ASM INTERNATIONAL REPORTS SECOND QUARTER 2010 OPERATING RESULTS
ALMERE, THE NETHERLANDS, July 28, 2010 - ASM International N.V. (NASDAQ: ASMI
and Euronext Amsterdam: ASM) reports today its second quarter 2010 (unaudited)
operating results in accordance with US GAAP.
·  Second quarter 2010 net sales of EUR 302.4 million a new record, up 38%
quarter to quarter and up 153% year to year;
·  For our Front-end segment this quarter we achieved our operating cost
(including manufacturing overhead) reduction target of 40% compared to the
fourth quarter 2008 run rate;
·  Earnings from operations excluding impairment and restructuring charges
increased from negative EUR 6.7 million in the second quarter of 2009 to EUR
83.5 million;
  ·  The Front-end segment increased from negative EUR 22.5 million to  EUR
6.9 million;
  ·  The Back-end segment increased from EUR 15.8 million to EUR 76.6 million;
·  Net earnings of the second quarter of 2010 were EUR 47.5 million, or EUR
0.61 diluted net earnings per share, as compared to net earnings of EUR 4.2
million, or EURÂ 0.08 diluted net earnings per share for the first quarter of
2010 and a net loss of EUR 55.7 million or EUR 1.08 diluted net loss per share
for the second quarter of 2009;
·  Bookings in the second quarter of 2010 were EUR 526.1 million, up 48% from
the first quarter of 2010. Bookings from our Front-end segment were up 32% and
bookings from our Back-end segment were up 52%. Quarter-end backlog was EUR
556.6 million, up 67% from the end of the previous quarter;
Commenting on the results, Chuck del Prado, President and Chief Executive
Officer of ASM International, said, "ASMI's second quarter performance reflects
strong growth in both our wafer processing and assembly and packaging
operations.
Our Front-end business returned to profitability, we reached the cost reduction
targets as set out in our global restructuring program PERFORM!, and we
experienced an acceleration of orders compared to prior quarters. In Back-end,
revenues, orders, and profits once again set quarterly records for our assembly
and packaging operations serving the semiconductor and LED markets".
Contacts:
Erik Kamerbeek
+31 88100 8500
Mary Jo Dieckhaus
+1 212 986 2900
Media Contact:
Charles Huijskens
+31 20 6855 955
+31 653 105 072
The following table shows the operating performance for the second quarter of
2010 as compared to the first quarter of 2010 and the second quarter of 2009:
+-----------------------+------------------------------------------------------+
|(EUR millions) | |
+-----------------------+-------+-------+-------+---------------+--------------+
| | | | | % Change Q1 | % Change Q2 |
| | | | | 2010 | 2009 |
| | | | | to | to |
| |Q2 2009|Q1 2010|Q2 2010| Q2 2010 | Q2 2010 |
+-----------------------+-------+-------+-------+---------------+--------------+
|Net sales | 119.5| 219.1| 302.4| 38%| 153%|
+-----------------------+-------+-------+-------+---------------+--------------+
|Gross profit before| | | | | |
|impairment of| 33.7| 92.5| 133.4| 44%| 296%|
|inventories | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Gross profit margin % | 28.2%| 42.2%| 44.1%| | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Impairment inventories | (20.6)| -| -| | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Gross profit | 13.1| 92.5| 133.4| 44%| 916%|
+-----------------------+-------+-------+-------+---------------+--------------+
|Selling, general and| (25.7)| (26.6)| (31.6)| 19%| 23%|
|administrative expenses| | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Research and| (14.6)| (17.5)| (18.2)| 4%| 25%|
|development expenses | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Amortization of other| (0.2)| (0.1)| (0.1)| | |
|intangible assets | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Restructuring expenses | (15.4)| (3.6)| (3.3)| | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Earnings (loss) from| (42.7)| 44.7| 80.2| 80%| |
|operations | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
+-----------------------+-------+-------+-------+---------------+--------------+
|Net earnings (loss)| | | | | |
|allocated to the| | | | | |
|shareholders of the of| (55.7)| 4.2| 47.5| | |
|the parent | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Net earnings (loss) per| (1.08)| 0.08| 0.61| | |
|share, diluted | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Â | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
|New orders | 155.8| 355.4| 526.1| 48%| 238%|
+-----------------------+-------+-------+-------+---------------+--------------+
|Backlog at end of| 122.4| 333.0| 556.6| 67%| 355%|
|period | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
+------------------------------------------------------------------------------+
Net Sales. The following table shows net sales of our Front-end and Back-end
segments for the second quarter of 2010 as compared to the first quarter of
2010 and the second quarter of 2009:
+--------------------+-------+-------+-------+----------------+----------------+
| Â Â Â Â Â Â | | | | | |
| | | | | | |
| Â Â Â Â Â Â | | | |% Change Q1 2010|% Change Q2 2009|
| | | | | to | to |
| Â Â Â Â Â Â |Q2 2009|Q1 2010|Q2 2010| Q2 2010 | Q2 2010 |
| | | | | | |
|Â Â Â Â Â Â (EUR millions)| | | | | |
+--------------------+-------+-------+-------+----------------+----------------+
|Front-end | 27.6| 54.0| 66.1|22% |139% |
+--------------------+-------+-------+-------+----------------+----------------+
|Back-end | 91.9| 165.1| 236.4|43% |157% |
+--------------------+-------+-------+-------+----------------+----------------+
|Total net sales | 119.5| 219.1| 302.4|38% |153% |
+--------------------+-------+-------+-------+----------------+----------------+
The increase in the second quarter of 2010 in our Front-end segment compared to
the previous quarter was driven by increased equipment sales in particular for
our ALD enabling technologies and higher spares and service sales as a result of
increased activity levels at our customers. In our Back-end segment record
quarterly sales again were realized in the second quarter of 2010 due to the
continued strong demand for our traditional products and increasing demand for
our LED related products.
