![](https://capedge.com/proxy/6-K/0000351483-13-000004/a2012q3conferencecallimage1a.jpg)
ASM International N.V. reports Fourth Quarter 2012 and Full Year 2012 Operating Results
ALMERE, The Netherlands - March 05, 2013 - ASM International N.V. (NASDAQ: ASMI and Euronext Amsterdam: ASM) reports today its fourth quarter 2012 and full year 2012 (unaudited) operating results in accordance with US GAAP.
Highlights
• | Net sales for the fourth quarter 2012 were EUR 320 million, a decrease of 22% quarter-to-quarter and 9% year-on-year. Net sales of our Front-end segment decreased 3% quarter-to-quarter, completely driven by currencies. Back-end sales decreased by 28% (excluding currency impact 25%). |
• | Result from operations for Q4 2012 was EUR (4) million. Result from operations in Q3 2012 was EUR 32 million while Q4 of 2011 showed a profit of EUR 19 million. |
• | The Front-end segment's operating profit was EUR 1.2 million compared to a loss of EUR 1.6 million quarter-to-quarter. Q4 2011 showed an operating profit of EUR 9.5 million; |
• | The Back-end segment operating loss was EUR 5.3 million compared to a profit of EUR 33.6 million quarter-to-quarter. Q4 2011 showed an operating profit of EUR 9.5 million. |
• | Fourth quarter 2012 net earnings were EUR (22) million compared to net earnings of EUR 5 million for the third quarter of 2012 and EUR 15 million for the fourth quarter of 2012 |
• | Book to bill in the fourth quarter of 2012 was 1.0. For the Front-end, the book to bill was 1.4, and for the Back-end segment 0.8. The Backlog compared to the end of the third quarter 2012, remained stable at EUR 289 million. |
• | Soft call on €150 million convertible bond took place in November. Further deleveraging ASM International by making the Front-end business debt free. |
Comment
Commenting on the results, Chuck del Prado, President and Chief Executive Officer of ASM International, said:
“Front-end results came in stronger than expected. Our Front-end sales, on a currency comparable level, showed a stable development quarter on quarter. Our Front-end gross margin improved strongly, mainly due to a better mix. Also our Front-end order intake was strong with 129 million euro. Our Back-end operation in Q4 experienced a much lower activity level. This in combination with a weak mix, led to a low gross margin percentage and an operating loss. Back-end order intake was 191 million euro, approximately 10% lower than Q3, as expected.
To the forthcoming AGM we will propose a dividend of €0.50 cent per common share, equal to last year.”
Outlook
Sales in the Front-end are expected to show a double digit decline in Q1, as compared to Q4 2012. However, we expect our Front-end operation to show an order intake in Q1, strongly above the expected sales level for Q1. Based on the backlog at the end of Q4 and the expected order intake in Q1 and Q2, we foresee a double-digit sales increase for Front-end in Q2.
Q1 sales in the Back-end are expected to be at approximately the same level as in Q4, order intake is expected to show an increase in Q1 over Q4.
Study on Market Valuation of the Company
ASM International with the assistance of its financial advisers is in the final stage of completing the study regarding the non-recognition by the markets of the value of the combined businesses of the Company. ASM International will report on the outcome of this study as soon as practical and in any event before the forthcoming Annual General Meeting scheduled on May 16, 2013.
Annual Report
ASM will publish its 2012 Annual report on Form 20-F and its Statutory Annual Report on April 4, 2013. The reports will be published on our website at www.asm.com.
About ASM International
ASM International N.V., headquartered in Almere, 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 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, corporate transactions, financing and liquidity matters, the success of restructurings, 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. The Company assumes no obligation to update or revise any forward-looking statements to reflect future developments or circumstances.
ASM International will host an investor conference call and webcast on Wednesday March 6, 2013 at 15:00 Continental European Time (9:00 a.m. - US Eastern Time, 9:00 p.m. Hong Kong Time).
The teleconference dial-in numbers are as follows:
• United States: +1 646 254 3362
• International: + 44 (0)20 3450 9987
• Access Code: 8774357
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 4, 2013.
The replay dial-in numbers are:
• United States: +1 347 366 9565
• England: + 44 (0)20 3427 0598
• The Netherlands: +31 (0)20 708 5013
• Hong Kong: +852 3011 4669
• Access Code: 8774357
Investor Relations:
Victor Bareño
+31 88 100 8500
Victor.Bareno@asm.com
Mary Jo Dieckhaus
+1 212 986 2900
MaryJo.Dieckhaus@asm.com
Media Contacts:
Ian Bickerton
+31 20 6855 955
+31 62501 8512
ANNEX 1
OPERATING AND FINANCIAL REVIEW
The following table shows the operating performance for the fourth quarter of 2012 as compared to the third quarter of 2012 and the fourth quarter of 2011:
(EUR millions, except earnings per share) | Q4 2011 | Q3 2012 | Q4 2012 | % Change Q3 2012 to Q4 2012 | % Change Q4 2011 to Q4 2012 | |||||
Net sales | 352.0 | 409.3 | 319.9 | (22 | )% | (9 | )% | |||
Gross profit | 106.1 | 125.4 | 87.8 | (30 | )% | (17 | )% | |||
Gross profit margin % | 30.2 | % | 30.6 | % | 27.5 | % | ||||
Selling, general and administrative expenses | (43.6 | ) | (53.6 | ) | (53.5 | ) | 0 | % | 23 | % |
Research and development expenses | (35.3 | ) | (40.0 | ) | (37.5 | ) | (6 | )% | 6 | % |
Impairment charges and restructuring expenses | (8.0 | ) | — | (0.9 | ) | n/a | (89 | )% | ||
Gain on bargain purchase SEAS | (0.1 | ) | — | — | n/a | n/a | ||||
Result from operations | 19.0 | 31.9 | (4.1 | ) | (113 | )% | (121 | )% | ||
Net earnings 1) | 15.4 | 4.9 | (21.7 | ) | ||||||
Net earnings per share, diluted in euro 1) | €0.27 | €0.09 | -€0.37 |
1) allocated to the shareholders of the parent
Net Sales. The following table shows net sales of our Front-end and Back-end segments for the fourth quarter of 2012 as compared to the third quarter of 2012 and the fourth quarter of 2011:
(EUR millions) | Q4 2011 | Q3 2012 | Q4 2012 | % Change Q3 2012 to Q4 2012 | % Change Q4 2011 to Q4 2012 | |||||
Front-end | 114.2 | 96.1 | 93.1 | (3 | )% | (18 | )% | |||
Back-end | 237.8 | 313.2 | 226.8 | (28 | )% | (5 | )% | |||
ASMI consolidated | 352.0 | 409.3 | 319.9 | (22 | )% | (9 | )% |
The fourth quarter 2012 sales decrease in our Front-end segment, compared to the previous quarter, is mainly the result of currency changes (impact €2.6 million). A lower volume of tool sales is nearly completely compensated by a better mix. The decrease of the Back-end sales came from lower Back-end equipment and leadframe sales, which decreased, currency comparable with 44%. SMT sales increased with 14% (currency comparable).
