Exhibit 99.1
AMIS Holdings, Inc. Reports Fourth Quarter and Full Year 2006
Financial Results and Announces Restructuring Plan to Drive Increased
R&D Effectiveness and Operating Leverage
-- Record Annual Revenue of $605.6 million, up 20% vs. 2005
-- Fourth Quarter GAAP EPS of $0.13, Non-GAAP EPS of $0.21
-- Operating Cash Flow of $40.5 million in Fourth Quarter
Business Editors/Technology Writers
POCATELLO, Idaho--(BUSINESS WIRE)--Feb. 1, 2007--AMIS Holdings,
Inc. (NASDAQ:AMIS), parent company of AMI Semiconductor, a leader in
the design and manufacture of integrated mixed-signal solutions, today
reported its financial results for the fourth quarter and year ended
December 31, 2006.
Financial Results
Fourth quarter 2006 revenue was $157.0 million, representing a
sequential decline of 1 percent but a year over year increase of 12
percent. Gross margin for the quarter was 44.7 percent, up 90 basis
points sequentially and 60 basis points year over year.
Operating margin was 9.8 percent in fourth quarter 2006, up 20
basis points sequentially, but down 120 basis points year over year.
On a non-GAAP basis, operating margin for the fourth quarter of 2006
was 15.7 percent, up 130 basis points sequentially but down 100 basis
points year over year. The sequential increase in non-GAAP operating
margin was driven by improved gross margins and lower research and
development expenses. Non-GAAP operating margin for the fourth quarter
of 2006 and 2005 excludes amortization of acquisition-related
intangibles and restructuring charges. In addition, the Company began
expensing stock options in the first quarter of 2006, and fourth
quarter 2006 non-GAAP operating income excludes approximately $1.9
million of stock-based compensation expense.
Net income for fourth quarter 2006 was $12.0 million, or $0.13 per
diluted share, which compares to net income of $9.7 million or $0.11
per diluted share for the same period in 2005. Non-GAAP net income for
fourth quarter 2006 was $19.0 million or $0.21 per diluted share,
compared to non-GAAP net income of $15.7 million or $0.18 per diluted
share in fourth quarter 2005. GAAP and non-GAAP net income in fourth
quarter 2006 were favorably affected by one-time tax items, including
a full year catch up on research and development tax credits, of
approximately $0.015 per share.
Revenue for 2006 was $605.6 million, an increase of 20 percent
over to 2005. Net income for 2006 was $37.4 million, or $0.42 per
diluted share, compared to $21.7 million or $0.25 per diluted share in
2005. Non-GAAP net income for 2006 was $63.5 million, or $0.71 per
diluted share, compared to non-GAAP net income of $53.9 million, or
$0.61 per diluted share in 2005. Full year 2006 and 2005 non-GAAP net
income exclude amortization of acquisition-related intangibles, and
restructuring and impairment charges, net of tax effects. Non-GAAP
earnings per share for 2006 also excludes stock-based compensation
expense of approximately $0.06 per diluted share. Non-GAAP net income
for 2005 also excludes charges related to debt refinancing activities
in the first quarter and in-process research and development
associated with the Flextronics acquisition in the third quarter.
The Company generated operating cash flow during the quarter of
$40.5 million. Cash at the end of the quarter was $77.1 million, a
decline of $14.4 million sequentially, due primarily to a voluntary
$35 million payment on the Company's term debt made just before the
end of the quarter. Capital expenditures during fourth quarter 2006
were $20.7 million.
"Despite sequentially lower revenue, I am pleased with our
performance especially given the industry environment," stated
Christine King, chief executive officer. "I am also pleased with our
ability to improve gross margin in the fourth quarter as well as our
achievements in 2006, including: record annual revenues with 20
percent growth in 2006, the acquisition of Starkey Laboratories'
design center and the medical business of NanoAmp Solutions,
completion of the test and sort consolidation into our new facility in
the Philippines, and the introduction of multiple new technologies
that enhance our core competencies. In addition, during 2006 we
successfully generated over $100 million in revenue from new products
introduced during the year."
