-- Please use the following link to view the entire release
including financial statements:
http://hugin.info/132090/R/1018461/159903.pdf
-- Net loss of (Eur) 6.3 million or (Eur) 0.12 diluted net loss per
share, as compared to net earnings of (Eur) 0.5 million or (Eur)
0.01 diluted net earnings per share in the second quarter of 2005
and net earnings of (Eur) 3.7 million or (Eur) 0.07 diluted net
earnings per share for the third quarter of 2004.
-- Net sales of (Eur) 174.5 million, down 4.8% from the second
quarter of 2005 and down 5.1% from the third quarter of 2004.
-- Third quarter bookings of (Eur) 201.5 million, up 13.4% from the
second quarter of 2005. Third quarter book-to-bill ratio of 1.15,
compared to 0.97 in the second quarter of 2005.
-- Quarter-end backlog of (Eur) 223.5 million, up 13.7% from the end
of the second quarter of 2005.
BILTHOVEN, Netherlands, Oct. 27, 2005 (PRIMEZONE) -- ASM International N.V. (Nasdaq:ASMI) and (Amsterdam:ASM) reports today its 2005 third quarter operating results. These operating results have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP").
In making the announcement, Arthur del Prado, President and CEO, stated, "As indicated in our prior guidance, ASM third quarter operating results declined sequentially, primarily reflecting the lower backlog for the Front-end segment at the end of the second quarter of 2005. Third quarter bookings, however, increased for the third consecutive quarter. The 13.4% quarter-over-quarter order improvement, included gains in both Front-end and Back-end segments bookings. Overall, our book-to-bill ratio was 1.15 with our Front-end segment realizing a strong order intake and our Back-end segment recording a book-to-bill of just under 1. We built backlog during the quarter, ending with (Eur) 223.5 million, a 13.7% increase over the second quarter."
The consolidated financial statements for the third quarter of 2005 and nine months ended September 30, 2005 include the operations of the Company's wholly owned subsidiaries ASM NuTool, Inc. and ASM Genitech, Inc., which were acquired in June 2004 and August 2004, respectively.
Three months ended September 30, 2005.
The following table shows the operating performance for the third quarter of 2005 as compared to the second quarter of 2005 and the third quarter of 2004:
(euro millions)
% %
Change Change
Q2 2005 Q3 2004
Q3 2004 Q2 2005 Q3 2005 to to
Q3 2005 Q3 2005
Net sales 183.8 183.3 174.5 (4.8)% (5.1)%
Gross profit 71.0 63.7 62.1 (2.6)% (12.5)%
Gross profit
margin % 38.6% 34.8% 35.6% 0.8%(1) (3.0)%(1)
Selling,
general and
administrative
expenses (28.1) (24.1) (26.6) 10.8% (5.0)%
Research and
development
expenses (22.1) (23.8) (23.7) (0.8)% 7.0%
Amortization of
purchased
technology and
other
intangible
assets (0.5) (0.4) (0.4) 4.7% (13.5)%
Earnings from
operations 20.3 15.4 11.4 (26.5)% (44.2)%
Net earnings
(loss) 3.7 0.5 (6.3) na na
New orders 157.1 177.7 201.5 13.4% 28.3%
Backlog at end
of period 222.3 196.5 223.5 13.7% 0.5%
(1) Percentage point change
Net sales in the third quarter of 2005 were lower as compared to both the second quarter of 2005 and the third quarter of 2004. The strengthening of the US dollar and US dollar related currencies against the euro in the third quarter of 2005 compared to the second quarter of 2005 impacted sales positively by 4.0%. The increase in currency exchange rates in the third quarter of 2005 compared to the third quarter of 2004 impacted sales positively by 0.6%.
As a percentage of net sales, selling, general and administrative expenses in the third quarter of 2005 were 15.3%, as compared to 13.1% in the second quarter of 2005 and 15.3% in the third quarter of 2004.
As a percentage of net sales, research and development costs in the third quarter of 2005 were 13.6%, as compared to 13.0% in the second quarter of 2005 and 12.0% in the third quarter of 2004.
Amortization of purchased technology and other intangible assets mainly relates to the amortization of purchased technology and other intangible assets from the acquisitions of ASM NuTool and ASM Genitech.
