BILTHOVEN, Netherlands, Feb. 24, 2004 (PRIMEZONE) -- ASM International N.V. (Nasdaq:ASMI) (Euronext Amsterdam: ASM) reports today its final 2003 fourth quarter and full year results:
- Fourth quarter of 2003 net sales of EUR 163.6 million, up 11.0% from net sales in the third quarter of 2003 and up 19.1% from net sales in the fourth quarter of 2002;
- Full year 2003 net sales of EUR 581.9 million, up 12.2% compared to EUR 518.8 million in net sales for the full year 2002. Sales from our Front-end operations were up 7.3% and sales from our Back-end operations were up 17.3%;
- Fourth quarter of 2003 net loss was EUR (5.5) million or EUR (0.11) per share, including EUR 6.0 million in restructuring charges in ASMI's Front-end operations, as compared to a net loss of EUR (9.2) million or EUR (0.19) per share for the third quarter of 2003 and a net loss of EUR (6.7) million or EUR (0.14) per share in the fourth quarter of 2002;
- The net loss for the full year 2003 was EUR (29.3) million or EUR (0.59) per share as compared to a net loss of EUR (29.9) million or EUR (0.61) per share for the full year 2002. Total restructuring charges in our Front-end operations amounted to EUR 6.5 million;
- Strong order intake of EUR 245.4 million in the fourth quarter of 2003, up 87.6% from the previous quarter. Year-end backlog of EUR 199.0 million. Full year 2003 order intake was EUR 637.9 million, up 20.6% from EUR 529.1 in 2002.
Please use the following link to view the press release including financial results: http://hugin.info/132090/R/935674/129332.pdf
The net loss for the fourth quarter of 2003, including EUR 6.0 million in restructuring charges, amounted to EUR (5.5) million, or EUR (0.11) basic and diluted net loss per share, compared to a net loss of EUR (6.7) million or EUR (0.14) basic and diluted net loss per share for the same period in 2002. The net loss for the year ended December 31, 2003, including EUR 6.5 million in restructuring charges, was EUR (29.3) million or EUR (0.59) basic and diluted net loss per share, compared to a net loss of EUR (29.9) million or EUR (0.61) basic and diluted net loss per share for the year ended December 31, 2002.
The fourth quarter of 2003 showed the first signs of a recovery in the semiconductor equipment industry. ASMI saw an increase in order levels and improved sales in the fourth quarter of 2003. In the second half of 2003 the Company implemented restructuring plans to lower the fixed costs base in the Company's Front-end operations and initiated strategic plans to improve future margins by establishing Front-end manufacturing capability in Asia. ASMI's aim is to duplicate the efficiencies and low cost structure of our Back-end assembly and packaging manufacturing operations, lowering costs and increasing production flexibility. The Company believes that the effects of these plans will start to materialize in the beginning of 2005.
The following table shows the operating performance for the fourth quarter of 2003 as compared to the third quarter of 2003 and the fourth quarter of 2002 and the percentage change for the fourth quarter of 2003 compared to the third quarter of 2003:
(euro millions) % Change
Q4 2002 Q3 2003 Q4 2003 Q3 to Q4
Net sales 137.3 147.4 163.6 11.0%
Gross profit margin 50.9 48.6 64.9 33.4%
Gross profit margin % 37.1% 33.0% 39.7% 6.7%
Selling, general and
administrative *0* expenses (28.8) (26.9) (32.8) 21.7%
Research and development (24.5) (18.8) (21.6) 15.2%
Earnings (loss) from operations* (2.4) 2.9 10.5
Net earnings (loss)* (6.7) (9.2) (5.5)
New orders 99.6 130.8 245.4 87.6%
Backlog at end of period 142.9 117.1 199.0 69.9%
* Includes restructuring charges of EUR 0.5 million for Q3 2003 and EUR 6.0 million for Q4 2003.
