EXHIBIT 99.1
AMIS Holdings, Inc. Reports Second Quarter 2007 Financial Results
-- Revenue increased 4 percent sequentially to $157.0 million
-- GAAP EPS of $0.08, Non-GAAP EPS of $0.18
-- Record Quarter for Design Wins
POCATELLO, Idaho--(BUSINESS WIRE)--July 24, 2007--AMIS Holdings,
Inc. (NASDAQ: AMIS) (the "Company"), parent company of AMI
Semiconductor, a leading designer and manufacturer of state-of-the-art
mixed-signal and digital products for the automotive, medical,
industrial, and military/aerospace sectors, today reported its
financial results for the second quarter and six months ended June 30,
2007.
Financial Results
Second quarter 2007 revenue was $157.0 million, an increase of
four percent both sequentially and when compared to the second quarter
of 2006. Gross margin for the second quarter of 2007 was 44.9 percent,
representing a decline of 20 basis points sequentially and 30 basis
points year over year. On a non-GAAP basis, gross margin for the
second quarter was 45.0 percent, down 30 basis points sequentially and
down 40 basis points compared to the same period in 2006. Non-GAAP
gross margin for the second quarter of 2007 and 2006 excludes
stock-based compensation expense.
Operating margin was 6.1 percent in the second quarter of 2007,
which is flat sequentially but a decline of 300 basis points year over
year. On a non-GAAP basis, operating margin for the second quarter of
2007 was 14.0 percent, down 60 basis points sequentially, and down 110
basis points year over year. Second quarter 2007 GAAP and non-GAAP
operating margins were negatively affected by increased general and
administrative expenses that were the result of additional bad debt
charges related to the previously announced financial difficulties of
the Company's former distributor, All American Semiconductor. Non-GAAP
operating margin for the second quarter of 2007 and 2006 excludes
amortization of acquisition-related intangibles, restructuring and
impairment charges and stock-based compensation expense.
Net income for second quarter 2007 was $7.0 million, or $0.08 per
diluted share, compared to net income of $8.2 million or $0.09 per
diluted share for the same period in 2006. Non-GAAP net income for
second quarter 2007 was $15.8 million or $0.18 per diluted share,
compared to $15.2 million or $0.17 per diluted share in second quarter
2006. Second quarter 2006 and 2007 non-GAAP net income excludes
amortization of acquisition-related intangibles, restructuring and
impairment charges and stock-based compensation, net of tax effects.
Revenue for the first six months of 2007 was $307.4 million, an
increase of 6 percent compared to the first six months of 2006. Net
income for the first six months of 2007 was $12.1 million, or $0.13
per diluted share, as compared to net income of $16.7 million, or
$0.19 per diluted share, for the same period of 2006. Non-GAAP net
income for the first six months of 2007 was $30.7 million, or $0.34
per diluted share, compared to non-GAAP net income of $29.8 million or
$0.33 per diluted share in the first six months of 2006. Non-GAAP net
income for the first six months of 2007 and 2006 excludes amortization
of acquisition-related intangibles, restructuring and impairment
charges and stock-based compensation, net of tax effects. Non-GAAP
earnings per share for the first six months of 2007 also excludes $0.8
million of pre-tax charges related to the March 2007 secondary stock
offering, from which the Company received no proceeds.
"During the second quarter we exceeded our revenue and EPS targets
and set another record for design wins as measured by anticipated
three year revenue," stated Christine King, chief executive officer.
"In addition, our operational improvements contributed 100 basis
points to our gross margins which was unfortunately offset by product
mix. Looking ahead, we anticipate flat to lower revenues in the third
quarter due to a weak overall medical market. However, we expect
savings from our operational initiatives to offset this decline and
help us maintain our EPS."
The Company generated operating cash flow during the quarter of
$11.8 million, bringing cash at the end of the quarter to $77.8
million, a sequential decrease of $1.8 million. Capital expenditures
during second quarter 2007 were $14.6 million.
