Exhibit 99.1
AMIS Holdings, Inc. Reports Third Quarter Results
POCATELLO, Idaho--(BUSINESS WIRE)--Oct. 21, 2004--AMIS Holdings,
Inc. (Nasdaq:AMIS):
-- Fully diluted EPS for third quarter increased to $0.19
-- Gross margins for the quarter increased for the seventh
consecutive quarter, improving 450 basis points year over year
-- Operating margins increased to 19.7 percent
-- Record high operating cash flows in the quarter
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
third quarter ended September 25, 2004.
Financial Results
Net income for the third quarter of 2004 increased five percent
sequentially to $16.2 million, or $0.19 per fully diluted share,
compared to net income of $15.4 million, or $0.18 per fully diluted
share for the second quarter of 2004 and net income of $1.7 million or
$(0.28) per share for the third quarter of 2003. Pro forma net income
in the third quarter of 2003 was $9.2 million, or $(0.12) per share.
Pro forma net income and EPS excludes restructuring and impairments,
nonrecurring charges and other items, net of the related tax effects.
Loss per share for the third quarter and first nine months of 2003, on
both a GAAP and a pro forma basis, were affected by preferred stock
dividends. There were no pro forma adjustments to the 2004
information. See related financial highlights in this press release
for a reconciliation of GAAP earnings to non-GAAP financial measures.
Third quarter 2004 revenue was $131.2 million, a decrease of two
percent over the second quarter 2004 revenue and 12 percent above the
third quarter of last year. Gross margin for the third quarter of 2004
was 48.4 percent, an increase of 160 basis points sequentially and 450
basis points year over year.
Operating margins were 19.7 percent in the third quarter of 2004,
up 100 basis points sequentially. Operating income was $25.9 million
for the third quarter of 2004, compared to second quarter operating
income of $25.2 million and operating income of $7.3 million in the
third quarter of 2003. Pro forma operating income in the third quarter
of 2003 was $18.7 million.
Revenue for the first nine months of 2004 increased 20 percent to
$394.0 million from $328.6 million in the first nine months of 2003.
Net income for the first nine months of 2004 was $45.0 million, or
$0.52 per fully diluted share, compared to a net loss of $3.8 million
in the first nine months of 2003, or $(1.06) per share. This is an
increase of 147 percent when compared to pro forma net income for the
first nine months of 2003 of $18.2 million, or $(0.59) per share.
"AMIS was able to continue to improve its profitability, despite a
sequential decrease in revenue," said Christine King, president and
chief executive officer. "We have developed cost reduction plans and
have been executing to those plans. We are in the process of reducing
headcount by approximately 80 positions in the U.S. and Europe.
Additionally, we will be relocating our test operations in Manila to a
new larger facility and transferring our wafer sort operations from
our Pocatello, Idaho and Oudenaarde, Belgium facilities to this new
facility during 2005. These and other cost reduction actions are
expected to generate approximately $4 million per quarter in cost
savings by the fourth quarter 2005, as we aim for our target operating
margin of 23 percent by the fourth quarter of 2005."
"We are investing in our future through stronger mixed-signal
technology and our acquisition of Dspfactory, which will bring
expertise in digital signal processing," continued King. "These
actions will give us additional technology, enabling us to expand the
support for our customers' needs in the future."
Operating cash flow for the third quarter was a record high $38.0
million and capital expenditures were $4.9 million. Cash at September
25, 2004 was $164.4 million, up $36.9 million sequentially.
Business Outlook
"We expect our fourth quarter revenue to be down four to eight
percent as compared to third quarter," said David Henry, senior vice
president and chief financial officer. "Bookings slowed down in the
third quarter due to weakness in the communications market impacting
all of our businesses, a greater than expected decline in
STMicroelectronics foundry orders and an inventory correction at
certain of our integrated mixed-signal customers. Despite lower
revenues, we anticipate gross margins and pro forma operating margins
each to be roughly flat sequentially due to an improved product mix.
We anticipate our effective tax rate to be between 24 percent and 26
percent in the fourth quarter. Pro forma fully diluted earnings per
share is expected to be in the range of $0.16 to $0.18. Pro forma
operating margin and pro forma earnings per share exclude anticipated
restructuring charges related to our cost reduction programs, an
in-process research and development charge for the acquisition of
Dspfactory, Ltd. and the tax effects related to these, which are
expected to be in the range of $0.05 to $0.06 per share. We continue
to expect capital expenditures for the year to be approximately seven
percent of annual revenues. Depreciation and amortization is expected
to be about $10.8 million in the fourth quarter."
Conference Call
President and CEO Christine King along with Senior Vice President
and CFO David Henry will conduct a conference call on October 21, 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
November 4.
