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News about BE Semiconductor Industries NV
BE Semiconductor Industries N.V. Announces Q3-20 Results
Q3-20 Revenue of € 108.3 Million and Net Income of € 34.0 Million, Respectively Nine Months 2020 Revenue and Net Income Up 22.8% and 84.0%, Respectively, vs. Prior YearDUIVEN, The Netherlands, Oct. 22, 2020 (GLOBE NEWSWIRE) -- 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 third quarter and nine months ended September 30, 2020.Key Highlights Q3-20 * Revenue of € 108.3 million, down 12.9% vs. Q2-20, consistent with seasonal trends. At favorable end of guidance range. Up 20.7% vs. Q3-19 primarily due to higher shipments for mobile applications to US and Asian customers * Orders of € 94.9 million, down 6.3% vs. Q2-20. Up 15.5% vs. Q3-19 due to increased demand for high end mobile applications related to new product introductions and 5G capabilities * Gross margin reached 60.8% and exceeded guidance. Down 1.2 points vs. Q2-20 but up 5.7 points vs. Q3-19 primarily due to a more favorable product mix and increased labor efficiencies * Net income of € 34.0 million decreased € 5.8 million (-14.6%) vs. Q2-20 due to lower revenue levels. Up strongly (+€ 14.8 million or +77.1%) vs. Q3-19 primarily due to significantly higher revenue and gross margins combined with reduced overhead levels related to cost control efforts * Net margin again exceeded 30%, reaching 31.3% vs. 32.0% in Q2-20. Substantial increase vs. 21.4% realized in Q3-19 * Net cash rose strongly to € 158.7 million, up € 65.1 million (+69.6%) vs. June 30, 2020 * Agreement signed with Applied Materials, Inc. to jointly develop industry’s first complete and proven die based hybrid bonding equipment solution for customers Key Highlights YTD-20 * Revenue of € 323.9 million, up 22.8 % vs. YTD-19 primarily reflecting improved market conditions and higher demand for mobile applications from US and Chinese customers * Similarly, orders of € 314.8 million grew € 66.6 million (+26.8%) vs. YTD-19 * Gross margin reached 60.1%, up 4.4 points vs. YTD-19 primarily due to Besi’s strong advanced packaging market position, a more favorable product mix and increased labor efficiencies * Net income of € 87.6 million increased € 40.0 million (+84.0%) vs. YTD-19. Net margin rose to 27.1% vs. 18.0% in YTD-19Outlook * Q4-20 revenue estimated to be flat to down 15% vs. Q3-20 primarily due to seasonal influences and concerns as to the development of the COVID-19 pandemic. Gross margin anticipated between 58%-60% (€ millions, except EPS)Q3- 2020Q2- 2020ΔQ3- 2019 ΔYTD- 2020YTD- 2019Δ Revenue108.3124.3-12.9%89.7+20.7%323.9263.8+22.8% Orders 94.9101.3-6.3%82.2+15.5%314.8248.2+26.8% Operating Income42.048.4-13.2%25.3+66.0%109.265.1+67.7% EBITDA46.553.1-12.4%30.2+54.0%123.579.8+54.8% Net Income34.039.8-14.6%19.2+77.1%87.647.6+84.0% EPS (basic)0.470.55-14.5%0.26+80.8%1.210.65+86.2% EPS (diluted)0.430.50-14.0%0.25+72.0%1.120.63+77.8% Net Cash & Deposits158.793.6*+69.6%106.9+48.5%158.7106.9+48.5% *Reflects cash dividend payments of € 73.5 million in Q2-20Richard W. Blickman, President and Chief Executive Officer of Besi, commented: “Besi reported solid results for Q3-20 and the first nine months of the year. For the quarter, revenue and net income reached € 108.3 million and € 34.0 million, respectively, increases of 20.7% and 77.1% versus Q3-19. Q3-20 orders of € 94.9 million grew by 15.5% versus Q3-19. Besi’s operating profit of € 42.0 million was at the high end of prior guidance as we had better than anticipated shipments for mobile applications, maintained gross margins in excess of 60% and exceeded our operating expense reduction target. As a result, Besi recorded a net margin of 31.3% in Q3-20, the second consecutive quarter in which profit margins exceeded the annual level achieved during our last 2017 cyclical peak.Results for the first nine months of 2020 were also strong, with revenue of € 323.9 million up 22.8% and net income of € 87.6 million, up 84.0% year over year. Similarly, orders of € 314.8 million grew 26.8% versus the comparative period of 2019. Besi’s business prospects have improved this year as demand for mobile applications by US and Asian customers grew significantly in light of new product introductions and expanded 5G capabilities. Growth in mobile end user markets has more than compensated for relatively stable demand for computing applications and continued weak demand experienced for automotive applications reflecting the current economic environment.The execution of strategic initiatives has also benefited our 2020 performance. A 2.1% reduction in fixed headcount increased labor efficiencies at both the gross and operating margin levels and pro-active supply chain management has limited inventory development