The impact of currency changes was a decrease of 3% quarter to quarter and an increase of 5% year-over-year.
1
Gross Profit (Margin). The following table shows our gross profit and gross profit margin for our Front-end and Back-end performance for the fourth quarter of 2012 as compared to the third quarter of 2012 and the fourth quarter of 2011:
(EUR millions) | Gross profit Q4 2011 | Gross profit Q3 2012 | Gross profit Q4 2012 | Gross profit margin Q4 2011 | Gross profit margin Q3 2012 | Gross profit margin Q4 2012 | Increase or (decrease) percentage points Q3 2012 to Q4 2012 | Increase or (decrease) percentage points Q4 2011 to Q4 2012 | ||||||
Front-end | 38.8 | 30.1 | 34.6 | 33.9 | % | 31.4 | % | 37.1 | % | 5.8pt | 3.2pt | |||
Back-end | 67.4 | 95.3 | 53.3 | 28.3 | % | 30.4 | % | 23.5 | % | (6.9)pt | (4.9)pt | |||
ASMI consolidated | 106.1 | 125.4 | 87.8 | 30.2 | % | 30.6 | % | 27.5 | % | (3.2)pt | (2.7)pt |
The gross profit margin of our Front-end segment in the fourth quarter increased 5.7%, mainly due to a strong mix. Under- absorption remains high, while efficiency improved further. The Back-end gross profit margin decreased, mainly due to a worsening of the mix and a lower volume of Assembly and Packaging equipment.
The impact of currency changes was a decrease of 3% quarter to quarter and an increase of 4% year-over-year.
Selling, General and Administrative Expenses. The following table shows selling, general and administrative expenses for our Front-end and Back-end segments for the fourth quarter of 2012 as compared to the third quarter of 2012 and the fourth quarter of 2011:
(EUR millions) | Q4 2011 | Q3 2012 | Q4 2012 | % Change Q3 2012 to Q4 2012 | % Change Q4 2011 to Q4 2012 | |||||
Front-end | 14.8 | 16.3 | 18.2 | 11 | % | 23 | % | |||
Back-end | 28.8 | 37.2 | 35.4 | (5 | )% | 23 | % | |||
ASMI consolidated | 43.6 | 53.6 | 53.5 | 0 | % | 23 | % | |||
Total selling, general and administrative expenses as a percentage of net sales | 12 | % | 13 | % | 17 | % |
In the Front-end segment SG&A as a percentage of sales increased for the fourth quarter of 2012 to 20%, compared to 17% of the previous quarter. This increase is caused by a €2 million bad debt provision taken for the customer Elpida. Excluding this provision Front-end SG&A, as % of sales would have been equal to the third quarter. In the Back-end segment SG&A, although decreasing in absolute amounts, increased as a percentage of sales from 12% to 16% compared to the previous quarter.
The impact of currency changes was a decrease of 3% quarter to quarter and an increase of 5% year-over-year.
2
Research and Development Expenses. The following table shows research and development expenses for our Front-end and Back-end segments for the fourth quarter of 2012 as compared to the third quarter of 2012 and the fourth quarter of 2011:
(EUR millions) | Q4 2011 | Q3 2012 | Q4 2012 | % Change Q3 2012 to Q4 2012 | % Change Q4 2011 to Q4 2012 | |||||
Front-end | 14.5 | 15.4 | 14.3 | (7 | )% | (1 | )% | |||
Back-end | 20.9 | 24.5 | 23.2 | (5 | )% | 11 | % | |||
ASMI consolidated | 35.3 | 40.0 | 37.5 | (6 | )% | 6 | % | |||
Total research and development expenses as a percentage of net sales | 10 | % | 10 | % | 12 | % |
R&D as a % of sales in the Front-end segment decreased from 16% in Q3, 2012 to 15% in Q4, 2012. In the Back-end segment R&D expenses increased for the same period from 8% to 10%.
The impact of currency changes was a decrease of 3% quarter to quarter and an increase of 5% year-over-year.
Result from Operations. The following table shows results from operations for our Front-end and Back-end segments for the fourth quarter of 2012 as compared to the third quarter of 2012 and the fourth quarter of 2011:
(EUR millions) | Q4 2011 | Q3 2012 | Q4 2012 | Change Q3 2012 to Q4 2012 | Change Q4 2011 to Q4 2012 | |||||
Front-end: | ||||||||||
- Before special items | 9.5 | (1.6 | ) | 2.1 | 3.7 | (7.4 | ) | |||
-Restructuring expenses | — | — | (0.9 | ) | (0.9 | ) | (0.9 | ) | ||
-After special items | 9.5 | (1.6 | ) | 1.2 | 2.8 | (8.3 | ) | |||
Back-end: | ||||||||||
- Before special items | 17.7 | 33.6 | (5.3 | ) | (38.9 | ) | (23 | ) | ||
-Impairment charges | (8.0 | ) | — | — | — | 8.0 | ||||
-Gain on bargain purchase SEAS | (0.1 | ) | — | — | — | 0.1 | ||||
-After special items | 9.5 | 33.6 | (5.3 | ) | (38.9 | ) | (14.9 | ) | ||
ASMI consolidated | 19.0 | 31.9 | (4.1 | ) | (36.0 | ) | (23.1 | ) | ||
Total result from operations excluding special items as a percentage of net sales | 8 | % | 8 | % | (1 | )% |
The impact of currency changes was a decrease of 2% quarter to quarter and an increase of 8% year-over-year.
