BILTHOVEN, Netherlands, July 28, 2003 (PRIMEZONE) -- ASM International (Nasdaq:ASMI) reports 2003 second quarter operating results:
- Second quarter net sales of EUR 153.1 million, up 30.0% from net sales of the previous quarter and up 8.7% from net sales of the second quarter of 2002; - Second quarter net loss of EUR (6.2) million or EUR (0.13) per share as compared to a net loss of EUR (8.3) million or EUR (0.17) per share for the previous quarter and a net loss of EUR (6.4) million or EUR (0.13) per share for the second quarter of 2002; - Second quarter bookings of EUR 111.8 million, down 25.4% from the previous quarter caused by a lower level of bookings in the Front-end operations. Six months bookings of EUR 261.7 million, compared to EUR 277.3 million in first half of 2002, a decrease of 5.6%; - Quarter-end backlog of EUR 133.7 million, down 23.6% from the previous quarter, Book-to-Bill ratio for the second quarter of 0.73; Over the first six months the Front-end Book-to-Bill ratio was 0.89, whilst Back-end achieved a 1.05 Book-to-Bill ratio. - Impacted negatively by strength of Euro versus the US Dollar and Japanese Yen.
ASM International N.V. (Nasdaq:ASMI) (Euronext Amsterdam:ASM) reported today the operating results for the second quarter of 2003. The net loss for the second quarter amounted to EUR (6.2) million, or EUR (0.13) diluted net loss per share compared to a net loss of EUR (6.4) million or EUR (0.13) diluted net loss per share for the second quarter of 2002.
For the six months ended June 30, 2003 the net loss amounted to EUR (14.6) million or EUR (0.29) diluted net loss per share, compared to a net loss of EUR (18.6) million or EUR (0.38) diluted net loss per share for the same period in 2002.
Net sales
Net sales for the second quarter of 2003 amounted to EUR 153.1 million, an increase of 8.7% compared to net sales of EUR 140.9 million for the second quarter of 2002 and an increase of 30.0% compared to the sales level of EUR 117.8 million for the first quarter of 2003.
Net sales for the first half of 2003, amounted to EUR 270.9 million, an increase of 12.2% compared to EUR 241.4 million net sales for the first half of 2002. Net sales of the company's Front-end wafer processing equipment amounted to EUR 146.0 million compared to EUR 122.2 million for the first half of 2002, an increase of 19.4%. Net sales for the Back-end assembly and packaging equipment and materials amounted to EUR 124.9 million compared to EUR 119.2 million for the first half of 2002, an increase of 4.8%.
The economic environment continues to impact the semiconductor equipment industry, which has been in a downturn since late 2000. Although there are positive signs for an increase in semiconductor sales, semiconductor manufacturers are still not ready for large capital investments resulting in a very volatile ordering pattern. In the Front-end operations sales for the first half of 2003 were strong in Epitaxy and PECVD products for new technology and 300mm systems at top-tier customers. ASMI also has seen an increase in the Front-end for capacity driven sales of 200mm systems. In the Back-end operations most equipment purchases were related to technological advancements such as fine pitch wire bonding, 300mm wafer die bonding, stacked die packaging, flip chip and new package types like QFN.
The strong Euro against the Japanese yen, the US dollar and US dollar related currencies did negatively impact ASMI's consolidated net sales levels as expressed in Euro. The growth in sales would have been as high as 32.2%, if the first half of 2003 exchange rates were applied to the first half of 2002 sales levels expressed in their original local currencies.
Operations
The gross profit margin for the second quarter of 2003 amounted to 32.4% of net sales, 5.4 percentage points below the gross profit margin of 37.8% of net sales in the second quarter of 2002, and at the same level of the 32.4% gross profit margin realized in the first quarter of 2003. The gross profit margin for the first half of 2003 amounted to 32.4%, a decrease of 3.4 percentage points compared to 35.8% gross profit margin for the first half of 2002. The stable gross profit margin in the second quarter of 2003, as compared to the first quarter of 2003, was a combination of the higher sales volumes resulting in better utilization of manufacturing capacity offset by lower margins due to competitive price pressure, product mix and the impact of lower US dollar exchange rates, in particular in the Front-end operations. Similarly the competitive price pressure, the product mix and the US dollar impact resulted in a decrease of gross margin for the first half of 2003 compared to the first half of 2002.