Restructuring Front-end operations
In the second half of 2003 the Company implemented restructuring plans including work force reduction in its Front-end operations. As part of these plans, the Company restructured research and development activities in Finland, consolidated its production facilities in the Netherlands and reduced work forces at other Front-end subsidiaries. The restructuring has resulted in a reduction of workforce in the second half of 2003, and restructuring charges in the amount of EUR 6.5 million, of which EUR 0.5 million was recorded in the third quarter of 2003 and EUR 6.0 million was recorded in the fourth quarter of 2003.
The total restructuring charges include EUR 1.6 million in personnel termination expenses, EUR 1.4 million in operational lease contract termination costs, EUR 3.2 million in non-cash fixed assets impairment charges and EUR 0.3 million in other costs. In 2004, the Company expects an additional charge ranging from EUR 1.0 to EUR 2.0 million upon completion of its restructuring programs. The Company expects a positive impact on fixed costs in its Front-end operations as a result of the restructuring.
Net sales
The following table shows our net sales for Front-end and Back-end segments and the percentage change between the years 2002 and 2003:
(euro millions) Year ended December 31,
2002 2003 % Change
Front-end 266.9 286.5 7.3%
Back-end 251.9 295.4 17.3%
Consolidated net sales 518.8 581.9 12.2%
In 2003, net sales of wafer processing equipment (Front-end segment) represented 49.2% of total net sales. Net sales of assembly and packaging equipment and materials (Back-end segment) represented 50.8% of consolidated ASMI net sales.
In the fourth quarter of 2003 we experienced increased order levels, indicating that the market for semiconductor equipment is recovering from the prolonged severe downturn in the industry that started late 2000. The year 2003 was challenging for the semiconductor equipment industry. Lack of visibility for most of the year kept semiconductor manufacturers extremely cautious in their ordering patterns. The increase in orders resulted in improved sales levels in the fourth quarter of 2003, particularly in Back-end, which typically is the first to benefit from increasing demand. In the second half of 2003, Front-end sales decreased 3.7%, and Back-end sales increased 36.5%, both compared to the first half of 2003.
Consolidated sales levels expressed in euro were negatively impacted by the strong euro against the Japanese yen, the US dollar and US dollar related currencies. The growth in consolidated sales would have been as high as 29.0% if the exchange rates for 2003 were applied to the sales levels for 2002, expressed in their original local currencies.
Net sales for the fourth quarter of 2003 amounted to EUR 163.6 million, an increase of 19.1% compared to net sales for the same period last year of EUR 137.3 million and 11.0% above the sales level of the third quarter of 2003.
Operations
Gross Profit. The following table shows our gross profit margin for Front-end and Back-end segments and the percent increase or decrease between the years 2002 and 2003:
(euro millions) Year ended December 31,
EUR EUR % % Increase or
2002 2003 2002 2003 (decrease)
Front-end 85.8 72.9 32.2% 25.4% (6.8)%
Back-end 104.9 128.4 41.6% 43.5% 1.9 %
Total gross profit 190.7 201.3 36.8% 34.6% (2.2)%
The decrease in gross profit margin for 2003 compared to 2002 for Front-end is the result of competitive price pressure, changes in the product mix and the impact of lower US dollar exchange rates. In particular, the weakening of the US dollar did impact the Company's margins on its vertical furnace products, for which the manufacturing costs are mainly in euros and the majority of its sales are dominated in US dollars. In addition, the low sales levels kept margins at a low level due to fixed overhead costs in the Company's manufacturing facilities. The increase in gross profit margin for Back-end is the result of the higher sales volume in 2003 compared to 2002.
The gross profit margin for the fourth quarter of 2003 of 39.7% of net sales was 6.7% above the 33.0% gross profit margin realized in the third quarter of 2003. Changes in product mix and the increasing volume of orders shipped contributed to the increase in the overall gross profit margin for the fourth quarter of 2003 when compared to the third quarter of 2003.
