the first quarter was down 12 percent compared to this time last year. If the order rate remains consistent for the rest of the quarter, revenue in Q1 2002 would be flat sequentially. This would be consistent with our pattern where for the four years prior to 2001, revenue in Q1 was within 1 percent of the previous Q4. The actual order rate for the remainder of Q1 2002 will be impacted by the performance of the overall economy. NI estimates that Q1 expenses will be approximately $61 million, flat with Q1 2001. New Transfer Standards for Optical-Fiber Power Metrology Available The Optoelectronics Division of NIST's Electronics and Electrical Engineering Laboratory (EEEL) has developed a new transfer standard that will enable higher accuracy calibrations of optical fiber power meters, one of the division's fastest growing measurement services. Because they accept laser radiation through an optical fiber connector, optical fiber power meters cannot be calibrated directly against the appropriate primary standard-in this case an instrument known as the Laser-Optimized Cryogenic Radiometer. Instead, a customer's instrument is calibrated against a specially designed transfer standard, which is suitable for calibration with a collimated beam and use with the highly divergent light from an optical fiber. It must have a very large field of view and low sensitivity to polarization, as well as being spatially uniform and stable. The NIST design builds upon earlier multiple reflection trap designs, modified to achieve a field of view of up to 30 degrees. It can be constructed with either silicon or germanium detectors to provide spectral coverage from 450 to 1,800 nanometers. Along with the new transfer standard, a new field-of-view measurement system based on an industrial six-axis robot was developed to characterize this and other optical detectors. The work was funded by the Department of Defense (DoD) Calibration Coordination Group, and copies of the new transfer standards will be supplied to DoD metrology laboratories. For technical information, contact Paul Hale, (303) 497-5367. Danaher Corporation Chief Executive Comments on Outlook and Announces Planned Restructuring Danaher Corporation commented on the performance outlook for the company for the balance of 2001 and 2002. The Company also announced an operational streamlining and an associated restructuring charge planned for the current year. President and Chief Executive Officer H. Lawrence Culp, Jr. stated, "Despite a difficult economic environment, we expect to report 2001 operating earnings per share of approximately $2.30, up from $2.23 in 2000, on essentially flat revenues, with free cash flow, that is operating cash flow less capital expenditures, in excess of $3.00 per share versus $2.91 in 2000. Our fourth quarter year over year revenue declines will likely be in the 11- 13% range, resulting in operating earnings for the quarter of approximately $.52 per share versus $.60 per share reported in the fourth quarter of 2000. The manufacturing recession continues to impact Danaher not only in North America but also increasingly in Europe, particularly affecting our platforms with major international operations and customers. We remain focused on operating in a tough economy while protecting our key growth initiatives for the recovery. We continue to implement broad-based cost measures, including headcount reductions totaling 4,000 this year, with over 1,000 in the fourth quarter alone. We plan to use this period of lower volume, which we expect to continue into mid-2002, to further reduce our fixed cost base and consolidate our manufacturing operations into higher volume and lower cost locations. These actions will include the closure of sixteen facilities and the elimination of another 1,100 positions during 2002 and will result in a fourth quarter 2001 charge of approximately $70 million before taxes or approximately $.30 per share after taxes." Mr. Culp concluded, "We do expect 2002 to begin as 2001 is ending - with sluggish sales and difficult comparables. The effect of the facility closings and continuing cost reductions, in combination with key growth initiatives and forecasts for a recovering economy, give us confidence to expect the second half of 2002 to be significantly above the second half of 2001, and in such a recovery, result in record earnings of $2.65 to $2.75 a share." Tom Reslewic Named to LeCroy Board of Directors LeCroy Corporation, a leading supplier of high-performance digital oscilloscopes, announced that its new chief executive officer, Tom Reslewic, has been named to the Company's Board of Directors. This newly created seat now brings the total on the Board to nine. As previously announced, Reslewic became CEO on January 1, 2002. Chairman of the Board Charles Dickinson, stated, "Tom Reslewic's appointment to the Board reflects his 10-year record of successful leadership at LeCroy. Most recently, Tom has been the driving force behind the refocus of LeCroy's oscilloscope business. As a result of this refocus, the Company has launched a series of innovative WaveShape analysis products that have produced strong sales and have solidly positioned LeCroy to capitalize on the need to analyze faster and more complex electronic signals. We look forward to working with Tom as CEO and as a fellow member of the Board, as we seek to build on this momentum and accelerate the Company's growth." Said Reslewic, "I am excited to be leading the Company as CEO and as a member of the Board of Directors at this important time in its development. There