-- Second quarter net sales of Eur 211.9 million, up 38.4% from net
sales of the second quarter of 2003 and up 8.2% from net sales of
the previous quarter;
-- Second quarter net earnings of Eur 4.4 million or Eur 0.08
diluted net earnings per share as compared to a net loss of Eur
(7.3) million or Eur (0.15) diluted net loss per share for the
second quarter of 2003 and net earnings of Eur 14.6 million or
Eur 0.28 diluted net earnings per share for the first quarter of
2004;
-- Second quarter net operating margins were impacted by some
one-time charges in the Back-end operations;
-- Second quarter bookings of Eur 232.1 million, an increase of
107.6% compared to Eur 111.8 million in the second quarter of
2003 and up 2.8% from Eur 225.7 million in the previous quarter.
-- Six months bookings of Eur 457.8, an increase of 74.9% compared
to the Eur 261.7 million in the first half of 2003;
-- Quarter-end backlog of Eur 248.9 million, up 8.8% from the
previous quarter.
Please use the following link to view the entire release including
financial statements:
http://hugin.info/132090/R/953877/135911.pdf
BILTHOVEN, The Netherlands, July 27, 2004 (PRIMEZONE) -- ASM International N.V. (Nasdaq:ASMI) (Euronext Amsterdam:ASM) reports today the operating results for the second quarter of 2004. Net earnings for the second quarter amounted to Eur 4.4 million, or Eur 0.08 diluted net earnings per share compared to a net loss of Eur (7.3) million or Eur (0.15) net loss per share for the second quarter of 2003.
For the six months ended June 30, 2004 net earnings amounted to Eur 19.0 million or Eur 0.37 diluted net earnings per share compared to a net loss of Eur (16.2) million or Eur (0.33) diluted net loss per share for the same period in 2003.
Sales in the first six months of 2004 improved substantially to Eur 407.8 million, the highest sales level since the second half of 2000. In particular the Company's Back-end segment reported record sales in the first six months of 2004, measured in the reporting currency of the Back-end segment, the Hong Kong dollar.
The second quarter of 2004 continued to show a strong order intake, particularly in the Company's Front-end segment. However, second quarter of 2004 operating performance levels were lower compared to the first quarter, in both the Company's Front-end and Back-end segments.
In the Front-end segment, operating results were lower due to changes in the product mix and lower average sales prices, in particular on our vertical furnaces, higher operating expenses in anticipation of expected increased sales levels in future periods and the first time consolidation of our 100% subsidiary NuTool, Inc. (NuTool), which is included in the consolidated financial statements since June 2, 2004..
In the Back-end segment, the consolidation of manufacturing activities in Malaysia needed to further improve manufacturing efficiency and to have manufacturing capacity closer to some of the Company's main lead-frame customers, resulted in some fixed asset impairment charges and write-offs.
In addition, our Back-end segment introduced a large number of new innovative products in the past six months, such as soft solder die attach, turret test handlers, ball placement systems, stud bumping machines, thermosonic flip chip bonders, lens holder attachments for image sensors, handlers for wafer level packages, LED wafer scanning equipment as well as photo diode assembly equipment. These new models / types are all in the early phases of their learning curves which typically lead to more frequent engineering changes and lower initial gross margin contributions on these products. Also, as a result of these new product introductions and the continuously changing product mix the Back-end segment recorded additional provisions on slow moving inventories.
The combined impact of the above circumstances were one-time charges in the Back-end segment of more than Eur 10 million, impacting gross profit margins and increased research and development expenses, and reducing the earnings from operations especially in the second quarter of 2004.
In the six months ended June 30, 2004, net sales of wafer processing equipment (Front-end segment) represented 41.5% of consolidated net sales. Net sales of assembly and packaging equipment and materials (Back-end segment) represented 58.5% of consolidated net sales.
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 decline in exchange rates for the first six months of 2004 compared to the first six months of 2003 impacted our sales negatively by 8.1%.
Net sales for the second quarter of 2004 amounted to Eur 211.9 million, an increase of 38.4% compared to net sales for the same period last year of Eur 153.1 million and 8.2% above the sales level of the first quarter of 2004.
Operations
The improvement in gross profit margin for the Front-end segment for the six months ended June 30, 2004 is mainly the result of the overall growth in sales volumes and the related better utilization of manufacturing capacity, and, to a lesser extent, changes in product mix. The Back-end segment also benefited from the increased volume although the higher proportion of new products and the one time impairment charges contributed negatively.
The gross profit margin for the second quarter of 2004 of 34.8% of net sales was 2.4 percentage points above the 32.4% gross profit margin realized in the second quarter of 2003 and 6.6 percentage points below the gross margin of 41.4% for the first quarter of 2004. Changes in product mix, pressure on average selling prices in the Front-end segment and the one time charges in the Back-end segment contributed to the quarter-to-quarter decrease in gross profit margin in the second quarter of 2004.
Within the Front-end segment, selling, general and administrative expenses decreased due to the effect of the restructuring measures implemented in 2003. However, the decrease was offset by additional expenses as a result of the growing activities and the need to further invest in the hiring and training of service engineers. The increase in the Back-end segment is the result of the increased sales activities as compared to the first half of 2003.
As a percentage of net sales, selling, general and administrative expenses were 13.3% in the first half of 2004, compared to 17.8% in the first half of 2003.
Selling, general and administrative expenses increased 19.9% from Eur 24.3 million in the second quarter of 2003 to Eur 29.1 million in the second quarter of 2004 and increased 16.7% from the Eur 25.0 million in the first quarter of 2004.