Selling, General and Administrative. The following table shows ASMI's selling, general and administrative expenses for Front-end and Back-end segments and the percentage change between the years 2002 and 2003:
(euro millions) Year ended December 31,
2002 2003 % Change
Front-end 65.6 63.9 (2.6)%
Back-end 42.8 44.1 3.0%
Total selling, general
and administrative expenses 108.4 108.0 (0.4)%
Selling, general and administrative expenses in 2003 were slightly below the expense level in 2002. As a percentage of net sales, selling, general and administrative expenses decreased to 18.6% in 2003 from 20.9% for the year 2002. Although the decrease is partly due to the strong euro against the Japanese yen, the US dollar and US dollar related currencies, the Company also strongly focused on fixed costs control and more efficient operations in the Front-end operations. In 2003, restructuring charges included in selling, general and administrative expenses for Front-end operations amounted to EUR 4.6 million.
In the fourth quarter of 2003, selling, general and administrative expenses were EUR 32.8 million, 21.7% above the EUR 26.9 million in expenses for the third quarter of 2003 and 13.8% above the EUR 28.8 million in the fourth quarter of 2002. Included in the fourth quarter of 2003 were restructuring charges for Front-end operations of EUR 4.4 million.
Research and Development. The following table shows ASMI's research and development expenses for Front-end and Back-end segments and the percentage change between the years 2002 and 2003:
(euro millions) Year ended December 31,
2002 2003 % Change
Front-end 62.8 54.2 (13.7)%
Back-end 25.5 24.9 (2.4)%
Total research and
development expenses 88.3 79.1 (10.5)%
The decrease in research and development expenses for Front-end is the result of the timing of some of the Company's research and development programs, which the Company believes will not impact its 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. In 2003 the Company also restructured its research and development operations in Finland. Restructuring charges included in research and development expenses for the Front-end segment amounted to EUR 1.9 million in 2003. The Company's research and development expenses in our Back-end segment continued at a high level, and partially decreased also due to the impact of the strong euro against the Hong Kong dollar.
In the fourth quarter of 2003, research and development expenses were EUR 21.6 million, a decrease of 11.5% as compared to EUR 24.5 million in the fourth quarter of 2002 and 15.2% above the EUR 18.8 million in the third quarter of 2003. Included in the fourth quarter of 2003 were restructuring charges of EUR 1.6 million. Earnings (Loss) from Operations amounted to earnings of EUR 14.2 million in 2003 compared to a loss of EUR (6.0) million in 2002. In the fourth quarter of 2003, the Company realized earnings from operations of EUR 10.5 million compared to a loss from operations of EUR (2.4) million in the fourth quarter of 2002. Included in earnings from operations for 2003 were EUR 6.5 million in restructuring expenses, of which EUR 0.5 million were recorded in the third quarter of 2003 and EUR 6.0 million in the fourth quarter of 2003.
Net Interest and Other Financial Income (Expenses) increased to a net expense of EUR (12.8) million in 2003 compared to a net expense of EUR (10.4) million in 2002. For the fourth quarter of 2003, the net expense was EUR (3.8) million compared to a net expense of EUR (3.6) million in the fourth quarter of 2002. The increase was 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 of 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 2003 were EUR (2.5) million compared to net currency transaction losses of EUR (2.1) million in 2002.
Bookings and backlog
The following table shows ASMI's level of new orders during the year and its backlog at the end of the year for the Front-end and Back-end segments and the percentage change between the years 2002 and 2003:
(euro millions) 2002 2003 % Change
Front-end:
New orders for the year ended 269.6 281.3 4.3%
Backlog at the end of the year 109.9 104.7 (4.7)%
Back-end:
New orders for the year ended 259.5 356.6 37.4%
Backlog at the end of the year 33.0 94.3 185.8%
Total
New orders for the year ended 529.1 637.9 20.6%
Backlog at the end of the year 142.9 199.0 39.3%
For the full year of 2003, the book-to-bill ratio was 1.10. In the last quarter of 2003, ASMI saw a shift in order momentum, which is signaling a recovery in the industry. The backlog of EUR 199.0 million as of December 31, 2003, is the highest level since June 30, 2001, and an increase of 69.9% compared to the backlog of EUR 117.1 at the end of September 2003.