The strengthening of the Yen, US dollar and US dollar related currencies against
the euro in the second quarter of 2010 as compared to the first quarter of 2010
impacted total net sales positively by 7%. The strengthening of these currencies
as compared to the second quarter of 2009 impacted total net sales positively by
4%.
Gross Profit Margin. The following table shows our gross profit and gross profit
margin for our Front-end and Back-end segments for the second quarter of 2010 as
compared to the first quarter of 2010 and the second quarter of 2009:
+----------+----------+------+------+------+------+------+----------+----------+
| | | | | | | | Increase| Increase|
| | | | | Gross| Gross| Gross| or| or|
| | Gross| Gross| Gross|profit|profit|profit|(decrease)|(decrease)|
| |profit(1))|profit|profit|margin|margin|margin|percentage|percentage|
| | | | | | | | points| points|
|(EUR | Q2 2009| Q1| Q2| Q2| Q1| Q2|Q1 2010 to|Q2 2009 to|
|millions) | | 2010| 2010| 2009| 2010| 2010| Q2 2010| Q2 2010|
| | Q2 2009| | | | | | | |
+----------+----------+------+------+------+------+------+----------+----------+
|Front-end | 0.4| 18.0| 26.0| 1.7%| 33.4%| 39.4%| 6.0| 37.7|
+----------+----------+------+------+------+------+------+----------+----------+
|Back-end | 33.3| 74.5| 107.3| 36.2%| 45.1%| 45.4%| 0.3| 9.2|
+----------+----------+------+------+------+------+------+----------+----------+
|Total | | | | | | | | |
|gross | 33.7| 92.5| 133.4| 28.2%| 42.2%| 44.1%| 1.9| 15.9|
|profit | | | | | | | | |
+----------+----------+------+------+------+------+------+----------+----------+
1. Â Â Â Â before impairment inventories
The gross profit margin of both our Front-end segment and our Back-end segment
continued to improve when compared to the first quarter of 2010 driven by higher
activity levels. The increase of the gross margin in our Front-end segment, both
compared to the same period last year and to the previous quarter is partly
attributable to the lower cost levels and manufacturing overhead as a result of
the transfer of our manufacturing activities to our plant in Singapore and a
favorable product mix.
The impact of currency changes quarter to quarter was an increase of 7% and year
to year an increase of 4%.
Selling, General and Administrative Expenses. The following table shows selling,
general and administrative expenses for our Front-end and Back-end segments for
the second quarter of 2010 as compared to the first quarter of 2010 and the
second quarter of 2009:
+-----------------------+-------+-------+-------+---------------+--------------+
| Â Â Â Â Â Â | | | | | |
| | | | | % Change Q1 | % Change Q2 |
| Â Â Â Â Â Â | | | | 2010 | 2009 |
| | | | | to | to |
| Â Â Â Â Â Â |Q2 2009|Q1 2010|Q2 2010| Q2 2010 | Q2 2010 |
| | | | | | |
|Â Â Â Â Â Â (EUR millions) | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
|Front-end | 14.7| 11.0| 11.2|2% |(24)% |
+-----------------------+-------+-------+-------+---------------+--------------+
|Back-end | 11.0| 15.6| 20.4|31% |85% |
+-----------------------+-------+-------+-------+---------------+--------------+
|Total selling, general | | | | | |
|and administrative | 25.7| 26.6| 31.6|19% |23% |
|expenses | | | | | |
+-----------------------+-------+-------+-------+---------------+--------------+
As a percentage of net sales, selling, general and administrative (SG&A)
expenses were 10% in the second quarter of 2010, 12% in the first quarter of
2010 and 21% in the second quarter of 2009.