Today the Company also announced a restructuring plan to reduce
costs through a consolidation of design centers and a workforce
reduction. The restructuring plan includes a workforce reduction of
approximately 80 - 85 employees world-wide, representing approximately
3 percent of its total workforce. As part of this reduction, the
Company will be closing design centers in Eilat, Israel; Panningen,
The Netherlands; Carlsbad, California; and India. The Company
anticipates these actions along with other business changes will
result in annual cost savings of approximately $10 million when fully
implemented by the end of the first quarter 2007. A restructuring
charge, expected to range between $6.0 million and $7.0 million, is
anticipated to be recorded in the first quarter of 2007. This charge
will reflect expenses associated with the workforce reduction and
lease termination and other costs associated with closed facilities.
Substantially all of the restructuring charges are expected to be cash
charges.
"The difficult actions announced today are necessary to increase
our R&D effectiveness and our operating leverage," continued King.
"These actions will help to focus our R&D efforts while building a
more competitive cost structure and streamlined organization."
Business Outlook
"Seasonal weakness in the military and medical markets and
continued weakness in communications is expected to drive a decline in
revenue in the first quarter, but when compared to the current
industry environment, our outlook demonstrates the stability of our
target end markets," stated David Henry, senior vice president and
chief financial officer. "Despite lower medical and military revenues,
which typically generate higher margins, we expect further progress in
improving gross margins as a result of our continued focus on
improving operating efficiencies and reducing costs. Our outlook for
the first quarter of 2007 is as follows:
-- Revenue is expected to be down 4 to 6 percent sequentially,
-- Gross margin is expected to be flat to up 50 basis points
sequentially,
-- GAAP earnings per share is expected to be in the range of
$0.03 to $0.06 per diluted share. Excluding amortization of
acquisition related intangibles, restructuring and impairment
charges and stock compensation expense, non-GAAP diluted
earnings per share is expected to be in the range of $0.15 to
$0.17,
-- Full year capital expenditures are expected to increase to
approximately nine percent of annual revenues, due primarily
to increased capacity requirements in our wafer fabs to
support future growth."
Conference Call and Webcast Information
Christine King, CEO, along with David Henry, senior vice president
and CFO, will host a conference call on February 1, 2007 at 5 p.m. ET,
to discuss the Company's fourth quarter and full year financial
results and its updated business outlook. The web simulcast of this
call will be available under the investor relations section of the
Company's web site at http://www.amis.com. A webcast replay will be
available at that same location until close of business February 15,
2007.
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 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.
Additional Information Regarding Non-GAAP Financial Measures
Management presents the non-GAAP financial measures presented in
this release because we use them as an additional measure of our
operating performance and we believe that these excluded charges
enhance comparability between current and prior periods. Please see
the reconciliation of each of these non-GAAP financial measures to its
closest GAAP financial measure in the financial statements that
accompany this release. Non-GAAP net income and non-GAAP 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.
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. These
forward-looking statements include the anticipated charges and the
future cost savings associated with the planned restructuring actions;
the expectation that the restructuring will focus R&D efforts while
building a more competitive cost structure and streamlined
organization; the anticipated seasonally weak first quarter revenues
in military and medical as well as continued weakness in the
communications end market; expected further progress in improving
gross margins; and guidance on first quarter 2007 revenue, gross
margin, GAAP and non-GAAP earnings per share, and capital
expenditures. These forward-looking statements involve risks and
uncertainties that could cause the actual results to differ materially
from those anticipated by these forward-looking statements. These
risks include failure to properly execute on the anticipated
restructuring plan, failure to operate our manufacturing facilities on
a cost-effective basis and in a manner that avoids manufacturing
defects and unnecessary scrap, the availability of required capacity
at our key subcontractors, manufacturing underutilization, changes in
the conditions affecting our target markets, fluctuations in customer
demand, timing and success of new products, competitive conditions in
the semiconductor industry, failure to successfully integrate the
recently-acquired Flextronics, Starkey and NanoAmp businesses, loss of
key personnel, general economic and political uncertainty, conditions
in the semiconductor industry, exchange rate and hedging risks and
other risks and uncertainties that we identified in reports filed from
time to time with the Securities and Exchange Commission, including
our most recent Quarterly Report on Form 10-Q and Annual Report on
Form 10-K. We do 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.
