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Almere, The Netherlands
July 23, 2014
ASM INTERNATIONAL N.V. REPORTS
SECOND QUARTER 2014 RESULTS
ASM International N.V. (NASDAQ: ASMI and Euronext Amsterdam: ASM) reports today its second quarter 2014 operating results (unaudited) in accordance with US GAAP.
FINANCIAL HIGHLIGHTS
Quarter | ||||||
EUR million | Q2 2013 | Q1 2014 | Q2 2014 | |||
New orders | 128.4 | 172.1 | 119.5 | |||
Net sales | 128.6 | 150.7 | 148.4 | |||
Gross profit margin % | 39.3 | % | 43.7 | % | 42.3 | % |
Operating results | 16.2 | 32.5 | 27.4 | |||
Result from investments (excl. amortization and fair value purchase price allocation) | 9.2 | 5.7 | 15.8 | |||
Remeasurement gain, realized gain on sale of ASMPT shares, amortization and fair value adjustments1) | (40.6 | ) | (5.4 | ) | (5.5 | ) |
Net earnings | (23.4 | ) | 27.1 | 34.6 | ||
Normalized net earnings (excl. remeasurement gain realized gain on sale of ASMPT shares, amortization and fair value adjustments) | 17.2 | 32.5 | 40.1 |
• | Net sales for the second quarter 2014 decreased with 2% compared to the first quarter and increased with 15% year-on-year, mainly driven by ALD and PEALD sales which were substantially higher than in the comparable period last year. |
• | Normalized net earnings for the second quarter 2014 increased compared to the first quarter mainly due to a higher result from investments. Compared to the same quarter last year, besides the effect of higher results from investments, the improvement was due to higher sales and positive mix effects. |
1) Following the close of the sale on March 15, 2013 of a 12% share in ASMPT, the entity in which the Back-end segment is organized, ASMI's shareholding is reduced to 40%. As a consequence, as from March 15, 2013 the results of ASMPT are deconsolidated. From that date onwards the net result of ASMPT is reported on the line 'result from investments'. In 2013 a purchase price allocation took place, which was finalized in the fourth quarter, resulting in the recognition and subsequent amortization of certain intangible assets.
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COMMENT
Commenting on the results, Chuck del Prado, President and Chief Executive Officer of ASM International said:
"The second quarter of 2014 showed again strong financial results. Sales were at EUR 148m only 2% below the record level in Q1. ALD and PEALD were the main drivers. Gross margin remained above 42%, even though the mix was not as favorable as in Q1. Order intake decreased by strong double digits in Q2, which was in line with our guidance and followed on the very high level of orders in Q1. We have seen that some of our customers are absorbing the investments that they have made in the last quarters, which drove the lower order intake in Q2."
OUTLOOK
For Q3 we expect a strong double digit sales decrease compared to Q2, on a currency comparable basis. The Q3 2014 order intake is expected to be around the same level as Q2, also on a currency comparable basis.
INTERIM FINANCIAL REPORT
On August 29, 2014 ASM International will publish its Interim Financial report for the six months ended June 30, 2014. This report comprises regulated information within the meaning of articles 1:1 and 5:25d of the Dutch Financial Markets Supervision Act (Wet op het Financieel Toezicht) and includes consolidated condensed interim financial statements prepared in accordance with IAS 34, “Interim Financial Reporting”, an interim management board report and a management board responsibility statement. The interim financial report for the six months ended June 30, 2014 will be available online at www.asm.com as from August 29, 2014.
About ASM International
ASM International NV, headquartered in Almere, the Netherlands, its subsidiaries and participations design and manufacture equipment and materials used to produce semiconductor devices. ASM International, its subsidiaries and participations provide production solutions for wafer processing (Front-end segment) as well as for assembly & packaging and surface mount technology (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 nor intends to update or revise any forward-looking statements to reflect future developments or circumstances.
ASM International will host an investor conference call and web cast on Thursday, July 24, 2014 at 15:00 Continental European Time (9:00 a.m. - US Eastern Time).
The teleconference dial-in numbers are as follows:
• | United States: +1 212 444 0412 |
• | International: + 44 (0)20 3427 1911 |
• | The Netherlands: + 31 (0)20 713 2998 |
• | Access Code: 8866280 |
A simultaneous audio web cast will be accessible at www.asm.com.
