PRESS RELEASE. 26 April

Transcription

1 PRESS RELEASE BE Semiconductor Industries Announces Q1-18 Results Solid Performance as Revenue and Net Income Up 40.5% and 52.7%, Respectively, vs. Q1-17 Duiven, the Netherlands, April 26, BE Semiconductor Industries N.V. (the Company" or "Besi") (Euronext Amsterdam: BESI; OTC markets: BESIY, Nasdaq International Designation), a leading manufacturer of assembly equipment for the semiconductor industry, today announced its results for the first quarter ended March 31, Key Highlights Revenue of million, up 1.1% vs. Q4-17 and within guidance. Up 40.5% vs. Q1-17 due to growth across product portfolio, favorable industry conditions and continued market share gains Orders of million, up 37.8% vs. Q4-17 due primarily to capacity additions for smart phone applications. Bookings down 14.2% vs. exceptionally high levels in Q1-17 Gross margin of 56.5% up 0.2 points vs. Q4-17 and 0.8 points vs. Q1-17 despite adverse forex influences from decline of USD vs. euro. Within guidance Net income of 37.1 million, down 6.5 million vs. Q4-17 primarily due to higher share based compensation expense and a 5.7 point higher effective tax rate as such expenses are not tax deductible. Up 12.8 million (+52.7%) vs. Q1-17 Net cash and deposits reach million, an increase of million (+65.1%) year over year as cash generation remains strong Outlook Q2-18 revenue expected to grow by 10-15% vs. Q1-18. H1-18 revenue anticipated to increase approximately 17% vs. H1-17 at the midpoint of guidance ( millions, except EPS) Q Q Δ Q Δ Revenue % % Orders % % Operating Income % % EBITDA % % Net Income % % EPS (basic) % % EPS (diluted) % % Net Cash % % Richard W. Blickman, President and Chief Executive Officer of Besi, commented: Besi s Q1-18 results were positively influenced by a continuation of many favorable trends from Our financial performance benefited from an extended industry upturn, ongoing customer investment in advanced packaging applications and Besi s favorable market position with key customers and supply chains. As such, revenue and net income increased by 40.5% and 52.7%, respectively, vs. Q1-17. In addition, gross and net margins showed further steady improvement vs. last year due to increased production efficiencies and the strategic execution of cost reduction initiatives despite adverse forex influences from the significant decline in the US dollar vs. the euro. Revenue growth this quarter was broad based across Besi s die bonding and packaging portfolio and reflected increased demand by Asian customers for smart phone and high performance computing applications and by North American and European IDMs for automotive and cloud server applications. In addition, Q1-18 orders grew by 37.8% vs. Q4-17 to reach million due primarily to capacity additions for smart phone applications by both IDMs and Asian subcontractors. 26 April