Condensed Consolidated Statements of Income
(In Millions - Unaudited)
Three Months Ended
December 31, 2006
Adjustments
---------------------------------------
Amortization
of
Acquisition Restructuring
Related and Stock
Intangible Impairment Compensation Non-
GAAP Assets Charges Expense GAAP
Revenue $157.0 $ - $ - $ - $157.0
Cost of
revenue 86.8 - - (0.3) 86.5
-------------------------------------------------------
Gross profit 70.2 - - (0.3) 70.5
Operating
expenses:
Research &
development 26.4 - - (0.7) 25.7
Selling,
general and
admini-
strative 21.0 - - (0.9) 20.1
Amortization
of
acquisition-
related
intangibles 5.0 (5.0) - - 0.0
Restructuring
and
impairment
charges 2.4 - (2.4) - 0.0
-------------------------------------------------------
54.8 (5.0) (2.4) (1.6) 45.8
Operating
income 15.4 5.0 2.4 1.9 24.7
Non-operating
expenses, net 5.3 - - - 5.3
Income before
income taxes 10.1 5.0 2.4 1.9 19.4
(Benefit)
Provision for
income taxes (1.9) 0.8 0.9 0.6 0.4
-------------------------------------------------------
Net income $ 12.0 $ 4.2 $ 1.5 $ 1.3 $ 19.0
=======================================================
Earnings per
share
Basic $ 0.14 $ 0.05 $ 0.02 $ 0.01 $ 0.22
Diluted $ 0.13 $ 0.05 $ 0.02 $ 0.01 $ 0.21
Weighted
average
shares
Basic 88.1 88.1 88.1 88.1 88.1
Diluted 89.8 89.8 89.8 89.8 89.8
Key Ratios &
Information:
Gross margin 44.7% 44.9%
Operating
margin 9.8% 15.7%
---------------------------------------
Three Months Ended
December 31, 2005
Adjustments
--------------------------
Amortization
of
Acquisition Restructuring
Related and
Intangible Impairment
GAAP Assets Charges Non-GAAP
Revenue $139.6 $ - $ - $ 139.6
Cost of
revenue 78.0 - - 78.0
-----------------------------------------------
Gross profit 61.6 - - 61.6
Operating
expenses:
Research &
development 23.5 - - 23.5
Selling,
general and
admini-
strative 14.8 - - 14.8
Amortization
of
acquisition-
related
intangibles 4.1 (4.1) - -
In-process
research and
development - - - -
Restructuring
and
impairment
charges 3.8 - (3.8) -
-----------------------------------------------
46.2 (4.1) (3.8) 38.3
Operating
income 15.4 4.1 3.8 23.3
Non-operating
expenses, net 4.1 - - 4.1
Income before
income taxes 11.3 4.1 3.8 19.2
Provision for
income taxes 1.6 0.6 1.3 3.5
-----------------------------------------------
Net income $ 9.7 $ 3.5 $ 2.5 $ 15.7
===============================================
Earnings per
share
Basic $ 0.11 $ 0.04 $ 0.03 $ 0.18
Diluted $ 0.11 $ 0.04 $ 0.03 $ 0.18
Weighted
average
shares
Basic 86.2 86.2 86.2 86.2
Diluted 88.9 88.9 88.9 88.9
Key Ratios &
Information:
Gross margin 44.1% 44.1%
Operating
margin 11.0% 16.7%
--------------------------
AMIS Holdings, Inc.