and improved cash flow generation. This year, we have also enhanced our CSR strategy with new short and medium-term targets and KPIs set. Long term ambitions include a 60% reduction in Besi’s Scope 1 and 2 carbon foot-print by 2030 and for renewable sources to represent 65% of our global energy needs by such date.Besi’s liquidity position continued to expand with growth in cash and deposits reaching € 564.5 million at the end of Q3-20, an increase of 54.0% versus June 30, 2020. Increased cash levels were primarily due to Besi’s issuance of € 150 million of its 0.75% Convertible Notes in August and strong cash flow from operations of € 60.9 million generated during the quarter. Similarly, net cash and deposits grew to € 158.7 million at quarter end, an increase of 69.6% versus the end of Q2-20. Of note, we will cancel 1.5 million shares held in treasury in Q4-20 so we have sufficient room within our current authorization to increase quarterly share repurchases from approximately € 3 million to € 10 million.Looking ahead, we estimate that Q4-20 revenue will be flat to down 15% due to typical seasonal influences, lower demand for mobile applications post the capacity build this year and concerns as to the development of the COVID-19 pandemic. Besi’s gross margin is estimated to range between 58-60% in Q4-20 based on the forecasted product mix. Operating expenses are expected to increase by 0-5% versus Q3-20.Longer-term, we are encouraged about Besi’s prospects in the next investment cycle given our strong performance during the last industry downturn and the current pandemic and by strong secular growth drivers. As chip functionality, complexity and density increase and geometries shrink, Besi’s advanced packaging solutions are ever more important to customers.As such, we are increasing our engagement with leading mobile, memory and logic players to expand our addressable market. In particular, we see significant market opportunities from the current 5G roll-out and initial orders from global memory producers for high volume, high accuracy flip chip systems versus traditional wire bonding solutions. In addition, Besi and Applied Materials, Inc. announced in a separate press release today an agreement to develop the industry’s first complete and proven equipment solution for die based hybrid bonding. The collaboration harnesses each firm’s respective expertise in front and back end process technology for next generation applications such as high-performance computing, AI, 5G mobile, data storage and automotive.”Third Quarter Results of Operations Q3-2020Q2-2020ΔQ3-2019Δ Revenue108.3124.3-12.9%89.7+20.7% Orders94.9101.3-6.3%82.2+15.5% Book to Bill Ratio0.90.8+0.1 0.9- Q3-20 revenue of € 108.3 million declined 12.9% versus Q2-20 and was at the favorable end of prior guidance (-10% to -25%). Versus Q3-19, revenue increased by 20.7% primarily due to higher shipments for mobile applications to US and Asian customers.Orders of € 94.9 million declined 6.3% versus Q2-20 consistent with seasonal trends. However, compared to Q3-19, orders grew by 15.5% primarily due to improved market conditions and increased demand for high end mobile applications. Per customer type, IDM orders decreased € 0.9 million, or 2.0%, versus Q2-20 and represented 46% of total orders. Subcontractor orders decreased by € 5.5 million, or 9.7%, versus Q2-20 and represented 54% of total orders. Q3-2020Q2-2020ΔQ3-2019Δ Gross Margin60.8%62.0%-1.255.1%+5.7 Operating Expenses23.928.6-16.4%24.2-1.2% Financial Expense/(Income), net3.22.7+18.5%3.3-3.0% EBITDA46.553.1-12.4%30.2+54.0% Besi’s gross margin reached 60.8% in Q3-20 which exceeded guidance (58-60%) and represented a decrease of 1.2 points versus Q2-20. Versus Q3-19, gross margin increased by 5.7 points primarily due to Besi’s strong advanced packaging position, more favorable product mix and increased labor efficiencies associated with lower fixed Asian production headcount.Q3-20 operating expenses declined by € 4.7 million (-16.4%) versus Q2-20 and were better than prior guidance (-10% to -15%). The decrease was primarily due to (i) a € 1.9 million reduction in variable compensation expense, (ii) € 1.3 million lower sales related warranty and commission expenses and (iii) favorable forex influences. Operating expenses declined € 0.3 million (-1.2%) versus Q3-19 despite Besi’s 20.7% revenue increase as a result of strategic cost control initiatives including a 2.1% fixed headcount reduction between Q3-19 and Q3-20 and lower travel expenses.Financial expense, net, increased by € 0.5 million (+18.5%) versus Q2-20 primarily due to Besi’s issuance in August of € 150 million of 0.75% Convertible Notes due 2027. Q3-2020Q2-2020ΔQ3-2019Δ Net Income34.039.8-14.6%19.2+77.1% Net Margin31.3%32.0%-0.721.4%+9.9 