* Second quarter net sales of € 153.1 million, up 30.0% from net sales of the previous quarter and up 8.7% from net sales of the second quarter of 2002;
* Second quarter net loss of € (6.2) million or € (0.13) per share as compared to a net loss of € (8.3) million or € (0.17) per share for the previous quarter and a net loss of € (6.4) million or € (0.13) per share for the second quarter of 2002;
* Second quarter bookings of € 111.8 million, down 25.4% from the previous quarter caused by a lower level of bookings in the Front-end operations. Six months bookings of € 261.7 million, compared to € 277.3 million in first half of 2002; a decrease of 5.6%;
* Quarter-end backlog of € 133.7 million, down 23.6% from the previous quarter, Book-to-Bill ratio for the second quarter of 0.73; Over the first six months the Front-end Book-to-Bill ratio was 0.89, whilst Back-end achieved a 1.05 Book-to-Bill ratio.
* Impacted negatively by strength of Euro versus the US Dollar and Japanese Yen.
BILTHOVEN, THE NETHERLANDS --- ASM International N.V. (NASDAQ: ASMI and Euronext Amsterdam: ASM) reported today the operating results for the second quarter of 2003. The net loss for the second quarter amounted to € (6.2) million, or € (0.13) diluted net loss per share compared to a net loss of € (6.4) million or € (0.13) diluted net loss per share for the second quarter of 2002.
For the six months ended June 30, 2003 the net loss amounted to € (14.6) million or € (0.29) diluted net loss per share, compared to a net loss of € (18.6) million or € (0.38) diluted net loss per share for the same period in 2002.
Net sales
Net sales for the second quarter of 2003 amounted to € 153.1 million, an increase of 8.7% compared to net sales of € 140.9 million for the second quarter of 2002 and an increase of 30.0% compared to the sales level of € 117.8 million for the first quarter of 2003.
Net sales for the first half of 2003, amounted to € 270.9 million, an increase of 12.2% compared to € 241.4 million net sales for the first half of 2002. Net sales of the company's Front-end wafer processing equipment amounted to € 146.0 million compared to € 122.2 million for the first half of 2002, an increase of 19.4%. Net sales for the Back-end assembly and packaging equipment and materials amounted to € 124.9 million compared to € 119.2 million for the first half of 2002, an increase of 4.8%.
The economic environment continues to impact the semiconductor equipment industry, which has been in a downturn since late 2000. Although there are positive signs for an increase in semiconductor sales, semiconductor manufacturers are still not ready for large capital investments resulting in a very volatile ordering pattern.
In the Front-end operations sales for the first half of 2003 were strong in Epitaxy and PECVD products for new technology and 300mm systems at top-tier customers. ASMI also has seen an increase in the Front-end for capacity driven sales of 200mm systems. In the Back-end operations most equipment purchases were related to technological advancements such as fine pitch wire bonding, 300mm wafer die bonding, stacked die packaging, flip chip and new package types like QFN.
The strong Euro against the Japanese yen, the US dollar and US dollar related currencies did negatively impact ASMI's consolidated net sales levels as expressed in Euro. The growth in sales would have been as high as 32.2%, if the first half of 2003 exchange rates were applied to the first half of 2002 sales levels expressed in their original local currencies.
Operations
The gross profit margin for the second quarter of 2003 amounted to 32.4% of net sales, 5.4 percentage points below the gross profit margin of 37.8% of net sales in the second quarter of 2002, and at the same level of the 32.4% gross profit margin realized in the first quarter of 2003. The gross profit margin for the first half of 2003 amounted to 32.4%, a decrease of 3.4 percentage points compared to 35.8% gross profit margin for the first half of 2002. The stable gross profit margin in the second quarter of 2003, as compared to the first quarter of 2003, was a combination of the higher sales volumes resulting in better utilization of manufacturing capacity offset by lower margins due to competitive price pressure, product mix and the impact of lower US dollar exchange rates, in particular in the Front-end operations. Similarly the competitive price pressure, the product mix and the US dollar impact resulted in a decrease of gross margin for the first half of 2003 compared to the first half of 2002.
Selling, general and administrative expenses were € 24.3 million in the second quarter of 2003 compared to € 28.6 million in the second quarter of 2002, a decrease of 15.0%, and slightly above the level of € 24.0 million in the first quarter of 2003. Selling, general and administrative expenses for the first half of 2003 were € 48.3 million, a decrease of 5.2% compared to € 51.0 million in the first half of 2002. As a percentage of net sales, selling, general and administrative expenses were 17.8% in the first half of 2003, compared to 21.1% in the first half of 2002. The overall decrease in selling, general and administrative expenses is the result of cost control measures and the lower US dollar exchange rate.