Net interest expense was (Eur) 2.4 million in the third quarter of 2005, down (Eur) 0.4 million as compared to net interest expenses in the second quarter of 2005 and up (Eur) 0.2 million as compared to net interest expenses in the third quarter of 2004. When compared to the third quarter of 2004, interest expenses increased due to increased borrowings, including the issuance of US$ 150.0 million in convertible debt in December 2004. This increased interest expense was almost fully offset by increased interest income, which was due to increased cash and cash equivalents and increased interest rates for US dollar cash deposits.
The net loss for the third quarter of 2005 amounted to (Eur) 6.3 million, or (Eur) 0.12 diluted net loss per share, compared to net earnings of (Eur) 3.7 million or (Eur) 0.07 diluted net earnings per share for the same period in 2004.
For the third consecutive quarter, order intake improved when compared to the previous quarter. Nine months ended September 30, 2005.
Net Sales of (Eur) 492.5 million for the nine months ended September 30, 2005 decreased 16.8% as compared to (Eur) 591.6 million in the same period in 2004.
Consolidated sales levels expressed in euro were negatively impacted by the strengthened euro against the US dollar and US dollar related currencies. The decline in exchange rates in the nine months ended September 30, 2005 compared to the nine months ended September 30, 2004 impacted sales negatively by 2.5%.
Gross Profit Margin amounted to 34.9% of net sales in the nine months ended September 30, 2005. The decrease of 3.3 percentage points as compared to the same period in 2004 was caused by lower volumes and an increase in the proportion of net sales accounted for by the lower margin Front-end segment. In addition, the gross profit margin of the Front-end segment decreased due to changes in the product mix.
ASM Front-End Manufacturing Singapore ("FEMS") focuses on manufacturing generic subassemblies and components for Front-end systems at lower costs. The project is on track. In the third quarter of 2005, the first generic subassembly for 200 mm Epitaxy systems was manufactured by FEMS. At the end of 2005, most generic subassemblies for 300 mm Vertical Furnaces and the first generic subassemblies for the 200 mm Vertical Furnaces and 200 mm Epitaxy systems will be manufactured by FEMS.
Selling, General and Administrative Expenses decreased 9.3% from (Eur) 82.1 million in the nine months ended September 30, 2004 to (Eur) 74.5 million in the nine months ended September 30, 2005. The decrease is mainly the result of lower commercial activities in the Back-end segment. Favourable currency exchange rates also contributed to the decrease. Selling, general and administrative expenses reported by the Front-end segment are stable as a result of the Company's focus on fixed cost control.
As a percentage of net sales, selling, general and administrative expenses were 15.1% in the nine months ended September 30, 2005, compared to 13.9% in the same period in 2004. The increase is the result of lower net sales.
Research and Development Expenses increased 9.1% from (Eur) 62.7 million in the nine months ended September 30, 2004 to (Eur) 68.5 million in the nine months ended September 30, 2005. The increase is the result of increased research and development activities, the inclusion of the operations of the Company's subsidiaries ASM NuTool and ASM Genitech, which were acquired in June 2004 and August 2004 respectively, and the full consolidation of the operations of the Company's subsidiary NanoPhotonics as of January 1, 2005.
As a percentage of net sales, research and development expenses were 13.9% in the nine months ended September 30, 2005, compared to 10.6% in the same period in 2004.
Earnings from Operations amounted to (Eur) 27.6 million for the nine months ended September 30, 2005 as compared to (Eur) 80.0 million for the same period in 2004.
Net Loss for the nine months ended September 30, 2005 amounted to (Eur) 13.0 million or (Eur) 0.25 diluted net loss per share compared to net earnings of (Eur) 22.6 million or (Eur) 0.44 diluted net earnings per share for the same period in 2004.
Bookings and backlog
New orders received increased 13.4% from (Eur) 177.7 million in the second quarter of 2005 to (Eur) 201.5 million in the third quarter of 2005.
For the nine months ended September 30, 2005 the total of new orders booked amounted to (Eur) 529.2 million compared to (Eur) 614.9 million in the same period of 2004, a decrease of 13.9%.
For the third quarter of 2005, the level of new orders divided by the net sales for the quarter (book-to-bill ratio) was 1.15, compared to a book-to-bill ratio of 1.11 and 0.97 in the first quarter of 2005 and second quarter of 2005, respectively.