3
Net Earnings allocated to the shareholders of the parent. The following table shows net earnings for our Front-end and Back-end segments for the fourth quarter of 2012 as compared to the third quarter of 2012 and the fourth quarter of 2011:
(EUR millions) | Q4 2011 | Q3 2012 | Q4 2012 | Change Q3 2012 to Q4 2012 | Change Q4 2011 to Q4 2012 | |||||
Front-end: | ||||||||||
- Before special items | 8.6 | (8.4 | ) | (16.4 | ) | (8.0 | ) | (25.0 | ) | |
-Early extinguishment of debt | — | — | (2.2 | ) | (2.2 | ) | (2.2 | ) | ||
-Impairment charges and restructuring expenses | — | — | (0.9 | ) | (0.9 | ) | (0.9 | ) | ||
-After special items | 8.6 | (8.4 | ) | (19.5 | ) | (11.1 | ) | (28.1 | ) | |
Back-end: | ||||||||||
-Before special items | 11.1 | 13.3 | (2.2 | ) | (15.5 | ) | (13.3 | ) | ||
-Impairment charges | (4.2 | ) | — | — | — | 4.2 | ||||
-After special items | 6.8 | 13.3 | (2.2 | ) | (15.5 | ) | (9.0 | ) | ||
Total net earnings allocated to the shareholders of the parent | 15.4 | 4.9 | (21.7 | ) | (26.6 | ) | (37.1 | ) |
Besides the special items in the fourth quarter, related to the soft call of the €150 million convertible, (€2,2 million) and restructuring expenses €0.9 million, the net result in the Front-end was further impacted by a usage of a deferred tax position in Japan. This is related to the sale of certain IP towards our Dutch IP Holding. While having a negative effect on our net result of €13.0 million, there are no cash flow effects, moreover it will reduce our tax payments in later years.
Net earnings for the Back-end segment reflect our 51.96% ownership of ASM Pacific Technology.
4
Full Year
The following table shows the operating performance and the percentage change for the full year 2012 compared to the same period in 2011:
(EUR millions, except earnings per share) | Full Year | |||||
2011 | 2012 | % Change | ||||
Net sales | 1,634.3 | 1,418.1 | (13 | )% | ||
Gross profit | 582.2 | 440.4 | (24 | )% | ||
Gross profit margin % | 35.6 | % | 31.1 | % | ||
Selling, general and administrative expenses | (176.5 | ) | (202.1 | ) | 15 | % |
Research and development expenses | (129.4 | ) | (149.2 | ) | 15 | % |
Gain on bargain purchase SEAS | 97.8 | — | n/a | |||
Impairment charges and restructuring cost | (8.0 | ) | (0.9 | ) | (89 | )% |
Earnings from operations | 366.0 | 88.3 | (76 | )% | ||
Net earnings 1) | 186.8 | 7.1 | (96 | )% | ||
Net earnings per share, diluted 1) | €3.14 | €0.13 | (96 | )% | ||
New orders | 1,369.5 | 1,377.2 | 1 | % | ||
Backlog at end of period | 330.6 | 289.2 | (13 | )% |
1) allocated to the shareholders of the parent
Net Sales. The following table shows net sales of our Front-end and Back-end segments for the full year 2012 compared to the same period in 2011:
(EUR millions) | Full Year | |||||
2011 | 2012 | % Change | ||||
Front-end | 456.1 | 370.4 | (19 | )% | ||
Back-end | 1,178.3 | 1,047.7 | (11 | )% | ||
ASMI consolidated | 1,634.3 | 1,418.1 | (13 | )% |
The decrease of net sales in the full year 2012 in our Front-end segment compared to the same period last year was driven by decreased equipment sales as a result of decreased activity at our customers. In our Back-end segment sales decreased due to a lower activity level in equipment sales.
The impact of currency changes year-over-year was an increase of 8%.
5
Gross Profit Margin. The following table shows gross profit and gross profit margin for the Front-end and Back-end segments for the full year 2012 compared to the same period in 2011:
(EUR millions) | Full Year | ||||||
Gross profit | Gross profit margin | ||||||
2011 | 2012 | 2011 | 2012 | Increase or (decrease) percentage points | |||
Front-end | 172.3 | 124.5 | 37.8 | % | 33.6 | % | (4.2)pt |
Back-end | 409.8 | 315.9 | 34.8 | % | 30.2 | % | (4.6)pt |
ASMI consolidated | 582.2 | 440.4 | 35.6 | % | 31.1 | % | (4.5)pt |
The decrease of the gross margin in our Front-end segment compared to the same period last year is mainly attributable to efficiency losses, lower loading of our factories causing under absorption, and inventory corrections, and higher investments in evaluation tools. The gross profit margin in the Back-end segment decreased mainly due to mix differences (higher lead frame activities), increased price pressure and a lower activity level.
The impact of currency changes year-over-year was an increase of 8%.
Selling, General and Administrative Expenses. The following table shows selling, general and administrative expenses for our Front-end and Back-end segments for the full year 2012 compared to the same period in 2011:
(EUR millions) | Full Year | |||||
2011 | 2012 | % Change | ||||
Front-end | 61.2 | 64.4 | 5 | % | ||
Back-end | 115.3 | 137.6 | 19 | % | ||
ASMI consolidated | 176.5 | 202.1 | 15 | % |
As a percentage of net sales, selling, general and administrative expenses were 14% in the full year 2012 and 11% in the same period of 2011.
