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The loss worsened from the March quarter ($6.6 million) and a year ago $(4.9 million). CFO Jeffrey Buchanan blamed product pricing and mix issues at the EMS firm's Redmond, WA, facility and the integration of Integrex, another EMS company.
Gross margin was 5.4%, excluding writeoffs and the Redmond plant results. Overall the gross margin showed a loss of 0.5%.
For the quarter, operating cash outflow was $5.4 million and net capital expenditures were $5.1 million. At quarter's end TFS had $18.7 million in cash, vs. $26.5 million sequentially.
Sequentially, sales outstanding improved by three days, to 59 days. Inventory turns slowed to 5.4 from 5.7
TFS guided for third-quarter sales of $38 million and $41 million and a net loss of 24 to 26 cents. Q4 revenue of $48 million and $60 million is expected.
"We are pleased with the results, particularly in a third quarter, which is traditionally a challenging quarter for us," said Garry W. Rogerson, president and CEO, in a statement.
Pro-forma net earnings were $16.1 million, up from $12.3 million last year. GAAP net earnings were $15.4 million, vs. $10.7 million, when the company wrote down $1.6 million in restructuring and other one-time charges.
Last quarter Varian took $1.6 million in restructuring charges due to a previously announced consolidation of consumables factories in southern California.
EMS revenues were up 17.5%, to $52.7 million, on higher demand for medical and industrial equipment. The EMS pro-forma and GAAP operating profit margin was 12.2%.
Overall, the operating profit margin was 10.5% on a pro-forma basis and 8.9% on a GAAP basis.
Weymouth, UK -- DEK (www.dek.com) has developed a high throughput backside wafer coating process, hosted on a mass imaging platform and capable of exceeding the ± 12.5 µm total thickness variation (TTV) stipulated by most wafer processing specialists. The new process is compatible with underfill or adhesive-type coatings, normally applied at a nominal 50 µm thickness to the backside of semiconductor wafers ahead of singulation.
"TTV is the critical success factor for any backside wafer coating process," said Clive Ashmore of DEK's global applied process engineering group. "By demonstrating our ability to meet the established criteria for backside wafer processing, we have opened new opportunities for semiconductor packaging specialists to increase throughput and reduce the cost per package by using high accuracy mass imaging."
The new process is compatible with the company's metal stencil and emulsion screen technologies.
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