Tax Rate12.4%12.9%-0.512.7%-0.3 Net income of € 34.0 million declined by € 5.8 million (-14.6%) versus Q2-20 due primarily to a 12.9% revenue decrease and lower gross margins partially offset by a € 4.7 million reduction in operating expenses. Versus Q3-19, net income increased € 14.8 million (+77.1%) primarily due to significantly higher revenue and gross margin levels realized combined with cost control efforts which limited operating expense development. Similarly, Besi’s net margin grew to 31.3% in Q3-20, a significant increase versus the 21.4% realized in Q3-19.Nine Months Results of Operations YTD-2020YTD-2019Δ Revenue323.9263.8+22.8% Orders314.8248.2+26.8% Gross Margin60.1%55.7%+4.4 Operating Income109.265.1+67.7% Net Income87.647.6+84.0% Net Margin27.1%18.0%+9.1 Tax Rate13.0%13.0%- For the nine months ended September 30, 2020, Besi’s revenue rose to € 323.9 million, up € 60.1 million, or 22.8% versus the comparable period of the prior year. The increase reflects improved industry conditions generally and particular strength in shipments for mobile applications to both US and Chinese customers. Similarly, orders of € 314.8 million grew by € 66.6 million (+26.8%) versus the prior year earlier period.Besi’s operating income of € 109.2 million grew by 67.7% year over year primarily due to (i) revenue growth which significantly outpaced a 4.5% increase in operating expenses and (ii) a gross margin expansion of 4.4 points associated with Besi’s strong advanced packaging market position, more favorable product mix and increased labor efficiencies. Similarly, Besi’s net income of € 87.6 million increased € 40.0 million, or 84.0% and net margins grew by 9.1 points to reach 27.1%.Financial Condition Q3 2020Q2 2020ΔQ3 2019ΔYTD- 2020YTD- 2019 Δ Total Cash and Deposits564.5366.6+54.0%383.7+47.1%564.5383.7+47.1% Net Cash and Deposits158.793.6+69.6%106.9+48.5%158.7106.9+48.5% Cash flow from Ops.60.922.9+165.9%38.8+57.0%110.383.8+31.6% At the end of Q3-20, cash and deposits aggregated € 564.5 million, an increase of € 197.9 million compared to Q2-20 principally as a result of the net proceeds received from Besi’s Convertible Note offering in August 2020. In addition, net cash and deposits increased by € 65.1 million compared to Q2-20 due primarily to € 60.9 million of cash flow from operations including a € 14.5 million reduction in working capital partially offset by (i) € 4.3 million of capitalized development spending and (ii) € 3.3 million of share repurchases.On August 5, 2020, Besi issued € 150 million principal amount of 0.75% Senior Unsecured Convertible Notes due August 2027 (the “Convertible Notes”). The Convertible Notes convert into approximately 2.9 million Besi ordinary shares at a conversion price of € 51.56 (subject to adjustment). Besi may redeem the Convertible Notes at any time from August 26, 2024 provided that the price of its ordinary shares exceeds 130% of the then effective conversion price for a specified period of time.The Convertible Notes may be redeemed at the option of the holder (i) on August 5, 2025 at their principal amount plus accrued interest and (ii) in the event of a change of control, at the principal amount plus accrued interest. The net proceeds from the offering totaled € 147.8 million which will be used to continue the development of next generation advanced packaging technologies and to further expand Besi´s Asian manufacturing operations. In addition, the balance of the net proceeds may be used for general corporate purposes including acquisitions and share buybacks.Share Repurchase Activity/Cancellation of shares During the quarter, Besi repurchased 84,219 of its ordinary shares at an average price of € 38.61 per share for a total of € 3.3 million. Cumulatively, as of September 30, 2020, 3.3 million shares have been purchased under the current € 125 million share repurchase program at an average price of € 22.98 per share for a total of € 76.5 million. As of such date, Besi held approximately 7.4 million shares in treasury at an average cost of € 15.75, equal to 9.2% of its shares outstanding.Besi will cancel 1.5 million of its 7.4 million ordinary shares held in treasury in Q4-20. Upon such cancellation, total shares outstanding, excluding treasury shares, will decline to 78.6 million and shares held in treasury will reduce to 5.9 million. As a result of the additional capacity created by the share cancellation, Besi intends to increase its share repurchases to approximately € 10 million per quarter.Outlook Based on its September 30, 2020 order backlog and feedback from customers, Besi forecasts for Q4-20 that: * Revenue will be flat to down 15% vs. the € 108.3 million reported in Q3-20. * Gross margin will range between 58-60% vs. the 60.8% realized in Q3-20. * Operating expenses will increase by 0-5% vs. the € 23.9 million reported in Q3-20. 