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CONTACT
Investor contact:
Victor Bareño
T: +31 88 100 8500
E: victor.bareno@asm.com
Mary Jo Dieckhaus
T: +1 212 986 2900
E: maryjo.dieckhaus@asm.com
Media contact:
Ian Bickerton
T: +31 625 018 512
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ANNEX 1
OPERATING AND FINANCIAL REVIEW
SECOND QUARTER 2014
The following table shows the operating performance for the second quarter of 2014 as compared to the first quarter of 2014 and the second quarter of 2013:
EUR million | Q2 2013 | Q1 2014 | Q2 2014 | Change Q1 2014 to Q2 2014 | Change Q2 2013 to Q2 2014 | ||||||||||
New orders | 128.4 | 172.1 | 119.5 | (31 | )% | (7 | )% | ||||||||
Backlog | 117.0 | 135.9 | 109.1 | (20 | )% | (7 | )% | ||||||||
Book-to-bill | 1.0 | 1.1 | 0.8 | ||||||||||||
Net sales | 128.6 | 150.7 | 148.4 | (2 | )% | 15 | % | ||||||||
Gross profit | 50.5 | 65.9 | 62.8 | (5 | )% | 24 | % | ||||||||
Gross profit margin % | 39.3 | % | 43.7 | % | 42.3 | % | |||||||||
Selling, general and administrative expenses | (18.6 | ) | (19.2 | ) | (19.9 | ) | 4 | % | 7 | % | |||||
Research and development expenses | (15.0 | ) | (14.1 | ) | (15.4 | ) | 9 | % | 3 | % | |||||
Restructuring expenses | (0.7 | ) | — | (0.1 | ) | n/a | n/a | ||||||||
Operating result | 16.2 | 32.5 | 27.4 | (5.1 | ) | 11.2 | |||||||||
Operating margin % | 12.6 | % | 21.6 | % | 18.5 | % | |||||||||
Financing costs | (4.8 | ) | (1.3 | ) | 2.5 | 3.8 | 7.3 | ||||||||
Income tax | (3.4 | ) | (4.4 | ) | (5.7 | ) | (1.3 | ) | (2.3 | ) | |||||
Result from investments | 9.2 | 5.7 | 15.8 | 10.1 | 6.6 | ||||||||||
Remeasurement gain, realized gain on sale of ASMPT shares, amortization and fair value adjustments | (40.6 | ) | (5.4 | ) | (5.5 | ) | (0.1 | ) | 35.1 | ||||||
Net earnings | (23.4 | ) | 27.1 | 34.6 | 7.5 | 58.0 | |||||||||
Normalized net earnings (excl. remeasurement gain, subsequent impairment charge, realized gain on sale of ASMPT shares, amortization and fair value adjustments) | 17.2 | 32.5 | 40.1 | 7.6 | 22.9 | ||||||||||
Net earnings per share, diluted | € | (0.37 | ) | € | 0.42 | € | 0.53 | € | 0.11 | € | 0.90 | ||||
Normalized net earnings per share, diluted | € | 0.28 | € | 0.50 | € | 0.62 | € | 0.12 | € | 0.34 |
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Results
The backlog decreased from €136 million at the end of the first quarter to €109 million as per June 30, 2014. The book-to-bill ratio decreased to a level of 0.8.
The following table shows the level of new orders for the second quarter of 2014 and the backlog at the end of the second quarter of 2014, compared to the previous quarter and the comparable quarter previous year:
EUR million | Q2 2013 | Q1 2014 | Q2 2014 | Change Q1 2014 to Q2 2014 | Change Q2 2013 to Q2 2014 | |||||
Backlog at the beginning of the quarter | 119.9 | 114.8 | 135.9 | 18 | % | 13 | % | |||
New orders for the quarter | 128.4 | 172.1 | 119.5 | (31 | )% | (7 | )% | |||
Net sales for the quarter | (128.6 | ) | (150.7 | ) | (148.4 | ) | (2 | )% | 15 | % |
FX-effect for the quarter | (2.7 | ) | (0.3 | ) | 2.1 | |||||
Backlog at the end of the quarter | 117.0 | 135.9 | 109.1 | (20 | )% | (7 | )% | |||
Book-to-bill ratio (new orders divided by net sales) | 1.0 | 1.1 | 0.8 |
Net sales for the second quarter 2014 decreased with 2% compared to the previous quarter and increased with 15% year-on-year, again mainly driven by ALD and PEALD. The impact of currency changes was flat quarter to quarter and a decrease of 5% year-over-year.
The gross profit margin in the second quarter slightly decreased to 42.3% (Q1 2014: 43.7%). This resulted from less favorable mix effects caused by a higher number of investment tools sold in Q2. For Q2 2013 gross profit margin as a percentage of sales was 39.3%. The impact of currency changes on gross profit was flat quarter to quarter and a decrease of 5% year-over-year.
Selling, general and administrative expenses increased with 4% compared to the previous quarter. As a percentage of sales SG&A expenses remained at 13%; the same level as in the previous quarter. For the second quarter of 2013 this was 14%. The impact of currency changes on SG&A expenses was flat quarter to quarter and a decrease of 3% year-over-year.
Research and development expenses increased with 9% compared to the previous quarter. As a percentage of sales R&D expenses increased to 10%, compared to 9% for the previous quarter. For the second quarter of 2013 this was 12%. The impact of currency changes on R&D expenses was flat quarter to quarter and a decrease of 5% year-over-year.