Selling, general and administrative expenses were EUR 24.3 million in the second quarter of 2003 compared to EUR 28.6 million in the second quarter of 2002, a decrease of 15.0%, and slightly above the level of EUR 24.0 million in the first quarter of 2003. Selling, general and administrative expenses for the first half of 2003 were EUR 48.3 million, a decrease of 5.2% compared to EUR 51.0 million in the first half of 2002. As a percentage of net sales, selling, general and administrative expenses were 17.8% in the first half of 2003, compared to 21.1% in the first half of 2002. The overall decrease in selling, general and administrative expenses is the result of cost control measures and the lower US dollar exchange rate.
Research and development expenses decreased from EUR 21.7 million or 15.4% of net sales in the second quarter of 2002 to EUR 20.2 million or 13.2% of net sales in the second quarter of 2003, and 10.0% above the EUR 18.4 million in research and development expenses in the first quarter of 2003. For the first half of 2003, research and development expenses decreased by 8.6% compared to the first half of 2002, and decreased as a percentage of net sales from 17.5% to 14.3%. The decrease is the result of cost control measures and the impact of the lower US dollar exchange rate, while at the same time ASMI continued its strong research and development commitment to the industry.
Earnings (loss) from operations amounted to earnings of EUR 5.1 million in the second quarter of 2003, an increase of 71.0% as compared to EUR 3.0 million in the same period of 2002. For the first half of 2003, earnings from operations amounted to EUR 0.8 million, compared to a loss from operations of EUR (6.8) million for the first half of 2002.
Net interest and other financial expenses increased from a net expense of EUR (2.3) million in the second quarter of 2002 to a net expense of EUR (3.3) million in the second quarter of 2003. In the first half of 2003 the net expense amounted to EUR (5.0) million compared to a net expense of EUR (4.6) million in the first half of 2002. The increase is the result of higher net interest expenses resulting from increased borrowings, including the issuance of US$ 90.0 million in convertible subordinated debt in May 2003 and lower interest income on cash deposits due to lower interest rates. The lower US dollar exchange rate did have a positive effect on the level of net interest expenses. Currency transaction losses for the second quarter of 2003 were EUR (0.7) million compared to currency transaction losses of EUR (0.5) million in the second quarter of 2002. Currency transaction losses for the first half of 2003 were EUR (0.5) million compared to EUR (0.7) million in the first half of 2002.
Bookings and backlog
New orders received in the second quarter of 2003 amounted to EUR 111.8 million, 25.4% lower than the EUR 149.9 million level of new orders received in the first quarter of 2003. For the first half of 2003 the total of new orders amounted to EUR 261.7 million compared to EUR 277.3 million for the first six months of 2002. The backlog at the end of June 2003 amounted to EUR 133.7 million, a decrease of 23.6% compared to EUR 175.0 million at the end of March 2003. The book-to-bill ratio for the second quarter of 2003 was 0.73 compared to 1.27 in the first quarter of 2003. Of the backlog at June 30, 2003 EUR 94.3 million relates to Front-end operations and EUR 39.4 million to Back-end operations.
Liquidity and capital resources
In May 2003, ASMI issued, in a private placement, US$ 90 million of 5.25% convertible subordinated notes due in 2010. The notes are convertible into common shares at a conversion price of approximately US$ 19.22 per common share. Part of the net proceeds of the sale of these notes was used to repay outstanding debt under the company's short-term credit facilities. At June 30, 2003, the company's principal sources of liquidity consisted of EUR 103.5 million in cash and cash equivalents, of which EUR 70.8 million was available for the company's Front-end operations and EUR 32.7 million was restricted for use in the company's Back-end operations. In addition, the company also had EUR 83.1 million in undrawn bank facilities, of which EUR 44.9 million was available for Back-end and EUR 38.2 million was available for Front-end, primarily the company's Japanese operations only. In light of the above mentioned strong liquidity situation for its Front-end activities, the company is currently renegotiating its bank facilities. In the context of these discussions ASMI has canceled its previous EUR 60.0 million multicurrency revolving credit facility with a consortium of banks.
Outlook
ASMI has not yet not seen a clear and convincing acceleration of activity in the Front-end industry segment. This is apparent from the erratic pattern in the volume of orders booked during recent quarters. Also the price levels of the orders booked is characteristic of a market where ample manufacturing capacity for certain products is available, which leads to pressure on Margins. In light thereof it is at this point in time difficult to foresee for the full year 2003 a level of Net Losses for the total company that would be noticeably better than the level of last year.