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 EDT). The dial-in for the conference call is (31) 20 531 5851. To access the audio webcast and webinar slides, please visit.Basis of PresentationThe accompanying condensed Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union. Reference is made to the Summary of Significant Accounting Policies to the Notes to the Consolidated Financial Statements as included in our 2019 Annual Report, which is available on www.besi.com.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 www.besi.com.Contacts: Richard W. Blickman, President & CEOCFF Communications Hetwig van Kerkhof, SVP FinanceFrank Jansen Tel. (31) 26 319 4500Tel. (31) 20 575 4024 investor.relations@besi.combesi@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, 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; the extent and duration of the COVID-19 pandemic and measures taken to contain the outbreak, and the associated adverse impacts on the global economy, financial markets, and our operations as well as those of our customers and suppliers; 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, 2019 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. Consolidated Statements of Operations(euro in thousands, except share and per share data) Three Months Ended September 30, (unaudited)Nine Months Ended September 30, (unaudited) 2020 201920202019 Revenue108,34389,694323,949263,801 Cost of sales42,46640,249129,339116,982 Gross profit65,87749,445194,610146,819 Selling, general and administrative expenses16,31215,61759,97054,801 Research and development expenses7,5988,55125,45726,872 Total operating expenses23,91024,16885,42781,673 Operating income41,96725,277109,18365,146 Financial expense, net3,1973,3128,50010,451 Income before taxes38,77021,965100,68354,695 Income tax expense4,8142,80013,0547,119 Net income33,95619,16587,62947,576 Net income per share – basic0.470.261.210.65 Net income per share – diluted0.430.251.120.63 Number of shares used in computing per share amounts: \- basic \- diluted 1 72,705,062 84,386,221 72,643,210 82,971,344 72,471,117 83,217,565 72,794,337 83,367,934 Consolidated Balance Sheets(euro in thousands)September 30, 2020 (unaudited)June 30, 2020 (unaudited)March 31, 2020 (unaudited)December 31, 2019 (audited) ASSETS Cash and cash equivalents339,459 251,621347,639278,398 Deposits 225,071115,00080,000130,000 Trade receivables 95,925 117,15891,79781,420 Inventories 52,051 52,12246,87246,578 Other current assets 11,029 12,76814,59813,854 Total current assets723,535548,669580,906550,250 Property, plant and equipment 26,675 27,14229,06730,383 Right of use assets 8,769 9,67810,26411,132 Goodwill 44,880 45,26245,42345,289 Other intangible assets 47,802 46,10144,38042,593 Deferred tax assets 12,117 13,22514,60714,978 Other non-current assets 1,058 1,0941,0972,255 Total non-current assets141,301142,502144,838146,630 Total assets864,836691,171725,744696,880 Notes payable to banks--487476 Current portion of long-term debt9191513515 Accounts payable38,71545,93934,31030,278 Accrued liabilities55,22551,38261,76955,359 Total current liabilities94,03197,41297,07986,628 Long-term debt405,736272,932278,299277,067 Lease liabilities5,8316,4387,1047,859 Deferred tax liabilities12,4378,4808,3768,858 Other non-current liabilities18,12218,22818,19717,960 Total non-current liabilities442,126306,078311,976311,744 Total equity328,679287,681316,689298,508 Total liabilities and equity864,836691,171725,744696,880 Consolidated Cash Flow Statements(euro in thousands) Three Months Ended September 30, (unaudited)Nine Months Ended September 30, (unaudited) 2020201920202019 Cash flows from operating activities: Income before income tax38,77021,965100,68354,695 Depreciation and amortization4,4954,90914,34314,682 Share based payment expense9818659,0146,206 Financial expense, net3,1973,3128,50010,451 Changes in working capital14,5468,346(10,197)15,962 Income tax paid(221)(316)(8,974)(15,423) Interest paid(865)(295)(3,045)(2,729) Net cash provided by operating activities60,90338,786110,32483,844 Cash flows from investing activities: Capital expenditures(1,250)(956)(2,600)(1,819) Capitalized development expenses(4,286)(3,169)(12,268)(9,082) Repayments of (investments in) deposits(110,127)-(95,127)50,000 Net cash provided by (used in) investing activities(115,663)(4,125)(109,995)39,099 Cash flows from financing activities: Proceeds from (payments of) bank lines of credit--(434)(2,812) Proceeds from (payments of) debt-(45)(416)(34) Proceeds from convertible notes147,757-147,757- Payments of lease liabilities(853)(860)(2,622)(2,641) Dividends paid to shareholders--(73,486)(122,419) Purchase of treasury shares(3,259)(13,333)(9,457)(38,853) Net