Operating result was affected by currency changes with an increase of 1% quarter to quarter and a decrease of 6% year-over-year.
Financing costs are mainly related to translation results. A substantial part of ASMI's cash position is denominated in US dollar. Currency changes, mainly between US dollar and Euro during Q2 resulted in a translation gain of €2.5 million compared to a loss of €0.9 million in the previous quarter.
Result from investments includes our 40% share in net earnings of ASMPT. In Q2 ASMPT showed a sales increase of 38% compared to the previous quarter, from HK$2,493 million to HK$3,438 million. Sales were 21% above the level of Q2, 2013 of HK$2,850 million. Net earnings increased from €14.3 million in Q1 to €39.5 million (on a 100% basis). Q2 last year, also on a 100% basis, showed net profit at €23 million.
The amortization of the recognized intangible assets and the depreciation of the fair value adjustment for property, plant & equipment negatively impacted net earnings with €5.5 million in Q2. For 2014 this amortization and depreciation amount is expected to be approximately €22 million.
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Cash flow, balance sheet, liquidity and capital resources
Cash flow. The following table shows the cash flow statement on a comparable basis. The ASMPT numbers have been deconsolidated:
EUR million | Q2 2013 | Q1 2014 | Q2 2014 | |||
Net earnings | (23.4 | ) | 27.1 | 34.6 | ||
Adjustments to cash from operating activities | ||||||
Depreciation and amortization | 5.1 | 5.1 | 5.0 | |||
Income tax | 3.0 | 2.0 | 1.9 | |||
Amortization PPA intangibles and fair value adjustments | 34.0 | 5.4 | 5.5 | |||
Result from investments | — | (5.7 | ) | (15.8 | ) | |
Other adjustments | — | 1.6 | 1.6 | |||
Changes in other assets and liabilities | ||||||
Accounts receivable | (25.4 | ) | 5.0 | 4.5 | ||
Inventories | 0.1 | (5.7 | ) | 11.5 | ||
Accounts payable | (1.3 | ) | 16.0 | (14.7 | ) | |
Other assets and liabilities | 8.5 | 11.8 | (15.8 | ) | ||
Net cash provided (used) by operating activities | 0.6 | 62.6 | 18.3 | |||
Capital expenditures | (0.2 | ) | (4.0 | ) | (6.5 | ) |
Divestment subsidiaries | — | — | — | |||
Other | 0.3 | — | (0.2 | ) | ||
Net cash provided (used) in investing activities | 0.1 | (4.0 | ) | (6.7 | ) | |
Bank positions | — | — | — | |||
Loans proceeds and debt issuance fees (paid) | — | (0.1 | ) | (1.3 | ) | |
Purchase treasury shares | — | — | — | |||
Shares issued | 0.1 | 0.8 | 2.1 | |||
Dividend paid and capital repaid to shareholders ASMI | (31.7 | ) | — | (27.7 | ) | |
Dividend received from investments | 4.7 | — | 7.5 | |||
Net cash provided (used) in financing activities | (26.9 | ) | 0.7 | (19.4 | ) | |
Net cash (used) provided | (26.2 | ) | 59.3 | (7.8 | ) |
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Balance sheet.
EUR million | December 31, 2013 | June 30, 2014 | ||
Cash and cash equivalents | 312.4 | 368.3 | ||
Accounts receivable | 83.0 | 75.2 | ||
Inventories | 104.5 | 100.8 | ||
Other current assets | 18.1 | 19.0 | ||
Total current assets | 517.9 | 563.4 | ||
Investments and associates | 944.0 | 967.2 | ||
Property, plant and equipment | 56.5 | 61.2 | ||
Goodwill | 11.4 | 11.8 | ||
Other non-current assets | 21.3 | 25.7 | ||
Total non-current assets | 1,033.2 | 1,065.8 | ||
Total assets | 1,551.2 | 1,629.2 | ||
Accounts payable | 44.8 | 47.3 | ||
Other current liabilities | 56.6 | 63.5 | ||
Total current liabilities | 101.5 | 110.9 | ||
Pension liabilities | 2.5 | 2.6 | ||
Total non-current liabilities | 2.5 | 2.6 | ||
Shareholders' equity | 1,447.2 | 1,515.7 | ||
Total liabilities and shareholders' equity | 1,551.2 | 1,629.2 |
Net working capital, consisting of accounts receivable, inventories, other current assets, accounts payable, accrued expenses, advance payments from customers and deferred revenue, increased to €95 million compared to €81 million per March 31, 2014. The number of outstanding days of working capital, measured against quarterly sales, increased from 48 days at March 31, 2014 to 57 days on June 30, 2014.
Sources of liquidity. On June 30, 2014, the Company’s principal sources of liquidity consisted of €368 million in cash and cash equivalents and €150 million in undrawn bank lines.
