-- Net sales of Eur 134.7 million, down 31.2% from net sales of the
first quarter of 2004 and down 17.2% from net sales of the fourth
quarter of 2004.
-- Net loss of Eur 7.2 million or Eur 0.14 diluted net loss per
share, as compared to net earnings of Eur 14.6 million or Eur
0.28 diluted net earnings per share for the first quarter of 2004
and net earnings of Eur 1.4 million or Eur 0.03 diluted net
earnings per share in the fourth quarter of 2004.
-- First quarter bookings of Eur 150.0 million, up 18.1% from the
fourth quarter of 2004.
-- Quarter-end backlog of Eur 202.1 million, up 8.2% from the end of
the previous quarter.
-- Please use the following link to view the entire release
including financial statements:
http://hugin.info/132090/R/990936/149109.pdf
BILTHOVEN, Netherlands, April 25, 2005 -- ASM International N.V. (Nasdaq:ASMI) (Euronext Amsterdam: ASM) reports today its 2005 first quarter operating results. These operating results have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP").
The net loss for the first quarter of 2005 amounted to Eur 7.2 million, or Eur 0.14 diluted net loss per share, compared to net earnings of Eur 14.6 million or Eur 0.28 diluted net earnings per share for the same period in 2004.
The first quarter of 2005 showed a positive development in order intake. With Eur 150.0 million in new orders, the order intake increased Eur 23.0 million or 18.1% as compared to Eur 127.0 million in the fourth quarter of 2004. Both the Company's Front-end and Back-end segments reported decreased levels of sales and operating results.
The consolidated financial statements for the first quarter of 2005 include the operations of the Company's 100% subsidiaries ASM NuTool, Inc. and ASM Genitech, Inc., which were acquired in June 2004 and August 2004, respectively.
The following table compares the operating performance for the first quarter of 2005 with the fourth quarter of 2004 and the first quarter of 2004:
(euro millions)
% Change % Change
Q4 2004 Q1 2004
to to
Q1 2004 Q4 2004 Q1 2005 Q1 2005 Q1 2005
Net sales 195.9 162.6 134.7 (17.2)% (31.2)%
Gross profit 81.1 55.9 45.9 (17.9)% (43.4)%
Gross profit margin 41.4% 34.4% 34.1% (0.3)(1) (7.3)(1)
Selling, general and
administrative
expenses (24.9) (24.9) (23.8) (4.6)% (4.7)%
Research and
development
expenses (17.5) (22.2) (20.9) (5.5)% 19.9 %
Amortization of
purchased
technology and
other
intangible assets -- (0.4) (0.4) -- --
Earnings from
operations 38.7 8.4 0.8 (90.4)% (97.9)%
Net earnings (loss) 14.6 1.4 (7.2) na na
New orders 225.7 127.0 150.0 18.1 % (33.5)%
Backlog at end
of period 228.8 186.8 202.1 8.2 % (11.7)%
(1) Percentage points change.
Net sales
In line with industry trends, net sales for the first quarter of 2005 were lower as compared to the fourth quarter of 2004 in both wafer processing equipment (Front-end) and assembly and packaging equipment and materials (Back-end).
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 first quarter of 2005 compared to the first quarter of 2004 impacted sales negatively by 4.7%.
Operations
Gross Profit Margin amounted to 34.1% of net sales in the first quarter of 2005, 7.3 percentage points below the gross profit margin of 41.4% of net sales in the first quarter of 2004. The decrease was caused by lower volumes and an increase in the proportion of net sales accounted for by the lower margin Front-end segment. The gross profit margin in the first quarter of 2005 was 0.3 percentage points below the gross profit margin of 34.4% in the fourth quarter of 2004.
Selling, General and Administrative Expenses decreased 4.7% from Eur 24.9 million in the first quarter of 2004 to Eur 23.8 million in the first quarter of 2005 and decreased 4.6% from Eur 24.9 million in the fourth quarter of 2004., The decrease was the result of favourable currency exchange rates and the Company's focus on fixed cost control.
As a percentage of net sales, selling, general and administrative expenses were 17.6% in the first quarter of 2005 compared to 12.7% in the first quarter of 2004, and 15.3% in the fourth quarter of 2004. The increase was the result of lower net sales.
Research and Development Expenses increased 19.9% from Eur 17.5 million in the first quarter of 2004 to Eur 20.9 million in the first quarter of 2005 and decreased 5.5% from Eur 22.2 million in the fourth quarter of 2004.
Research and development expenses increased in the first quarter of 2005 when compared to the first quarter of 2004 mainly as a result of 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.
Amortization of Purchased Technology and Other Intangible Assets was Eur 0.4 million in the first quarter of 2005, unchanged from the fourth quarter of 2004. The amortization mainly relates to the amortization of purchased technology and other intangible assets from the acquisitions of ASM NuTool and ASM Genitech.