For the full year 2012 selling, general and administrative expenses as a percentage of net sales of our Front-end segment, increased to 17% compared with 14% for the same period of 2011. The SG&A expenses include a provision of €2.1 million for Elpida. For the Back-end segment selling, general and administrative expenses as a percentage of net sales increased from 9% in 2011 to 13% in 2012. Cost increases mainly took place in the Back-end equipment and lead frames business, caused by a strengthening of the organisation.
The impact of currency changes year-over-year was an increase of 8%.
6
Research and Development Expenses. The following table shows research and development expenses for our Front-end and Back-end segments for the full year 2012 compared to the same period in 2011:
(EUR millions) | Full Year | |||||
2011 | 2012 | % Change | ||||
Front-end | 48.5 | 58.7 | 21 | % | ||
Back-end | 80.9 | 90.5 | 12 | % | ||
ASMI consolidated | 129.4 | 149.2 | 15 | % |
As a percentage of net sales, research and development expenses were 11% in the full year 2012 compared to 8% for the same period of 2011.
The impact of currency changes year-over-year was an increase of 8%.
Earnings from Operations. The following table shows earnings from operations for our Front-end and Back-end segments for the full year 2012 compared to the same period in 2011:
(EUR millions) | Full Year | |||||
2011 | 2012 | Change | ||||
Front-end: | ||||||
-Before special items | 62.6 | 1.4 | (61.2 | ) | ||
-Restructuring charges | — | (0.9 | ) | (0.9 | ) | |
-After special items | 62.6 | 0.5 | (62.1 | ) | ||
Back-end: | ||||||
-Before special items | 213.5 | 87.7 | (125.8 | ) | ||
-Impairment charges | (8.0 | ) | — | 8.0 | ||
-Gain on bargain purchase SEAS | 97.8 | — | (97.8 | ) | ||
-After special items | 303.4 | 87.7 | (215.7 | ) | ||
ASMI consolidated | 366.0 | 88.3 | (277.7 | ) | ||
The impact of currency changes year-over-year was a increase of 10% | ||||||
7
Net Earnings allocated to the shareholders of the parent. The following table shows net earnings for our Front-end and Back-end segments for the full year 2012 compared to the same period in 2011:
(EUR millions) | Full Year | |||||
2011 | 2012 | Change | ||||
Front-end: | ||||||
-Before special items | 49.7 | (26.1 | ) | (75.8 | ) | |
-Restructuring | — | (0.9 | ) | (0.9 | ) | |
-Loss from early extinguishment of debt | (0.8 | ) | (2.2 | ) | (1.4 | ) |
-Fair value change conversion options | (4.4 | ) | — | 4.4 | ||
-Special items | (5.2 | ) | (3.1 | ) | 2.1 | |
-After special items | 44.5 | (29.1 | ) | (73.6 | ) | |
Back-end: | ||||||
-Before special items | 95.4 | 36.3 | (59.1 | ) | ||
-Impairment charges | (4.2 | ) | — | 4.2 | ||
-Net gain on bargain purchase SEAS | 51.1 | — | (51.1 | ) | ||
-After special items | 142.2 | 36.3 | (105.9 | ) | ||
ASMI consolidated, total earnings 1) | 186.7 | 7.2 | (179.5 | ) | ||
1) Allocated to the shareholders of the parent | ||||||
Net earnings for the Back-end segment reflect our 51.96% ownership of ASM Pacific Technology. |
8
Bookings and backlog
The following table shows, for our Front-end and Back-end segments, the level of new orders for the fourth quarter of 2012 and the backlog at the end of the fourth quarter of 2012 as compared to the third quarter of 2012 and the fourth quarter of 2011:
(EUR millions, except earnings per share) | Q4 2011 | Q3 2012 | Q4 2012 | % Change Q3 2012 to Q4 2012 | % Change Q4 2011 to Q4 2012 | |||||
Front-end | ||||||||||
Backlog at the beginning of the quarter | 116.2 | 92.2 | 57.3 | (38 | )% | (51 | )% | |||
- New orders for the quarter | 100.3 | 64.3 | 129.5 | 101 | % | 29 | % | |||
- Net sales for the quarter | (114.2 | ) | (96.1 | ) | (93.1 | ) | (3 | )% | (18 | )% |
- FX-effect for the quarter | 2.8 | (3.1 | ) | (2.0 | ) | n/a | n/a | |||
Backlog at the end of the quarter | 105.1 | 57.3 | 91.7 | 60 | % | (13 | )% | |||
Book-to-bill ratio (new orders divided by net sales) | 0.9 | 0.7 | 1.4 | |||||||
Back-end | ||||||||||
Backlog at the beginning of the quarter | 280.4 | 346.9 | 237.9 | (31 | )% | (15 | )% | |||
- New orders for the quarter | 172.9 | 209.9 | 190.5 | (9 | )% | 10 | % | |||
- Net sales for the quarter | (237.8 | ) | (313.2 | ) | (226.8 | ) | (28 | )% | (5 | )% |
- FX-effect for the quarter | 10.0 | (5.7 | ) | (4.0 | ) | n/a | n/a | |||
Backlog at the end of the quarter | 225.5 | 237.9 | 197.5 | (17 | )% | (12 | )% | |||
Book-to-bill ratio (new orders divided by net sales) | 0.7 | 0.7 | 0.8 | |||||||
ASMI consolidated | ||||||||||
Backlog at the beginning of the quarter | 396.5 | 439.1 | 295.2 | (33 | )% | (26 | )% | |||
- New orders for the quarter | 273.2 | 274.2 | 320.0 | 17 | % | 17 | % | |||
- Net sales for the quarter | (352.0 | ) | (409.3 | ) | (319.9 | ) | (22 | )% | (9 | )% |
- FX-effect for the quarter | 12.8 | (8.8 | ) | (6.0 | ) | n/a | n/a | |||
Backlog at the end of the quarter | 330.6 | 295.2 | 289.2 | (2 | )% | (13 | )% | |||
Book-to-bill ratio (new orders divided by net sales) | 0.8 | 0.7 | 1.0 | |||||||
9
Liquidity and capital resources
Net cash provided by operations was EUR 50 million for the fourth quarter of 2012, as compared to a usage of EUR 20 million for the third quarter of 2012. For the fourth quarter of 2011 net cash provided by operations was EUR 40 million. For the full year 2012, EUR 42 million net cash was provided by operations compared to EUR 217 million cash provided for the same period previous year.