Condensed Consolidated Statements of Income
(In Millions - Unaudited)
Twelve Months Ended
December 31, 2006
Adjustments
----------------------------
Amorti-
zation
of Restruc-
Acqui- turing
sition and Stock
Related Impair- Compen-
Intangible ment sation
GAAP Assets Charges Expense Non-GAAP
Revenue $605.6 $ - $ - $ - $ 605.6
Cost of revenue 334.5 - - (0.8) 333.7
----------------------------------------------
Gross profit 271.1 - - (0.8) 271.9
Operating
expenses:
Research &
development 104.6 - - (3.1) 101.5
Selling,
general and
admini-
strative 82.9 - - (3.9) 79.0
Amortization
of
acquisition-
related
intangibles 18.0 (18.0) - - -
Restructuring
and
impairment
charges 8.3 - (8.3) - -
----------------------------------------------
213.8 (18.0) (8.3) (7.0) 180.5
Operating
income 57.3 18.0 8.3 7.8 91.4
Non-operating
expenses, net 18.7 - - - 18.7
Income before
income taxes 38.6 18.0 8.3 7.8 72.7
Provision for
income taxes 1.2 2.7 2.9 2.4 9.2
----------------------------------------------
Net income $ 37.4 $ 15.3 $ 5.4 $ 5.4 $ 63.5
==============================================
Earnings per
share
Basic $ 0.43 $ 0.17 $ 0.06 $ 0.06 $ 0.72
Diluted $ 0.42 $ 0.17 $ 0.06 $ 0.06 $ 0.71
Weighted
average shares
Basic 87.6 87.6 87.6 87.6 87.6
Diluted 89.4 89.4 89.4 89.4 89.4
Key Ratios &
Information:
Gross margin 44.8% 44.9%
Operating
margin 9.5% 15.1%
----------------------------
Twelve Months Ended
December 31, 2005
Adjustments
---------------------------------------
Costs
associated
with the
Amorti- tender of
zation 10 3/4%
of Restruc- In- notes and
Acqui- turing process write-off
sition and Research of
Related Impair- and deferred
Intangible ment Develop- financing Non-
GAAP Assets Charges ment costs GAAP
Revenue $503.6 $ - $ - $ - $ - $503.6
Cost of revenue 266.4 - - - - 266.4
------------------------------------------------------
Gross profit 237.2 - - - - 237.2
Operating
expenses:
Research &
development 87.4 - - - - 87.4
Selling,
general and
admini-
strative 67.6 - - - - 67.6
Amortization
of
acquisition-
related
intangibles 9.0 (9.0) - - - -
In-process
research and
development 0.8 - - (0.8) - -
Restructuring
and
impairment
charges 5.3 - (5.3) - - -
------------------------------------------------------
170.1 (9.0) (5.3) (0.8) - 155.0
Operating
income 67.1 9.0 5.3 0.8 - 82.2
Non-operating
expenses, net 48.5 - - - (34.7) 13.8
Income before
income taxes 18.6 9.0 5.3 0.8 34.7 68.4
Provision
(benefit) for
income taxes (3.1) 1.4 1.8 0.1 14.3 14.5
------------------------------------------------------
Net income $ 21.7 $ 7.6 $ 3.5 $ 0.7 $ 20.4 $ 53.9
======================================================
Earnings per
share
Basic $ 0.25 $ 0.09 $ 0.04 $ 0.01 $ 0.24 $ 0.63
Diluted $ 0.25 $ 0.09 $ 0.04 $ 0.01 $ 0.23 $ 0.61
Weighted
average shares
Basic 85.7 85.7 85.7 85.7 85.7 85.7
Diluted 88.2 88.2 88.2 88.2 88.2 88.2
Key Ratios &
Information:
Gross margin 47.1% 47.1%
Operating
margin 13.3% 16.3%
---------------------------------------
AMIS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In Millions)
December 31, December 31,
2006 2005
(unaudited)
------------- -------------
Assets
- -----------------------------------------
Current assets:
Cash and cash equivalents $ 77.1 $ 96.7
Accounts receivable, net 110.1 99.9
Inventories 77.5 64.3
Deferred tax assets 3.9 4.5