Earnings from Operations amounted Eur 0.8 million in the first quarter of 2005 compared to Eur 38.7 million in the first quarter of 2004 and Eur 8.4 million in the fourth quarter of 2004. Earnings from operations decreased in both the Company's Front-end and Back-end segments.
Net Interest Expense increased from a net expense of Eur 2.4 million in the first quarter of 2004 to a net expense of Eur 2.8 million in the first quarter of 2005. The increase is mainly the result of increased interest expenses due to increased borrowings, including the issuance of US$ 150.0 million in convertible debt in December 2004. The increased interest expense is partly offset by favourable US dollar exchange rates and increased interest income, which is due to increased cash and cash equivalents and increased interest rates for cash deposits. Net interest expense in the first quarter of 2005 also includes a Eur 0.3 million loss related to the early extinguishment of US$ 4.6 million of convertible subordinated notes due November 2005.
Bookings and backlog
New orders received increased 18.1% from Eur 127.0 million in the fourth quarter of 2004 to Eur 150.0 million in the first quarter of 2005 reflecting a surge in Back-end orders. For the first quarter of 2005, the level of new orders divided by the net sales for the quarter (book-to-bill ratio) was 1.11, compared to a book-to-bill ratio of 0.86 and 0.78 in the third and fourth quarter of 2004, respectively.
The backlog at March 31, 2005 amounted to Eur 202.1 million, an increase of 8.2% compared to the backlog of Eur 186.8 million at December 31, 2004. Of this amount approximately one-third refers to the ending backlog of ASM Pacific Technology.
Liquidity and capital resources
Net cash provided by operations in the first quarter of 2005 was Eur 22.5 million as compared to Eur 34.1 million in the first quarter of 2004. The decrease was primarily caused by the net loss reported in the first quarter of 2005, partly compensated by increased collections on outstanding receivables. Net cash used in investing activities in the first quarter of 2005 was Eur 11.9 million as compared to net cash used of Eur 9.0 million in the first quarter of 2004. The increase was primarily caused by increased capital expenditures, in particular machinery. Net working capital, consisting of accounts receivable, inventories, other current assets, accounts payable, accrued expenses, advance payments from customers and deferred revenue, decreased from Eur 189.2 million at December 31, 2004 to Eur 174.9 million at March 31, 2005. The decrease is primarily the result of decreased sales levels, partly offset by increased inventory levels for shipments in the second quarter of 2005. The number of outstanding days of working capital, measured based on quarterly sales, increased from 107 days at December 31, 2004 to 117 days at March 31, 2005. At March 31, 2005, the Company's principal sources of liquidity consisted of Eur 232.9 million in cash and cash equivalents, of which Eur 148.2 million was available for the Company's Front-end operations and Eur 84.7 million was restricted for use in the Company's Back-end operations. In addition, the Company also had Eur 69.7 million in undrawn bank facilities, of which Eur 33.6 million was available for its Back-end operations and Eur 36.1 million was available for its Front-end operations in Japan.
If the Company's convertible subordinated notes due November 2005 are not converted into common shares prior to or at maturity in November 2005, the Company has to repay these notes in cash. The conversion price is $18.85. At March 31, 2005, Eur 72.8 million of these notes were outstanding.
Outlook
In the first quarter of 2005 we have seen a positive development in order intake, but at lower levels than we anticipated earlier in the year. Although we have won important orders, our customers are more cautious in adding capacity and as a result customers are delaying orders further into 2005 or even into 2006. Based on the current market forecast we expect sales levels to be lower than anticipated earlier, in particular in our Front-end wafer processing segment. This lower sales expectation also delays the achievement of operational profitability for the Front-end operations. In contrast to earlier guidance, and despite continued strong focus on fixed costs, we do no longer expect positive earnings from operations for our Front-end segment for the full year 2005.
We continue to invest in our Front-end technological capabilities and our Front-end manufacturing facility in Singapore. We also remain confident that our Back-end segment will see improved momentum starting in the second quarter 2005. Based on the above, and in combination with our current backlog, we expect the net sales and net result in the second quarter of 2005 to improve when compared to the first quarter of 2005.
ASM INTERNATIONAL CONFERENCE CALL
ASM International will host an investor conference call and web cast on
TUESDAY, APRIL 26, 2005 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: +1 800.510.9661 International: +1 617.614.3452 Participation pass code is 263 23 962
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 May 3, 2005. The replay dial-in numbers are:
United States: +1 888.286.8010 International +1 617.801.6888 Participation pass code is 805 18 954
About ASM International
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 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 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 reports on Form 20-F and Form 6-K as filed.
Please use the following link to view the entire release including financial statements: http://hugin.info/132090/R/990936/149109.pdf