For the nine months ended September 30, 2000, Net Earnings amounted to € 67.9 million or € 1.42 diluted Net earnings per share, compared to € 1.2 million for the same period in 1999 or € 0.03 per share.
Net sales
Net sales for the three months ended September 30, 2000 amounted to € 251.1 million, more than two times the net sales in the same period last year and only 2% lower than the record net sales of the second quarter of 2000. Constraints at sub-contractors and some shortage in components resulted in lower than planned shipments in the quarter.
For the nine months ended September 30, 2000, Net sales totaled € 672.1 million, an increase of more than 150% over the net sales in the same period last year.
Operations
The Gross profit margin for the third quarter of 2000 amounted to 45.3% of Net sales, a margin increase of 1.5 percentagepoint compared to the previous quarter. The improvement was achieved through a mix of better pricing as well as manufacturing efficiencies.
Selling, general and administrative costs showed a small decline to € 38.6 million from € 39.9 million in the previous quarter. As a percentage of Net sales, SG&A costs declined from 20% in the first nine months of 1999 to just under 16% in the first nine months of 2000. Investments in Research and development concentrated on the products that have pushed ASM’s progress during the last three years. Our successful products in the 300mm wafer processing markets and in the bonder market, the strength in SiliconGermanium, now also available in 300mm, our low-k program, Atomic Layer CVD (ALCVD) and the integrated line concept for assembly and packaging continue to be the focus of the investments in Research & development. The investments amounted to € 50.7 million, an increase of 55% in the first nine months of 2000 compared to the € 32.8 million invested in the same period last year, but declined as a percentage of Net sales from 13% to 8%.
Earnings from Operations, after deduction of amortization of intangible assets of € 1.9 million, amounted to € 54.7 million in the three months ended September 30, 2000, compared to € 16.5 million in the same period in 1999. For the nine months ended September 30, 2000, Earnings from Operations amounted to € 136.8 million, after deduction of € 2.3 million in amortization of intangibles. Earnings from Operations in the same period last year amounted to € 21.2 million. The Operations Margin (Earnings from Operations before amortization of intangibles as a percentage of Net sales) improved to 22.5% in the third quarter of 2000 and 20.7% for the nine months ending September 30, 2000, compared to 14.8% and 9.6% (before restructuring charges of € 3.9 million related to a concentration of manufacturing activities in the first quarter of 1999), respectively, in the same periods last year.
In early July 2000, the Company acquired almost 5% of the outstanding shares in ASM Pacific Technology Ltd, bringing its ownership in this company from just over 50% to almost 55%. This purchase resulted in an increase in Intangible assets of € 71 million and an increase in related amortization expenses with effect from the third quarter of 2000.
The purchase was financed through a US$ 75 million loan facility, of which US$ 69 million was taken down. The loan is secured by a portion of ASM International’s ownership of ASM Pacific Technology common shares. Notwithstanding the related increase in interest expense, Net interest and other financial income remained positive during the quarter and in the nine months ended September 30, 2000. The improvement in the Company’s financial position achieved with the proceeds of the secondary equity offering that was completed in April 2000, and currency gains resulting from the strong US Dollar contributed to this development.
Bookings and backlog
New orders received in the third quarter of 2000 amounted to € 346 million, a new record for the Company, surpassing the previous record of € 304 million that was achieved in the first quarter of this year. The growth in new orders in the third quarter came from the front-end segment of the market.
The backlog increased by 28% when compared to June 30, 2000 and stands at € 431 million at the end of September 2000, also a new record for the Company.
Outlook
Our backlog comprises approximately 3 months of activity for ASM Pacific Technology and over 6 months of orders for front-end. Further, our ongoing discussions with customers on their technology development and their expansion plans have led to continued robust quoting activity. This gives us sufficient visibility and confidence in our outlook to invest in additional manufacturing and assembly capacity.
In turn, our greater capacity will allow us to keep delivery times under control and to continue our three-year growth in market share.
We believe that diluted net earnings in the fourth quarter of 2000, after deduction of amortization of intangible assets, may amount to € 0.62-0.64 per share.
Conference Call
An investor conference call will take place tomorrow, Tuesday, October 24, 2000 at
15:00 Continental European time
9:00 a.m. US East Coast time
6:00 a.m. US West Coast time
The teleconference dial-in numbers are:
United States: (800) 288-9626
All others: +1 612 332-0802
A digitized replay is available through Thursday, 11:59 p.m. (US Eastern time) October 26, 2000. The replay telephone numbers are
United States: (800) 475-6701
All others: +1 320 365-3844
Access code for all replay calls: 544 888
About ASM
ASM International is headquartered in Bilthoven, the Netherlands. ASM International’s subsidiaries design, develop, manufacture and market equipment and materials used to produce semiconductor devices. ASM International and its subsidiaries provide production solutions for the wafer processing, assembly and packaging segments of the semiconductor equipment market through their facilities in the United States, Europe, Japan and Asia. ASM International’s common shares trade on the NASDAQ National Market and on the AEX Stock Exchange in Amsterdam under the symbol “ASMI”. More information on ASM can be found on its website at http://www.asm.com
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Safe Harbor Statement under the US 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 in the semiconductor industry, currency fluctuations, the timing of significant orders, market acceptance of new products, competitive factors, risk factors related to litigation and other risks indicated in filings from time to time with the SEC and Stock Exchange Authorities.