For the nine months ended September 30, 2005 the book-to-bill ratio was 1.07, compared to a book-to-bill ratio of 1.04 for the same period in 2004.
The backlog at September 30, 2005 amounted to (Eur) 223.5 million, showing a strong increase of 13.7% compared to the backlog of (Eur) 196.5 million at June 30, 2005. The increase noticed is the largest quarterly increase since the first quarter of 2004.
Liquidity and capital resources
Net cash provided by operations in the third quarter of 2005 was (Eur) 10.9 million as compared to net cash provided by operations of (Eur) 22.6 million in the third quarter of 2004. For the nine months ended September 30, 2005, net cash provided by operations was (Eur) 29.6 million compared to cash provided by operations of (Eur) 79.2 million for the same period in 2004. The decrease is the result of lower net earnings. Net cash used in investing activities in the third quarter of 2005 was (Eur) 14.3 million, compared to (Eur) 21.7 million in the third quarter of 2004. For the nine months ended September 30, 2005, net cash used in investing activities was (Eur) 33.1 million compared to (Eur) 46.3 million for the same period in 2004. The decrease is mainly caused by acquisitions in 2004 and decreased capital expenditures in 2005.
Net working capital, consisting of accounts receivable, inventories, other current assets, accounts payable, accrued expenses, advance payments from customers and deferred revenue, increased from (Eur) 211.0 million at June 30, 2005 to (Eur) 218.7 million at September 30, 2005. The increase is primarily the result of increased order intake, resulting in increased inventory levels. The number of outstanding days of working capital, measured based on annual sales, increased from 116 days at June 30, 2005 to 122 days at September 30, 2005.
At September 30, 2005, the Company's principal sources of liquidity consisted of (Eur) 202.0 million in cash and cash equivalents, of which (Eur) 154.0 million was available for the Company's Front-end operations and (Eur) 48.0 million was restricted for use in the Company's Back-end operations. In addition, the Company also had (Eur) 77.1 million in undrawn bank facilities, of which (Eur) 36.2 million was available for its Back-end operations and (Eur) 40.6 million was available for the Front-end operations in Japan.
If the Company's convertible subordinated notes due November 15, 2005 are not converted into common shares prior to or at maturity on November 15, 2005, the Company has to repay these notes in cash. The conversion price is $18.85. At September 30, 2005, (Eur) 78.3 million of these notes were outstanding. Outlook
During the fourth quarter of 2005, we intend to complete our evaluation of the strategic options for ASM NuTool, which will include a review of the valuation of ASM NuTool assets. Excluding potential effects from this evaluation, our fourth quarter Front-end segment results should show improvement over the third quarter. Based on current order backlog, we expect increased sales in our Front-end segment, though we do not expect to be break-even in Front-end in the fourth quarter. Our Back-end segment has continued to outperform its peers and to strengthen its market position in 2005. Assuming that the markets of our Back-end segment stay at the current levels, we expect the result in the fourth quarter to be above the average of the first three quarters of 2005.
ASM INTERNATIONAL CONFERENCE CALL
ASM International will host an investor conference call and web cast on
FRIDAY, OCTOBER 28, 2005 at
9:00 a.m. US Eastern time 3:00 p.m Continental European time.
The teleconference dial-in numbers are as follows:
United States: +1 866.578.5788 International: +1 617.213.8057 Participation pass code is 795 90 849
A simultaneous audio web cast will be accessible at www.asm.com.
The teleconference will be available for replay, beginning one hour after completion of the live broadcast, through November 7, 2005. The replay dial-in numbers are:
United States: +1 888.286.8010 International +1 617.801.6888 Participation pass code is 359 68 228
About ASM International
ASM International N.V., headquartered in Bilthoven, the Netherlands, 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 generally and the timing of the industry cycles specifically, 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 natural disasters, terrorist activity, armed conflict or political instability, epidemics 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 reports on Form 20-F and Form 6-K as filed. The Company assumes no obligation nor intends to update or revise any forward-looking statements to reflect future developments or circumstances.
Please use the following link to view the entire release including financial statements:
http://hugin.info/132090/R/1018461/159903.pdf
-0- Contact : Naud van der Ven, + 31 30 229 85 40 Mary Jo Dieckhaus, + 1 212 986 29 00