Exhibit 99.1
AMIS Holdings, Inc. Reports Fourth Quarter and Full Year 2004 Results
POCATELLO, Idaho--(BUSINESS WIRE)--Jan. 27, 2005--
-- Record revenue in 2004 of $517.3 million
-- 2004 revenue in target end markets increased 19 percent year
over year
-- Gross margins for the fourth quarter increased for the eighth
consecutive 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
fourth quarter and full year ended December 31, 2004.
Financial Results
Fourth quarter 2004 revenue was $123.3 million, a decrease of six
percent sequentially and two percent below the fourth quarter of last
year. Gross margin for the fourth quarter of 2004 was 49.1 percent, an
increase of 60 basis points sequentially and 370 basis points year
over year.
Operating margin was 10.9 percent in the fourth quarter of 2004, a
decrease of 880 basis points sequentially primarily driven by charges
for restructuring and in process research and development related to
the Dspfactory acquisition which did not occur in the third quarter.
Excluding these and other charges, on a pro forma basis, operating
margin was 19.1 percent, a decrease of 80 basis points sequentially
and an increase of 180 basis points year over year.
Net income for the fourth quarter of 2004 decreased 55 percent
sequentially to $7.3 million, or $0.08 per fully diluted share,
compared to net income of $16.2 million, or $0.19 per fully diluted
share for the third quarter of 2004 and net income of $3.4 million or
$0.04 per fully diluted share in the fourth quarter of 2003. Pro forma
net income in the fourth quarter of 2004 was $14.2 million or $0.16
per fully diluted share, compared to pro forma net income of $16.3
million or $0.19 per fully diluted share in the third quarter of 2004
and pro forma net income of $10.6 million, or $0.12 per fully diluted
share in the fourth quarter of 2003.
Revenue for 2004 increased 14 percent to $517.3 million from
$454.2 million in 2003. Net income for 2004 was $52.4 million, or
$0.60 per fully diluted share, compared to a net loss of $0.4 million
in 2003, or $(0.84) per share. Pro forma net income for 2004 was $59.6
million or $0.69 per fully diluted share, compared to pro forma net
income of $31.5 million or $(0.27) per share in 2003. Earnings per
share amounts in 2003 were impacted by a preferred stock dividend. Pro
forma operating margin, net income and EPS exclude amortization of
acquisition-related intangible assets, in-process research and
development, restructuring and impairments, nonrecurring charges and
other items, net of the related tax effects. See related financial
highlights in this press release for a reconciliation of GAAP earnings
to non-GAAP financial measures.
"Despite a difficult fourth quarter, AMIS achieved record revenues
in 2004," said Christine King, president and chief executive officer.
"Growth in our target markets of automotive, medical and industrial
was 19 percent for 2004 compared to 2003, which was offset by weakness
in communications, particularly in the second half. We also increased
our three year design win revenue in these target end markets 12
percent year over year from 2003 to 2004. Finally, during the fourth
quarter of 2004, we completed our acquisition of Dspfactory, Ltd.,
which increases our presence in the medical end market and which
helped generate record medical revenue in the fourth quarter."
Operating cash flow for the fourth quarter was $30.8 million and
capital expenditures were $11.3 million. Cash at December 31, 2004 was
$161.7 million, a decrease of $2.7 million sequentially, which
includes a $27.2 million cash payment for the Dspfactory acquisition
and related expenses.
Business Outlook
"We expect our first quarter 2005 revenue to be down six to eight
percent as compared to fourth quarter due to continued weakness in the
communications market and an inventory buildup at several key
customers," said David Henry, senior vice president and chief
financial officer. "Based on recent ordering patterns, we believe the
first quarter will represent the trough in our 2005 revenues. The
beneficial effect of incremental product mix improvements, which have
been a key driver of our gross margin expansion in the second half of
2004, will not recur in the first quarter of 2005. Additionally, we
expect a further decrease in factory utilization in the first quarter.
As a result, we anticipate first quarter gross margins to be down
approximately 300 to 400 basis points sequentially. We expect pro
forma operating margins will be down 500 to 600 basis points
sequentially, as we will continue to invest in research and
development during this challenging market environment. We anticipate
our effective tax rate to be between 10 percent and 12 percent in the
first quarter. Pro forma fully diluted earnings per share in the first
quarter is expected to be in the range of $0.10 to $0.12. Pro forma
operating margin and pro forma earnings per share exclude anticipated
pre-tax charges of approximately $1.5 to $2.0 million in the first
quarter for amortization of acquisition-related intangibles and
charges as a result of our previously announced restructuring plan. We
expect capital expenditures for 2005 to be approximately eight percent
of annual revenues. Depreciation and amortization is expected to be
about $12.0 million in the first quarter."
Conference Call
President and CEO Christine King along with Senior Vice President
and CFO David Henry will conduct a conference call on January 27, 2005
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
February 10.