In the Front-end segment SG&A as a precentage of sales was 17% in Q2 as compared
to 20% in Q1 and 53% in Q2 2009, reflecting our focus to reduce the fixed cost
base as part of our restructuring program Perform!.
In the Back-end segment SG&A, as a percentage of net sales, decreased due to the
higher activity level.
The impact of currency changes quarter to quarter was an increase of 6% and year
to year an increase of 4%.
Research and Development Expenses. The following table shows research and
development expenses for our Front-end and Back-end segments for the second
quarter of 2010 as compared to the first quarter of 2010 and the second quarter
of 2009:
+---------------------+-------+-------+-------+----------------+---------------+
| Â Â Â Â Â Â | | | | | |
| | | | | | % Change Q2 |
| Â Â Â Â Â Â | | | |% Change Q1 2010| 2009 |
| | | | | to | to |
| Â Â Â Â Â Â |Q2 2009|Q1 2010|Q2 2010| Q2 2010 | Q2 2010 |
| | | | | | |
|Â Â Â Â Â Â (EUR millions) | | | | | |
+---------------------+-------+-------+-------+----------------+---------------+
|Front-end | 8.1| 8.3| 7.8|(6)% |(4)% |
+---------------------+-------+-------+-------+----------------+---------------+
|Back-end | 6.5| 9.2| 10.3|12% |58% |
+---------------------+-------+-------+-------+----------------+---------------+
|Total research and| 14.6| 17.5| 18.2|4% |25% |
|development expenses | | | | | |
+---------------------+-------+-------+-------+----------------+---------------+
As a percentage of net sales, research and development expenses were 6% in the
second quarter of 2010, 8% in the first quarter of 2010 and 12% in the second
quarter of 2009.
We continue to focus and prioritize our programs carefully in line with our
strategic objectives.
The impact of currency changes quarter to quarter was an increase of 6% and year
to year an increase of 5%.
Restructuring expenses. In 2009 ASMI started the implementation of a major
restructuring in the Front-end segment. Related to these restructuring projects
EUR 3.3 million of expenses were incurred during the second quarter of 2010.
These related mainly to severance packages, retention costs, provisions for
vacancy and other costs related to the transfer of activities to Singapore.
Earnings (Loss) from Operations. The following table shows earnings (loss) from
operations for our Front-end and Back-end segments for the second quarter of
2010 as compared to the first quarter of 2010 and the second quarter of 2009:
+-----------------+------------+------------+------------+----------+----------+
| Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | | |
| | | | | | |
| Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â |Change Q1 |Change Q2 |
| | | | | 2010 | 2009 |
| Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | to | to |
| | | | | Q2 2010 | Q2 2010 |
|Â Â Â Â Â Â (EUR | Â Â Â Â Â Â Q2| Â Â Â Â Â Â Q1| Â Â Â Â Â Â Q2| | |
|millions) | 2009| 2010| 2010| | |
+-----------------+------------+------------+------------+----------+----------+
|Front-end: | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Excluding | | | | | |
|impairments and| (22.5)| (1.4)| 6.9|8.3 |29.4 |
|restructuring | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Impairments and| (36.0)| (3.6)| (3.3)|0.3 |32.7 |
|restructuring | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Including | | | | | |
|impairments and| (58.5)| (5.0)| 3.6|8.6 |62.1 |
|restructuring | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Back-end | 15.8| 49.7| 76.6|26.9 |60.8 |
+-----------------+------------+------------+------------+----------+----------+
|Total earnings| | | | | |
|(loss) from| (42.7)| 44.7| 80.2|35.5 |122.9 |
|operations | | | | | |
+-----------------+------------+------------+------------+----------+----------+
Net Earnings (Loss) allocated to the shareholders of the parent. The following
table shows net earnings(loss) for our Front-end and Back-end segments for the
second quarter of 2010 as compared to the first quarter of 2009 and the second
quarter of 2009:
+------------------+------------+------------+------------+----------+---------+
| Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | | |
| | | | | | |
| Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â |Change Q1 |Change Q2|
| | | | | 2010 | 2009 |
| Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | to | to |
| | | | | Q2 2010 | Q2 2010 |
|Â Â Â Â Â Â (EUR | Â Â Â Â Â Â Q2| Â Â Â Â Â Â Q1| Â Â Â Â Â Â Q2| | |
|millions) | 2009| 2010| 2010| | |
+------------------+------------+------------+------------+----------+---------+
|Front-end | | | | | |
+------------------+------------+------------+------------+----------+---------+
|Excluding | | | | | |
|impairments, | | | | | |
|restructuring | | | | | |
|expenses, result | | | | | |
|on early | | | | | |
|extinguishment of | (23.9)| (10.1)| 1.4| 11.5| 25.3|
|debt and fair | | | | | |
|value changes | | | | | |
|conversion option | | | | | |
+------------------+------------+------------+------------+----------+---------+
+------------------+------------+------------+------------+----------+---------+
|Impairments and | (34.9)| (3.6)| (3.3)| 0.3| 31.6|
|restructuring | | | | | |
+------------------+------------+------------+------------+----------+---------+
|Result on early | | | | | |
