Exhibit 99.1
AMIS Holdings, Inc. Reports Third Quarter 2007 Financial Results and
Completion of Audit Committee Accounting Review
-- Revenue of $154.6 million, In-line with Previous Guidance
-- GAAP EPS of $0.09, Non-GAAP EPS of $0.18
POCATELLO, Idaho--(BUSINESS WIRE)--Nov. 8, 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 third quarter and nine months ended
September 29, 2007, as well as the completion of its Audit Committee
accounting review. The Company also announced that as a result of the
review, it will be restating its first and second quarter 2007
financial statements, resulting in a negative net adjustment to net
income of approximately $443,000 for the first half of 2007. The
consolidated financial statements and amounts in this press release
have been restated to reflect these changes.
Financial Results
Third quarter 2007 revenue was $154.6 million, a decrease of less
than two percent sequentially and three percent compared to the third
quarter of 2006. Gross margin for the third quarter of 2007 was 44.0
percent, flat sequentially and up 20 basis points year over year. On a
non-GAAP basis, gross margin for the third quarter was 44.2 percent,
up 10 basis points sequentially and 30 basis points compared to the
same period in 2006. Non-GAAP gross margin for the third quarter of
2007 and 2006 excludes stock-based compensation expense.
Operating margin was 8.3 percent in the third quarter of 2007, up
290 basis points sequentially but down 130 basis points year over
year. On a non-GAAP basis, operating margin for the third quarter of
2007 was 15.7 percent, up 250 basis points sequentially and 130 basis
points year over year. Third quarter 2007 GAAP and non-GAAP operating
margins were higher sequentially due to savings realized from
restructuring initiatives in the first and second quarter of 2007,
spending controls during the third quarter, and reduced bad debt
expense after taking the full reserve for the receivable from a former
distributor that went into bankruptcy in the second quarter. Non-GAAP
operating margins for each quarter in 2007 and 2006 exclude
amortization of acquisition-related intangibles, restructuring and
impairment charges and stock-based compensation expense.
Net income for the third quarter of 2007 was $7.8 million, or
$0.09 per diluted share, compared to net income of $8.6 million, or
$0.10 per diluted share, for the same period in 2006. Non-GAAP net
income for third quarter 2007 was $16.2 million or $0.18 per diluted
share, compared to $14.6 million or $0.16 per diluted share in third
quarter 2006. Third 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 nine months of 2007 was $462.0 million, an
increase of 3 percent compared to the first nine months of 2006. Net
income for the first nine months of 2007 was $19.4 million, or $0.22
per diluted share, as compared to net income of $25.4 million, or
$0.28 per diluted share, for the same period of 2006. Non-GAAP net
income for the first nine months of 2007 was $46.7 million, or $0.52
per diluted share, compared to non-GAAP net income of $44.5 million or
$0.50 per diluted share in the first nine months of 2006. Non-GAAP net
income for the first nine 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 net income and earnings per share for the first nine months
of 2007 also excludes charges related to the first quarter 2007
secondary stock offering, from which the Company received no proceeds.
"Our third quarter results demonstrate improved operating
leverage," stated Christine King, chief executive officer. "Going
forward we expect to reach our fourth quarter 46 percent gross margin
target and we believe that the actions we've taken will enable us to
further demonstrate operating leverage improvements despite a flat
revenue outlook."
The Company generated cash from operations during the third
quarter of $23.5 million, bringing cash at the end of the quarter to
$89.3 million, a sequential increase of $11.5 million. Capital
expenditures during the quarter 2007 were $15.5 million.
Audit Committee Review Completed
As previously announced in the Company's October 24, 2007 press
release, the Audit Committee of the Board of Directors, which is
comprised solely of independent directors, reviewed the Company's
February 2007 standard cost valuation of inventories and related
issues. The Audit Committee's review was conducted with the assistance
of independent accounting and legal advisors.
The Audit Committee has completed its review, and as a result, the
Company, in consultation with its independent registered public
accounting firm, has decided to restate its consolidated financial
statements for the first and second quarters of fiscal year ended
December 31, 2007. In connection with the February 2007 standard cost
valuation the Audit Committee review found that the Company made
errors in certain aspects of the standard cost process. In addition,
in the course of its review, the Audit Committee found system coding
issues that resulted in certain errors in the Company's recording of
inventory value. The total adjustment amount was a decrease to net
income of approximately $443,000 for the first half of 2007, comprised
of an increase of approximately $208,000 for the first quarter ended
March 31, 2007 and a reduction of approximately $651,000 for the
second quarter ended June 30, 2007.