The longer than expected absence of a convincing recovery in the industry prompts the Company to take further steps to reduce its existing fixed cost base. During the third and fourth quarter of this year we will execute plans that will reduce the worldwide Front-end employment levels with approximately 150 persons, or ca. 10% of the total Front-end staff. These plans will affect most locations of our Front-end operations, with the likely exception of Japan. The one-time costs associated with these plans will amount to approximately EUR 15 million and charging these costs in the second half of this year will be in addition to the performance level indicated in the paragraph above. The full beneficial effects of these improvements will become visible in the operating performance as from 2004 onwards.
With the resulting streamlined and more efficient Front-end organization, in combination with the already existing leading edge technology and strong customer base, ASMI will be even better positioned to benefit from an industry recovery and growth.
ASM INTERNATIONAL CONFERENCE CALL
ASM International will host an investor conference call and web cast on:
TUESDAY, July 29, 2003 at 9:00 a.m. US Eastern time 15:00 Continental European time. The teleconference dial-in numbers are as follows: United States: 800.884.5695 International: +1 617.786.2960 The participation pass code is 95870227 A simultaneous audio web cast will be accessible at www.asm.com and www.companyboardroom.com. The teleconference will be available for replay for 48-hours, beginning one hour after completion of the live broadcast. The replay dial-in numbers are: United States: 888.286.8010 International: +1 617.801.6888 The participation pass code is 36832278
About ASM
ASM International N.V., headquartered in Bilthoven, the Netherlands, is a global company servicing one of the most important and demanding industries in the world. The Company possesses a strong technology base, state-of-the-art manufacturing facilities, a competent and qualified workforce and a highly trained, strategically distributed support network. ASM International and its subsidiaries design and manufacture equipment and materials used to produce semiconductor devices. ASM International and its subsidiaries provide production solutions for wafer processing (Front-end segment) as well as assembly and packaging (Back-end segment) through facilities in the United States, Europe, Japan and Asia. ASM International's common stock trades on Nasdaq (symbol ASMI) and the Euronext Amsterdam Stock Exchange (symbol ASM). For more information, visit ASMI's website at http://www.asm.com.
Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: All matters discussed in this statement, except for any historical data, are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These include, but are not limited to, economic conditions and trends in the semiconductor industry, currency fluctuations, the timing of significant orders, market acceptance of new products, competitive factors, litigation involving intellectual property, shareholder and other issues, commercial and economic disruption due to terrorist activity, armed conflict or political instability and other risks indicated in the Company's filings from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, the Company's report on Form 20-F for the year ended December 31, 2002 and Form 6-K as filed.
ASM INTERNATIONAL N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS
(thousands except
per share data) in Euro
Three months Six months
ended June 30, ended June 30,
2002 2003 2002 2003
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales 140,853 153,102 241,424 270,869
Cost of sales (87,588) (103,505) (155,007) (183,159)
Gross profit 53,265 49,597 86,417 87,710
Operating
expenses:
Selling, general
and administrative (28,587) (24,291) (50,990) (48,324)
Research and
development (21,704) (20,219) (42,253) (38,606)
Total operating
expenses (50,291) (44,510) (93,243) (86,930)
Earnings (loss)
from operations 2,974 5,087 (6,826) 780
Net interest and
other financial
income (expenses) (2,283) (3,325) (4,602) (4,999)
Earnings (loss)
before income
taxes and
minority interest 691 1,762 (11,428) (4,219)
Income taxes (376) (1,263) 617 (1,402)
Earnings (loss)
before minority
interest 315 499 (10,811) (5,621)
Minority interest (6,703) (6,735) (7,747) (8,935)
Net loss (6,388) (6,236) (18,558) (14,556)
Basic net loss per
share (0.13) (0.13) (0.38) (0.29)
Diluted net loss
per share (1) (0.13) (0.13) (0.38) (0.29)
Weighted average
number of shares
used in
computing per
share amounts (in
thousands):
Basic 49,151 49,443 49,124 49,408
Diluted (1) 49,151 49,443 49,124 49,408
(1) The calculation of diluted net earnings (loss) per share
reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that
then shared in earnings of the Company. Only instruments that have a
dilutive effect on net earnings (loss) are included in the
calculation. The assumed conversion results in adjustment in the
weighted average number of common shares and net earnings (loss) due
to the related impact on interest expense. The calculation is done
for each reporting period individually. Due to the loss reported in
the three months ended June 30, 2002 and June 30, 2003 and the six
months ended June 30, 2002 and June 30, 2003, the effect of
securities and other contracts to issue common stock were
anti-dilutive and no adjustments have been reflected in the diluted
weighted average number of shares and net earnings (loss) for that
period.