|extinguishment of | -| (2.3)| -| 2.3| -|
|debt | | | | | |
+------------------+------------+------------+------------+----------+---------+
|Fair value changes| (4.7)| (2.6)| 14.0| 16.6| 18.7|
|conversion options| | | | | |
+------------------+------------+------------+------------+----------+---------+
|Special items | (39.6)| (8.5)| 10.7| 19.2| 50.3|
+------------------+------------+------------+------------+----------+---------+
+------------------+------------+------------+------------+----------+---------+
|Including | | | | | |
|impairments, | | | | | |
|restructuring | | | | | |
|expenses, result | | | | | |
|on early | | | | | |
|extinguishment of | (63.5)| (18.6)| 12.1| 30.7| 75.6|
|debt and fair | | | | | |
|value changes | | | | | |
|conversion option | | | | | |
+------------------+------------+------------+------------+----------+---------+
|Back-end | 7.8| 22.7| 35.4| 12.7| 27.6|
+------------------+------------+------------+------------+----------+---------+
|Total net earnings| | | | | |
|(loss) allocated | (55.7)| 4.2| 47.5| 43.3| 103.2|
|to the | | | | | |
+------------------+------------+------------+------------+----------+---------+
|shareholders of | | | | | |
|the parent | | | | | |
+------------------+------------+------------+------------+----------+---------+
Net earnings for the Back-end segment reflect our 52.59% ownership of ASM
Pacific Technology.
Six months ended June 30, 2010
The following table shows the operating performance and the percentage change
for the six months ended June 30, 2010 compared to the same period in 2009:
+-----------------------------------------------+----------------------------+
| (EUR millions, except earnings per share) | Six months ended June 30, |
+-----------------------------------------------+--------+--------+----------+
| | 2009 | 2010 | % Change |
+-----------------------------------------------+--------+--------+----------+
| Net sales | 208.6 | 521.5 | 150% |
+-----------------------------------------------+--------+--------+----------+
| Gross profit before impairment of inventories | 55.0 | 225.9 | 311% |
+-----------------------------------------------+--------+--------+----------+
| Gross profit margin % | 26.4% | 43.3% | |
+-----------------------------------------------+--------+--------+----------+
| Impairment inventories | (20.6) | - | |
+-----------------------------------------------+--------+--------+----------+
| Gross profit | 34.4 | 225.9 | 556% |
+-----------------------------------------------+--------+--------+----------+
+-----------------------------------------------+--------+--------+----------+
| Selling, general and administrative expenses | (50.9) | (58,2) | 14% |
+-----------------------------------------------+--------+--------+----------+
| Research and development expenses | (31.1) | (35.7) | 15% |
+-----------------------------------------------+--------+--------+----------+
| Amortization of other intangible assets | (0.3) | (0.2) | |
+-----------------------------------------------+--------+--------+----------+
| Restructuring expenses | (19.5) | (7.0) | |
+-----------------------------------------------+--------+--------+----------+
| Earnings(loss) from operations | (67.4) | 124.9 | |
+-----------------------------------------------+--------+--------+----------+
+-----------------------------------------------+--------+--------+----------+
| Net earnings (loss) (1)) | (79.0) | 51.7 | |
+-----------------------------------------------+--------+--------+----------+
| Â | | | |
+-----------------------------------------------+--------+--------+----------+
| Net earnings (loss) per share, diluted(1)) | (1.53) | 0.77 | |
+-----------------------------------------------+--------+--------+----------+
+-----------------------------------------------+--------+--------+----------+
| New orders | 240.2 | 881.5 | 267% |
+-----------------------------------------------+--------+--------+----------+
| Backlog at end of period | 122.4 | 556.6 | 167% |
+-----------------------------------------------+--------+--------+----------+
(1) )allocated to the shareholders of the parent
Net Sales. The following table shows net sales of our Front-end and Back-end
segments for the six months ended June 30, 2010 compared to the same period in
2009:
+-----------------+---------------------------+
| (EUR millions) | Six months ended June 30, |
+-----------------+-------+-------+-----------+
| | 2009 | 2010 | % Change |
+-----------------+-------+-------+-----------+
| Front-end | 73.4 | 120.0 | 63% |
+-----------------+-------+-------+-----------+
| Back-end | 135.2 | 401.5 | 197% |
+-----------------+-------+-------+-----------+
| Total net sales | 208.6 | 521.5 | 150% |
+-----------------+-------+-------+-----------+
The increase of net sales in the first six months of 2010 in our Front-end
segment compared to the same period last year was driven by increased equipment
and higher spares and service sales as a result of increased activity at our
customers. In our Back-end segment record quarterly sales was realized both in
the first quarter and in the second quarter of 2010 due to the high continued
strong demand for our traditional products and increasing demand for our LED
related products.