Net cash used in investing activities was EUR 21 million for the fourth quarter of 2012, as compared to EUR 15 million for the third quarter of 2012 and EUR 23 million for the fourth quarter of 2011. For the full year 2012, EUR 72 million net cash was used for investing activities compared to EUR 93 million for the same period previous year.
Net cash used in financing activities was EUR 35 million for the fourth quarter of 2012, as compared EUR 5 million used for the third quarter of 2012. For the fourth quarter of 2011 net cash provided by financing activities of EUR 22 million was reported. For the full year 2012, EUR 73 million net cash was used for financing activities compared to EUR 45 million for the same period previous year.
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 507 million at September 30, 2012 to EUR 468 million at December 31, 2012.
The number of outstanding days of working capital, measured against quarterly sales, increased from 111 days at September 30, 2012 to 126 days at December 31, 2012. For the same period our Front-end segment decreased from 113 days to 110 days while our Back-end segment increased from 111 days to 126 days.
Sources of liquidity. At December 31, 2012, the Company’s principal sources of liquidity consisted of EUR 290 million in cash and cash equivalents and EUR 276 million in undrawn bank lines. Approximately EUR 145 million of the cash and cash equivalents and EUR 126 million of the undrawn bank lines are restricted to use in the Company’s Back-end operations.
10
ASM INTERNATIONAL N.V.
CONSOLIDATED STATEMENTS OF OPERATIONS
(EUR thousands, except earnings per share date) | Three months ended December 31, | Full Year | ||||||
2011 | 2012 | 2011 | 2012 | |||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||
Net sales | 351,950 | 319,902 | 1,634,334 | 1,418,067 | ||||
Cost of sales | (245,810 | ) | (232,073 | ) | (1,052,179 | ) | (977,638 | ) |
Gross profit | 106,140 | 87,829 | 582,155 | 440,429 | ||||
Operating expenses: | ||||||||
Selling, general and administrative | (43,577 | ) | (53,471 | ) | (176,454 | ) | (202,062 | ) |
Research and development | (35,350 | ) | (37,535 | ) | (129,400 | ) | (149,219 | ) |
Net gain on bargain purchase | (145 | ) | — | 97,750 | — | |||
Impairment of PPE | (8,038 | ) | — | (8,038 | ) | — | ||
Restructuring expenses | — | (891 | ) | — | (891 | ) | ||
Total operating expenses | (87,110 | ) | (91,898 | ) | (216,142 | ) | (352,173 | ) |
Earnings from operations | 19,030 | (4,070 | ) | 366,014 | 88,256 | |||
Net interest expense | (2,274 | ) | (1,809 | ) | (10,595 | ) | (10,124 | ) |
Loss from early extinguishment of debt | — | (2,209 | ) | (824 | ) | (2,209 | ) | |
Accretion of interest | (1,111 | ) | (745 | ) | (4,401 | ) | (4,469 | ) |
Revaluation conversion option | — | — | (4,378 | ) | — | |||
Foreign currency exchange gains (losses) | 5,227 | (1,441 | ) | 7,040 | (3,959 | ) | ||
Results on investments | — | (766 | ) | — | (766 | ) | ||
Earnings before income taxes | 20,872 | (11,039 | ) | 352,855 | 66,730 | |||
Income tax expense | 790 | (12,758 | ) | (36,692 | ) | (26,300 | ) | |
Net earnings | 21,662 | (23,797 | ) | 316,164 | 40,430 | |||
Allocation of net earnings | ||||||||
Shareholders of the parent | 15,444 | (21,734 | ) | 186,770 | 7,149 | |||
Minority interest | 6,218 | (2,063 | ) | 129,394 | 33,282 | |||
Net earnings per share, allocated to the shareholders of the parent: | ||||||||
Basic net earnings | 0.28 | (0.37 | ) | 3.38 | 0.13 | |||
Diluted net earnings (1) | 0.27 | (0.37 | ) | 3.16 | 0.13 | |||
Weighted average number of shares used in | ||||||||
computing per share amounts (in thousands): | ||||||||
Basic | 55,375 | 58,886 | 55,210 | 56,108 | ||||
Diluted (1) | 56,299 | 58,886 | 64,682 | 56,767 | ||||
Outstanding shares: | 55,377,020 | 63,095,986 | ||||||
(1) The calculation of diluted net earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in earnings of the Company. Only instruments that have a dilutive effect on net earnings are included in the calculation. The assumed conversion results in adjustment in the weighted average number of common shares and net earnings due to the related impact on interest expense. The calculation is done for each reporting period individually. For three months ended December 31, 2012 the effect of a potential conversion of convertible debt into 5,720,824 common shares was anti dilutive and for the full year 2012 8,231,432 was anti dilutive and no adjustments have been reflected in the diluted weighted average number of shares and net earnings per share for these periods. The possible increase of common shares caused by employee stock options for the full year 2012 with 658,671 common shares, adjustments have been reflected in the diluted weighted average number of shares and net earnings per share for this period. | ||||||||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
11
ASM INTERNATIONAL N.V.
