Exhibit 99.1
AMIS Holdings, Inc. Reports Second Quarter Results
POCATELLO, Idaho--(BUSINESS WIRE)--July 29, 2004--AMIS Holdings, Inc.
(Nasdaq:AMIS):
-- Record revenue in second quarter
-- Gross margins for the quarter increased for the sixth consecutive
quarter, improving 310 basis points year over year
-- Operating margins increased to 18.7 percent
-- Fully diluted EPS for second quarter grew 13 percent to $0.18
AMIS Holdings, Inc. ("AMIS" or "Company") (Nasdaq:AMIS), parent company of
AMI Semiconductor, a leader in the design and manufacture of integrated
mixed-signal solutions, today reported results for the second quarter ended June
26, 2004.
Financial Results
Second quarter 2004 revenue was $134.5 million, an increase of five percent
over the first quarter 2004 revenue and 24 percent above the second quarter of
last year. Gross margin for the second quarter of 2004 was 46.8 percent, an
increase of 100 basis points sequentially and 310 basis points year over year.
Operating income was $25.2 million for the second quarter of 2004, compared
to first quarter operating income of $22.2 million and an operating loss of $6.7
million in the second quarter of 2003. Operating margins were 18.7 percent in
the second quarter, up 140 basis points sequentially. Second quarter 2003
results included an impairment charge of $20.0 million. Excluding this charge,
pro forma operating income grew 89 percent year over year. There were no pro
forma adjustments to the 2004 information.
Net income for the second quarter of 2004 increased 14 percent sequentially
to $15.4 million, or $0.18 per fully diluted share, compared to net income of
$13.5 million, or $0.16 per fully diluted share for the first quarter of 2004
and a net loss of $7.3 million or $(0.49) per share for the second quarter of
2003. Excluding the impairment charge and the related tax effects, pro forma net
income in the second quarter of 2003 was $4.6 million, or $(0.23) per share.
Revenue for the first six months of 2004 increased 24.4 percent to $262.8
million from $211.2 million in the first six months of 2003. Net income for the
first six months of 2004 was $28.9 million, or $0.33 per fully diluted share,
compared to a net loss of $5.5 million in the first six months of 2003, or
$(0.79) per share. This is an increase of 221 percent when compared to pro forma
net income for the first six months of 2003 of $9.0 million, or $(0.47) per
share. Pro forma net income and loss per share for the first six months of 2003
exclude an impairment charge, write-off of deferred financing fees, settlement
of hedge transactions, and the tax effects related to each of these. Earnings
per share for the second quarter and first six months of 2003, on both a GAAP
and a pro forma basis, were impacted by a preferred stock dividend.
"AMIS generated record-breaking revenue in the second quarter of 2004 and
revenue growth for the sixth consecutive quarter," said Christine King,
president and chief executive officer. "Our record revenue was driven by our
integrated mixed-signal product line, which increased seven percent
sequentially. This growth was centered in the automotive and industrial end
markets. Structured digital products improved nine percent sequentially, driven
by higher revenues in the communications and military end markets. Our
mixed-signal foundry services revenue decreased three percent sequentially, due
to the expected decline in STMicroelectronics revenue related to the expiration
of a take-or-pay foundry arrangement."
Operating cash flow for the second quarter was $19.0 million and capital
expenditures were $6.5 million. Cash at June 26, 2004 was $127.5 million, up
$10.8 million sequentially.
"I am very pleased with our second quarter financial results," stated King.
"We continue to sustain our margin growth through operational efficiencies.
However, bookings dropped on a run-rate basis from our record first quarter
level. Six-month backlog has returned to year-end levels. We continue to see
strength in the automotive and industrial end markets. We also had excellent
computing and military orders during the quarter, but we expect this to be
offset by softness in the communications market, due to the STMicroelectronics
business as well as in the medical end market. In summary, the fundamentals of
our business remain strong."