The strengthening of the Yen, US dollar and US dollar related currencies against
the euro in the first six months of 2010 as compared to the first six months of
2009 impacted total net sales positively by 2%.
Gross Profit Margin. The following table shows gross profit and gross profit
margin for the Front-end and Back-end segments for the six months ended June
30, 2010 compared to the same period in 2009:
+------------------+--------------------------------+--------------------------+
|(EUR millions) | Six months ended June 30,| |
+------------------+--------------+-----------------+--------------------------+
| | Gross profit| Gross profit| |
| | | margin| |
+------------------+--------+-----+-----+-----------+--------------------------+
| |2009(1))| 2010| 2009| 2010| Increase or (decrease)|
| | | | | | percentage points|
+------------------+--------+-----+-----+-----------+--------------------------+
|Front-end | 12.6| 44.0|17.2%| 36.7%| 19.5|
+------------------+--------+-----+-----+-----------+--------------------------+
|Back-end | 42.4|181.8|31.4%| 45.3%| 13.9|
+------------------+--------+-----+-----+-----------+--------------------------+
|Total gross profit| 55.0|225.9|26.4%| 43.3%| 16.9|
+------------------+--------+-----+-----+-----------+--------------------------+
(1)) before impairment inventories
The gross profit margin of both our Front-end segment and our Back-end segment
strongly improved when compared to the first six months of 2009 driven by
significantly higher activity levels. The increase of the gross margin in our
Front-end segment, both compared to the same period last year is partly
attributable to the lower manufacturing overhead as a result of the transfer of
our manufacturing activities to Singapore.
The impact of currency changes year to year was an increase of 2%.
Selling, General and Administrative Expenses. The following table shows selling,
general and administrative expenses for our Front-end and Back-end segments for
the six months ended June 30, 2010 compared to the same period in 2009:
+---------------------------------------------+-----------------------+--------+
|(EUR millions) | Six months ended June| |
| | 30,| |
+---------------------------------------------+----+------------------+--------+
| |2009| 2010|% Change|
+---------------------------------------------+----+------------------+--------+
|Front-end |30.6| 22.2|Â Â Â (27)%|
+---------------------------------------------+----+------------------+--------+
|Back-end |20.3| 36.0| Â Â Â 77%|
+---------------------------------------------+----+------------------+--------+
|Total selling, general and administrative |50.9| 58.2| Â Â Â 14%|
|expenses | | | |
+---------------------------------------------+----+------------------+--------+
As a percentage of net sales, selling, general and administrative expenses were
11% in the first half year of 2010 and 24% in the same period of 2009.
For the first six months of 2010 selling, general and administrative expenses as
a percentage of net sales of our Front-end segment, were reduced to 19% compared
with 42% for the first 6 months of 2009, reflecting our focus to reduce the
fixed cost base as part of our restructuring program Perform!. For the period
under review the selling, general and administrative expenses in the Back-end
segment as a percentage of net sales decreased from 15% in 2009 to 9% in 2010.
The impact of currency changes year to year was an increase of 1%.
Research and Development Expenses. The following table shows research and
development expenses for our Front-end and Back-end segments for the six months
ended June 30, 2010 compared to the same period in 2009:
+---------------------------------------+-----------------------+--------+
|(EUR millions) | Six months ended June| |
| | 30,| |
+---------------------------------------+----+------------------+--------+
| |2009| 2010|% Change|
+---------------------------------------+----+------------------+--------+
|Front-end |18.1| 16.1|Â Â Â (11)%|
+---------------------------------------+----+------------------+--------+
|Back-end |13.0| 19.5| Â Â Â 50%|
+---------------------------------------+----+------------------+--------+
|Total research and development expenses|31.1| 35.7| Â Â Â 15%|
+---------------------------------------+----+------------------+--------+
As a percentage of net sales, research and development expenses were 7% in the
first six months of 2010 and 15% in the first six months of 2009.
The decrease in our Front-end segment is the result of a further prioritisation
of research and development projects.