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 North America,
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, risks
associated with international operations and the other risks and
uncertainties discussed in the Company's Form 10-K Annual Report for
the year ended December 31, 2003, Form 10-Q Quarterly Reports and
other reports filed with the SEC. The Company does not intend 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 Year Ended
------------------ -----------------
December December December December
31, 31, 31, 31,
2004 2003 2004 2003
--------- -------- -------- --------
Revenue
Integrated mixed signal
products $ 74.3 $ 62.2 $ 290.6 $ 241.4
Structured digital products 28.6 31.0 119.6 96.7
Mixed signal foundry services 20.4 32.3 107.1 116.1
--------- -------- -------- --------
Total revenue 123.3 125.5 517.3 454.2
Cost of revenue 62.8 68.5 271.0 255.4
--------- -------- -------- --------
Gross profit 60.5 57.0 246.3 198.8
Operating expenses:
Research & development 19.4 17.9 77.2 70.2
Selling, general and
administrative 17.5 17.4 71.7 60.5
--------- -------- -------- --------
36.9 35.3 148.9 130.7
--------- -------- -------- --------
Pro forma operating income 23.6 21.7 97.4 68.1
Non-operating expenses, net 5.1 5.4 19.3 22.5
--------- -------- -------- --------
Income before income taxes 18.5 16.3 78.1 45.6
Provision for income taxes 4.3 5.7 18.5 14.1
--------- -------- -------- --------
Pro forma net income $ 14.2 $ 10.6 $ 59.6 $ 31.5
========= ======== ======== ========
Pro forma earnings (loss) per
share
Basic $ 0.17 $ 0.13 $ 0.72 $ (0.27)
Diluted $ 0.16 $ 0.12 $ 0.69 $ (0.27)
Weighted average shares
Basic 83.9 79.1 82.9 55.4
Diluted 87.3 86.4 86.6 55.4
Note: 2003 Pro forma EPS is based on net loss available to common
shareholders of approximately $14.8 million
Key Pro Forma Ratios
- ---------------------------------
Pro forma gross margin 49.1% 45.4% 47.6% 43.8%
Pro forma operating margin 19.1% 17.3% 18.8% 15.0%
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
(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 months and year ended
December 31, 2004 pro forma adjustments include the amortization of
acquisition-related intangible assets, in-process research and
development related to the DSPfactory acquisition, restructuring
expenses and the tax effects related to these items. During the three
months and year ended December 31, 2003 the items included the
amortization of acquisition-related intangible assets, 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 Year Ended
------------------ -----------------
December December December December
31, 31, 31, 31,
2004 2003 2004 2003
--------- -------- -------- --------
Operating income $ 13.4 $ 19.8 $ 86.7 $ 30.2
Adjustments to reconcile
operating income to pro forma
operating income:
Amortization of acquisition-
related intangible assets 0.9 0.2 1.4 4.8
In-process research and
development 1.5 - 1.5 -
Restructuring and impairment
charges 7.8 - 7.8 21.7
Nonrecurring charges - 1.7 - 11.4
--------- -------- -------- --------
Pro forma operating income $ 23.6 $ 21.7 $ 97.4 $ 68.1
========= ======== ======== ========
AMIS Holdings, Inc.
Reconciliation of Net Income (Loss) to Pro Forma Net Income
(In millions - Unaudited)
Three Months Ended Year Ended
------------------ -----------------
December December December December
31, 31, 31, 31,
2004 2003 2004 2003
--------- -------- -------- --------
Net income (loss) $ 7.3 $ 3.4 $ 52.4 $ (0.4)
Adjustments to reconcile net
income (loss) to pro forma net
income:
Amortization of acquisition-
related intangible assets 0.9 0.2 1.4 4.8
In-process research and
development 1.5 - 1.5 -
Restructuring and impairment
charges 7.8 - 7.8 21.7
Nonrecurring charges - 1.7 - 11.4
Write-off of deferred financing
fees - 2.8 - 7.9
Settlement of hedge
transactions - - - 0.8
Premium on bond repayment - 7.5 - 7.5
Related tax effects (3.3) (5.0) (3.5) (22.2)
--------- -------- -------- --------
Pro forma net income $ 14.2 $ 10.6 $ 59.6 $ 31.5
========= ======== ======== ========
AMIS Holdings, Inc.