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OPERATING AND FINANCIAL REVIEW
SIX MONTHS ENDED JUNE 30, 2014
The following table shows the operating performance for the six months ended June 30, 2014 as compared to the same period of the previous year on a pro-forma basis:
Six months ended June 30, | |||||||||
EUR million | 2013 pro-forma | 2014 | Change | ||||||
New orders | 234.3 | 291.6 | 24 | % | |||||
Backlog | 117.0 | 109.1 | (7 | )% | |||||
Book-to-bill | 1.1 | 1.0 | |||||||
Net sales | 208.6 | 299.1 | 43 | % | |||||
Gross profit | 80.7 | 128.7 | 59 | % | |||||
Gross profit margin % | 38.7 | % | 43.0 | % | |||||
Selling, general and administrative expenses | (33.9 | ) | (39.1 | ) | 15 | % | |||
Research and development expenses | (28.4 | ) | (29.6 | ) | 4 | % | |||
Restructuring expenses | (1.0 | ) | (0.1 | ) | n/a | ||||
Operating result | 17.3 | 59.9 | 42.6 | ||||||
Operating margin % | 8.3 | % | 20.0 | % | |||||
Financing costs | (2.2 | ) | 1.3 | 3.5 | |||||
Income tax | (4.0 | ) | (10.1 | ) | (6.1 | ) | |||
Result from investments | 8.7 | 21.5 | 12.8 | ||||||
Remeasurement gain, realized gain on sale of ASMPT shares, amortization and fair value adjustments | 1,366.9 | (10.9 | ) | (1,377.8 | ) | ||||
Net earnings | 1,386.7 | 61.7 | (1,325.0 | ) | |||||
Normalized net earnings (excl. remeasurement gain, subsequent impairment charge, realized gain on sale of ASMPT shares, amortization and fair value adjustments) | 19.8 | 72.6 | 52.8 | ||||||
Net earnings per share, diluted | € | 21.72 | € | 0.95 | € | (20.77 | ) | ||
Normalized net earnings per share, diluted | € | 0.31 | € | 1.12 | € | 0.81 |
The pro-forma figures show ASMI numbers whereby ASMPT is deconsolidated. Result from investments reflects ASMI's share in the net earnings of ASMPT. In the pro-forma results for Q1, 2013 a share of 52% in ASMPT's net earnings is presented for the period January 1- March 15. For the period March 16 - March 31 the actual 40% shareholding is reflected.
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Results
The backlog decreased with 7% compared to June 30 last year. The book-to-bill ratio was 1.0.
The following table shows the level of new orders for the six months ended June 30, 2014, the backlog at the end of the second quarter of 2014, compared to the comparable period of 2013:
Six months ended June 30, | ||||||
EUR million | 2013 | 2014 | Change | |||
Backlog at the beginning of the year | 91.7 | 114.8 | 25 | % | ||
New orders | 234.3 | 291.6 | 24 | % | ||
Net sales | (208.6 | ) | (299.1 | ) | 43 | % |
FX-effect | (0.4 | ) | 1.8 | |||
Backlog as per reporting date | 117.0 | 109.1 | (7 | )% | ||
Book-to-bill ratio (new orders divided by net sales) | 1.1 | 1.0 |
Net sales for the six months ended June 30, 2014 increased with 43% year-on-year, mainly driven by ALD and PEALD sales, which were subsequently higher than in the comparable period last year. The impact of currency changes was a decrease of 4%.
The gross profit margin for the six months ended June 30, 2014 increased to 43.0% (2013: 38.7%). This resulted from continued positive mix effects and a high utilization in combination with effects of changes in our manufacturing operations and supply chain. The impact of currency changes was a decrease of 5%.
Selling, general and administrative expenses increased with 15% compared to the comparable period previous year. As a percentage of sales SG&A expenses were 13% compared to 16% for the same period previous year. The impact of currency changes was a decrease of 3%.
Research and development expenses increased with 4% compared to the comparable period previous year. As a percentage of sales R&D expenses decreased to 10%, compared to 14% for the same period previous year. The impact of currency changes was a decrease of 5%.
Operating result was affected by the translation effect of currency changes with a decrease of 7% year-over-year.
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ANNEX 2
RECONCILIATION RESULTS TO ASMI CONSOLIDATED
The results of Back-end were consolidated until March 15, 2013. From that date on the net result of ASMPT is reported on the line "result from investments".