is no end in sight to the need for faster data communications. Meanwhile, complex encoding schemes are allowing data rates to exceed electronic signal speeds. This trend gives us the opportunity to use our core competency of WaveShape analysis to increase our addressable share of the oscilloscope market. We also envision applying our WaveShape analysis competency to other categories of instruments that will not be able to keep pace with the speed and complexity of electronic signals. During the past two years, we have invested in product development efforts that have led to a number of successful product introductions that addressed both general market and specific vertical application segment needs. We recently announced the first in a number of products to be introduced under our exciting new WaveMaster family of silicon germanium-based oscilloscopes, the fastest in the world. This program of new product introductions to meet the increasing demand for WaveShape analysis will continue. To execute on our vision, we also have recruited a number of talented people to the LeCroy team, several of whom have significant experience beyond our core oscilloscope business. With our technology and team in place, I believe we are poised for growth and I look forward to the challenges ahead." Yokogawa Corporation of America announces new CEO Yokogawa Corporation of America, the North American subsidiary of Yokogawa Electric Company, headquartered in Tokyo, Japan has announced the appointment of Shuzo Kaihori, Chief Operating Officer, to the position of Chief Executive Officer of Yokogawa Corporation of America effective October 1, 2001. Mr. Kaihori has been Chief Operating Officer of the Newnan, Georgia headquarters since April, 2000. "I am honored to be chosen CEO," said Kaihori, "and I look forward to leading our company into many new areas of technology. With the help of our management team and every employee, we aim to achieve great success in North America." Transmation Products Group (TPG) Sold To Fluke Transmation, Inc., a leading business-to-business distributor, servicer and manufacturer of test, measurement and calibration instrumentation used in industrial markets, today announced that it has completed the sale of Transmation Products Group ("TPG") to a wholly-owned subsidiary of Fluke Corporation, a subsidiary of Danaher Corporation. Under the terms of the sale, Transmation received $10.5 million in cash at closing. Substantially all of the proceeds will go to pay down the Company's indebtedness to Key Bank, N.A. The sale involved the purchase of all of Transmation's stock in its wholly-owned subsidiary, Altek Industries Corporation, which housed TPG. Mr. Robert G. Klimasewski, President and Chief Executive Officer of Transmation, Inc., stated: "The strategic core of Transmation's future is in our ability to satisfy our customers' test and measurement product and calibration service requirements from one source. Thus, the sale of the non-core Transmation Products Group signals the first milestone toward fully focusing our resources on our Calibration Services and Distribution Products businesses. Our anticipated sale of the MAC division will be the final piece of this strategy. "When all of our intended divestures of non-core business have been completed, our resulting focus on our strategic businesses should allow us to further penetrate high growth markets such as process, communications, pharmaceutical manufacturing, automotive and aerospace markets. " Mr. Peter J. Adamski, Vice President, Finance and Chief Financial Officer, commented: "We believe that the divestiture of our TPG business unit enhances our working capital by reducing our interest expense as a result of a substantially reduced debt burden." Transmation Products Group's ISO 9001 manufacturing facility, located in Rochester, NY, produces a broad line of calibration instruments under the Altek and Transmation brand names and is a nationally recognized leader in the design and manufacture of industrial-grade calibration tools. TPG had fiscal 2001 revenues of approximately $9.5 million, or 12.5 percent of total 2001 sales. Transmation, Inc. is a leading business-to-business distributor, servicer and manufacturer of test, measurement and calibration instrumentation used in industrial markets. NACLA Forum to Focus on Laboratory Accreditation A National Cooperation for Laboratory Accreditation (NACLA) sponsored forum on April 8-9, 2002 will feature presentations by a number of experts on the latest developments in all areas of national and international laboratory accreditation as well as the direction in which accreditation is headed. The forum will be held at the Hyatt Regency Crystal City, in Arlington, VA, and will conclude with NACLA's Annual General Meeting and open meetings of NACLA committees. Among the laboratory accreditation specialists slated to speak at World-Class Accreditation - Today and Tomorrow are representatives from the U.S. Department of Commerce, the National Voluntary Laboratory Accreditation Program, American Association for Laboratory Accreditation and the National Institute of Standards and Technology (NIST) including Dr. Arden Bement, the new director of NIST. In addition, international experts will include representatives from the International Accreditation Forum (IAF) as well as Canadian, Brazilian, Mexican, South African and British standards and accreditation organizations. Joseph O'Neil, NACLA executive administrator, said, "The forum is designed for representatives of accreditation bodies, testing