The Audit Committee continues to have confidence in the leadership
of the Company's management and the review resulted in no
recommendation of personnel changes or disciplinary action.
The Audit Committee conferred with the Company's independent
registered public accounting firm regarding the scope and results of
the review. The Company also informed the Securities and Exchange
Commission of the Audit Committee's review.
Business Outlook
-- Revenue in the fourth quarter is expected to be roughly flat
sequentially.
-- Fourth quarter gross margin is expected to be approximately 46
percent.
-- GAAP diluted earnings per share in the fourth quarter is
expected to be in the range of $0.09 to $0.11 per diluted
share. Excluding amortization of acquisition-related
intangibles, restructuring and impairment charges, stock-based
compensation expense, and charges related to the Audit
Committee accounting review, non-GAAP diluted earnings per
share is expected to be in the range of $0.18 to $0.20.
-- 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 November 8, 2007 at 4:30 p.m. ET, to discuss
the Company's third 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 November 22, 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 the North
America, Europe and the Asia Pacific region. For more information,
please visit the AMIS Web site at www.amis.com.
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 the expectation that actions taken
will result in attainting fourth quarter 46 percent gross margin
target and further operating leverage improvements despite a flat
revenue outlook, and fourth quarter 2007 guidance on revenue, gross
margin, 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 and efficiently operate our
manufacturing facilities, to take the actions necessary to increase
our gross margins and avoid manufacturing defects and unnecessary
scrap, failure to maintain and improve the quality and effectiveness
of our internal controls over financial reporting, the impact of our
Audit Committee's completed accounting review and the related
restatement of financial statements, our ability to manage the
availability, capacity and quality of our subcontractors,
manufacturing under-utilization, changes in the conditions affecting
our target markets, fluctuations in customer demand, timing and
success of new products, loss of key personnel, failure to properly
execute on anticipated restructuring plans, general economic and
political uncertainty, failure to successfully integrate the NanoAmp
Solutions business, 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
September 29, 2007
Adjustments
--------------------------------------
Amortiz-
ation of
Acquisition- Restruc- Share-
Related turing and based
Intangible Impairment Compensation Non-
GAAP Assets Charges Expense GAAP
----------------------------------------------------
Revenue $154.6 $ - $ - $ - $154.6
Cost of revenue 86.6 - - (0.3) 86.3
----------------------------------------------------
Gross profit 68.0 - - (0.3) 68.3
Operating
expenses:
Research &
development 25.5 - - (0.6) 24.9
Selling, general
&
administrative 20.1 - - (1.0) 19.1
Amortization of
acquisition-
related
intangibles 5.2 (5.2) - - -
Restructuring &
impairment
charges 4.3 - (4.3) - -
----------------------------------------------------
Total operating
expenses 55.1 (5.2) (4.3) (1.6) 44.0
Operating income 12.9 5.2 4.3 1.9 24.3
Non-operating
expenses, net 6.0 - - - 6.0
Income before
income taxes 6.9 5.2 4.3 1.9 18.3
Provision
(benefit) for
income taxes (0.9) 0.8 1.6 0.6 2.1
----------------------------------------------------
Net income $ 7.8 $ 4.4 $ 2.7 $ 1.3 $ 16.2
====================================================
Earnings per share
Basic $ 0.09 $ 0.18
Diluted $ 0.09 $ 0.18
Weighted average
shares
Basic 89.2 89.2
Diluted 90.0 90.0
Key Ratios &
Information:
Gross margin 44.0% 44.2%
Operating margin 8.3% 15.7%
--------------------------------------
Three Months Ended
September 30, 2006