SIX MONTHS ENDED JUNE 30, 2014
Six months ended June 30, | ||||||
EUR million, except earnings per share | 2013 | 2014 | Change | |||
Net sales | 368.9 | 299.1 | (19 | )% | ||
Gross profit | 119.1 | 128.7 | 8 | % | ||
Gross profit margin % | 32.3 | % | 43.0 | % | ||
Selling, general and administrative expenses | (59.5 | ) | (39.1 | ) | (34 | )% |
Research and development expenses | (45.5 | ) | (29.6 | ) | (35 | )% |
Restructuring expenses | (1.0 | ) | (0.1 | ) | n/a | |
Result from operations | 13.0 | 59.9 | n/a | |||
Net earnings -1- | 1,386.7 | 61.7 | n/a | |||
Net earnings per share, diluted in euro -1- | €21.72 | €0.95 | n/a |
1) Allocated to the shareholders of the parent
Net Sales
Six months ended June 30, | ||||||
EUR million | 2013 | 2014 | Change | |||
Front-end | 208.6 | 299.1 | 43 | % | ||
Back-end | 160.3 | — | n/a | |||
ASMI consolidated | 368.9 | 299.1 | (19 | )% |
Gross Profit (Margin)
Six months ended June 30, | ||||||||||
EUR million | Gross profit | Gross profit margin | ||||||||
2013 | 2014 | 2013 | 2014 | Increase or (decrease) percentage points | ||||||
Front-end | 80.7 | 128.7 | 38.7 | % | 43.0 | % | 4.3 | ppt | ||
Back-end | 38.4 | — | 24.0 | % | — | % | (24.0 | )ppt | ||
ASMI consolidated | 119.1 | 128.7 | 32.3 | % | 43.0 | % | 10.7 | ppt |
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Selling, General and Administrative Expenses
Six months ended June 30, | ||||||
EUR million | 2013 | 2014 | Change | |||
Front-end | 33.9 | 39.1 | 15 | % | ||
Back-end | 25.6 | — | n/a | |||
ASMI consolidated | 59.5 | 39.1 | (34 | )% |
Research and Development Expenses
Six months ended June 30, | ||||||
EUR million | 2013 | 2014 | Change | |||
Front-end | 28.4 | 29.6 | 4 | % | ||
Back-end | 17.1 | — | n/a | |||
ASMI consolidated | 45.5 | 29.6 | (35 | )% |
Result from Operations
Six months ended June 30, | ||||||
EUR million | 2013 | 2014 | Change | |||
Front-end | ||||||
Before special items | 18.3 | 60.0 | 41.7 | |||
Restructuring expenses | (1.0 | ) | (0.1 | ) | 0.9 | |
After special items | 17.3 | 59.9 | 42.6 | |||
Back-end | (4.3 | ) | — | 4.3 | ||
ASMI consolidated | 13.0 | 59.9 | 46.9 |
Net Earnings allocated to the shareholders of the parent
Six months ended June 30, | ||||||
EUR million | 2013 | 2014 | Change | |||
Front-end | ||||||
Before special items | 12.2 | 51.2 | 39.0 | |||
Restructuring expenses | (1.0 | ) | (0.1 | ) | 0.9 | |
After special items | 11.2 | 51.1 | 39.9 | |||
Back-end | ||||||
Until March 15, 2013 consolidated | (2.8 | ) | — | 2.8 | ||
As from March 15, 2013 as a 40% investment | 11.5 | 21.5 | 10.0 | |||
Total | 8.7 | 21.5 | 12.8 | |||
Realized gain on the sale of 11.88% of the ASMPT shares | 245.2 | — | (245.2 | ) | ||
Unrealized remeasurement gain on the remaining 40% of the ASMPT shares and amortization intangibles recognized in purchase price allocation | 1,121.7 | (10.9 | ) | (1,132.6 | ) | |
Total net earnings allocated to the shareholders of the parent | 1,386.7 | 61.7 | (1,325.0 | ) |
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ANNEX 3
ASM INTERNATIONAL N.V.
CONSOLIDATED STATEMENTS OPERATIONS
Three months ended June 30, | Six months ended June 30, | |||||||
2013 | 2014 | 2013 | 2014 | |||||
EUR thousand, except earnings per share | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||
Net sales | 128,569 | 148,379 | 368,900 | 299,103 | ||||
Cost of sales | (78,053 | ) | (85,582 | ) | (249,834 | ) | (170,447 | ) |
Gross profit | 50,516 | 62,796 | 119,067 | 128,656 | ||||
Operating expenses: | ||||||||
Selling, general and administrative | (18,599 | ) | (19,902 | ) | (59,496 | ) | (39,087 | ) |
Research and development | (15,030 | ) | (15,433 | ) | (45,537 | ) | (29,580 | ) |
Restructuring expenses | (671 | ) | (55 | ) | (985 | ) | (80 | ) |
Total operating expenses | (34,300 | ) | (35,390 | ) | (106,019 | ) | (68,747 | ) |
Earnings from operations | 16,215 | 27,407 | 13,048 | 59,909 | ||||
Net interest income (expense) | (307 | ) | 26 | (1,050 | ) | (387 | ) | |
Accretion of interest | — | — | (10 | ) | — | |||
Foreign currency exchange gains (losses) | (4,479 | ) | 2,516 | (603 | ) | 1,661 | ||
Result from investments | (31,471 | ) | 10,338 | 1,378,359 | 10,649 | |||
Earnings before income taxes | (20,042 | ) | 40,287 | 1,389,744 | 71,832 | |||
Income tax expense | (3,361 | ) | (5,688 | ) | (5,594 | ) | (10,096 | ) |
Net earnings | (23,403 | ) | 34,598 | 1,384,150 | 61,735 | |||
Allocation of net earnings: | ||||||||
Shareholders of the parent | (23,403 | ) | 34,598 | 1,386,743 | 61,735 | |||
Minority interest | — | — | (2,593 | ) | — | |||
Net earnings per share, allocated to the shareholders of the parent: | ||||||||
Basic net earnings | (0.37 | ) | 0.54 | 21.96 | 0.97 | |||
Diluted net earnings (1) | (0.37 | ) | 0.53 | 21.72 | 0.95 | |||
Weighted average number of shares used in | ||||||||
computing per share amounts (in thousand): | ||||||||
Basic | 63,163 | 63,500 | 63,163 | 63,558 | ||||
Diluted (1) | 63,163 | 64,777 | 63,839 | 64,707 | ||||
Outstanding shares: | 63,173 | 63,651 | 63,173 | 63,651 | ||||
(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. The possible increase of common shares caused by employee stock options for the three month ended June 30, 2014 with 1,277,498 common shares and for the six month ended June 30, 2014 with 1,148,720 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. |
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ASM INTERNATIONAL N.V.