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 http://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 Ended Nine Months Ended
------------------- -------------------
September September September September
25, 27, 25, 27,
2004 2003 2004 2003
--------- --------- --------- ---------
Revenue
Integrated mixed signal
products $74.3 $61.8 $216.3 $179.1
Structured digital products 32.4 24.8 90.9 65.7
Mixed signal foundry
services 24.5 30.8 86.8 83.8
--------- --------- --------- ---------
Total revenue 131.2 117.4 394.0 328.6
Cost of revenue 67.7 65.9 208.7 187.3
--------- --------- --------- ---------
Gross profit 63.5 51.5 185.3 141.3
Operating expenses:
Research & development 19.5 17.5 57.8 52.4
Selling, general and
administrative 18.1 15.3 54.2 47.1
--------- --------- --------- ---------
37.6 32.8 112.0 99.5
--------- --------- --------- ---------
Pro forma operating income 25.9 18.7 73.3 41.8
Non-operating expenses, net 4.5 6.2 14.3 17.0
--------- --------- --------- ---------
Income before income taxes 21.4 12.5 59.0 24.8
Provision for income taxes 5.2 3.3 14.0 6.6
--------- --------- --------- ---------
Pro forma net income $16.2 $9.2 $45.0 $18.2
========= ========= ========= =========
Pro forma earnings (loss) per
share
Basic $0.20 $(0.12) $0.55 $(0.59)
Diluted $0.19 $(0.12) $0.52 $(0.59)
Weighted average shares
Basic 82.9 48.0 82.5 47.1
Diluted 86.4 48.0 86.4 47.1
Note: 2003 Pro forma EPS is based on net loss available to common
shareholders of approximately $5.9 million in the third quarter
and $28.1 million in the first nine months
Key Pro Forma Ratios
- ------------------------------
Pro forma gross margin 48.4% 43.9% 47.0% 43.0%
Pro forma operating margin 19.7% 15.9% 18.6% 12.7%
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
(loss) per share should not be considered as alternatives to net
income (loss), earnings (loss) 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 nine months ended
September 25, 2004 there were no pro forma adjustments. During the
three and nine months ended September 27, 2003 the items included the
write-off of deferred financing fees, settlement of hedge
transactions, a non-cash impairment charge related to the write-off of
a non-competition agreement deemed to have no remaining value, fees
for amending advisory agreements, compensation expense on the
redemption of Preferred Stock Options and the tax effects related to
these items. We believe that these excluded charges are nonrecurring
and that the exclusion of these charges enhances comparability
between the current periods and the prior periods.
AMIS Holdings, Inc.
Reconciliation of Operating Income (Loss) to Pro Forma Operating
Income
(In millions - Unaudited)
Three Months Ended Nine Months Ended
------------------- -------------------
September September September September
25, 27, 25, 27,
2004 2003 2004 2003
--------- --------- --------- ---------
Operating income $25.9 $7.3 $73.3 $10.4
Adjustments to reconcile
operating income to pro
forma operating income:
Restructuring and
impairment charges -- -- -- 20.0
Nonrecurring charges -- 11.4 -- 11.4
--------- --------- --------- ---------
Pro forma operating income $25.9 $18.7 $73.3 $41.8
========= ========= ========= =========
AMIS Holdings, Inc.
Reconciliation of Net Income (Loss) to Pro Forma Net Income
(In millions - Unaudited)
Three Months Ended Nine Months Ended
------------------- -------------------
September September September September
25, 27, 25, 27,
2004 2003 2004 2003
--------- --------- --------- ---------
Net income (loss) $16.2 $1.7 $45.0 $(3.8)
Adjustments to reconcile net
income (loss) to pro forma
net income:
Restructuring and
impairment charges -- -- -- 20.0
Nonrecurring charges -- 11.4 -- 11.4
Write-off of deferred
financing fees -- 1.4 -- 5.1
Settlement of hedge
transactions -- - -- 0.8
Related tax effects -- (5.3) -- (15.3)
--------- --------- --------- ---------
Pro forma net income $16.2 $9.2 $45.0 $18.2
========= ========= ========= =========
AMIS Holdings, Inc.