CONSOLIDATED BALANCE SHEETS
(EUR thousands) | December 31, | December 31, | ||
Assets | 2011 | 2012 | ||
(unaudited) | ||||
Cash and cash equivalents | 390,250 | 290,475 | ||
Accounts receivable, net | 330,891 | 304,840 | ||
Inventories, net | 376,667 | 403,400 | ||
Income taxes receivable | 907 | 890 | ||
Deferred tax assets | 14,350 | 17,967 | ||
Other current assets | 76,020 | 79,979 | ||
Total current assets | 1,189,084 | 1,097,551 | ||
Pledged cash | 20,000 | 20,000 | ||
Debt issuance costs | 4,389 | 735 | ||
Deferred tax assets | 13,072 | 5,955 | ||
Other intangible assets | 14,776 | 13,915 | ||
Goodwill, net | 52,131 | 51,888 | ||
Investments | 1,044 | 278 | ||
Other non current assets | 6,695 | 10,828 | ||
Assets held for sale | 6,862 | 5,998 | ||
Evaluation tools at customers | 13,987 | 16,922 | ||
Property, plant and equipment, net | 260,180 | 275,436 | ||
Total Assets | 1,582,221 | 1,499,506 | ||
Liabilities and Shareholders' Equity | ||||
Notes payable to banks | 40,680 | 61,675 | ||
Accounts payable | 157,549 | 151,761 | ||
Other current payables | 195,574 | 170,683 | ||
Income taxes payable | 54,878 | 27,625 | ||
Deferred tax liability - current | 3,513 | 36 | ||
Current portion of long-term debt | 4,332 | 6,316 | ||
Total current liabilities | 456,527 | 418,096 | ||
Pension liabilities | 9,887 | 12,540 | ||
Deferred tax liabilities | 868 | 952 | ||
Provision for warranty | 6,828 | 5,298 | ||
Long-term debt | 15,319 | 12,632 | ||
Convertible subordinated debt | 135,078 | — | ||
Total Liabilities | 624,507 | 449,518 | ||
Shareholders' Equity: | ||||
Common shares | 2,215 | 2,584 | ||
Capital in excess of par value | 376,217 | 480,153 | ||
Treasury shares at cost | — | — | ||
Retained earnings | 301,515 | 288,105 | ||
Accumulated other comprehensive loss | (20,151 | ) | (28,966 | ) |
Total Shareholders' Equity | 659,796 | 741,876 | ||
Non-controlling interest | 297,918 | 308,112 | ||
Total Equity | 957,714 | 1,049,988 | ||
Total Liabilities and Equity | 1,582,221 | 1,499,506 | ||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
12
ASM INTERNATIONAL N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EUR thousands) | Three months ended December 31, | Full Year | ||||||
2011 | 2012 | 2011 | 2012 | |||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||
Cash flows from operating activities: | ||||||||
Net earnings | 21,662 | (23,797 | ) | 316,164 | 40,430 | |||
Adjustments to reconcile net earnings to net cash from | ||||||||
operating activities: | ||||||||
Depreciation and amortization | 12,828 | 15,018 | 46,974 | 56,918 | ||||
Impairment charges | — | — | — | 96 | ||||
Impairment of property, plant and equipment | 8,038 | — | 8,038 | — | ||||
Amortization of debt issuance costs | 374 | 293 | 2,477 | 1,446 | ||||
Early extinguishment of debt | — | 2,209 | — | 2,209 | ||||
Compensation expense employee stock option plan | 1,530 | 6,145 | 13,452 | 23,065 | ||||
Revaluation conversion option | — | — | 4,378 | — | ||||
Additional non-cash interest | 1,111 | 744 | 4,401 | 4,469 | ||||
Other investments at cost | 766 | — | 766 | |||||
Net gain on bargain purchase | 145 | — | (97,750 | ) | — | |||
Income taxes | (17,853 | ) | (5,053 | ) | (6,893 | ) | (25,968 | ) |
Deferred income taxes | (7,700 | ) | 12,012 | (13,275 | ) | (147 | ) | |
Changes in other assets and liabilities: | ||||||||
Inventories | 50,881 | 21,027 | 5,994 | (32,077 | ) | |||
Accounts receivable | 5,385 | 46,937 | 35,619 | 17,905 | ||||
Accounts payable | (8,290 | ) | (20,200 | ) | (67,969 | ) | (2,757 | ) |
Other current assets | (28,160 | ) | (5,963 | ) | (35,028 | ) | (43,875 | ) |
Net cash provided (used) by operating activities | 39,952 | 50,137 | 216,581 | 42,479 | ||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (19,566 | ) | (19,647 | ) | (89,218 | ) | (68,162 | ) |
Purchase of intangible assets | (6,309 | ) | (1,648 | ) | (7,051 | ) | (4,630 | ) |
Acquisition of business | — | — | (994 | ) | — | |||
Proceeds from sale of property, plant and equipment | 2,555 | 209 | 3,823 | 902 | ||||
Net cash used in investing activities | (23,320 | ) | (21,086 | ) | (93,440 | ) | (71,890 | ) |
Cash flows from financing activities: | ||||||||
Notes payable to banks, net | 19,660 | (22,075 | ) | 22,680 | 23,366 | |||
Cash from business combination | — | — | 33,150 | — | ||||
Net proceeds from long-term debt | 14,445 | 19,246 | 12,987 | 19,246 | ||||
Repayments of long-term debt and subordinated debt | (11,929 | ) | (5,531 | ) | (16,590 | ) | (19,661 | ) |
Purchase of treasury shares ASMI | — | (27,192 | ) | — | (40,554 | ) | ||
Purchase of treasury shares ASMPT | — | — | — | (3,552 | ) | |||
Proceeds from issuance of common shares | 121 | 449 | 4,122 | 2,209 | ||||
Dividend to minority shareholders ASMPT | — | — | (79,474 | ) | (27,024 | ) | ||
Dividend to shareholders ASMI | (148 | ) | — | (22,262 | ) | (27,519 | ) | |
Net cash provided (used) in financing activities | 22,148 | (35,103 | ) | (45,388 | ) | (73,489 | ) | |
Exchange rate effects | 841 | (791 | ) | (7,801 | ) | 3,127 | ||
Net increase (decrease) in cash and cash equivalents | 39,621 | (6,843 | ) | 69,954 | (99,774 | ) | ||
Cash and cash equivalents at beginning of period | 370,627 | 297,317 | 340,294 | 390,250 | ||||
Cash and cash equivalents at end of period | 410,250 | 290,475 | 410,250 | 290,475 | ||||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
13
ASM INTERNATIONAL N.V.