Business Outlook
"We expect our third quarter revenue to be roughly flat as compared to
second quarter, due to the decline in STMicroelectronics revenue related to the
expiration of a take-or-pay foundry arrangement," said David Henry, senior vice
president and chief financial officer. "Excluding revenues from
STMicroelectronics, we expect revenue to be up two to three percent in third
quarter, as compared to second quarter. We anticipate gross margins and
operating margins to each improve 50 basis points over the second quarter, which
will help offset an anticipated increase in our effective tax rate to between 27
percent and 29 percent in the third quarter. Fully diluted earnings per share is
expected to be about $0.18. We continue to expect capital expenditures for the
year to be approximately seven percent of annual revenues. Depreciation and
amortization is planned to be about $10.8 million in the third quarter."
Conference Call
President and CEO Chris King along with Senior Vice President and CFO David
Henry will conduct a conference call on July 29, 2004 at 5 p.m. ET, to discuss
the Company's earnings and operations. Investors and other interested parties
may listen to a live audio webcast of the conference call by visiting the
investor relations section of the AMIS Web site at http://www.amis.com. A
webcast replay will be available on the Company's Web site until close of
business August 12.
About AMI Semiconductor
AMI Semiconductor (AMIS) is a leader in the design and manufacture of
silicon solutions for the real world. As a widely recognized innovator in
state-of-the-art integrated mixed-signal products, mixed-signal foundry services
and structured digital products AMIS is committed to providing customers with
the optimal value, quickest time-to-market semiconductor solutions. Offering
unparalleled manufacturing flexibility and dedication to customer service, AMI
Semiconductor operates globally with headquarters in Pocatello, Idaho, European
corporate offices in Oudenaarde, Belgium, and a network of sales and design
centers located in the key markets of the United States, Europe and the Asia
Pacific region. For more information, please visit the AMIS Web site at
www.amis.com.
Forward-Looking Statements
Statements in this press release other than statements of historical fact
are "forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company's future results could differ
materially from the expectations discussed herein. Factors that could cause or
contribute to such differences include general economic and political
uncertainty, conditions in the semiconductor industry, changes in the conditions
affecting our target markets, manufacturing underutilization, fluctuations in
customer demand, raw material costs, exchange rates, timing and success of new
products, competitive conditions in the semiconductor industry, and risks
associated with international operations. For a more comprehensive discussion of
risks and uncertainties relating to our business, please read the discussions of
these risks in the Company's Form 10-K Annual Report and Form 10-Q Quarterly
Reports filed with the SEC. The Company undertakes no obligation to revise or
update any forward-looking statements to reflect events or circumstances after
the date of this press release.
AMIS Holdings, Inc.
Pro forma Condensed Consolidated Statements of Operations
(In millions - Unaudited)
Three Months Six Months
Ended Ended
------------------------------
June June June June
26, 28, 26, 28,
2004 2003 2004 2003
------ ------- ------- -------
Revenue
Integrated mixed signal products $73.3 $60.5 $142.0 $117.3
Mixed signal foundry services 30.7 27.0 62.3 53.0
Structured digital products 30.5 20.9 58.5 40.9
------ ------- ------- -------
Total revenue 134.5 108.4 262.8 211.2
Cost of revenue 71.5 61.0 141.0 121.4
------ ------- ------- -------
Gross profit 63.0 47.4 121.8 89.8
Operating expenses:
Research & development 18.8 16.9 38.3 34.9
Selling, general and administrative 19.0 17.2 36.1 31.7
------ ------- ------- -------
37.8 34.1 74.4 66.6
------ ------- ------- -------
Pro forma operating income 25.2 13.3 47.4 23.2
Non-operating expenses, net 4.9 6.8 9.7 10.9
------ ------- ------- -------
Income before income taxes 20.3 6.6 37.7 12.3
Provision for income taxes 4.9 2.0 8.8 3.3
------ ------- ------- -------
Pro forma net income $15.4 $4.6 $28.9 $9.0
====== ======= ======= =======
Pro forma earnings per share
Basic $0.19 $(0.23) $0.35 $(0.47)
Diluted $0.18 $(0.23) $0.33 $(0.47)
Weighted average shares
Basic 82.5 46.7 82.3 46.7
Diluted 86.3 46.7 86.3 46.7
Note: 2003 Pro forma EPS is based on net loss available to common
shareholders of approximately $10.8 million in the second quarter and
$22.2 million in the first six months
Key Pro Forma Ratios
- ---------------------------------------
Pro forma gross margin 46.8% 43.7% 46.3% 42.5%
Pro forma operating margin 18.7% 12.3% 18.0% 11.0%
Pro forma condensed consolidated statements of operations are
presented because we use them as an additional measure of our
operating performance. Pro forma net income and pro forma earnings
per share should not be considered as alternatives to net income,
earnings per share or other consolidated operations data prepared in
accordance with accounting principles generally accepted in the
United States of America, as indicators of our operating performance
or as a measure of liquidity.