CONSOLIDATED BALANCE SHEETS
December 31, | June 30, | |||
2013 | 2014 | |||
EUR thousand | (unaudited) | |||
Assets | ||||
Cash and cash equivalents | 312,437 | 368,337 | ||
Accounts receivable, net | 83,017 | 75,204 | ||
Inventories, net | 104,467 | 100,781 | ||
Income taxes receivable | 1,226 | 184 | ||
Deferred tax assets | 3,739 | 2,982 | ||
Other current assets | 12,521 | 15,207 | ||
Total current assets | 517,408 | 562,695 | ||
Debt issuance costs | 276 | 1,402 | ||
Deferred tax assets | 1,320 | 2,879 | ||
Other intangible assets | 5,637 | 4,805 | ||
Goodwill, net | 11,421 | 11,762 | ||
Investments | 278 | 278 | ||
Associates | 943,676 | 966,895 | ||
Other non current assets | 634 | 673 | ||
Assets held for sale | 738 | 758 | ||
Evaluation tools at customers | 13,332 | 15,820 | ||
Property, plant and equipment, net | 56,531 | 61,216 | ||
Total Assets | 1,551,249 | 1,629,184 | ||
Liabilities and Shareholders' Equity | ||||
Accounts payable | 44,837 | 47,328 | ||
Other current payables | 46,526 | 49,748 | ||
Income taxes payable | 10,087 | 13,749 | ||
Total current liabilities | 101,450 | 110,825 | ||
Pension liabilities | 2,514 | 2,625 | ||
Deferred tax liabilities | 35 | 36 | ||
Total Liabilities | 103,999 | 113,485 | ||
Total Shareholders' Equity | 1,447,249 | 1,515,698 | ||
Total Liabilities and Equity | 1,551,249 | 1,629,184 | ||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
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ASM INTERNATIONAL N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended June 30, | Six months ended June 30, | |||||||
2013 | 2014 | 2013 | 2014 | |||||
EUR thousand | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||
Cash flows from operating activities: | ||||||||
Net earnings | (23,403 | ) | 34,598 | 1,384,150 | 61,735 | |||
Adjustments to reconcile net earnings to net cash from operating activities: | ||||||||
Depreciation and amortization | 5,107 | 4,962 | 18,540 | 10,051 | ||||
Other | 1,234 | 1,613 | 2,813 | 3,218 | ||||
Result investments | 31,523 | (10,338 | ) | (1,378,359 | ) | (10,649 | ) | |
Income taxes | 2,983 | 1,945 | (25 | ) | 3,956 | |||
Changes in other assets and liabilities: | ||||||||
Inventories | 80 | 11,525 | (31,102 | ) | 5,835 | |||
Accounts receivable | (25,384 | ) | 4,518 | (7,072 | ) | 9,493 | ||
Accounts payable | (1,352 | ) | (14,737 | ) | 5,843 | 1,220 | ||
Other current assets | 9,799 | (15,762 | ) | 7,365 | (3,977 | ) | ||
Net cash provided (used) by operating activities | 586 | 18,324 | 2,153 | 80,880 | ||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (206 | ) | (6,451 | ) | (6,944 | ) | (10,578 | ) |
Purchase of intangible assets | (212 | ) | (182 | ) | (433 | ) | (181 | ) |
Disposal of investments | (340 | ) | — | 298,307 | — | |||
Proceeds from sale of property, plant and equipment | 885 | (43 | ) | 1,052 | 131 | |||
Net cash used in investing activities | 127 | (6,675 | ) | 291,982 | (10,628 | ) | ||
Cash flows from financing activities: | ||||||||
Debt redemption, net | — | — | (21,908 | ) | — | |||
Debt issuance fees paid | — | (1,304 | ) | — | (1,363 | ) | ||
Proceeds from issuance of common shares | 40 | 2,116 | 1,026 | 2,893 | ||||
Proceeds from non consolidated investments | 4,726 | 7,451 | 4,726 | 7,451 | ||||
Dividend to shareholders ASMI | (31,681 | ) | (27,700 | ) | (31,681 | ) | (27,700 | ) |
Net cash provided (used) in financing activities | (26,914 | ) | (19,438 | ) | (47,837 | ) | (18,720 | ) |
Exchange rate effects | (2,953 | ) | 5,343 | (1,331 | ) | 4,367 | ||
Net increase (decrease) in cash and cash equivalents | (29,153 | ) | (2,447 | ) | 244,968 | 55,899 | ||
Cash and cash equivalents at beginning of period | 564,595 | 370,784 | 290,475 | 312,437 | ||||
Cash and cash equivalents at end of period | 535,442 | 368,337 | 535,442 | 368,337 | ||||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