Business Outlook
-- Revenue in the third quarter is expected to be flat to down
two percent sequentially,
-- Third quarter gross margin is expected to be approximately 44
percent; however, the Company expects to exit the fourth
quarter of 2007 with gross margin at approximately 46 percent,
-- GAAP diluted earnings per share in the third quarter is
expected to be in the range of $0.08 to $0.10 per diluted
share. Excluding amortization of acquisition related
intangibles, restructuring and impairment charges and
stock-based compensation expense, non-GAAP diluted earnings
per share is expected to be in the range of $0.17 to $0.18,
-- The Company continues to expect full year capital expenditures
to be approximately nine percent of annual revenues.
Conference Call and Webcast Information
Christine King, chief executive officer, along with Joseph
Passarello, senior vice president and chief financial officer, will
host a conference call on July 24, 2007 at 5 p.m. ET, to discuss the
Company's second quarter 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 August 7, 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 mixed-signal and digital products, AMIS
is committed to providing customers in the automotive, medical,
industrial, mil/aero, and communication markets with the optimal
value, quickest time to market semiconductor solutions. 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 provides 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 excluding these 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 operational 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 our expectation of flat to lower
revenues in the third quarter due to a weak overall medical market and
an unfavorable product mix; anticipated savings from our operational
initiatives to offset revenue decline and maintain our EPS; and
guidance on third quarter 2007 revenue, third and fourth quarter gross
margin, third quarter GAAP and non-GAAP earnings per share, and full
year 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 the failure to properly execute on anticipated
restructuring plans, the failure to properly and efficiently operate
our manufacturing facilities and to take the actions necessary to
increase our gross margins and avoid manufacturing defects and
unnecessary scrap, our ability to manage the availability, capacity
and quality of our 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 maintain and
improve the quality and effectiveness of our internal controls over
financial reporting, failure to successfully integrate the Flextronics
and NanoAmp Solutions businesses, loss of key personnel, general
economic and political uncertainty, conditions in the semiconductor
industry, 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 Annual Report on Form 10-K and
Quarterly Report on Form 10-Q. 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
June 30, 2007
Adjustments
----------------------------------------
Amortization
of
Acquisition Restructuring
Related and Share-based
Intangible Impairment Compensation Non-
GAAP Assets Charges Expense GAAP
------------------------------------------------------
Revenue $157.0 $ - $ - $ - $157.0
Cost of revenue 86.5 - - (0.2) 86.3
------------------------------------------------------
Gross profit 70.5 - - (0.2) 70.7
Operating
expenses:
Research &
development 26.6 - - (0.7) 25.9
Selling,
general and
administrative 23.9 - - (1.1) 22.8
Amortization of
acquisition-
related
intangibles 5.2 (5.2) - - -
Restructuring
and impairment
charges 5.2 - (5.2) - -
------------------------------------------------------
60.9 (5.2) (5.2) (1.8) 48.7
Operating income 9.6 5.2 5.2 2.0 22.0
Non-operating
expenses, net 4.6 - - - 4.6
Income before
income taxes 5.0 5.2 5.2 2.0 17.4
Provision
(benefit) for
income taxes (2.0) 0.8 2.1 0.7 1.6
