BILTHOVEN, The Netherlands, Oct. 20, 2003 (PRIMEZONE) -- ASM International N.V. (Nasdaq:ASMI) (Euronext Amsterdam: ASM) reported today the operating results for the third quarter of 2003.
* Third quarter net sales of EUR 147.4 million, down 3.7% from net sales of the previous quarter and up 5.3% from net sales of the third quarter of 2002;
* Third quarter net loss of EUR (9.2) million or EUR (0.19) per share as compared to a net loss of EUR (6.2) million or EUR (0.13) per share for the previous quarter and a net loss of EUR (4.6) million or EUR (0.09) per share for the third quarter of 2002;
* Third quarter bookings of EUR 130.8 million, up 17.0% from the previous quarter. Nine months bookings of EUR 392.5 million, compared to EUR 429.5 million in the first nine months of 2002, a decrease of 8.6%;
* Quarter-end backlog of EUR 117.1 million, down 12.4% from the previous quarter, Book-to-Bill ratio for the third quarter of 0.89;
* Over the first nine months of 2003 the Book-to-Bill ratio was 0.94.
Please use the following link to view the press release including financial results: http://hugin.info/132090/R/921241/124241.pdf
The net loss for the third quarter amounted to EUR (9.2) million, or EUR (0.19) diluted net loss per share compared to a net loss of EUR (4.6) million or EUR (0.09) diluted net loss per share for the third quarter of 2002.
For the nine months ended September 30, 2003 the net loss amounted to EUR (23.8) million or EUR (0.48) diluted net loss per share, compared to a net loss of EUR (23.2) million or EUR (0.47) diluted net loss per share for the same period in 2002.
Net sales
Net sales for the third quarter of 2003 amounted to EUR 147.4 million, an increase of 5.3% compared to net sales of EUR 140.0 million for the third quarter of 2002 and a decrease of 3.7% compared to the sales level of EUR 153.1 million for the second quarter of 2003. Net sales for the first nine months of 2003 amounted to EUR 418.3 million, an increase of 9.6% compared to EUR 381.5 million net sales for the same period in 2002.
Sales levels for the third quarter were at approximately the same level as the preceding second quarter, both in Front-end as well as Back-end. Although there are positive signs for higher semiconductor sales, semiconductor manufacturers are still not quite ready to firmly commit to large scale capital investments, which results in an erratic order intake as well as price pressure and required short lead times between order intake and delivery.
The strong Euro against the Japanese yen, the US dollar and US dollar related currencies did negatively impact the Company's consolidated net sales levels as expressed in Euro. The growth in sales would have been as high as 26.6%, if the exchange rates for the first nine months of 2003 were applied to the sales levels for the first nine months of 2002 expressed in their original local currencies.
Operations
The gross profit margin for the third quarter of 2003 amounted to 33.0% of net sales, 5.1 percentage points below the gross profit margin of 38.1% of net sales in the third quarter of 2002, and 0.6 percentage points better than the 32.4% gross profit margin realized in the second quarter of 2003. The gross profit margin for the first nine months of 2003 amounted to 32.6%, a decrease of 4.1 percentage points compared to the 36.7% gross profit margin for the same period in 2002. Although the gross profit margin improved slightly in the third quarter of 2003 as compared to the second quarter of 2003, the gross profit margin is still negatively impacted by competitive price pressure, the product mix and the impact of lower US dollar exchange rates, in particular in the Front-end operations. The same factors also contributed to the decrease of gross margin for the nine months of 2003 when compared to the same period in 2002.
Selling, general and administrative expenses were EUR 26.9 million in the third quarter of 2003 compared to EUR 28.6 million in the third quarter of 2002, a decrease of 5.9%, and 10.8% above the level of EUR 24.3 million in the second quarter of 2003. Selling, general and administrative expenses were EUR 75.2 million in the first nine months of 2003, a decrease of 5.5% compared to EUR 79.6 million in the same period of 2002. As a percentage of net sales, selling, general and administrative expenses were 18.0% in the first nine months of 2003, compared to 20.9% in the same period of 2002.
Research and development expenses decreased from EUR 21.6 million or 15.4% of net sales in the third quarter of 2002 to EUR 18.8 million or 12.8% of net sales in the third quarter of 2003, and 7.0% below the EUR 20.2 million in research and development expenses in the second quarter of 2003. For the first nine months of 2003, research and development expenses decreased by 10.1% compared to the same period in 2002, and decreased as a percentage of net sales from 16.7% to 13.7%. The decrease is the result of our adjustment of the timing in some of our R&D programs, which we believe will not affect our strong research and development commitment to the industry, and, to a lesser extent, the impact of the strong Euro against the Japanese Yen, the US dollar and US dollar related currencies.