cash provided by (used in) financing activities143,645(14,238)61,342(166,759) Net increase (decrease) in cash and cash equivalents88,88520,42361,671(43,816) Effect of changes in exchange rates on cash and cash equivalents (1,047) 1,575 (610) 2,004 Cash and cash equivalents at beginning of the period 251,621 231,729 278,398 295,539 Cash and cash equivalents at end of the period339,459253,727339,459253,727 Supplemental Information (unaudited) (euro in millions, unless stated otherwise)REVENUEQ1-2019Q2-2019Q3-2019Q4-2019Q1-2020Q2-2020Q3-2020 Per geography: Asia Pacific58.6 72%68.6 74%67.3 75%63.8 69%77.6 85%105.7 85%86.6 80% EU / USA22.8 28%24.1 26%22.4 25%28.6 31%13.7 15%18.6 15%21.7 20% Total81.4 100%92.7 100%89.7 100%92.4 100%91.3 100%124.3 100%108.3 100% ORDERS Q1-2019Q2-2019Q3-2019Q4-2019Q1-2020Q2-2020Q3-2020 Per geography: Asia Pacific55.9 67%61.2 74%59.2 72%80.4 80%102.0 86%88.1 87%75.9 80% EU / USA27.5 33%21.5 26%23.0 28%20.1 20%16.6 14%13.2 13%19.0 20% Total83.4 100%82.7 100%82.2 100%100.5 100%118.6 100%101.3 100%94.9 100% Per customer type: IDM57.5 69%55.4 67%43.6 53%58.3 58%47.4 40%44.6 44%43.7 46% Subcontractors25.9 31%27.3 33%38.6 47%42.2 42%71.2 60%56.7 56%51.2 54% Total83.4 100%82.7 100%82.2 100%100.5 100%118.6 100%101.3 100%94.9 100% HEADCOUNTMar 31, 2019Jun 30, 2019Sep 30, 2019Dec 31, 2019Mar 31, 2020Jun 30, 2020Sep 30, 2020 Fixed staff (FTE) Asia Pacific1,174 72%1,155 72%1,093 71%1,081 70%1,071 70%1,067 70%1,054 70% EU / USA452 28%450 28%453 29%453 30%458 30%455 30%459 30% Total1,626 100%1,605 100%1,546 100%1,534 100%1,529 100%1,522 100%1,513 100% Temporary staff (FTE) Asia Pacific11 16%54 49%34 39%8 13%42 46%121 72%95 63% EU / USA58 84%57 51%54 61%54 87%50 54%48 28%57 37% Total69 100%111 100%88 100%62 100%92 100%169 100%152 100% Total fixed and temporary staff (FTE)1,695 1,716 1,634 1,596 1,621 1,691 1,665 OTHER FINANCIAL DATAQ1-2019Q2-2019Q3-2019Q4-2019Q1-2020Q2-2020Q3-2020 Gross profit45.5 55.9%51.9 56.0%49.4 55.1%52.0 56.3%51.7 56.7%77.0 62.0%65.9 60.8% Selling, general and admin expenses21.7 26.7%17.5 18.9%15.6 17.4%16.7 18.1%23.5 25.7%20.1 16.2%16.3 15.1% Research and development expenses: As reported9.0 11.1%9.3 10.0%8.6 9.6%8.5 9.2%9.4 10.3%8.4 6.8%7.6 7.0% Capitalization of R&D charges2.9 3.6%3.0 3.2%3.2 3.6%4.1 4.4%3.7 4.1%4.3 3.5%4.3 4.0% Amortization of intangibles(2.5)-3.1%(2.5)-2.7%(2.6)-2.9%(2.6)-2.8%(2.6)-2.8%(2.1)-1.7%(2.1)-2.0% R&D expenses as adjusted9.4 11.5%9.8 10.6%9.2 10.3%10.0 10.8%10.5 11.5%10.6 8.5%9.8 9.0% Financial expense (income), net: Interest expense (income), net2.4 2.4 2.7 2.5 2.6 2.5 3.1 Hedging results1.3 0.7 0.8 0.7 0.7 0.5 0.3 Foreign exchange effects, net0.2 0.1 (0.2) 0.1 (0.7) (0.3) (0.2) Total3.9 3.2 3.3 3.3 2.6 2.7 3.2 Operating income (loss) as % of net sales14.7 18.1%25.1 27.1%25.3 28.2%26.8 29.0%18.8 20.6%48.4 39.0%42.0 38.8% EBITDA as % of net sales19.7 24.2%30.0 32.4%30.2 33.7%31.9 34.5%24.0 26.3%53.1 42.7%46.5 42.9% Net income (loss) as % of net sales9.5 11.6%18.9 20.4%19.2 21.4%33.7 36.5%13.9 15.2%39.8 32.0%34.0 31.3% Income per share Basic0.13 0.26 0.26 0.47 0.19 0.55 0.47 Diluted0.13 0.25 0.25 0.43 0.19 0.50 0.43 __________________ 1) The calculation of diluted income per share assumes the exercise of equity settled share based payments and the conversion of all Convertible Notes outstanding
Thu, 22 Oct 2020 06:48:00 +0000Read moreApplied Materials and BE Semiconductor Industries to Accelerate Chip Integration Technology for the Semiconductor Industry
Companies Form Joint Program to Develop Industry’s First Complete and Proven Equipment Solution for Die-Based Hybrid BondingSANTA CLARA, Calif. and DUIVEN, the Netherlands, Oct. 22, 2020 (GLOBE NEWSWIRE) -- Applied Materials, Inc. and BE Semiconductor Industries N.V. (Besi) today announced an agreement to develop the industry’s first complete and proven equipment solution for die-based hybrid bonding, an emerging chip-to-chip interconnect technology that enables heterogeneous chip and subsystem designs for applications including high-performance computing, AI and 5G.As traditional 2D scaling slows, the semiconductor industry is shifting towards heterogeneous design and chip integration as a new way to deliver improvements in performance, power, area/cost and time-to-market (PPACt). To accelerate this trend, Applied and Besi have formed a joint development program and are establishing a Center of Excellence focused on next-generation chip-to-chip bonding technology. The program harnesses the companies’ respective front- and back-end semiconductor expertise to deliver co-optimized integrated hybrid bonding configurations and equipment solutions for customers.