Research and development expenses decreased from € 21.7 million or 15.4% of net sales in the second quarter of 2002 to € 20.2 million or 13.2% of net sales in the second quarter of 2003, and 10.0% above the € 18.4 million in research and development expenses in the first quarter of 2003. For the first half of 2003, research and development expenses decreased by 8.6% compared to the first half of 2002, and decreased as a percentage of net sales from 17.5% to 14.3%. The decrease is the result of cost control measures and the impact of the lower US dollar exchange rate, while at the same time ASMI continued its strong research and development commitment to the industry.
Earnings (loss) from operations amounted to earnings of € 5.1 million in the second quarter of 2003, an increase of 71.0% as compared to € 3.0 million in the same period of 2002. For the first half of 2003, earnings from operations amounted to € 0.8 million, compared to a loss from operations of € (6.8) million for the first half of 2002.
Net interest and other financial expenses increased from a net expense of € (2.3) million in the second quarter of 2002 to a net expense of € (3.3) million in the second quarter of 2003. In the first half of 2003 the net expense amounted to € (5.0) million compared to a net expense of € (4.6) million in the first half 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 lower US dollar exchange rate did have a positive effect on the level of net interest expenses. Currency transaction losses for the second quarter of 2003 were € (0.7) million compared to currency transaction losses of € (0.5) million in the second quarter of 2002. Currency transaction losses for the first half of 2003 were € (0.5) million compared to € (0.7) million in the first half of 2002.
Bookings and backlog
New orders received in the second quarter of 2003 amounted to € 111.8 million, 25.4% lower than the € 149.9 million level of new orders received in the first quarter of 2003. For the first half of 2003 the total of new orders amounted to € 261.7 million compared to € 277.3 million for the first six months of 2002. The backlog at the end of June 2003 amounted to € 133.7 million, a decrease of 23.6% compared to € 175.0 million at the end of March 2003. The book-to-bill ratio for the second quarter of 2003 was 0.73 compared to 1.27 in the first quarter of 2003. Of the backlog at June 30, 2003 € 94.3 million relates to Front-end operations and € 39.4 million to Back-end operations.
Liquidity and capital resources
In May 2003, ASMI issued, in a private placement, US$ 90 million of 5.25% convertible subordinated notes due in 2010. The notes are convertible into common shares at a conversion price of approximately US$ 19.22 per common share. Part of the net proceeds of the sale of these notes was used to repay outstanding debt under the company's short-term credit facilities. At June 30, 2003, the company's principal sources of liquidity consisted of € 103.5 million in cash and cash equivalents, of which € 70.8 million was available for the company's Front-end operations and € 32.7 million was restricted for use in the company's Back-end operations. In addition, the company also had € 83.1 million in undrawn bank facilities, of which € 44.9 million was available for Back-end and € 38.2 million was available for Front-end, primarily the company's Japanese operations only. In light of the above mentioned strong liquidity situation for its Front-end activities, the company is currently renegotiating its bank facilities. In the context of these discussions ASMI has canceled its previous € 60.0 million multicurrency revolving credit facility with a consortium of banks.
Outlook
ASMI has not yet not seen a clear and convincing acceleration of activity in the Front-end industry segment. This is apparent from the erratic pattern in the volume of orders booked during recent quarters. Also the price levels of the orders booked is characteristic of a market where ample manufacturing capacity for certain products is available, which leads to pressure on Margins. In light thereof it is at this point in time difficult to foresee for the full year 2003 a level of Net Losses for the total company that would be noticeably better than the level of last year.
The longer than expected absence of a convincing recovery in the industry prompts the Company to take further steps to reduce its existing fixed cost base. During the third and fourth quarter of this year we will execute plans that will reduce the worldwide Front-end employment levels with approximately 150 persons, or ca. 10% of the total Front-end staff. These plans will affect most locations of our Front-end operations, with the likely exception of Japan. The one-time costs associated with these plans will amount to approximately € 15 million and charging these costs in the second half of this year will be in addition to the performance level indicated in the paragraph above. The full beneficial effects of these improvements will become visible in the operating performance as from 2004 onwards.
With the resulting streamlined and more efficient Front-end organization, in combination with the already existing leading edge technology and strong customer base, ASMI will be even better positioned to benefit from an industry recovery and growth.
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ASM INTERNATIONAL CONFERENCE CALL
ASM International will host an investor conference call and web cast on
TUESDAY, July 29, 2003 at
9:00 a.m. US Eastern time
15:00 Continental European time.
The teleconference dial-in numbers are as follows:
United States: 800.884.5695
International: +1 617.786.2960
The participation pass code is 95870227
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 36832278
Please use the following link to view the press release including financial results:
http://reports.huginonline.com/911957/120649.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.
Auditors: Deloitte & Touche, Accountants
Stock: Traded on the NASDAQ National Market System under the symbol 'ASMI' and on the Euronext Amsterdam Stock Exchange under the symbol 'ASM'
Contact :
Robert L. de Bakker,
+ 31 30 229 8540
Mary Jo Dieckhaus,
+ 1 212 986 2900