Earnings (loss) from operations amounted to earnings of EUR 2.9 million for the third quarter of 2003, a decrease of 7.9% as compared to EUR 3.2 million for the same period in 2002. For the nine months of 2003, earnings from operations amounted to EUR 3.7 million, compared to a loss from operations of EUR (3.6) million for the same period in 2002. This quarter's result is after EUR 0.5 million restructuring costs described below.
Net interest and other financial expenses increased from a net expense of EUR (2.2) million in the third quarter of 2002 to a net expense of EUR (4.0) million in the third quarter of 2003. In the first nine months of 2003 the net expense amounted to EUR (9.0) million compared to a net expense of EUR (6.8) million in the same period 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 increase was partially offset by the lower US dollar exchange rate. Net currency transaction losses for the third quarter of 2003 were EUR (1.1) million compared to net currency transaction losses of EUR (0.1) million in the third quarter of 2002.
Bookings and backlog
New orders received in the third quarter of 2003 amounted to EUR 130.8 million, 17.0% higher than the EUR 111.8 million level of new orders received in the second quarter of 2003. Both segments of the company's business showed increases over the second quarter's levels, although in Front-end the quarterly book-to-bill ratio stayed well under 1.0. The overall book-to-bill ratio for the third quarter was 0.89 compared to 0.73 in the second quarter of 2003. For the first nine months of 2003 the total of new orders amounted to EUR 392.5 million compared to EUR 429.5 million for the first nine months of 2002. The backlog at the end of September 2003 amounted to EUR 117.1 million, a decrease of 12.4% compared to EUR 133.7 million at the end of June 2003.
Liquidity and capital resources
Net cash provided by operations and investing activities for the third quarter was EUR 14.6 million as compared to EUR 15.6 million for the third quarter of 2002. Net cash provided on the same basis for the first nine months of 2003 amounted to EUR 6.7 million as compared to a cash utilization of EUR (9.3) million for the same period in 2002.
At September 30, 2003, the Company's principal sources of liquidity consisted of EUR 115.2 million in cash and cash equivalents, of which EUR 81.5 million was available for the company's Front-end operations and EUR 33.7 million was restricted for use in the company's Back-end operations. In addition, the Company also had EUR 67.8 million in undrawn bank facilities, of which EUR 39.2 million was available for Back-end and EUR 28.6 million was available for Front-end, primarily for the Japanese operations.
Restructuring
In July 2003 the Company announced to take further steps to reduce its existing fixed cost base and reduce its Front-end workforce by approximately 150 employees or 10% of the total Front-end staff. In the third quarter of 2003 the Front-end workforce was reduced by 45 employees, including temporary contract employees. The associated termination expenses for the third quarter were EUR 0.5 million, which were included in operating expenses. Decisions regarding the remaining reductions in workforce and restructuring of activities will be taken in the fourth quarter of 2003. The financial recognition of the associated expenses will be in the fourth quarter of this year, as well as in the first half of 2004. The associated restructuring expenses, including impairment of fixed assets, for the fourth quarter of 2003 are estimated to be approximately EUR 5.0 million.
Outlook
There are signs of general improvement in the semiconductor industry that should filter to the equipment sector in coming quarters. At the same time, the momentum developing in our Back-end operations may be a precursor for the equipment sector as a whole. But we are still waiting for a convincing acceleration of booking activity in the industry's Front-end segment.
This situation continues to create volatility in our order intake that makes reliable projections difficult. Considering the lower level of Front-end bookings over the past quarters, we expect fourth quarter consolidated sales and net results ( before restructuring expenses ) at a lower level than the third quarter of 2003.
ASM INTERNATIONAL CONFERENCE CALL
ASM International will host an investor conference call and web cast on
TUESDAY, October 21, 2003 at
9:00 a.m. US Eastern time 15:00 p.m. Continental European time.
The teleconference dial-in numbers are as follows:
United States: 800.901.5241
International: +1 617.786.2963
The participation pass code is 44967150
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 61494829
Please use the following link to view the press release including financial results: http://hugin.info/132090/R/921241/124241.pdf
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.