Condensed Consolidated Statements of Operations
(In millions - Unaudited)
Three Months Ended Year Ended
------------------ -----------------
December December December December
31, 31, 31, 31,
2004 2003 2004 2003
--------- -------- -------- --------
Revenue
Integrated mixed signal
products $ 74.3 $ 62.2 $ 290.6 $ 241.4
Structured digital products 28.6 31.0 119.6 96.7
Mixed signal foundry services 20.4 32.3 107.1 116.1
--------- -------- -------- --------
Total revenue 123.3 125.5 517.3 454.2
Cost of revenue 62.8 68.5 271.0 255.4
--------- -------- -------- --------
Gross profit 60.5 57.0 246.3 198.8
Operating expenses:
Research & development 19.4 17.9 77.2 70.2
Selling, general and
administrative 17.5 17.4 71.7 60.5
Amortization of acquisition-
related intangibles 0.9 0.2 1.4 4.8
In-process research and
development 1.5 - 1.5 -
Restructuring and impairment
charges 7.8 - 7.8 21.7
Nonrecurring charges - 1.7 - 11.4
--------- -------- -------- --------
47.1 37.2 159.6 168.6
--------- -------- -------- --------
Operating income 13.4 19.8 86.7 30.2
Non-operating expenses, net 5.1 15.8 19.3 38.7
--------- -------- -------- --------
Income (loss) before income taxes 8.3 4.0 67.4 (8.5)
Provision (benefit) for income
taxes 1.0 0.6 15.0 (8.1)
--------- -------- -------- --------
Net income (loss) $ 7.3 $ 3.4 $ 52.4 $ (0.4)
========= ======== ======== ========
Earnings (loss) per share
Basic $ 0.09 $ 0.04 $ 0.63 $ (0.84)
Diluted $ 0.08 $ 0.04 $ 0.60 $ (0.84)
Weighted average shares
Basic 83.9 79.1 82.9 55.4
Diluted 87.3 86.4 86.6 55.4
Note: 2003 full year EPS is based on net loss available to common
shareholders of approximately $46.7 million
Key Ratios & Information:
- ---------------------------------
Gross margin 49.1% 45.4% 47.6% 43.8%
Operating margin 10.9% 15.8% 16.8% 6.6%
AMIS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In Millions)
December December
31, 31,
2004 2003
(unaudited)
----------- -----------
Assets
- ------
Current assets:
Cash and cash equivalents $ 161.7 $ 119.1
Accounts receivable, net 78.6 73.6
Inventories 52.2 45.6
Deferred tax assets 9.3 9.0
Prepaid expenses and other current assets 30.1 20.7
----------- -----------
Total current assets 331.9 268.0
Property, plant and equipment, net 199.2 205.9
Goodwill, net 16.8 1.2
Other intangibles, net 35.1 9.7
Deferred tax assets 36.8 38.6
Other long-term assets 23.4 26.7
----------- -----------
Total assets $ 643.2 $ 550.1
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 1.3 $ 1.3
Accounts payable 37.6 34.8
Accrued expenses 62.4 54.1
Income taxes payable 1.3 1.1
----------- -----------
Total current liabilities 102.6 91.3
Long-term debt, less current portion 252.2 253.4
Other long-term liabilities 2.4 0.4
----------- -----------
Total liabilities 357.2 345.1
Stockholder's equity:
Common stock 0.8 0.8
Additional paid-in capital 530.6 510.7
Accumulated deficit (270.6) (323.0)
Deferred stock-based compensation (0.4) (0.5)
Accumulated other comprehensive income 25.6 17.0
----------- -----------
Total stockholders' equity 286.0 205.0
Total liabilities and stockholders' equity $ 643.2 $ 550.1
=========== ===========
AMIS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In Millions)
Year Ended
--------------------
December December
31, 31,
2004 2003
(unaudited)
----------- --------
Cash flows from operating activities
Net income (loss) $ 52.4 $ (0.4)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 43.8 44.8
In-process research and development 1.5 -
Amortization of deferred financing costs 1.3 1.3
Stock-based compensation expense 0.9 3.9
Restructuring charges, net of cash expended 5.1 0.7
Write-off of deferred financing charges and
loss on settlement of derivatives - 8.7
Impairment of long-term asset - 20.0
Provision for (benefit from) deferred income
taxes 2.2 (19.1)
Loss on sale of property, plant and equipment - 0.5
Interest on stockholder notes receivable - (0.3)
Changes in operating assets and liabilities:
Accounts receivable (0.4) (1.7)
Inventories (4.0) (2.3)
Prepaid expenses and other assets (4.8) 6.5
Accounts payable and other accrued expenses (1.4) 8.1
----------- --------
Net cash provided by operating activities 96.6 70.7
Cash flows from investing activities
Purchases of property, plant and equipment (32.4) (26.6)
Proceeds from sale of property, plant and
equipment 0.1 0.3
Purchase of business, net of cash acquired (27.2) -
Release of restricted cash 2.4 -
Changes in other assets (3.3) (0.2)
----------- --------
Net cash used in investing activities (60.4) (26.5)
Cash flows from financing activities
Payments on long-term debt (1.2) (230.4)
Proceeds from issuance of senior subordinated
notes - 200.0
Proceeds from senior term loan - 125.0
Issuance of common and preferred stock, net of
offering costs - 470.3
Payment to settle derivatives - (0.8)
Debt issuance costs - (11.4)
Payments on long-term payables - (1.4)
Proceeds from exercise of stock options 2.5 0.9
Redemption of preferred stock - (550.2)
----------- --------
Net cash provided by financing activities 1.3 2.0
Effect of exchange rate changes on cash and cash
equivalents 5.1 10.7
----------- --------
Net increase in cash and cash equivalents 42.6 56.9
Cash and cash equivalents at beginning of period 119.1 62.2
----------- --------
Cash and cash equivalents at end of period $ 161.7 $ 119.1
=========== ========
CONTACT: AMI Semiconductor, Pocatello
Investor Relations:
Arlen Wittrock, 208-234-6012
arlen_wittrock@amis.com
or
Media Relations:
Tamera Drake, 208-234-6890
tamera_drake@amis.com