“Challenges in conventional Moore’s Law scaling are straining the economics and pace of the semiconductor industry’s roadmap,” said Nirmalya Maity, Corporate Vice President of Advanced Packaging at Applied Materials. “Our collaboration with Besi and the formation of a new Hybrid Bonding Center of Excellence are key components of Applied’s strategy to equip customers with a ‘New Playbook’ for driving improvements in PPACt. Applied looks forward to working with Besi to co-optimize our equipment offerings and accelerate advanced heterogeneous integration technology for our customers.”“We are excited about forming this unique joint development program with Applied Materials which brings together the semiconductor industry’s leading materials engineering and advanced packaging technologies for customers,” said Ruurd Boomsma, CTO of Besi. “Our collaboration can greatly accelerate the adoption and proliferation of hybrid bonding for leading-edge 5G, AI, high-performance computing, data storage and automotive applications.”Hybrid bonding connects multiple “chiplets” in die form using direct, copper interconnects. This technique enables designers to bring chiplets of various process nodes and technologies into closer physical and electrical proximity so that they perform as well or better than if they were made on a single large, monolithic die. Hybrid bonding is a major improvement over conventional chip packaging because it permits increased chip density and shortens the lengths of the interconnect wiring between chiplets, thereby improving overall performance, power, efficiency and cost.A complete die-based hybrid bonding equipment solution requires a broad suite of semiconductor manufacturing technologies along with high-speed and extremely precise chiplet placement technology. To achieve this, the joint development program brings together Applied’s semiconductor process expertise in etch, planarization, deposition, wafer cleaning, metrology, inspection and particle defect control with Besi’s leading die placement, interconnect and assembly solutions.The Center of Excellence will be located at Applied’s Advanced Packaging Development Center in Singapore which is one of the industry’s most advanced wafer-level packaging labs. It enables the foundational building blocks of heterogenous integration in a 17,300-square-foot Class 10 cleanroom with full lines of wafer-level packaging equipment. The Center of Excellence will provide customers a platform to accelerate the development of custom hybrid bonding test vehicles including design, modeling, simulation, fabrication and testing.About Applied Materials Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Our expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality. At Applied Materials, our innovations make possible the technology shaping the future. Learn more at www.appliedmaterials.com.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 www.besi.com.Contact:Applied Materials:Ricky Gradwohl (editorial/media) 408.235.4676 Michael Sullivan (financial community) 408.986.7977Besi:Richard W. Blickman, President & CEO Hetwig van Kerkhof, SVP Finance Tel. (31) 26 319 4500 investor.relations@besi.com
Thu, 22 Oct 2020 05:00:00 +0000Read moreBE Semiconductor Industries N.V. Announces Q2-20 and H1-20 Results
Q2-20 Revenue of € 124.3 Million and Net Income of € 39.8 Million Up 34.1% and 110.6%, Respectively, vs. Q2-19. Results Exceed Expectations Share Buyback Program Extended and Increased to € 125 MillionDUIVEN, The Netherlands, July 28, 2020 (GLOBE NEWSWIRE) -- BE Semiconductor Industries NV (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 second quarter and first half year ended June 30, 2020.Key Highlights Q2-20 * Revenue of € 124.3 million, up 36.1% vs. Q1-20 and 34.1% vs. Q2-19 primarily due to higher shipments for mobile and, to a lesser extent, high-end logic applications and increased demand from Chinese customers. Exceeded high end of guidance range * Orders of € 101.3 million, down 14.6% vs. Q1-20 but up 22.5% vs. Q2-19. The sequential order decrease was primarily due to lower demand for high end mobile applications generally, partially offset by increased orders from Chinese subcontractors for mobile and other electronics applications * Gross margin reached 62.0%, up 5.3 points vs. Q1-20 and 6.0 points vs. Q2-19 primarily due to a more favorable product mix, increased labor efficiencies and, to a lesser extent, forex benefits * Net income of € 39.8 million grew € 25.9 million (186.3%) vs. Q1-20 and € 20.9 million (110.6%) vs. Q2-19 primarily due to significantly higher revenue and gross margins. Net margin more than doubled to 32.0% vs. 15.2% in Q1-20 and 13.5% in Q2-19 * Share buyback program extended until October 2021 and increased by € 50 million to € 125 millionKey Highlights H1-20 * Revenue of € 215.6 million, up 23.8% vs. H1-19 reflecting improved market conditions and higher demand