DISCLOSURE ABOUT SEGMENTS AND RELATED INFORMATION (1/3)
The Company organizes its activities in two operating segments, Front-end and Back-end. | ||||||
The Front-end segment manufactures and sells equipment used in wafer processing, encompassing the fabrication steps in which silicon wafers are layered with semiconductor devices. The segment is a product driven organizational unit comprised of manufacturing, service, and sales operations in Europe, the United States, Japan and Southeast Asia. | ||||||
The Back-end segment manufactures and sells equipment and materials used in assembly and packaging, encompassing the processes in which silicon wafers are separated into individual circuits and subsequently assembled, packaged and tested. The segment is organized in ASM Pacific Technology Ltd., in which the Company holds a majority interest of 51.96% at December 31, 2012, whilst the remaining shares are listed on the Stock Exchange of Hong Kong. The segment's main operations are located in Hong Kong, Singapore, the People's Republic of China and Malaysia. | ||||||
(EUR thousands) | Three months ended December 31, 2011 | |||||
Front-end | Back-end | Total | ||||
(unaudited) | (unaudited) | (unaudited) | ||||
Net sales to unaffiliated customers | 114,160 | 237,790 | 351,950 | |||
Gross profit | 38,756 | 67,384 | 106,140 | |||
Earnings from operations | 9,522 | 9,509 | 19,030 | |||
Net interest income (expense) | (2,758 | ) | 484 | (2,274 | ) | |
Loss resulting from early extinguishment of debt | — | — | — | |||
Accretion of interest | (1,111 | ) | — | (1,111 | ) | |
Foreign currency exchange gains (losses) | 6,504 | (1,276 | ) | 5,227 | ||
Income tax income (expense) | (3,548 | ) | 4,338 | 790 | ||
Net earnings | 8,609 | 13,054 | 21,663 | |||
Net earnings allocated to: | ||||||
Shareholders of the parent | 15,445 | |||||
Minority interest | 6,218 | |||||
Capital expenditures and purchase of intangible assets | 11,167 | 14,708 | 25,875 | |||
Depreciation and amortization | 4,002 | 8,826 | 12,828 | |||
Impairment of fixed assets | — | 8,038 | 8,038 | |||
Three months ended December 31, 2012 | ||||||
(unaudited) | (unaudited) | (unaudited) | ||||
Net sales to unaffiliated customers | 93,104 | 226,798 | 319,902 | |||
Gross profit | 34,551 | 53,278 | 87,829 | |||
Earnings (loss) from operations | 1,241 | (5,311 | ) | (4,070 | ) | |
Net interest expense | (1,589 | ) | (221 | ) | (1,809 | ) |
Loss resulting from early extinguishment of debt | (2,209 | ) | - | (2,209 | ) | |
Accretion of interest | (818 | ) | 73 | (745 | ) | |
Foreign currency exchange gains (losses) | (2,103 | ) | 662 | (1,441 | ) | |
Results on investments | (766 | ) | — | (766 | ) | |
Income tax income (expense) | (13,241 | ) | 483 | (12,758 | ) | |
Net earnings | (19,484 | ) | (4,313 | ) | (23,797 | ) |
Net earnings allocated to: | ||||||
Shareholders of the parent | (21,734 | ) | ||||
Minority interest | (2,063 | ) | ||||
Capital expenditures and purchase of intangible assets | 10,212 | 11,083 | 21,295 | |||
Depreciation and amortization | 4,581 | 10,437 | 15,018 | |||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
14
ASM INTERNATIONAL N.V.
DISCLOSURE ABOUT SEGMENTS AND RELATED INFORMATION (2/3)
(EUR thousands) | Full Year 2011 | |||||
Front-end | Back-end | Total | ||||
(unaudited) | (unaudited) | (unaudited) | ||||
Net sales to unaffiliated customers | 456,065 | 1,178,270 | 1,634,334 | |||
Gross profit | 172,318 | 409,837 | 582,155 | |||
Earnings from operations | 62,581 | 303,433 | 366,014 | |||
Net interest income (expense) | (12,166 | ) | 1,571 | (10,595 | ) | |
Loss resulting from early extinguishment of debt | (824 | ) | — | (824 | ) | |
Accretion of interest | (4,401 | ) | — | (4,401 | ) | |
Revaluation conversion option | (4,378 | ) | — | (4,378 | ) | |
Foreign currency exchange gains (losses) | 8,296 | (1,256 | ) | 7,040 | ||
Income tax expense | (4,581 | ) | (32,110 | ) | (36,692 | ) |
Net earnings | 44,527 | 271,637 | 316,164 | |||
Net earnings allocated to: | ||||||
Shareholders of the parent | 186,770 | |||||
Minority interest | 129,394 | |||||
Capital expenditures and purchase of intangible assets | 22,510 | 73,759 | 96,269 | |||
Depreciation and amortization | 14,335 | 32,638 | 46,973 | |||
Impairment of fixed assets | — | 8,038 | 8,038 | |||
Cash and cash equivalents | 228,114 | 182,136 | 410,250 | |||
Capitalized goodwill | 11,193 | 40,939 | 52,131 | |||
Other intangible assets | 9,643 | 5,133 | 14,776 | |||
Other identifiable assets | 336,090 | 768,973 | 1,105,064 | |||
Total assets | 585,040 | 997,181 | 1,582,221 | |||
Total debt | 162,464 | 32,946 | 195,410 | |||
Headcount in full-time equivalents (1) | 1,631 | 14,563 | 16,194 | |||
(1) Headcount includes those employees with a fixed contract, and is exclusive of temporary workers. | ||||||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
15
ASM INTERNATIONAL N.V.