Liquidity and capital resources
Net cash provided by operations and investing activities for 2003 was EUR 30.7 million as compared to a cash utilization of EUR 15.3 million for 2002. Net cash provided by operations and investing activities was EUR 24.0 million for the fourth quarter of 2003 as compared to a cash utilization of EUR 6.0 million for the same period in 2002.
At December 31, 2003, the Company's principal sources of liquidity consisted of EUR 154.9 million in cash and cash equivalents, of which EUR 102.3 million was available for the Company's Front-end operations and EUR 52.6 million was restricted for use in the Company's Back-end operations. In addition, the Company also had EUR 57.1 million in undrawn bank facilities, of which EUR 34.4 million was available for Back-end and the remainder was available for its Front-end operations in Japan.
Outlook
The increased order activity as well as the signs of a general improvement in the semiconductor industry indicate that a long downturn in the semiconductor equipment industry is now behind the Company as it enters into 2004. Although the visibility has improved, semiconductor manufacturers remain cautious in placing new orders and require short lead times. Although the Company has a positive outlook for 2004, it believes its ability to provide projections for the full year 2004 is still limited given the volatility in order intake. The Company expects consolidated net sales in the first quarter of 2004 to be higher than the fourth quarter of 2003 and we expect to report positive net earnings for the three months ending March 31, 2004.
ASM INTERNATIONAL CONFERENCE CALL
ASM International will host an investor conference call and web cast on
WEDNESDAY, FEBRUARY 25, 2004 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: +1 800.901.5231
International: +1 617.786.2961
Participation pass code is 95205874
A simultaneous audio web cast will be accessible at www.asm.com and www.fulldisclosure.com
The teleconference will be available for digitized replay for 48-hours, beginning one hour after completion of the live broadcast. The replay dial-in numbers are:
United States: +1 888.286.8010
International: +1 617.801.6888
Participation pass code is 13644769
Please use the following link to view the press release including financial results: http://hugin.info/132090/R/935674/129332.pdf
About ASM
ASM International N.V., based in Bilthoven, the Netherlands, is aglobal company servicing one of the most important and demandingindustries in the world. The Company possesses a strong technologybase, state-of-the-art manufacturing facilities, a competent andqualified workforce and a highly trained, strategically distributedsupport network. ASM International and its subsidiaries design andmanufacture equipment and materials used to produce semiconductordevices. ASM International and its subsidiaries provide productionsolutions for wafer processing (Front-end segment) as well asassembly and packaging (Back-end segment) through facilities in theUnited States, Europe, Japan and Asia. ASM International's commonstock trades on NASDAQ (symbol ASMI) and the Euronext Amsterdam StockExchange (symbol ASM). For more information, visit ASMI's website athttp://www.asm.com.
Safe Harbor Statement under the U.S. Private Securities LitigationReform Act of 1995: All matters discussed in this statement, exceptfor any historical data, are forward-looking statements.Forward-looking statements involve risks and uncertainties that couldcause actual results to differ materially from those in theforward-looking statements. These include, but are not limited to,economic conditions and trends in the semiconductor industrygenerally and the duration of the current industry downturnspecifically, currency fluctuations, the timing of significantorders, market acceptance of new products, competitive factors,litigation involving intellectual property, shareholder and otherissues, commercial and economic disruption due to terrorist activity,armed conflict or political instability and other risks indicated inthe Company's filings from time to time with the U.S. Securities andExchange Commission, including, but not limited to, the Company'sreport on Form 20-F and Form 6-K as filed.