for mobile and, to a lesser extent, high end logic applications * Orders of € 219.9 million grew € 53.9 million (+ 32.5%) primarily due to higher demand for mobile applications * Gross margin reached 59.7%, up 3.8 points vs. H1-19 primarily due to Besi's strong advanced packaging market position, more favorable product mix and increased labor efficiencies * Net income of € 53.7 million increased € 25.3 million (+ 89.1%) vs. H1-19. Net margin grew strongly to 24.9% vs. 16.3% in H1-19 * Net cash of € 93.6 million rose € 7.5 million (+ 8.7%) vs. June 30, 2019Outlook * Q3-20 revenue estimated to decrease by approximately 10-25% vs. Q2-20 due to typical seasonal influences, lower demand for mobile applications post H1-20 build and ongoing uncertainty as to the development of the COVID-19 pandemic. Gross margin anticipated to range between 58% -60%(€ million, excluding EPS)Q2- 2020Q1- 2020ΔQ2- 2019 ΔH1- 2020H1- 2019 Δ Revenue124.391.3+36.1%92.7+34.1%215.6174.1+23.8% Orders 101.3118.6-14.6%82.7+22.5%219.9166.0+32.5% Operating Income48.418.8+157.4%25.1+92.8%67.239.9+68.4% EBITDA53.124.0+121.3%30.0+77.0%77.149.7+55.1% Net Income39.813.9+186.3%18.9+110.6%53.728.4+89.1% EPS (basic)0.550.19+189.5%0.26+111.5%0.740.39+89.7% EPS (diluted)0.500.19+163.2%0.25+100.0%0.690.38+81.6% Net Cash & Deposits93.6 *148.3-36.9%86.1 *+8.7%93.686.1\+ 8.7% * Reflects cash dividend payments of € 73.5 million and € 122.4 million in Q2-20 and Q2-19, respectivelyRichard W. Blickman, President and Chief Executive Officer of Besi, commented: “Besi reported strong Q2-20 and first half year results in an improving industry environment. Revenue and net income for Q2-20 were € 124.3 million and € 39.8 million, respectively, increases of 34.1% and 110.6% versus Q2-19. Besi exceeded the high end of revenue guidance as we resumed full operations globally despite the COVID-19 pandemic, achieved higher than anticipated shipments for mobile applications and benefited from increased demand by Chinese subcontractors for mobile and other electronics applications, continuing a trend starting in H2 -19.Profitability and efficiency also increased significantly in Q2-20 and for the first half year. Gross and operating margins in Q2-20 increased to 62.0% and 39.0%, respectively, increases of 6.0 and 11.9 points, respectively, versus the comparable period of the prior year. Besi's solid financial performance primarily reflected improved industry conditions, our strong advanced packaging market position and a favorable product mix. On the operational front, it reflected strategic execution in a difficult production environment, labor efficiencies associated with a 5.2% decrease in year over year fixed headcount levels and lower travel, service and other overhead costs associated with the shift to a work at home business environment . Similarly, H1-20 revenue of € 215.6 million and net income of € 53.7 million grew by 23.8% and 89.1%, respectively.Orders for the first half year were € 219.9 million, an increase of 32.5% versus H1-19 as industry overcapacity lessened and mobile customers increased demand in anticipation of new handset introductions later this year with advanced features and functionality. To a lesser extent, orders also benefited from continued demand growth for high end logic applications such as cloud infrastructure, artificial intelligence and high-performance computing as we move more rapidly into the digital society. Automotive end market demand remained at depressed levels as consumers react to the economic fall-out from the pandemic. For the quarter, orders were € 101.3 million, a 22.5% increase versus Q2-19 but a decrease of 14.6% versus Q1-20 primarily as a result of reduced spending by high end mobile customers after their H1-20 capacity build. Besi ended the first half year with a strong balance sheet and continues to return excess capital to shareholders. At June 30, 2020, cash and deposits totaled € 366.6 million after the payment of € 76.6 million in the form of cash dividends and share repurchases. Net cash and deposits of € 93.6 million at quarter end grew by 8.7% versus the end of Q2-19. Given continued strong profitability and cash flow generation this year, Besi will extend its current share buyback program until October 30, 2021 and increase its size by € 50 million to € 125 million.Looking ahead, we estimate that Q3-20 revenue will decrease by approximately 10-25% due to typical seasonal influences, lower demand for mobile applications post the H1-20 build and customer caution as to the development of the COVID-19 pandemic. Gross margin is estimated to range between 58-60% based on the forecasted product mix. Operating expenses are expected to decrease by 10-15% versus Q2-20 as we carefully control costs in an uncertain environment. We