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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 held a majority interest until March 15, 2013. As per March 15, 2013 the Company holds a 40.08% share in ASMPT. Per the same date control on ASMPT ceased and the numbers are deconsolidated. 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, Malaysia and Germany. As per June 30, 2014 the interest in ASMPT amounts to 40%. | ||||||
Three months ended June 30, 2013 | ||||||
Front-end | Back-end | Total | ||||
EUR thousand | (unaudited) | (unaudited) | (unaudited) | |||
Net sales to unaffiliated customers | 128,569 | — | 128,569 | |||
Gross profit | 50,516 | — | 50,516 | |||
Earnings from operations | 16,215 | — | 16,215 | |||
Net interest expense | (307 | ) | — | (307 | ) | |
Foreign currency exchange losses | (4,479 | ) | — | (4,479 | ) | |
Result from investments | — | (31,471 | ) | (31,471 | ) | |
Income tax expense | (3,361 | ) | — | (3,361 | ) | |
Net earnings | 8,068 | (31,471 | ) | (23,403 | ) | |
Net earnings allocated to: | ||||||
Shareholders of the parent | (23,403 | ) | ||||
Minority interest | — | |||||
Capital expenditures and purchase of intangible assets | 418 | — | 418 | |||
Depreciation and amortization | 4,991 | — | 4,991 | |||
Three months ended June 30, 2014 | ||||||
Front-end | Back-end | Total | ||||
(unaudited) | (unaudited) | (unaudited) | ||||
Net sales to unaffiliated customers | 148,379 | — | 148,379 | |||
Gross profit | 62,796 | — | 62,796 | |||
Earnings from operations | 27,407 | — | 27,407 | |||
Net interest income | 26 | — | 26 | |||
Foreign currency exchange gains | 2,516 | — | 2,516 | |||
Result from investments | — | 10,338 | 10,338 | |||
Income tax expense | (5,688 | ) | — | (5,688 | ) | |
Net earnings | 24,260 | 10,338 | 34,598 | |||
Net earnings allocated to: | ||||||
Shareholders of the parent | 34,598 | |||||
Minority interest | — | |||||
Capital expenditures and purchase of intangible assets | 6,633 | — | 6,633 | |||
Depreciation and amortization | 4,962 | — | 4,962 | |||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
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ASM INTERNATIONAL N.V.
DISCLOSURE ABOUT SEGMENTS AND RELATED INFORMATION (2/3)
Six months ended June 30, 2013 | ||||||
Front-end | Back-end | Total | ||||
EUR thousand | (unaudited) | (unaudited)-2- | (unaudited) | |||
Net sales to unaffiliated customers | 208,614 | 160,286 | 368,900 | |||
Gross profit | 80,676 | 38,390 | 119,067 | |||
Earnings from operations | 17,335 | (4,287 | ) | 13,048 | ||
Net interest expense | (738 | ) | (312 | ) | (1,050 | ) |
Accretion of interest | — | (10 | ) | (10 | ) | |
Foreign currency exchange gains (losses) | (1,451 | ) | 847 | (603 | ) | |
Result from investments | — | 1,378,359 | 1,378,359 | |||
Income tax expense | (3,957 | ) | (1,637 | ) | (5,594 | ) |
Net earnings | 11,188 | 1,372,962 | 1,384,150 | |||
Net earnings allocated to: | ||||||
Shareholders of the parent | 1,386,743 | |||||
Minority interest | (2,593 | ) | ||||
Capital expenditures and purchase of intangible assets | 917 | 6,460 | 7,377 | |||
Depreciation and amortization | 9,717 | 8,591 | 18,308 | |||
Cash and cash equivalents | 535,442 | — | 535,442 | |||
Capitalized goodwill | 11,193 | — | 11,193 | |||
Other intangible assets | 7,556 | — | 7,556 | |||
Investments and Associates | 278 | 1,389,785 | 1,390,063 | |||
Other identifiable assets | 302,399 | — | 302,399 | |||
Total assets | 858,869 | 1,389,785 | 2,246,654 | |||
Headcount in full-time equivalents -1- | 1,570 | — | 1,570 | |||
1) Headcount includes those employees with a fixed contract, and is exclusive of temporary workers. | ||||||
2) Operational results and cash flow numbers relate to the period January 1, 2013 - March 15, 2013. | ||||||
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding. |
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ASM INTERNATIONAL N.V.