The impact of currency changes year to year was an increase of 2%.
Restructuring Expenses. In 2009 ASMI started the implementation of a major
restructuring in the Front-end segment. Related to these restructuring projects,
during the first six months of 2010 EUR 7.0 million of expenses were incurred.
These related mainly to severance packages, retention costs, provisions for
vacancy and other costs related to the transition of activities to Singapore.
Earnings (Loss) from Operations. The following table shows earnings (loss) from
operations for our Front-end and Back-end segments for the six months ended June
30, 2010 compared to the same period in 2009:
+-----------------------------------------------+-----------------------+------+
|(EUR millions) | Six months ended June| |
| | 30,| |
+-----------------------------------------------+------+----------------+------+
| | 2009| 2010|Change|
+-----------------------------------------------+------+----------------+------+
|Front-end: | | | |
+-----------------------------------------------+------+----------------+------+
|Excluding impairments and restructuring charges|(36.4)| 5.6| 42.0|
+-----------------------------------------------+------+----------------+------+
|Impairments and restructuring charges |(40.1)| (7.0)| 33.1|
+-----------------------------------------------+------+----------------+------+
|Including impairments and restructuring charges|(76.5)| (1.4)| 75.1|
+-----------------------------------------------+------+----------------+------+
|Back-end | 9.1| 126.3| 117.2|
+-----------------------------------------------+------+----------------+------+
|Total earnings (loss) from operations |(67.4)| 124.9| 192.3|
+-----------------------------------------------+------+----------------+------+
Net Earnings (Loss) allocated to the shareholders of the parent. The following
table shows net earnings (loss) for our Front-end and Back-end segments for the
six months ended June 30, 2010 compared to the same period in 2009:
+-----------------------------------------------+-----------------------+------+
|(EUR millions) | Six months ended June| |
| | 30,| |
+-----------------------------------------------+------+----------------+------+
| | 2009| 2010|Change|
+-----------------------------------------------+------+----------------+------+
|Front-end: | | | |
+-----------------------------------------------+------+----------------+------+
|Â Â Excluding impairments, restructuring charges,| | | |
|result on early extinguishment of debt and fair|(40.7)| (8.6)| 32.1|
|value change conversion option | | | |
+-----------------------------------------------+------+----------------+------+
|Â Â Loss from early extinguishment of debt | -| (2.3)| (2.3)|
+-----------------------------------------------+------+----------------+------+
|Â Â Impairments and restructuring charges |(37.8)| (7.0)| 30.8|
+-----------------------------------------------+------+----------------+------+
|Â Â Fair value change conversion options | (4.1)| 11.4| 15.5|
+-----------------------------------------------+------+----------------+------+
|Â Â Including impairments, restructuring charges | | | |
|result on early extinguishment of debt and fair| | | |
|value change conversion options |(82.6)| (6.4)| |
| | | | 76.2|
+-----------------------------------------------+------+----------------+------+
|Back-end | 3.6| 58.1| 54.5|
+-----------------------------------------------+------+----------------+------+
|Total earnings (loss) (1)) |(79.0)| 51.7| 130.7|
+-----------------------------------------------+------+----------------+------+
(1) )Allocated to the shareholders of the parent
Net earnings for the Back-end segment reflect our 52.59% ownership of ASM
Pacific Technology.