DISCLOSURE ABOUT SEGMENTS AND RELATED INFORMATION (3/3)
(EUR thousands) | Full Year 2012 | |||||
(unaudited) | (unaudited) | (unaudited) | ||||
Net sales to unaffiliated customers | 370,409 | 1,047,658 | 1,418,067 | |||
Gross profit | 124,531 | 315,898 | 440,429 | |||
Earnings from operations | 539 | 87,717 | 88,256 | |||
Net interest income (expense) | (10,367 | ) | 243 | (10,124 | ) | |
Loss resulting from early extinguishment of debt | (2,209 | ) | — | (2,209 | ) | |
Accretion of interest | (4,329 | ) | (140 | ) | (4,469 | ) |
Revaluation conversion option | — | — | — | |||
Foreign currency exchange gains (losses) | (3,051 | ) | (908 | ) | (3,959 | ) |
Results on investments | (766 | ) | — | (766 | ) | |
Income tax expense | (8,965 | ) | (17,335 | ) | (26,300 | ) |
Net earnings (loss) | (29,147 | ) | 69,577 | 40,430 | ||
Net earnings allocated to: | ||||||
Shareholders of the parent | 7,149 | |||||
Minority interest | 33,282 | |||||
Capital expenditures and purchase of intangible assets | 24,015 | 48,777 | 72,792 | |||
Depreciation and amortization | 17,295 | 39,622 | 56,918 | |||
Cash and cash equivalents | 145,061 | 145,414 | 290,475 | |||
Pledged cash | — | 20,000 | 20,000 | |||
Capitalized goodwill | 11,648 | 40,239 | 51,888 | |||
Other intangible assets | 9,049 | 4,866 | 13,915 | |||
Other identifiable assets | 334,399 | 788,829 | 1,123,228 | |||
Total assets | 500,157 | 999,348 | 1,499,506 | |||
Total debt | — | 80,623 | 80,623 | |||
Headcount in full-time equivalents (1) | 1,636 | 15,768 | 17,404 | |||
(1) Headcount includes those employees with a fixed contract, and is exclusive of temporary workers. | ||||||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
16
ASM INTERNATIONAL N.V. | ||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | ||||||||
Basis of Presentation | ||||||||
ASM International N.V, ("ASMI") follows accounting principles generally accepted in the United States of America ("US GAAP"). | ||||||||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. | ||||||||
Principles of Consolidation | ||||||||
The Consolidated Financial Statements include the accounts of ASMI and its subsidiaries, where ASMI holds a controlling interest. The non-controlling interest of third parties is disclosed separately in the Consolidated Financial Statements. All intercompany profits, transactions and balances have been eliminated in consolidation. | ||||||||
Change in accounting policies | ||||||||
No significant changes in accounting policies incurred during the fourth quarter of 2012. |
17
ASM INTERNATIONAL N.V.
RECONCILIATION US GAAP - IFRS
Accounting principles under IFRS | |||||||||
ASMI’s primary consolidated financial statements are and will continue to be prepared in accordance with US GAAP. However, ASMI is required under Dutch law to report its Consolidated Financial Statements in accordance with International Financial Reporting Standards (“IFRS”). As a result of the differences between IFRS and US GAAP that are applicable to ASMI, the Consolidated Statement of Operations and Consolidated Balance Sheet reported in accordance with IFRS differ from those reported in accordance with US GAAP. The major differences relate to development costs, goodwill, pensions, inventory obsolescence reserve, pension plans and preferred shares. | |||||||||
The reconciliation between IFRS and US GAAP is as follows: | |||||||||
(EUR thousands, except per share date) | Three months ended December 31, | Full Year | |||||||
Net earnings | |||||||||
2011 | 2012 | 2011 | 2012 | ||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||
US GAAP | 21,662 | (23,797 | ) | 316,164 | 40,430 | ||||
Adjustments for IFRS: | |||||||||
Pensions | — | (691 | ) | (691 | ) | ||||
Reversal inventory write downs | (153 | ) | 234 | (1,639 | ) | 335 | |||
Tax rate difference on eliminated intercompany profit | 768 | 437 | 768 | (718 | ) | ||||
Development expenses | 2,200 | 210 | 8,908 | 8,652 | |||||
Debt issuance fees | 105 | 108 | (55 | ) | 446 | ||||
Total adjustments | 2,920 | 298 | 7,982 | 8,024 | |||||
IFRS | 24,582 | (23,499 | ) | 324,146 | 48,454 | ||||
IFRS allocation of net earnings: | |||||||||
Shareholders | 18,364 | (21,256 | ) | 194,752 | 15,904 | ||||
Minority interest | 6,218 | (2,243 | ) | 129,394 | 32,550 | ||||
Net earnings per share, allocated to the shareholders of the parent: | |||||||||
Basic | €0.34 | -€0.36 | €3.52 | €0.28 | |||||
Diluted | €0.33 | -€0.36 | €3.27 | €0.28 | |||||
(EUR thousands) | Total Equity | ||||||||
December 31, | December 31, | ||||||||
2011 | 2012 | ||||||||
(unaudited) | (unaudited) | ||||||||
US GAAP | 957,714 | 1,049,988 | |||||||
Adjustments for IFRS: | |||||||||
Goodwill | (10,647 | ) | (10,481 | ) | |||||
Debt issuance fees | (1,181 | ) | (735 | ) | |||||
Reversal inventory write downs | 1,626 | 2,009 | |||||||
Development expenses | 43,741 | 51,386 | |||||||
Tax rate difference on eliminated intercompany profit | 767 | 49 | |||||||
Pension plans | (179 | ) | 3,329 | ||||||
Total adjustments | 34,127 | 45,557 | |||||||
IFRS | 991,841 | 1,095,545 | |||||||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
18
19