2 Besi s cash generation was also strong in Q1-18 with net cash and deposits expanding to million, an increase of million, or 65.1%, compared to the end of Q1-17. We utilized 6.0 million of excess cash flow this quarter to enhance shareholder value via regular share repurchase activities. For Q2-18, we estimate that Besi s revenue will grow by 10-15% vs. Q1-18 and that H1-18 revenue will rise by approximately 17% vs. H1-17 at the midpoint of Q2-18 revenue guidance. We also expect significantly higher operating profit both on a sequential quarterly and half year comparative basis given anticipated revenue growth and the efficiency of our business model. Looking forward, leading industry analysts expect continued growth of the assembly equipment market into However, subsequent to quarter end, VLSI Research downwardly revised its 2018 market growth estimate from 18.1% in January to 12.5% based on announcements by several semiconductor manufacturers indicating a softening of demand trends from First Quarter Results of Operations Q Q Δ Q Δ Revenue % % Orders % % Backlog % % Book to Bill Ratio 1.3x 1.0x x -0.9 Besi s Q1-18 revenue increased by 1.1% vs. Q4-17 and was within guidance (-5% to +5%). Revenue increased by 40.5% on a year over year basis reflecting broad based demand across Besi s die bonding and packaging portfolio, a continuation of favorable market conditions and market share gains. In addition, it reflected increased demand by Asian customers for smart phone and high performance computing applications and automotive and cloud server applications by North American and European IDMs. Orders of million increased by 37.8% vs. Q4-17 due primarily to capacity additions by both IDMs and Asian subcontractors for smart phone applications. Q1-18 orders declined by 14.2% vs. exceptionally high levels in Q1-17. Per customer type, IDM orders increased sequentially by 36.4 million, or 48.7%, vs. Q4-17 while subcontractor orders increased by 20.0 million, or 26.8%. IDM and subcontractor orders represented 54% and 46%, respectively, of total Q1-18 bookings vs. 82% and 18%, respectively, of total Q1-17 bookings. Q Q Δ Q Δ Gross Margin 56.5% 56.3% % +0.8 Operating Expenses % % Financial Expense, net % % EBITDA % % Besi s gross margin in Q1-18 increased by 0.2 points vs. Q4-17 and was within guidance (55-57%). As compared to Q1-17, the 0.8 point gross margin increase was due primarily to production cost efficiencies. In both comparable periods, gross margin was adversely affected by a significant decline in the value of the USD vs. the euro. Q1-18 operating expenses increased by 4.9 million (+14.3%) vs. Q4-17 due to higher share based compensation expense associated with Besi s 2017 performance. Vs. Q1-17, operating expenses increased by 8.6 million (+28.2%) primarily due to 4.6 million of increased share based compensation expense and higher headcount and variable overhead expenses necessary to support increased revenue levels. Total headcount at March 31, 2018 increased by 13.5% (+254 employees) vs. March 26 April

3 31, 2017 principally due to higher fixed and temporary Asian personnel necessary to support Besi s revenue growth and an expansion of its Asian sales and service operations. Financial expense, net increased by 1.0 million vs. Q4-17 and 2.3 million vs. Q1-17 due primarily to higher net interest expense associated with Besi s issuance of 175 million of Convertible Notes in December On a year over year basis, net financial expense also grew due to higher hedging costs related to increased sales volume. Q Q Δ Q Δ Net Income % % Net Margin 23.9% 28.4% % +1.9 Tax Rate 16.3% 10.6% % +0.4 Besi s Q1-18 net income declined by 6.5 million vs. Q4-17 due to higher share based compensation expense and a higher effective tax rate as such expenses are not tax deductible. Excluding such charges, Besi s effective tax rate would have been 14.0%, 14.6% and 10.3%, respectively, in Q1-18, Q1-17 and Q4-17. As compared to Q1-17, net income increased by 12.8 million (+52.7%) and net margins rose 1.9 points to 23.9% as significant revenue and gross margin improvement more than offset higher operating expenses. Financial Condition Q Q Δ Q Δ Net Cash % % Cash flow from Ops % % Besi s net cash rose to million at the end of Q1-18, an increase of 42.5 million, or 17.2%, vs. Q4-17 and million, or 65.1%, vs. Q1-17. The Company generated cash flow from operations of 54.9 million in Q1-18 which was utilized primarily to fund (i) 6.0 million of share repurchases, (ii) 2.6 million of capitalized development spending and (iii) 1.9 million of capital expenditures. During the quarter, Besi repurchased 71,738 of its ordinary shares at an average price of per share. Cumulatively as of March 31, 2018, a total of 678,374 shares have been purchased under the current 1.0 million share repurchase authorization at an average price of per share for a total of 32.4 million. Outlook Based on its March 31, 2018 backlog and feedback from customers, Besi forecasts for Q2-18 that: Revenue will increase by 10%-15% vs. the million reported in Q1-18. Gross margin will range between 55-57% vs. the 56.5% realized in Q1-18. Operating expenses will decrease approximately 5%-10% vs. the 39.1 million reported in Q1-18. Investor and media conference call A conference call and webcast for investors and media will be held today at 4:00 pm CET (10:00 am EST). The dial-in for the conference call is (31) To access the audio webcast and webinar slides, please visit 26 April