laboratories, calibration laboratories, industrial firms and government agencies. The agenda will focus on national and international programs, the International Laboratory Accreditation Cooperation (ILAC) system and guidance documents, interpretation of new ISO/IEC accreditation standards, regional mutual recognition agreements among accreditation bodies and NACLA status and plans." Agenda topics on Monday, April 8th will cover important developments in assessment and accreditation. Subject matter experts will address interpretations and implementations of ISO/IEC 17025, General requirements for the competence of testing and calibration laboratories, transitions to ISO accreditation standards, government reliance on accreditors in international agreements, peer evaluation and an overview of international laboratory accreditation programs. On Tuesday, April 9th, the agenda will focus on critical issues in world-class accreditation including developments in proficiency testing/interlaboratory comparisons, the future of ISO/IEC 17011, One standard for accreditation of all conformity assessment, and the relationship between IAF and ILAC followed by the NACLA General Meeting, which will commence immediately following the NACLA Awards presentation and lunch. For more information and to register for the forum, please visit the NACLA website (www.nacla.net), download and complete the registration form; mail or fax it to the NACLA Secretariat before January 31, 2002 to take advantage of special discounted rates. The 19th meeting of the ISO Technical Committee (TC) 176 took place October 5-13, 2001 in Birmingham, U.K. The working group revising ISO 10012 Parts 1 (Quality Assurance Requirements for Measuring Equipment-Metrological Confirmation System for Measuring Equipment) and Parts 2 (Quality Assurance Requirements for Measuring Equipment-Guidelines for Control of Measurement Processes) will meet in the first quarter of 2002 to complete comment resolution work. The document, now combined into one writing and titled Measurement management system-Requirements for measurement processes and measuring equipment, will then be balloted as a Final Draft International Standard. For more information visit the ASQ's Aviation/Space & Defense Division web site at www.asdnet.org AMETEK Acquires Instruments for Research and Applied Science AMETEK, Inc. announced the acquisition of Instruments for Research and Applied Science (IRAS), a leading developer and manufacturer of analytic instrumentation, from PerkinElmer, Inc. IRAS manufactures and markets technologically advanced analytical instrumentation that is used in a number of applications including nuclear spectroscopy, research electrochemistry, and electronic signal processing. IRAS, based in Oak Ridge, TN, has 275 employees and is expected to report sales of approximately $50 million in 2001. The purchase price was approximately $63 million in cash. "Our acquisition of IRAS further expands AMETEK's position in differentiated analytical instruments," notes AMETEK Chairman and Chief Executive Officer Frank S. Hermance. "IRAS significantly extends our capabilities in the measurement of physical properties. It brings new technologies, applications and end market opportunities to AMETEK and also provides an additional platform for growth," he adds. IRAS markets its instruments under the ORTEC, Princeton Applied Research, and Signal Recovery brand names. ORTEC products include high-purity germanium detectors and spectrometers used to detect, identify, quantify and monitor radioactive materials. Princeton Applied Research products are high-precision electrochemical analysis instruments used in research, life sciences, and semiconductor applications. Signal Recovery products include a variety of instruments that measure low level or contaminated electrical signals with applications in the electronics, optics, industrial and research markets. Visit A2LA's web site at www.a2la.org for new information regarding A2LA's Advertising Policy for 2002 that will become effective April 30, 2002 for all A2LA accredited and enrolled laboratories. The site has also posted guidance documents that contain information that may be helpful to organizations seeking to comply with ISO/IEC 17025 requirements. MKS Instruments Shareholders Approve ENI Acquisition MKS Instruments, Inc. a leading supplier of gas measurement, control and analysis products used in semiconductor and other advanced thin-film manufacturing processes, today announced shareholder approval of the acquisition of ENI, an Emerson company. ENI is a leading supplier of solid-state radio frequency (RF) and direct current (DC) plasma power supplies, matching networks and instrumentation to the semiconductor and thin-film processing industries. The acquisition will further expand MKS' comprehensive suite of products and is part of the Company's ongoing strategy to augment its product and technology portfolio. ENI products will become part of a technologically advanced product family that includes MKS' pressure management subsystems, vacuum subsystem products, advanced materials delivery products, process monitor products, digital process control network products, plasma and reactive gas generator products, and FTIR-based gas and thin-film measurement products. The acquisition will also enable MKS to offer more highly integrated and higher value products to its OEM and end-user customers by adding solid-state power conversion technology to MKS' core capability in plasma management. The transaction, which involves the exchange of 12 