ASM INTERNATIONAL N.V.
CONSOLIDATED BALANCE SHEETS
(thousands except share data)
In Euro
December 31, June 30,
Assets 2002 2003
(unaudited)
Cash and cash equivalents 70,991 103,452
Marketable securities 11 10
Accounts receivable, net 132,818 152,128
Inventories, net 185,752 169,326
Income taxes receivable 1,840 459
Deferred tax assets 1,843 1,724
Other current assets 18,786 21,863
Total current assets 412,041 448,962
Property, plant and equipment, net 160,501 141,936
Goodwill, net 54,529 50,360
Deferred tax assets 2,781 2,534
Other assets 23,989 27,532
Total Assets 653,841 671,324
Liabilities and Shareholders'
Equity
Notes payable to banks 26,548 8,028
Accounts payable 67,029 76,169
Accrued expenses 55,414 52,293
Advance payments from customers 6,290 7,930
Deferred revenue 8,851 10,227
Income taxes payable 5,560 6,439
Current portion of long-term debt 2,669 1,353
Total current liabilities 172,361 162,439
Deferred tax liabilities 1,050 869
Long-term debt 8,175 7,322
Subordinated debt
Convertible subordinated debt 109,665 179,396
Total Liabilities 291,251 350,026
Minority interest in subsidiary 97,048 84,866
Shareholders' Equity:
Common shares
Authorized 110,000,000 shares, par value
EUR 0.04, issued and outstanding
49,370,308 and
49,495,158 shares 1,975 1,980
Financing preferred shares, issued none -- --
Preferred shares, issued none -- --
Capital in excess of par value 254,999 255,939
Retained earnings 35,054 20,498
Accumulated other comprehensive loss (26,486) (41,985)
Total Shareholders' Equity 265,542 236,432
Total Liabilities and Shareholders' Equity 653,841 671,324
ASM INTERNATIONAL N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands)
in Euro
Three months Six months
ended June 30, ended June 30,
2002 2003 2002 2003
(unaudited) (unaudited)
Cash flows from
operating activities:
Net loss (6,388) (6,236) (18,558) (14,556)
Depreciation and
amortization 9,919 8,355 20,301 17,143
Amortization of debt
issuance costs 374 370 763 687
Deferred income taxes (270) (222) (319) (99)
Minority interest 6,703 6,735 7,747 8,935
Changes in other assets
and liabilities (19,507) (3,333) (23,986) (8,585)
Net cash provided by (used in)
operating activities (9,169) 5,669 (14,052) 3,525
Cash flows from
investing activities:
Net capital expenditures (5,711) (6,044) (10,854) (10,217)
Investment in
participations -- (1,229) -- (1,229)
Net cash used in
investing activities (5,711) (7,273) (10,854) (11,446)
Cash flows from
financing activities:
Notes payable to
banks, net 1,811 (20,305) (62) (17,143)
Proceeds from issuance of shares 335 934 695 945
Proceeds from long-term debt
and subordinated debt 1 75,968 502 75,990
Repayments of long-term debt (530) (809) (2,120) (1,705)
Dividend to minority
shareholders (16,217) (12,969) (16,217) (12,969)
Net cash provided by (used
in) financing activities (14,600) 42,819 (17,202) 45,118
Exchange rate effects (6,762) (2,024) (5,364) (4,736)
Net increase (decrease) in
cash and cash equivalents (36,242) 39,191 (47,472) 32,461
ASM INTERNATIONAL N.V.
DISCLOSURE ABOUT SEGMENTS AND RELATED INFORMATION
The Company organizes its activities in two operating segments,
Front-end and Back-end.
The Front-end segment manufactures and sells equipment used in
wafer processing, encompassing the fabrication steps in which
silicon wafers are layered with semiconductor devices. The
segment is a product driven organizational unit comprised of
manufacturing, service, and sales operations in Europe, the
United States, Japan and South East Asia.