------------------------------------------------------
Net income $ 7.0 $ 4.4 $ 3.1 $ 1.3 $ 15.8
======================================================
Earnings per
share
Basic $ 0.08 $ 0.18
Diluted $ 0.08 $ 0.18
Weighted average
shares
Basic 88.8 88.8
Diluted 89.8 89.8
Key Ratios &
Information:
Gross margin 44.9% 45.0%
Operating margin 6.1% 14.0%
----------------------------------------
Three Months Ended
July 1, 2006
Adjustments
----------------------------------------
Amortization
of
Acquisition Restructuring
Related and Share-based
Intangible Impairment Compensation Non-
GAAP Assets Charges Expense GAAP
------------------------------------------------------
Revenue $150.7 $ - $ - $ - $150.7
Cost of revenue 82.6 - - (0.3) 82.3
------------------------------------------------------
Gross profit 68.1 - - (0.3) 68.4
Operating
expenses:
Research &
development 26.8 - - (0.8) 26.0
Selling,
general and
administrative 20.6 - - (1.0) 19.6
Amortization of
acquisition-
related
intangibles 4.3 (4.3) - - -
Restructuring
and impairment
charges 2.7 - (2.7) - -
------------------------------------------------------
54.4 (4.3) (2.7) (1.8) 45.6
Operating income 13.7 4.3 2.7 2.1 22.8
Non-operating
expenses, net 4.6 - - - 4.6
Income before
income taxes 9.1 4.3 2.7 2.1 18.2
Provision for
income taxes 0.9 0.6 0.9 0.6 3.0
------------------------------------------------------
Net income $ 8.2 $ 3.7 $ 1.8 $ 1.5 $ 15.2
======================================================
Earnings per
share
Basic $ 0.09 $ 0.17
Diluted $ 0.09 $ 0.17
Weighted average
shares
Basic 87.6 87.6
Diluted 89.2 89.2
Key Ratios &
Information:
Gross margin 45.2% 45.4%
Operating margin 9.1% 15.1%
----------------------------------------
Six Months Ended
June 30, 2007
Adjustments
----------------------------------------
Amortiz-
ation
of Restruc- Share-
Acquisition turing based
Related and Compen- Secondary
Intangible Impairment sation Offering Non-
GAAP Assets Charges Expense Expenses GAAP
------------------------------------------------------
Revenue $307.4 $ - $ - $ - $ - $307.4
Cost of revenue 169.1 - - (0.5) - 168.6
------------------------------------------------------
Gross profit 138.3 - - (0.5) - 138.8
Operating
expenses:
Research &
development 52.8 - - (1.2) - 51.6
Selling,
general and
administrative 45.3 - - (2.0) - 43.3
Amortization of
acquisition-
related
intangibles 10.2 (10.2) - - - -
Restructuring
and impairment
charges 11.3 - (11.3) - - -
------------------------------------------------------
119.6 (10.2) (11.3) (3.2) - 94.9
Operating income 18.7 10.2 11.3 3.7 - 43.9
Non-operating
expenses, net 10.2 - - - (0.8) 9.4
Income before
income taxes 8.5 10.2 11.3 3.7 0.8 34.5
Provision
(benefit) for
income taxes (3.6) 1.7 4.1 1.2 0.4 3.8
------------------------------------------------------
Net income $ 12.1 $ 8.5 $ 7.2 $ 2.5 $ 0.4 $ 30.7
======================================================
Earnings per
share
Basic $ 0.14 $ 0.35
Diluted $ 0.13 $ 0.34
Weighted average
shares
Basic 88.6 88.6
Diluted 89.7 89.7
Key Ratios &
Information:
Gross margin 45.0% 45.2%
Operating margin 6.1% 14.3%
----------------------------------------
Six Months Ended
July 1, 2006
Adjustments
-------------------------------
Amortiz-
ation
of Restruc- Share-
Acquisition turing based
Related and Compen-
Intangible Impairment sation
GAAP Assets Charges Expense Non-GAAP
------------------------------------------------------
Revenue $289.3 $ - $ - $ - $289.3
Cost of revenue 158.2 - - (0.3) 157.9
-----------------------------------------------
Gross profit 131.1 - - (0.3) 131.4
Operating
expenses:
Research &
development 50.9 - - (1.6) 49.3
Selling,
general and
administrative 40.4 - - (2.0) 38.4
Amortization of
acquisition-
related
intangibles 8.4 (8.4) - - -
Restructuring
and impairment
charges 4.8 - (4.8) - -
-----------------------------------------------
104.5 (8.4) (4.8) (3.6) 87.7
Operating income 26.6 8.4 4.8 3.9 43.7
Non-operating
expenses, net 8.8 - - - 8.8
Income before
income taxes 17.8 8.4 4.8 3.9 34.9
Provision for
income taxes 1.1 1.1 1.7 1.2 5.1
-----------------------------------------------
Net income $ 16.7 $ 7.3 $ 3.1 $ 2.7 $ 29.8
===============================================
Earnings per
share
Basic $ 0.19 $ 0.34
Diluted $ 0.19 $ 0.33
Weighted average
shares
Basic 87.6 87.6
Diluted 89.4 89.4
Key Ratios &
Information:
Gross margin 45.3% 45.4%
Operating margin 9.2% 15.1%
-------------------------------
AMIS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In Millions)
June 30, December 31,
2007 2006
(unaudited)
-------------- ------------
Assets
- -------------------------------------------
Current assets:
Cash and cash equivalents $ 77.8 $ 77.1
Accounts receivable, net 108.4 110.1
Inventories 90.0 77.5
Deferred tax assets 4.5 3.9
Prepaid expenses and other current assets 31.5 32.3
-------------- ------------
Total current assets 312.2 300.9
Property, plant and equipment, net 218.6 215.9
Goodwill, net 90.5 89.1
Other intangibles, net 91.4 100.6
Deferred tax assets 65.0 61.3
Other long-term assets 31.3 23.4
-------------- ------------
Total assets $ 809.0 $ 791.2
============== ============
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 2.8 $ 2.8
Accounts payable 49.2 56.5
Accrued expenses 61.7 58.4
Foreign deferred tax liability 0.8 2.3
Income taxes payable 0.2 1.7
-------------- ------------
Total current liabilities 114.7 121.7
Long-term debt, less current portion 275.4 276.8
Other long-term liabilities 11.9 10.0
-------------- ------------
Total liabilities 402.0 408.5
Stockholder's equity:
Common stock 0.9 0.9
Additional paid-in capital 560.7 553.6
Accumulated deficit (200.4) (211.5)
Accumulated other comprehensive income 45.8 39.7
-------------- ------------
Total stockholders' equity 407.0 382.7
Total liabilities and stockholders' equity $ 809.0 $ 791.2
============== ============
AMIS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In Millions)
Six Months Ended:
-----------------
June 30, July 1,
2007 2006
Cash flows from operating activities
Net income $ 12.1 $ 16.7
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 35.8 33.0
Amortization of deferred financing costs 0.3 0.4
Share-based compensation expense 3.7 3.9
Impairment of long-term asset 2.6 -
Restructuring charges, net of cash expended 1.4 -
Benefit from deferred income taxes (5.3) (2.8)
Loss on disposition of property, plant and
equipment 0.8 0.1
Changes in operating assets and liabilities:
Accounts receivable 2.8 (6.7)
Inventories (12.0) (8.7)
Prepaid expenses and other assets 2.7 2.3
Accounts payable and other accrued expenses (19.5) (10.2)
-------- --------
Net cash provided by operating activities 25.4 28.0
Cash flows from investing activities
Purchases of property, plant and equipment (25.5) (17.6)
Change in restricted cash 0.4 -
Change in other assets (1.7) (2.0)
Purchase of a business (0.7) -
-------- --------
Net cash used in investing activities (27.5) (19.6)
Cash flows from financing activities
Payments on long-term debt (1.4) (1.6)
Debt issuance costs - (0.1)
Proceeds from exercise of stock options 3.4 1.4
-------- --------
Net cash (used in) provided by financing activities 2.0 (0.3)
Effect of exchange rate changes on cash and cash
equivalents 0.8 3.7
-------- --------
Net decrease in cash and cash equivalents 0.7 11.8
Cash and cash equivalents at beginning of period 77.1 96.7
-------- --------
Cash and cash equivalents at end of period $ 77.8 $108.5
======== ========
CONTACT: AMIS Holdings, Inc.
Wade Olsen, 208-234-6045 (Investor Relations)
wade_olsen@amis.com
Tamera Drake, 208-234-6890 (Media Relations)
tamera_drake@amis.com