Adjustments
--------------------------------------
Amortiz-
ation of
Acquisition- Restruc- Share-
Related turing and based
Intangible Impairment Compensation Non-
GAAP Assets Charges Expense GAAP
----------------------------------------------------
Revenue $159.3 $ - $ - $ - $159.3
Cost of revenue 89.5 - - (0.2) 89.3
----------------------------------------------------
Gross profit 69.8 - - (0.2) 70.0
Operating
expenses:
Research &
development 27.3 - - (0.8) 26.5
Selling, general
&
administrative 21.5 - - (1.0) 20.5
Amortization of
acquisition-
related
intangibles 4.6 (4.6) - - -
Restructuring &
impairment
charges 1.1 - (1.1) - -
----------------------------------------------------
Total operating
expenses 54.5 (4.6) (1.1) (1.8) 47.0
Operating income 15.3 4.6 1.1 2.0 23.0
Non-operating
expenses, net 4.7 - - - 4.7
Income before
income taxes 10.6 4.6 1.1 2.0 18.3
Provision for
income taxes 2.0 0.7 0.4 0.6 3.7
----------------------------------------------------
Net income $ 8.6 $ 3.9 $ 0.7 $ 1.4 $ 14.6
====================================================
Earnings per share
Basic $ 0.10 $ 0.17
Diluted $ 0.10 $ 0.16
Weighted average
shares
Basic 87.8 87.8
Diluted 89.5 89.5
Key Ratios &
Information:
Gross margin 43.8% 43.9%
Operating margin 9.6% 14.4%
--------------------------------------
Nine Months Ended
September 29, 2007
Adjustments
----------------------------------------------
Amortiz-
ation of
Acquisition- Restruc- Share-
Related turing and based Secondary
Intangible Impairment Compensation Offering
GAAP Assets Charges Expense Expenses
-----------------------------------------------------
Revenue $462.0 $ - $ - $ - $ -
Cost of revenue 256.6 - - (0.8) -
-----------------------------------------------------
Gross profit 205.4 - - (0.8) -
Operating
expenses:
Research &
development 78.3 - - (1.8) -
Selling,
general &
administrative 65.5 - - (3.0) -
Amortization of
acquisition-
related
intangibles 15.4 (15.4) - - -
Restructuring &
impairment
charges 15.6 - (15.6) - -
-----------------------------------------------------
Total operating
expenses 174.8 (15.4) (15.6) (4.8) -
Operating income 30.6 15.4 15.6 5.6 -
Non-operating
expenses, net 16.0 - - - (0.8)
Income before
income taxes 14.6 15.4 15.6 5.6 0.8
Provision
(benefit) for
income taxes (4.8) 2.5 5.5 1.7 0.4
-----------------------------------------------------
Net income $ 19.4 $ 12.9 $ 10.1 $ 3.9 $ 0.4
=====================================================
Earnings per
share
Basic $ 0.22
Diluted $ 0.22
Weighted average
shares
Basic 88.8
Diluted 89.8
Key Ratios &
Information:
Gross margin 44.5%
Operating margin 6.6%
----------------------------------------------
Non-GAAP
--------
Revenue $462.0
Cost of revenue 255.8
--------
Gross profit 206.2
Operating expenses:
Research & development 76.5
Selling, general & administrative 62.5
Amortization of acquisition-related intangibles -
Restructuring & impairment charges -
--------
Total operating expenses 139.0
Operating income 67.2
Non-operating expenses, net 15.2
Income before income taxes 52.0
Provision (benefit) for income taxes 5.3
--------
Net income $ 46.7
========
Earnings per share
Basic $ 0.53
Diluted $ 0.52
Weighted average shares
Basic 88.8
Diluted 89.8
Key Ratios & Information:
Gross margin 44.6%
Operating margin 14.5%
Nine Months Ended
September 30, 2006
Adjustments
-------------------------------------
Amortiz-
ation of
Acquisition- Restruc- Share-
Related turing and based
Intangible Impairment Compensation Non-
GAAP Assets Charges Expense GAAP
---------------------------------------------------
Revenue $448.6 $ - $ - $ - $448.6
Cost of revenue 247.7 - - (0.5) 247.2
---------------------------------------------------
Gross profit 200.9 - - (0.5) 201.4
Operating expenses:
Research &
development 78.2 - - (2.4) 75.8
Selling, general
& administrative 61.9 - - (3.0) 58.9
Amortization of
acquisition-
related
intangibles 13.0 (13.0) - - -
Restructuring &
impairment
charges 5.9 - (5.9) - -