4 About Besi Besi is a leading supplier of semiconductor assembly equipment for the global semiconductor and electronics industries offering high levels of accuracy, productivity and reliability at a low cost of ownership. The Company develops leading edge assembly processes and equipment for leadframe, substrate and wafer level packaging applications in a wide range of end-user markets including electronics, mobile internet, cloud server, computing, automotive, industrial, LED and solar energy. Customers are primarily leading semiconductor manufacturers, assembly subcontractors and electronics and industrial companies. Besi s ordinary shares are listed on Euronext Amsterdam (symbol: BESI). Its Level 1 ADRs are listed on the OTC markets (symbol: BESIY Nasdaq International Designation) and its headquarters are located in Duiven, the Netherlands. For more information, please visit our website at Contacts: Richard W. Blickman, President & CEO CFF Communications Cor te Hennepe, SVP Finance Frank Jansen Tel. (31) Tel. (31) investor.relations@besi.com besi@cffcommunications.nl Caution Concerning Forward Looking Statements This press release contains statements about management's future expectations, plans and prospects of our business that constitute forward-looking statements, which are found in various places throughout the press release, including, but not limited to, statements relating to expectations of orders, net sales, product shipments, backlog, expenses, timing of purchases of assembly equipment by customers, gross margins, operating results and capital expenditures. The use of words such as anticipate, estimate, expect, can, intend, believes, may, plan, predict, project, forecast, will, would, and similar expressions are intended to identify forward looking statements, although not all forward looking statements contain these identifying words. The financial guidance set forth under the heading Outlook contains such forward looking statements. While these forward looking statements represent our judgments and expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from those contained in forward looking statements, including any inability to maintain continued demand for our products; failure of anticipated orders to materialize or postponement or cancellation of orders, generally without charges; the volatility in the demand for semiconductors and our products and services; failure to develop new and enhanced products and introduce them at competitive price levels; failure to adequately decrease costs and expenses as revenues decline; loss of significant customers, including through industry consolidation or the emergence of industry alliances; lengthening of the sales cycle; acts of terrorism and violence; disruption or failure of our information technology systems; inability to forecast demand and inventory levels for our products; the integrity of product pricing and protection of our intellectual property in foreign jurisdictions; risks, such as changes in trade regulations, currency fluctuations, political instability and war, associated with substantial foreign customers, suppliers and foreign manufacturing operations, particularly to the extent occurring in the Asia Pacific region; potential instability in foreign capital markets; the risk of failure to successfully manage our diverse operations; any inability to attract and retain skilled personnel; those additional risk factors set forth in Besi's annual report for the year ended December 31, 2017 and other key factors that could adversely affect our businesses and financial performance contained in our filings and reports, including our statutory consolidated statements. We expressly disclaim any obligation to update or alter our forward-looking statements whether as a result of new information, future events or otherwise. 26 April

5 Consolidated Statements of Operations (euro in thousands, except share and per share data) Three Months Ended March 31, December 31, March 31, Revenue 154, , ,241 Cost of sales 67,327 67,010 48,872 Gross profit 87,610 86,234 61,369 Selling, general and administrative expenses 29,242 24,618 22,211 Research and development expenses 9,812 9,535 8,335 Total operating expenses 39,054 34,153 30,546 Operating income 48,556 52,081 30,823 Financial expense (income), net 4,272 3,345 1,958 Income before taxes 44,284 48,736 28,865 Income tax expense 7,205 5,152 4,585 Net income 37,079 43,584 24,280 Net income per share basic Net income per share diluted Number of shares used in computing per share amounts: - basic - diluted 1 37,238,405 42,389,214 37,316,355 41,129,857 37,241,357 40,799,822 1 The calculation of diluted income per share assumes the exercise of equity settled share based payments and the conversion of the Convertible Notes. 26 April