The Front-end segment research and development expenses decreased as a result of cost control measures, although the Company's strong commitment to research and development and the consolidation of NuTool in the second quarter of 2004 led to increased spending in the second quarter of 2004 compared to the first quarter of 2004. The increase in the Back-end segment is amongst others the result of increased spending for the procurement of components to be used in various engineering prototypes, in particular, our new models of gold wire bonders.
As a percentage of net sales, research and development expenses were 10.0% in the first half of 2004, compared to 14.3% in the first half of 2003.
Research and development expenses increased 14.3% from Eur 20.2 million or 13.2% of net sales in the second quarter of 2003 to Eur 23.1 million or 10.9% of net sales in the second quarter of 2004 and were 32.1% above the Eur 17.5 million in the first quarter of 2004.
Amortization of purchased technology and other intangible assets was Eur 0.5 million in the second quarter of 2004 and relates to the amortization of purchased technology and intangible assets from the acquisition of NuTool on June 2, 2004. The amount includes Eur 0.4 million for purchased In-Process Research and Development, which amount has been expensed in full.
Earnings from operations amounted to earnings of Eur 21.0 million in the second quarter of 2004, compared to earnings of Eur 5.1 million in the same period of 2003. For the first half of 2004, earnings from operations amounted to Eur 59.7 million compared to Eur 0.8 million for the first half of 2003.
Bookings and backlog
New orders received in the second quarter of 2004 amounted to Eur 232.1 million, 2.8% higher than the Eur 225.7 million of new orders in the first quarter of 2004. For the second quarter of 2004 the level of new orders divided by the net sales for the quarter (book-to-bill ratio) was 1.09. For the six months ended June 30, 2004 the book-to-bill ratio was 1.12, consisting of 1.21 for the Front-end segment and 1.06 for the Back-end segment. The backlog at the end of June 2004 of Eur 248.9 million was 8.8% above the backlog of Eur 228.8 million at the end of March 2004.
The order intake and backlog continued to grow in the second quarter of 2004 and is confirming the current industry recovery. Front-end order intake continued to improve in the quarter and Back-end order intake, while still at high levels, softened somewhat towards the end of the quarter.
Liquidity and capital resources
Net cash provided by operations and investing activities for second quarter of 2004 was Eur 6.8 million compared to cash utilized of Eur 1.6 million in the second quarter of 2003. For the six months ended June 30, 2004 net cash provided by operations and investing activities was Eur 32.0 million compared to cash utilized of Eur 7.9 million for the same period in 2003.
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 154.4 million at December 31, 2003 to Eur 177.5 million at June 30, 2004. The increase is primarily the result of increased sales levels and manufacturing activity, although outstanding days of working capital, measured based on a six months basis of net sales, decreased from 89 days at December 31, 2003 to 78 days at June 30, 2004.
In the second quarter of 2004 the Company's subsidiary in the Back-end segment, ASM Pacific Technology Ltd. (ASMPT) repurchased 0.40% of its outstanding shares on the open market in the amount of Eur 4.5 million (HK$ 42.5 million). This repurchase increased the interest of ASM International N.V. (ASMI) in ASMPT from 53.87% to 54.09%.
The acquisition of the 84.3% interest in NuTool not already owned by ASMI on June 2, 2004 was financed with the issue of 1,962,282 common shares of ASMI and 57,720 replacement employee stock options to acquire common shares of ASMI. The total consideration of the acquisition amounted to Eur 35.1 million of which Eur 34.5 million is attributable to the common shares and employee stock options issued in the transaction. The remainder relates to transaction expenses, such as legal and audit fees.
At June 30, 2004, the Company's principal sources of liquidity consisted of Eur 171.5 million in cash and cash equivalents, of which Eur 90.7 million was available for the Company's Front-end segment and Eur 80.8 million was restricted for use in the Company's Back-end segment. In addition the Company also had Eur 64.8 million in undrawn bank facilities, of which Eur 35.6 million was restricted for use in the Back-end segment and Eur 29.2 million was available for use in the Front-end operations, of which Eur 28.2 million is for the Japanese operations.
Outlook
For the short term we have observed a slight cooling of the industry sentiment during the last few weeks. Although we entered the second half of 2004 with a well-filled backlog, the overheated character of the market seems to be disappearing. This will likely have an impact on the remainder of the year.
Our technology position and the appreciation by our customers for the solutions offered by the Company however have never been at a higher level than today. The separate Press Release by ASM Pacific Technology Ltd., on the results for the six months ended June 30, 2004 (as issued earlier today), as well as the separate Press Release on Orders from Multiple Customers (as issued by ASMI simultaneously with this release), both provide examples of our performance. The strong interest for our processes and equipment from major customers during the recent Semicon West conferences in California, USA, further support this.
These technology breakthroughs and the contribution that the Company's manufacturing facility in Singapore will give to the cost effectiveness of our Front-end operations as from early 2005 onwards make us optimistic that we will strongly benefit from the upturn in the industry which we expect to continue well into 2005.
ASM INTERNATIONAL CONFERENCE CALL ASM International will host an investor conference call and web cast on WEDNESDAY, JULY 28, 2004 at 9:00 a.m. US Eastern time 15:00 hours Continental European time. The teleconference dial-in numbers are as follows: United States: +1 888.396.2386 International: +1 617.847.8712 Participation pass code is 32298078
A simultaneous audio web cast will be accessible at www.asm.com.
The teleconference will be available for digitized replay, beginning one hour after completion of the live broadcast through August 4, 2004. The replay dial-in numbers are:
United States: +1 888.286.8010 International +1 617.801.6888. Participation pass code is 24512136
About ASM
ASM International N.V., based 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 generally 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, 2003 and Forms 6-K as filed.
Please use the following link to view the entire release including financial statements: