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December 14, 2000

Ten Fast Facts: Electro Scientific Industries

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Electro Scientific Industries

WHO:
A publicly held technology company founded in 1944

WHAT:
Designs and produces manufacturing equipment used by the electronics industry

WHERE:
Portland


Fast Fact #1: Sales at Electro Scientific Industries (ESI) are growing at a record-setting clip.

Comment: The company's fiscal year 2000 sales hit an all-time high of $317 million, up 54 percent from the 1999 figure of $206 million. Sales for the first quarter of fiscal year 2001 were $129 million. If that pace holds for the rest of the year, ESI will make $526 million in fiscal 2001. The company will announce second quarter results next week.

VanLuvanee
Donald R. VanLuvanee, Chief Executive Officer and President of ESI


Fast Fact #2: Employment at ESI also has hit an all-time high. 

Comment: The company has 1,200 full-time employees plus 250 temporary employees. Most work at the company's headquarters facility in Portland, but ESI also has operations in Michigan, Minnesota and Southern California.


Fast Fact #3: ESI's stock price peaked this year, too.

Comment: Last spring, it hit $69.12 a share before slipping with the rest of the tech market. It now trades in the high 20s -- still quite an increase from the $2 a share the stock (Nasdaq: ESIO) fetched when current CEO Donald VanLuvanee arrived in 1992. Another feather in VanLuvanee's cap: even during years when the company's sales have dipped, it has always turned a profit.


Fast Fact #4: ESI pioneered the use of lasers in electronics manufacturing.

Comment: For the first half of its history, the company focused exclusively on producing electronics measuring equipment -- the kind of devices found in college science labs. In 1970, ESI branched out, introducing the first system to use lasers to trim electronics components in order to set their resistance level. That opened the door to whole a new market.


Fast Fact #5: ESI has since sold the measuring equipment portion of the company.

Comment: All of its energies are devoted to designing and producing manufacturing equipment for makers of computers, cell phones and other electronic devices. The company's five product lines fall within three core technical competencies --  laser systems, rapid handling of tiny electronics parts and machine vision. Customers include well-known companies such as IBM, Motorola and Texas Instruments as well as lesser known manufacturers such as AVX, a leading producer of capacitors.


Fast Fact #6: ESI has a fist full of patents.

Comment: "We are quite aggressive about protecting them," says Fletcher Chamberlain, communications director, noting the company currently is pursuing two patent infringement suits. All told, the company holds 82 U.S. patents and has applied for 29 others. It also owns 91 foreign patents and has applied for 94 others.


Fast Fact #7: Three of ESI's five product lines are laser systems.

Comment: The company's first laser system, called circuit fine tuning, still accounts for about 10 percent of its sales, says Chamberlain. Another system, used to drill holes in circuit boards, accounts for about 22 percent. A third system, used to improve memory yield in the production of computer chips, accounts for 32 percent. Only one other company in the world makes a similar memory improvement system, says Chamberlain.


Fast Fact #8: A system that handles tiny electronics components is ESI's best seller.   

Comment: That system, which tests and inserts capacitors, accounts for 37 percent of the company's sales. How tiny are these capacitors? Well, a cell phone contains as many as 400, says Chamberlain. Machine vision systems comprise ESI's fifth product line. Those systems enable manufacturing equipment to "see" computer chips, capacitors/resisitors and circuit boards during the production process, guiding the work of the machines as well as detecting defects.


Fast Fact #9: Smaller is better for ESI.

Comments: That's because the company has the know-how to design and produce the equipment needed to manufacture today's increasingly miniaturized electronic devices, says Chamberlain. ESI works closely with its customers to prepare product road maps that chart how the customer's products will evolve and what equipment ESI can provide to help, says Chamberlain.


Fast Fact #10: Nearly 62 percent of the company's business comes from Asia.

Comment: ESI recently announced the establishment of direct sales and service organizations in Korea and Singapore. The Singapore division opened last October and the Korean division will open Jan. 1, 2001.



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