Bookings and backlog
The following table shows, for our Front-end and Back-end segments, the level of
new orders for the second quarter of 2010 and the backlog at the end of the
second quarter of 2010 as compared to the first quarter of 2010 and the second
quarter of 2009:
+-----------------+------------------------------------------------------------+
|(EUR millions,| |
|except | |
|book-to-bill | |
|ratio) | |
+-----------------+------------+------------+------------+----------+----------+
| Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | | |
| | | | | | |
| Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | % Change | % Change |
| | | | | Q1 2010 | Q2 2009 |
| Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | Â Â Â Â Â Â | to | to |
| | | | | Q2 2010 | Q2 2010 |
|Â Â Â Â Â Â | Â Â Â Â Â Â Q2| Â Â Â Â Â Â Q1| Â Â Â Â Â Â Q2| | |
| | 2009| 2010| 2010| | |
+-----------------+------------+------------+------------+----------+----------+
|Front-end: | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|New orders for| Â 22.1| Â 65.4| Â 86.5|32% |291% |
|the quarter | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Backlog at the| | | | | |
|end of the| Â 36.2| Â 61.7| Â 82.1|33% |127% |
|quarter | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Book-to-bill | Â | Â | Â | | |
|ratio (new orders| | | | | |
|divided by | Â 0.80| Â 1.21| Â 1.31| | |
|net sales) | | | | | |
+-----------------+------------+------------+------------+----------+----------+
| | Â | Â | Â | | |
+-----------------+------------+------------+------------+----------+----------+
|Back-end: | Â | Â | Â | | |
+-----------------+------------+------------+------------+----------+----------+
|New orders for| Â 133.7| Â 290.0| Â 439.6|52% |229% |
|the quarter | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Backlog at the| | | | | |
|end of the| Â 86.2| Â 271.3| Â 474.5|75% |450% |
|quarter | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Book-to-bill | Â | Â | Â | | |
|ratio (new orders| | | | | |
|divided by | Â 1.45| Â 1.76| Â 1.86| | |
|net sales) | | | | | |
+-----------------+------------+------------+------------+----------+----------+
| | Â | Â | Â | | |
+-----------------+------------+------------+------------+----------+----------+
|Total | Â | Â | Â | | |
+-----------------+------------+------------+------------+----------+----------+
|New orders for| Â 155.8| Â 355.4| Â 526.1|48% |238% |
|the quarter | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Backlog at the| | | | | |
|end of the| Â 122.4| Â 333.0| Â 556.6|67% |355% |
|quarter | | | | | |
+-----------------+------------+------------+------------+----------+----------+
|Book-to-bill | Â | Â | Â | | |
|ratio (new orders| | | | | |
|divided by | Â 1.30| Â 1.62| Â 1.74| | |
|net sales) | | | | | |
+-----------------+------------+------------+------------+----------+----------+
+-----------------+------------+------------+------------+----------+----------+
In our Front-end segment we have seen increased order bookings. Both 200mm and
300mm Epitaxy equipment led our second quarter Front-end order book. 200mm
Epitaxy system bookings included Epitaxy orders for power management
applications. In July, we received an order, valued in excess of US $25 million
(approximately EUR 20 million), for multiple 300 mm Epitaxy tools, in addition
to continued strong performance to date in our overall Front-end orderbook. Our
Back-end segment bookings level in the second quarter was a new record. The
demand for equipment to assemble both integrated circuits and LEDs was very
strong.
Liquidity and capital resources
Net cash provided by operations was EURÂ 61.2 million for the second quarter of
2010 as compared to net cash used by operations of EUR 6.4 million for the
second quarter of 2009. For the six months ended June 30, 2010 net cash provided
from operations of EUR 87.0 million compared to net cash used in operations of
EUR 0.5 million for the comparable period in 2009. This increase results mainly
from the improved net earnings, partly offset by investments in working capital
resulting from the increased level of activity.
Net cash used in investing activities was EURÂ 19.3 million for the second
quarter of 2010 as compared to EURÂ 2.3 million for the second quarter of 2009.
For the six months ended June 30, 2010 net cash used in investing activities of
EUR 30.1 million compared to EUR 5.3 million for the comparable period in 2009.
The increase results mainly from increased capital expenditures in our Back-end
segment.
Net cash used in financing activities was EURÂ 30.5 million for the second
quarter of 2010 as compared to net cash used in financing activities of EURÂ 15.3
million for the second quarter of 2009. For the six months ended June 30, 2010
net cash used in financing activities of EUR 70.6 million compared to EUR 17.6
million for the comparable period in 2009. The increase mainly results from the
increased payment of dividend to minority shareholders and the repurchase of
convertible bonds during the first quarter of 2010.
Net working capital, consisting of accounts receivable, inventories, other
current assets, accounts payable, accrued expenses, advance payments from
customers and deferred revenue, increased from EUR 214.1 million at March
31, 2010 to EUR 262.6 million at June 30, 2010. This increase is primarily the
result of increased activity levels and exchange rates. The number of
outstanding days of working capital, measured based on quarterly sales,
decreased from 90 days at March 31, 2010 to 80 days at June 30, 2010. For the
same period, our Front-end segment increased from 84 days to 104 days and our
Back-end segment decreased from 92 days to 73 days.
At June 30, 2010, the Company's principal sources of liquidity consisted of EUR
308.2 million in cash and cash equivalents and EUR 127.6 million in undrawn bank
lines. Approximately EURÂ 148.7 million of the cash and cash equivalents and EUR
31.6 million of the undrawn bank lines are restricted to use in the Company's
Back-end operations. EUR 27.4 million of the cash and cash equivalents and
EURÂ 6.1 million in undrawn bank lines are restricted to use in the Company's
Front-end operations in Japan. The use of EUR 33.7 of cash and cash equivalents
is restricted in use for buy-back of outstanding convertible bonds due 2011.
Outlook
For the 2010 third quarter, we expect to generate positive revenue growth in
both our Front-end and Back-end business segments.