6 Consolidated Balance Sheets (euro in thousands) March 31, 2018 ASSETS December 31, 2017 (audited) Cash and cash equivalents 440, ,806 Deposits 130,000 - Accounts receivable 159, ,654 Inventories 81,575 70,947 Income tax receivable Other current assets 11,894 11,652 Total current assets 824, ,429 Property, plant and equipment 26,918 26,517 Goodwill 44,443 44,687 Other intangible assets 34,604 34,140 Deferred tax assets 4,707 4,660 Other non-current assets 2,746 2,520 Total non-current assets 113, ,524 Total assets 937, ,953 LIABILITIES AND SHAREHOLDERS EQUITY Notes payable to banks 969 1,742 Current portion of long-term debt and financial leases 11,547 11,228 Accounts payable 73,428 62,721 Accrued liabilities 81,942 70,595 Total current liabilities 167, ,286 Other long-term debt and financial leases 268, ,274 Deferred tax liabilities 12,045 10,050 Other non-current liabilities 17,125 17,211 Total non-current liabilities 297, ,535 Total equity 472, ,132 Total liabilities and equity 937, , April

7 Consolidated Cash Flow Statements (euro in thousands) Three Months Ended March 31, Cash flows from operating activities: Operating income 48,556 30,823 Depreciation and amortization 3,414 3,359 Share based compensation expense 7,161 2,560 Other non-cash items Change in working capital (2,022) (18,185) Income tax received (paid) (1,877) (509) Interest received (paid) (309) 88 Net cash provided by operating activities 54,923 18,563 Cash flows from investing activities: Capital expenditures (1,926) (1,121) Capitalized development expenses (2,640) (1,884) Investment in deposits 1 (130,000) (25,000) Net cash provided by (used in) investing activities (134,566) (28,005) Cash flows from financing activities: Proceeds from (payments of) bank lines of credit (463) (3,855) Proceeds from (payments of) debt and financial leases Proceeds from reissuance (purchase) of treasury shares (6,000) (7,500) Net cash provided by (used in) financing activities (6,156) (11,281) Net increase (decrease) in cash and cash equivalents (85,799) (20,723) Effect of changes in exchange rates on cash and cash equivalents (1,024) (49) Cash and cash equivalents at beginning of the period 527, ,790 Cash and cash equivalents at end of the period 440, ,018 1 Reclassification from financing activities in Q1-17 to investing activities in Q April

8 Supplemental Information (euro in millions, unless stated otherwise) REVENUE Q Q Q Q Q Per geography: Asia Pacific % % % % % EU / USA % % % % % Total % % % % % ORDERS Q Q Q Q Q Per geography: Asia Pacific % % % % % EU / USA % % % % % Total % % % % % Per customer type: IDM % % % % % Subcontractors % % % % % Total % % % % % BACKLOG Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Backlog HEADCOUNT Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Fixed staff (FTE) Asia Pacific 1,112 69% 1,164 70% 1,199 70% 1,222 71% 1,254 71% EU / USA % % % % % Total 1, % 1, % 1, % 1, % 1, % Temporary staff (FTE) Asia Pacific % % % % % EU / USA 55 21% 67 20% 85 26% 87 28% 93 24% Total % % % % % Total fixed and temporary staff (FTE) 1,883 2,005 2,033 2,040 2,137 OTHER FINANCIAL DATA Gross profit As reported Q % Q % Q % Q % Q % Restructuring charges / (gains) % (0.0) -0.0% Gross profit as adjusted % % % % % Selling, general and admin expenses: As reported % % % % % Amortization of intangibles (0.1) -0.1% (0.1) -0.1% (0.1) -0.1% (0.1) -0.1% (0.1) -0.1% Restructuring gains / (charges) (0.0) 0.0% % (0.0) 0.0% % % SG&A expenses as adjusted % % % % % Research and development expenses: As reported % % % % % Capitalization of R&D charges % % % % % Amortization of intangibles (2.0) -1.8% (2.0) -1.2% (2.0) -1.3% (2.1) -1.4% (2.1) -1.4% Restructuring gains / (charges) R&D expenses as adjusted % % % % % Financial expense (income), net: Interest expense (income), net Foreign exchange effects Total Operating income (loss) as % of net sales % % % % % EBITDA as % of net sales % % % % % Net income (loss) as % of net sales % % % % % Income per share Basic Diluted April