Pro forma condensed consolidated statements of operations are intended
to present our operating results, excluding items described below,
for the periods presented. During the three and six months ended
June 28, 2003 the items included the write-off of deferred financing
fees, settlement of hedge transactions, an impairment charge and the
tax effects related to these items. We believe that these excluded
charges are nonrecurring that the exclusion of these charges
enhances comparability between the current period and the prior
period.
AMIS Holdings, Inc.
Reconciliation of Operating Income (Loss) to Pro Forma Operating
Income
(In millions - Unaudited)
Three Months Six Months
Ended Ended
------------------------------
Jun Jun Jun Jun
26, 28, 26, 28,
2004 2003 2004 2003
------ ------- ------- -------
Operating income (loss) $25.2 $(6.7) $47.4 $3.2
Adjustments to reconcile operating
income (loss) to pro forma operating
income:
Impairment charge -- 20.0 -- 20.0
------ ------- ------- -------
Pro forma operating income $25.2 $13.3 $47.4 $23.2
====== ======= ======= =======
AMIS Holdings, Inc.
Reconciliation of Net Income (Loss) to Pro Forma Net Income
(In millions - Unaudited)
Three Months Six Months
Ended Ended
------------------------------
Jun Jun Jun Jun
26, 28, 26, 28,
2004 2003 2004 2003
------ ------- ------- -------
Net income (loss) $15.4 $(7.3) $28.9 $(5.5)
Adjustments to reconcile net income
(loss) to pro forma net income:
Impairment charge -- 20.0 -- 20.0
Write-off of deferred financing
fees -- -- -- 3.7
Settlement of hedge transactions -- -- -- 0.8
Related tax effects -- (8.1) -- (10.0)
------ ------- ------- -------
Pro forma net income $15.4 $4.6 $28.9 $9.0
====== ======= ======= =======
AMIS Holdings, Inc.
Condensed Consolidated Statements of Operations
(In millions - Unaudited)
Three Months Six Months
Ended Ended
------------------------------
Jun Jun Jun Jun
26, 28, 26, 28,
2004 2003 2004 2003
------ ------- ------- -------
Revenue
Integrated mixed signal products $73.3 $60.5 $142.0 $117.3
Mixed signal foundry services 30.7 27.0 62.3 53.0
Structured digital products 30.5 20.9 58.5 40.9
------ ------- ------- -------
Total revenue 134.5 108.4 262.8 211.2
Cost of revenue 71.5 61.0 141.0 121.4
------ ------- ------- -------
Gross profit 63.0 47.4 121.8 89.8
Operating expenses:
Research & development 18.8 16.9 38.3 34.9
Selling, general and administrative 19.0 17.2 36.1 31.7
Impairment charge 0.0 20.0 0.0 20.0
------ ------- ------- -------
37.8 54.1 74.4 86.6
------ ------- ------- -------
Operating income 25.2 (6.7) 47.4 3.2
Non-operating expenses, net 4.9 6.8 9.7 15.4
------ ------- ------- -------
Income (loss) before income taxes 20.3 (13.5) 37.7 (12.2)
Provision (benefit) for income taxes 4.9 (6.2) 8.8 (6.7)
------ ------- ------- -------
Net income (loss) $15.4 $(7.3) $28.9 $(5.5)
====== ======= ======= =======
Earnings per share
Basic $0.19 $(0.49) $0.35 $(0.79)
Diluted $0.18 $(0.49) $0.33 $(0.79)
Weighted average shares
Basic 82.5 46.7 82.3 46.7
Diluted 86.3 46.7 86.3 46.7
Note: 2003 EPS is based on net loss available to common shareholders
of approximately $22.6 million in the second quarter and $36.7
million in the first six months
Key Ratios & Information:
- ---------------------------------------
Gross margin 46.8% 43.7% 46.3% 42.5%
Operating margin 18.7% -6.2% 18.0% 1.5%