We expect Front-end orders to strengthen further. Based on current order
visibility, we believe this trend will continue through the rest of the year, as
the semiconductor industry transitions to the more advanced technology nodes. We
anticipate third quarter Back-end orders will continue to reflect the robust
demand of both the semiconductor and LED markets.
Overall, we look forward to further improving our Front-end operating
performance, complete PERFORM!, and to realizing another strong results' quarter
for our Back-end operations.
Proposed Acquisition by ASM Pacific Technology Limited
After pursuing our very successful Back-end strategy of internal organic growth
for the past thirty years, we believe that it is time for us to adopt a new
strategy of pursuing multiple growth engines. One of the challenges of changing
a core strategic vision is to change it while one's business is still performing
strongly.
The Group's proposed acquisition of the entire interest of the Electronics
Assembly Systems business from Siemens AG represents an exciting and excellent
opportunity for the Company. It offers ASM a significant growth opportunity and
a chance to replicate our success in the assembly and packaging equipment
business to the surface mount technology ("SMT") equipment business.
The SMT placement equipment business that has been built up by Siemens AG has
excellent market-leading technologies, good market reputation and a commendable
market position. Currently, it enjoys strong market shares for products in the
high-end market segments, particularly in Europe and the USA, which it is
well-placed to maintain its leadership position. In terms of synergy, it shares
many of the key enabling technologies and manufacturing processes of the
assembly and packaging equipment offered by ASM. By contributing ASM's
experience and expertise in cost-efficient manufacturing and marketing networks
in Asia, we aim to lower the costs of SMT equipment hitherto offered to the
market. Hence, we are confident of expanding the market share of the acquired
business in Asia, particularly in China. We also aim to repeat our successful
total solution strategy by horizontally expanding the product portfolio of this
new SMT equipment business to cater to the needs of diverse customers.
We strongly believe that the proposed acquisition represents an excellent
combination of advanced technologies with vast experience in cost-efficient
manufacturing and marketing networks in Asia. The synergistic effects of
combining the strengths of the two organizations will serve to push this new SMT
business unit and the whole ASM Group to new heights.
Details of the proposed acquisition are set out in the announcement on "Major
Transaction - Acquisition of the SEAS Business" of ASM Pacific Technology dated
28 July 2010.
Interim Financial Report
On August 31, 2010 ASM International will publish its Interim Financial report
for the six months ended June 30, 2010. This report is in accordance with the
requirements of the EU Transparency Directive as implemented in the Netherlands
and includes consolidated condensed interim financial statements prepared in
accordance with IAS 34, "Interim Financial Reporting", an interim management
board report and a management board responsibility statement. The interim
financial report for the six months ended June 30, 2010 will be available online
at www.asm.com as from August 31, 2010.
ASM International will host an investor conference call and web cast on
Thursday, July 29, 2010 at 15:00 Continental European Time (9:00 a.m. - US
Eastern Time).
The teleconference dial-in numbers are as follows:
United States - +1 718 247 0888
International - + 44 (0)20 7806 1967
A simultaneous audio web cast will be accessible at www.asm.com.
The teleconference will be available for replay, beginning one hour after
completion of the live broadcast, through August 11, 2010.
The replay dial-in numbers are:
United States - +1 347 366 9565
International - + 44 (0)20 7111 1244
Access Code: 9715249#
About ASM International
ASM International N.V., headquartered in Almere, the Netherlands, and its
subsidiaries design and manufacture equipment and materials used to produce
semiconductor devices. ASM International and its subsidiaries provide production
solutions for wafer processing (Front-end segment) as well as assembly and
packaging (Back-end segment) through facilities in the United States, Europe,
Japan and Asia. ASM International's common stock trades on NASDAQ (symbol ASMI)
and the Euronext Amsterdam Stock Exchange (symbol ASM). For more information,
visit ASMI's website at www.asm.com.
Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of
1995: All matters discussed in this statement, except for any historical data,
are forward-looking statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements. These include, but are not limited to, economic
conditions and trends in the semiconductor industry generally and the timing of
the industry cycles specifically, currency fluctuations, financing and liquidity
matters, the success of restructurings, the timing of significant orders, market
acceptance of new products, competitive factors, litigation involving
intellectual property, shareholder and other issues, commercial and economic
disruption due to natural disasters, terrorist activity, armed conflict or
political instability, epidemics and other risks indicated in the Company's
filings from time to time with the U.S. Securities and Exchange Commission,
including, but not limited to, the Company's reports on Form 20-F and Form 6-K.
The Company assumes no obligation nor intends to update or revise any
forward-looking statements to reflect future developments or circumstances.
[HUG#1434641]
PR Q2 2010: http://hugin.info/132090/R/1434641/380200.pdf
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Source: ASM International NV via Thomson Reuters ONE