Prepaid expenses and other current
assets 32.3 31.7
------------- -------------
Total current assets 300.9 297.1
Property, plant and equipment, net 215.9 203.8
Goodwill, net 89.1 72.6
Other intangibles, net 103.5 92.5
Deferred tax assets 57.0 51.4
Other long-term assets 20.5 23.4
------------- -------------
Total assets $ 786.9 $ 740.8
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 2.8 $ 3.2
Accounts payable 57.0 48.8
Accrued expenses 57.9 62.7
Foreign deferred tax liability 2.3 2.7
Income taxes payable 1.7 0.7
------------- -------------
Total current liabilities 121.7 118.1
Long-term debt, less current portion 276.8 314.7
Other long-term liabilities 5.7 8.2
------------- -------------
Total liabilities 404.2 441.0
Stockholder's equity:
Common stock 0.9 0.9
Additional paid-in capital 553.6 534.4
Accumulated deficit (211.5) (248.9)
Deferred stock-based compensation - (0.2)
Accumulated other comprehensive income 39.7 13.6
------------- -------------
Total stockholders' equity 382.7 299.8
Total liabilities and stockholders'
equity $ 786.9 $ 740.8
============= =============
AMIS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In Millions)
Twelve Months Ended:
-------------------------
December 31, December 31,
2006 2005
(unaudited)
------------ ------------
Cash flows from operating activities
Net income $ 37.4 $ 21.7
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 67.9 55.0
Write-off of deferred financing costs 0.5 6.7
Amortization of deferred financing
costs 0.8 0.8
Stock-based compensation expense 7.9 0.2
Impairment of long-term asset 0.6 -
In-process research and development - 0.8
Restructuring charges, net of cash
expended - 4.9
Benefit from deferred income taxes (4.4) (4.5)
Loss on disposition of property, plant
and equipment 0.5 0.1
Noncash effect of change in value of
derivative (3.8) -
Changes in operating assets and
liabilities:
Accounts receivable (5.1) (16.3)
Inventories (6.6) (11.5)
Prepaid expenses and other assets (1.4) 1.0
Accounts payable and other accrued
expenses (0.7) (2.7)
------------ ------------
Net cash provided by operating activities 93.6 56.2
Cash flows from investing activities
Purchases of property, plant and equipment (51.2) (34.5)
Change in restricted cash - (1.2)
Change in other assets (5.6) (2.1)
Purchase of businesses (27.0) (138.5)
------------ ------------
Net cash used in investing activities (83.8) (176.3)
Cash flows from financing activities
Payments on long-term debt (38.2) (255.6)
Proceeds from bank borrowings - 320.0
Deferred financing costs (0.1) (4.5)
Proceeds from derivative - (0.1)
Proceeds from exercise of stock options 2.8 3.8
------------ ------------
Net cash (used in) provided by financing
activities (35.5) 63.6
Effect of exchange rate changes on cash and
cash equivalents 6.1 (8.5)
------------ ------------
Net decrease in cash and cash equivalents (19.6) (65.0)
Cash and cash equivalents at beginning of
period 96.7 161.7
------------ ------------
Cash and cash equivalents at end of period $ 77.1 $ 96.7
============ ============
CONTACT: AMI Semiconductor
Wade Olsen, 208-234-6045 (Investor Relations)
wade_olsen@amis.com
Tamera Drake, 208-234-6890 (Press Relations)
tamera_drake@amis.com
or
Cain Communications
Susan Cain, 503-538-2747 (Press Relations)
scain@caincom.com