Condensed Consolidated Statements of Operations
(In millions - Unaudited)
Three Months Ended Nine Months Ended
------------------- -------------------
September September September September
25, 27, 25, 27,
2004 2003 2004 2003
--------- --------- --------- ---------
Revenue
Integrated mixed signal
products $74.3 $61.8 $216.3 $179.1
Mixed signal foundry
services 32.4 24.8 90.9 65.7
Structured digital products 24.5 30.8 86.8 83.8
--------- --------- --------- ---------
Total revenue 131.2 117.4 394.0 328.6
Cost of revenue 67.7 65.9 208.7 187.3
--------- --------- --------- ---------
Gross profit 63.5 51.5 185.3 141.3
Operating expenses:
Research & development 19.5 17.5 57.8 52.4
Selling, general and
administrative 18.1 15.3 54.2 47.1
Restructuring and impairment
charges -- -- -- 20.0
Nonrecurring charges -- 11.4 -- 11.4
--------- --------- --------- ---------
37.6 44.2 112.0 130.9
--------- --------- --------- ---------
Operating income 25.9 7.3 73.3 10.4
Non-operating expenses, net 4.5 7.6 14.3 22.9
--------- --------- --------- ---------
Income (loss) before income
taxes 21.4 (0.3) 59.0 (12.5)
Provision (benefit) for income
taxes 5.2 (2.0) 14.0 (8.7)
--------- --------- --------- ---------
Net income (loss) $16.2 $1.7 $45.0 $(3.8)
========= ========= ========= =========
Earnings (loss) per share
Basic $0.20 $(0.28) $0.55 $(1.06)
Diluted $0.19 $(0.28) $0.52 $(1.06)
Weighted average shares
Basic 82.9 48.0 82.5 47.1
Diluted 86.4 48.0 86.4 47.1
Note: 2003 EPS is based on net loss available to common shareholders
of approximately $13.5 million in the third quarter and $50.1
million in the first nine months
Key Ratios & Information:
- ------------------------------
Gross margin 48.4% 43.9% 47.0% 43.0%
Operating margin 19.7% 6.2% 18.6% 3.2%
AMIS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In Millions)
September December
25, 31,
2004 2003
(unaudited)
------------ ------------
Assets
- --------------------------------------------
Current assets:
Cash and cash equivalents $164.4 $119.1
Accounts receivable, net 86.0 73.6
Inventories 45.3 45.6
Deferred tax assets 10.0 9.0
Prepaid expenses and other current assets 20.9 20.7
------------ ------------
Total current assets 326.6 268.0
Property, plant and equipment, net 197.0 205.9
Goodwill, net 1.2 1.2
Other intangibles, net 16.3 18.0
Deferred tax assets 32.6 38.6
Other long-term assets 15.7 18.4
------------ ------------
Total assets $589.4 $550.1
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $1.3 $1.3
Accounts payable 30.7 34.8
Accrued expenses 48.1 54.1
Income taxes payable 4.2 1.1
------------ ------------
Total current liabilities 84.3 91.3
Long-term debt, less current portion 252.8 253.4
Other long-term liabilities 0.4 0.4
------------ ------------
Total liabilities 337.5 345.1
Stockholder's equity:
Common stock 0.8 0.8
Additional paid-in capital 513.6 510.7
Accumulated deficit (278.0) (323.0)
Deferred stock-based compensation (0.4) (0.5)
Accumulated other comprehensive income 15.9 17.0
------------ ------------
Total stockholders' equity 251.9 205.0
Total liabilities and stockholders' equity $589.4 $550.1
============ ============
AMIS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In Millions - Unaudited)
Nine Months Ended
--------------------
September September
25, 27,
2004 2003
---------- ---------
Cash flows from operating activities
Net income (loss) $45.0 $(3.8)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 32.2 34.6
Amortization of deferred financing costs 0.9 0.9
Stock-based compensation expense 0.9 3.2
Write-off of deferred financing charges and
loss on settlement of derivatives -- 5.9
Impairment of long-term asset -- 20.0
Provision for (benefit from) deferred income
taxes 4.9 (15.1)
Loss on sale of property, plant and equipment 0.1 0.3
Interest on stockholder notes receivable -- (0.3)
Changes in operating assets and liabilities:
Accounts receivable (13.4) (8.9)
Inventories (0.3) (2.4)
Prepaid expenses and other assets 1.1 8.2
Accounts payable and other accrued expenses (5.6) 4.0
---------- ---------
Net cash provided by operating activities 65.8 46.6
Cash flows from investing activities
Purchases of property, plant and equipment (21.1) (20.1)
Proceeds from sale of property, plant and
equipment 0.1 --
Release of restricted cash 1.0 --
Purchases of other intangibles (1.6) (0.2)
---------- ---------
Net cash used in investing activities (21.6) (20.3)
Cash flows from financing activities
Payments on long-term debt (0.6) (160.1)
Proceeds from issuance of senior subordinated
notes -- 200.0
Proceeds from senior term loan -- 125.0
Issuance of common stock, net of offering costs -- 472.1
Payment to settle derivatives -- (0.8)
Debt issuance costs -- (11.2)
Payments on long-term payables -- (0.2)
Proceeds from exercise of stock options 2.1 0.6
Redemption of preferred stock -- (546.0)
---------- ---------
Net cash provided by financing activities 1.5 79.4
Effect of exchange rate changes on cash and cash
equivalents (0.4) 3.3
---------- ---------
Net increase in cash and cash equivalents 45.3 109.0
Cash and cash equivalents at beginning of period 119.1 62.2
---------- ---------
Cash and cash equivalents at end of period $164.4 $171.2
========== =========
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