The Back-end segment manufactures and sells equipment and
materials used in assembly and packaging, encompassing the
processes in which silicon wafers are separated into individual
circuits and subsequently assembled, packaged and tested. The
segment is organized in ASM Pacific Technology Ltd., in which the
company holds a majority of 54.11% interest, whilst the remaining
shares are listed on the Stock Exchange of Hong Kong. The
segment's main operations are located in Hong Kong, Singapore,
the People's Republic of China and Malaysia.
(thousands) In Euro
Six months
ended June 30, 2002 Front-end Back-end Total
(unaudited) (unaudited) (unaudited)
Net sales to unaffiliated
customers 122,207 119,217 241,424
Earnings (loss) from operations (24,526) 17,700 (6,826)
Net interest and other financial
income (expense) (5,030) 428 (4,602)
Income taxes 1,769 (1,152) 617
Minority interest -- (7,747) (7,747)
Net earnings (loss) (27,787) 9,229 (18,558)
Net capital expenditure 6,695 4,159 10,854
Depreciation and amortization 9,056 11,245 20,301
Cash and cash equivalents 7,420 52,685 60,105
Capitalized goodwill 3,888 53,238 57,126
Other identifiable assets 329,198 216,586 545,784
Total assets 340,506 322,509 663,015
Total debt 143,243 -- 143,243
Headcount (1) 1,077 4,979 6,056
Six months
ended June 30, 2003
(unaudited) (unaudited) (unaudited)
Net sales to unaffiliated
customers 145,953 124,916 270,869
Earnings (loss) from operations (20,304) 21,084 780
Net interest and other financial
income (expense) (5,321) 322 (4,999)
Income taxes 533 (1,935) (1,402)
Minority interest -- (8,935) (8,935)
Net earnings (loss) (25,092) 10,536 (14,556)
Net capital expenditure 3,656 6,561 10,217
Total assets -- -- --
Depreciation and amortization 8,266 8,877 17,143
Cash and cash equivalents 70,799 32,653 103,452
Capitalized goodwill 3,888 46,472 50,360
Other identifiable assets 307,053 210,459 517,512
Total assets 381,740 289,584 671,324
Total debt 196,099 -- 196,099
Headcount (1) 1,228 5,829 7,057
(1) Headcount includes those employees with a permanent contract, and
is exclusive of workers with a temporary contract as well as
agency personnel. At December 31, 2002 the headcounts for the
Front-end and Back-end segments were 1,226 and 5,328
respectively.
ASM INTERNATIONAL N.V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Amounts in Euro thousands)
Basis of Presentation
ASM International N.V, ("ASMI") follows accounting principles that confom with those generally accepted in the United States of America ("US GAAP"). Accounting principles applied are unchanged compared to the year 2002.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of ASMI and its subsidiaries, where ASMI holds a controlling interest. The minority interest of third parties is disclosed separately in the Financial Statements. All intercompany profits, transactions and balances have been eliminated in consolidation. Intercompany profits included in inventory are recognized in the Statement of Operations upon the sale of the respective inventory to a third party.
Accounting principles under Dutch GAAP
Under accounting principles generally accepted in the Netherlands ('Dutch GAAP') the statement of operations, the balance sheet and statement of cash flows would not differ significantly from those presented under US GAAP, except for the amortization of goodwill. Under US accounting standard SFAS 142 "Goodwill and Other Intangible Assets," ASMI, stopped amortizing goodwill as of January 1, 2002, which is not allowed under Dutch GAAP. Under Dutch GAAP goodwill should be capitalized and amortized over a period not to exceed 20 years. If ASMI had amortized goodwill in accordance with Dutch GAAP, the net loss for the three months ended June 30, 2002 and June 30, 2003 would have been EUR (8,127) and EUR (7,760) respectively and the net loss for the six months ended June 30, 2002 and June 30, 2003 would have been EUR (22,232) and EUR (17,680) respectively. The diluted loss per share for the three months ended June 30, 2002 and June 30, 2003 would have been EUR (0.17) and EUR (0.16) respectively, and the diluted loss per share
At June 30, 2003: 1 EUR = 1.1427 US$.
Auditors: Deloitte & Touche, Accountants Stock: Traded on the NASDAQ National Market System under the symbol 'ASMI' and on the Euronext Amsterdam Stock Exchange under the symbol 'ASM'
Please use the following link to view the press release including financial results: http://reports.huginonline.com/911957/120649.pdf