AMIS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In Millions)
June December
26, 31,
2004 2003
(unaudited)
----------- --------
Assets
- -------------------------------------------------
Current assets:
Cash and cash equivalents $127.5 $119.1
Accounts receivable, net 93.4 73.6
Inventories 43.2 45.6
Deferred tax assets 9.1 9.0
Prepaid expenses and other current assets 20.4 20.7
----------- --------
Total current assets 293.6 268.0
Property, plant and equipment, net 202.4 205.9
Goodwill, net 1.2 1.2
Other intangibles, net 17.5 18.0
Deferred tax assets 36.2 38.6
Other long-term assets 17.1 18.4
----------- --------
Total assets $568.0 $550.1
=========== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $1.3 $1.3
Accounts payable 25.6 34.8
Accrued expenses 51.1 54.1
Income taxes payable 4.5 1.1
----------- --------
Total current liabilities 82.5 91.3
Long-term debt, less current portion 253.1 253.4
Other long-term liabilities 0.4 0.4
----------- --------
Total liabilities 336.0 345.1
Stockholder's equity:
Common stock 0.8 0.8
Additional paid-in capital 512.1 510.7
Accumulated deficit (294.1) (323.0)
Deferred stock-based compensation (0.4) (0.5)
Accumulated other comprehensive income 13.6 17.0
----------- --------
Total stockholders' equity 232.0 205.0
Total liabilities and stockholders' equity $568.0 $550.1
=========== ========
AMIS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In Millions - Unaudited)
Six Months
Ended
---------------
June June
26, 28,
2004 2003
------- -------
Cash flows from operating activities
Net income (loss) $28.9 $(5.5)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 21.1 24.9
Amortization of deferred financing costs 0.6 0.6
Stock-based compensation expense 1.0 0.3
Write-off of deferred financing charges and loss on
settlement of derivatives -- 4.5
Impairment of long-term asset -- 20.0
Deferred income taxes 2.1 (11.9)
Loss on sale of property, plant and equipment -- 0.2
Interest on stockholder notes receivable -- (0.2)
Changes in operating assets and liabilities:
Accounts receivable (21.5) 2.3
Inventories 1.6 0.6
Prepaid expenses and other assets 1.0 3.2
Accounts payable and other accrued expenses (7.0) 4.9
------- -------
Net cash provided by operating activities 27.8 43.9
Cash flows from investing activities
Purchases of property, plant and equipment (16.2) (10.0)
Proceeds from sale of property, plant and equipment 0.1 --
Purchases of other intangibles (1.5) --
------- -------
Net cash used in investing activities (17.6) (10.0)
Cash flows from financing activities
Payments on long-term debt (0.3) (120.2)
Proceeds from issuance of senior subordinated notes -- 200.0
Payment to settle derivatives -- (0.8)
Deferred financing costs -- (7.3)
Payments on long-term payables -- (0.2)
Proceeds from exercise of stock options 0.5 --
Redemption of preferred stock -- (80.7)
------- -------
Net cash used in financing activities 0.2 (9.2)
Effect of exchange rate changes on cash and cash
equivalents (2.0) 2.2
------- -------
Net increase in cash and cash equivalents 8.4 26.9
Cash and cash equivalents at beginning of period 119.1 62.2
------- -------
Cash and cash equivalents at end of period $127.5 $89.1
======= =======
CONTACT: AMI Semiconductor, Pocatello
Investor Relations:
Jimmie Hutchens, 208-234-6732
jimmie_hutchens@amis.com
or
Media Relations:
Tamera Drake, 208-234-6890
tamera_drake@amis.com