DISCLOSURE ABOUT SEGMENTS AND RELATED INFORMATION (3/3)
Six months ended June 30, 2014 | ||||||
Front-end | Back-end | Total | ||||
EUR thousand | (unaudited) | (unaudited) | (unaudited) | |||
Net sales to unaffiliated customers | 299,103 | — | 299,103 | |||
Gross profit | 128,656 | — | 128,656 | |||
Earnings from operations | 59,909 | — | 59,909 | |||
Net interest expense | (387 | ) | — | (387 | ) | |
Foreign currency exchange gains | 1,661 | — | 1,661 | |||
Result from investments | — | 10,649 | 10,649 | |||
Income tax expense | (10,096 | ) | — | (10,096 | ) | |
Net earnings | 51,086 | 10,649 | 61,735 | |||
Net earnings allocated to: | ||||||
Shareholders of the parent | 61,735 | |||||
Minority interest | — | |||||
Capital expenditures and purchase of intangible assets | 10,759 | — | 10,759 | |||
Depreciation and amortization | 10,051 | — | 10,051 | |||
Cash and cash equivalents | 368,337 | — | 368,337 | |||
Capitalized goodwill | 11,762 | — | 11,762 | |||
Other intangible assets | 4,805 | — | 4,805 | |||
Investments & Associates | 278 | 966,895 | 967,173 | |||
Other identifiable assets | 277,106 | — | 277,106 | |||
Total assets | 662,288 | 966,895 | 1,629,184 | |||
Headcount in full-time equivalents ¹ | 1,554 | — | 1,554 | |||
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. |
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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 second quarter of 2014. |
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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, inventory obsolescence reserve and pension plans. | ||||||||
The reconciliation between IFRS and US GAAP is as follows: | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||
Net earnings | 2013 | 2014 | 2013 | 2014 | ||||
EUR million, except per share date | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||
US GAAP, net earnings allocated to common shares | ||||||||
Adjustments for IFRS: | ||||||||
Reversal inventory write downs | 0.4 | — | 0.4 | 0.2 | ||||
GAAP differences investments | 0.2 | 0.1 | 0.2 | 0.3 | ||||
Goodwill | — | — | 9.5 | — | ||||
Development expenses | (0.4 | ) | (1.5 | ) | 1.0 | (0.7 | ) | |
Debt issuance fees | 0.1 | (1.2 | ) | 0.2 | (1.1 | ) | ||
Total adjustments | 0.3 | (2.5 | ) | 11.3 | (1.4 | ) | ||
IFRS | (23.1 | ) | 32.1 | 1,398.0 | 60.3 | |||
IFRS allocation of net earnings for common shares: | ||||||||
Continued operations | (16.5 | ) | 32.1 | (9.7 | ) | 60.3 | ||
Discontinued operations 1) | (6.6 | ) | — | 1,407.7 | — | |||
1) Discontinued operations include the ASMI share in net earnings of ASMPT until March 15, 2013, net result on the sale of ASMI's 12% share and the remeasurement gain on the remaining ASMI share. | ||||||||
Net earnings per share, diluted: | ||||||||
Continued operations | €(0.26) | €0.49 | €(0.15) | €0.93 | ||||
Discontinued operations | €(0.10) | €0.00 | €22.05 | €0.00 | ||||
Total operations | €(0.37) | €0.49 | 21.89\ | €0.93 | ||||
Shareholders' equity | ||||||||
December 31, | June 30, | |||||||
2013 | 2014 | |||||||
EUR million | (unaudited) | |||||||
US GAAP | 1,447.2 | 1,515.7 | ||||||
Adjustments for IFRS: | ||||||||
Goodwill | (0.9 | ) | (0.9 | ) | ||||
Debt issuance fees | (0.3 | ) | (1.4 | ) | ||||
Reversal inventory write downs | 1.8 | 1.9 | ||||||
Development expenses | 47.5 | 47.5 | ||||||
GAAP differences investments | — | 0.3 | ||||||
Pension plans | 0.2 | 0.2 | ||||||
Total adjustments | 48.4 | 47.5 | ||||||
IFRS | 1,495.6 | 1,563.2 | ||||||
Amounts are rounded to the nearest million euro; therefore amounts may not equal (sub) totals due to rounding. |
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