---------------------------------------------------
Total operating
expenses 159.0 (13.0) (5.9) (5.4) 134.7
Operating income 41.9 13.0 5.9 5.9 66.7
Non-operating
expenses, net 13.4 - - - 13.4
Income before
income taxes 28.5 13.0 5.9 5.9 53.3
Provision for
income taxes 3.1 1.8 2.1 1.8 8.8
---------------------------------------------------
Net income $ 25.4 $ 11.2 $ 3.8 $ 4.1 $ 44.5
===================================================
Earnings per share
Basic $ 0.29 $ 0.51
Diluted $ 0.28 $ 0.50
Weighted average
shares
Basic 87.4 87.4
Diluted 89.3 89.3
Key Ratios &
Information:
Gross margin 44.8% 44.9%
Operating margin 9.3% 14.9%
-------------------------------------
AMIS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In Millions)
September 29, December 31,
2007 2006
(unaudited)
------------- ------------
Assets
- --------------------------------------------
Current assets:
Cash and cash equivalents $ 89.3 $ 77.1
Accounts receivable, net 104.4 110.1
Inventories 89.6 77.5
Deferred tax assets 4.2 3.9
Prepaid expenses and other current assets 30.3 32.3
------------- ------------
Total current assets 317.8 300.9
Property, plant and equipment, net 226.2 215.9
Goodwill, net 93.4 89.1
Other intangibles, net 88.6 100.6
Deferred tax assets 67.3 61.3
Other long-term assets 30.4 23.4
------------- ------------
Total assets $ 823.7 $ 791.2
============= ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 41.7 $ 56.5
Accrued expenses 60.9 58.4
Current portion of long-term debt 2.8 2.8
Foreign deferred tax liability 0.2 2.3
Income taxes payable 0.2 1.7
------------- ------------
Total current liabilities 105.8 121.7
Long-term debt, less current portion 274.7 276.8
Other long-term liabilities 11.3 10.0
------------- ------------
Total liabilities 391.8 408.5
Stockholders' equity:
Common stock 0.9 0.9
Additional paid-in capital 563.7 553.6
Accumulated deficit (193.1) (211.5)
Accumulated other comprehensive income 60.4 39.7
------------- ------------
Total stockholders' equity 431.9 382.7
Total liabilities and stockholders' equity $ 823.7 $ 791.2
============= ============
AMIS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In Millions)
Nine Months Ended:
---------------------------
September 29, September 30,
2007 2006
Cash flows from operating activities
Net income $ 19.4 $ 25.4
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 52.8 50.4
Write-off of deferred financing fees - 0.1
Amortization of deferred financing
costs 0.5 0.6
Share-based compensation expense 5.6 5.9
Restructuring charges, net of cash
expended 2.7 -
Impairment of long-term assets 2.7 -
Benefit from deferred income taxes (6.3) (3.4)
Loss on disposition of property,
plant and equipment 0.8 0.4
Changes in operating assets and
liabilities:
Accounts receivable 9.2 (7.8)
Inventories (9.3) (6.2)
Prepaid expenses and other assets 2.0 (3.4)
Accounts payable and other accrued
expenses (31.3) (9.5)
------------- -------------
Net cash provided by operating activities 48.8 52.5
Cash flows from investing activities
Purchases of property, plant and
equipment (41.0) (30.5)
Change in restricted cash 0.8 -
Change in other assets (3.6) (3.4)
Purchase of a business (0.7) (27.0)
------------- -------------
Net cash used in investing activities (44.5) (60.9)
Cash flows from financing activities
Payments on long-term debt (2.1) (2.4)
Debt issuance costs (0.6) (0.1)
Proceeds from exercise of stock options 4.5 2.6
------------- -------------
Net cash provided by financing activities 1.8 0.1
Effect of exchange rate changes on cash
and cash equivalents 6.1 3.1
------------- -------------
Net increase (decrease) in cash and cash
equivalents 12.2 (5.2)
Cash and cash equivalents at beginning of
period 77.1 96.7
------------- -------------
Cash and cash equivalents at end of period $ 89.3 $ 91.5
============= =============
CONTACT: AMI Semiconductor
Investor Relations:
Wade Olsen, 208-234-6045
wade_olsen@amis.com
or
Media Relations:
Tamera Drake, 208-234-6890
tamera_drake@amis.com