million shares of MKS common stock for the businesses and assets of ENI, is scheduled to close in the first quarter of 2002. At the close of the transaction, Emerson president James Berges will join the MKS Board of Directors. FARO Receives Approval for New European Patent FARO Technologies Inc. announces approval by the European Patent Office of a European Patent Application covering portable coordinate measurement machines(CMMs) having seven axes with three degrees of freedom at the probe end. This European Patent Application is expected to be granted as a European Patent by mid 2002 and should provide FARO with the right to exclude its competitors from making and/or selling similar seven-axis CMMs in Great Britain, Germany, France and Italy. The significant patent rights to be granted in the European Patent will become a part of the growing FARO patent portfolio that already includes U.S. Patent Nos. 5,611,147 and 5,794,356, both of which include similar claims covering a seven-axis CMM. As is consistent with FARO business strategy, the company intends to vigorously enforce its patent rights as required to maintain its market leadership and to protect its valuable innovations. Simon Raab, CEO and President of FARO said, "The ability of a portable CMM to have three degrees of freedom at the probe end constitutes an important advance in CMM technology." Demand for the additional axis of rotation at the probe end is in direct relation to the current interest in laser-scanning probes. The additional rotation allows a laser-type scanner to be positioned with much greater ease and accuracy in order to maintain its orientation to the object being measured. For more information visit www.faro.com. Oliver R. Smoot to Lead International Organization for Standardization (ISO) Oliver R. Smoot is prepared to become the President-elect of the International Organization for Standardization, (ISO) this month. The one-year appointment as President-elect becomes effective January 2002 and will be followed by a two-year term of office as ISO President. He will succeed Mario Gilbert Cortopassi of Brazil. Smoot's nomination was put forward by ANSI earlier this year. Members confirmed their selection at a meeting of the ISO General Assembly in Sydney, Australia. "I am extremely honored to have been selected as ISO President-elect and am enthusiastic about the opportunities that lie ahead," said Smoot, "I look forward to working collaboratively with colleagues from around the globe to promote the development of a single set of international standards - that can be agreed and accepted by all stakeholders - for improved safety, health, protection of the environment, and improved global trade." Established in 1947 as a non-governmental organization, ISO's mission is to promote the development of standardization and related activities in the world with a view toward facilitating the international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological and economic activity. For more information about ISO visit www.iso.org. Sandia Primary Standards Laboratory, DOE/AL Approve Use of Accredited Commercial Calibration Laboratories The Sandia Primary Standards Laboratory (PSL) and DOE/AL recently approved the use of accredited commercial calibration laboratories in support of the Nuclear Weapons Complex (NWC). "This move will change the way we do business," says Dick Pettit, Manager of Primary Electrical Standards Dept. 2542. "No longer will we have to send teams to each laboratory that calibrates equipment in support of DOE programs in order to make sure they meet our calibration requirements. Instead if the calibration laboratories themselves are accredited by a recognized accreditation body, we will accept that the laboratories are adequately calibrating critical measuring and test equipment." The result will be a reduction in the costs associated with the oversight of commercial calibration laboratories, as well as a reduction the number of on-site audits experienced by the laboratories themselves. The Sandia Primary Standards Laboratory (PSL) is charged with making sure all the facilities in the NWC follow the same calibration program standards. It assures the accuracy of measurements for the DOE by certifying standards, developing measurement techniques, and advancing the state of the art in metrology, the science that deals with measurement. In the past teams would go to the commercial calibration laboratories and conduct audits to ensure that calibrations were being performed properly. Each visit would cost between $5,000 and $10,000. That will change as more and more calibration laboratories become accredited and DOE can accept their calibrations without performing audits. Implementing this new process in the NWC not only makes better use of resources but also helps assure the quality of measurements and ultimately the quality of the many products that go into our nuclear weapons. The PSL itself has been accredited by the National Voluntary Laboratory Accreditation Program, a NACLA recognized accreditation body. For more information visit www.nacla.net. NIST Announces Staffing Changes in Standards Programs The National Institute of Standards and Technology (NIST), a non-regulatory agency of the U.S. Department of Commerce (DoC) and an ANSI member, recently promoted three members of its standards team to new positions within its Technology Services unit. Director of the
Office of Standards Services Chief of the Global
Standards and Information Program Deputy Director
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