are cautiously optimistic about Besi’s prospects for the remainder of 2020 given our better than anticipated first half results and Q3-20 guidance. We temper this optimism, however, given the current unpredictable course, recurrence and severity of the pandemic and its implications for semiconductor demand.Longer-term, we are encouraged about Besi’s prospects in the next investment cycle given our strong performance in a difficult environment and by strong secular growth drivers for our business. Further, we have a leading position in advanced packaging which is an important enabler of the digital society and the new applications to be generated along with it. ”Second Quarter Results of Operations Q2-2020Q1-2020ΔQ2-2019Δ Revenue124.391.3\+ 36.1% 92.7\+ 34.1% Orders101.3118.6-14.6% 82.7\+ 22.5% Book to Bill Ratio0.81.3-0.5 0.9-0.1 Q2-20 revenue of € 124.3 million increased by 36.1% and 34.1% versus Q1-20 and Q2-19, respectively, primarily due to higher shipments for mobile and, to a lesser extent, high-end logic and cloud infrastructure applications. In addition, shipments to Chinese customers increased relative to each respective period, continuing a favorable trend which began in H2-19. Q2-20 revenue growth exceeded the high end of guidance (+ 5% to + 25%) primarily due to higher than anticipated shipments for mobile applications as Besi and its main customers resumed full operations amidst the global pandemic.Orders of € 101.3 million were down 14.6% versus Q1-20 primarily due to lower demand for high end mobile applications generally, partially offset by increased orders by Chinese subcontractors for mobile and other electronics applications. In contrast, orders grew by 22.5% versus Q2-19 primarily due to improved market conditions and higher bookings for mobile and computing applications. Per customer type, IDM orders decreased € 2.8 million, or 5.9%, versus Q1-20 and represented 44% of total orders for the period. Subcontractor orders decreased by € 14.5 million, or 20.4%, versus Q1-20 and represented 56% of total orders. Q2-2020Q1-2020ΔQ2-2019Δ Gross Margin62.0%56.7%+5.356.0%+6.0 Operating Expenses28.633.0-13.3%26.8\+ 6.7% Financial Expense / (Income), net2.72.6\+ 3.8%3.2-15.6% EBITDA53.124.0\+ 121.3%30.0\+ 77.0% Besi's gross margin reached 62.0% in Q2-20, an increase of 5.3 points vs Q1-20 and 6.0 points versus Q2-19 primarily due to a more favorable product mix, increased labor efficiencies from lower fixed Asian production headcount, and, to a lesser extent, forex benefits from favorable changes in the euro versus the USD, MYR and CHN currencies. The Q2-20 gross margin significantly exceeded guidance (56% -58%) due to higher than anticipated shipments for mobile applications during the period.Q2-20 operating expenses declined by € 4.4 million (-13.3%) versus Q1-20 and was in-line with guidance. The decrease was primarily due to (i) a € 2.5 million reduction in variable compensation expense, (ii) € 1.0 million lower development expense due to higher R&D capitalization, net in the quarter and (iii) lower consulting expenses. Operating expenses increased by € 1.8 million (+ 6.7%) versus Q2-19 due to increased variable compensation expense of € 2.4 million. Q2-2020Q1-2020ΔQ2-2019Δ Net Income39.813.9\+ 186.3%18.9\+ 110.6% Net Margin32.0%15.2%+16.820.4%+11.6 Tax Rate12.9%14.4%-1.513.5%-0.6 Net income of € 39.8 million grew by € 25.9 million (186.3%) versus Q1-20 and € 20.9 million (110.6%) versus Q2-19 primarily due to higher revenue and gross margin levels realized along with operating leverage from tight controls of fixed overhead levels relative to revenue growth. Similarly, Besi’s net margin increased to 32.0% in Q2-20, a significant increase versus the 15.2% and 20.4% realized in Q1-20 and Q2-19, respectively.Half Year Results of Operations H1-2020H1-2019Δ Revenue215.6174.1\+ 23.8% Orders219.9166.0\+ 32.5% Gross Margin59.7%55.9%+3.8 Operating Income67.239.9\+ 68.4% Net Income53.728.4\+ 89.1% Net Margin24.9%16.3%+8.6 Tax Rate13.3%13.2%+0.1 H1-20 revenue reached € 215.6 million, up 23.8% versus H1-19 reflecting improved industry conditions and higher demand for mobile and, to a lesser extent, high end logic and cloud infrastructure applications . Similarly, orders of € 219.9 million grew € 53.9 million (+ 32.5%) versus H1-19. Revenue and order growth were partially offset by reduced demand for automotive applications due to the adverse impact on consumer demand from the pandemic.Besi’s gross margin rose 3.8 points versus H1-19 to reach 59.7% primarily due to its strong advanced packaging market position, more favorable product mix and increased labor efficiencies. In addition, Besi’s net income of € 53.7 million and net margin of 24.9% increased by 89.1% and 8.6 points, respectively, versus H1-19 as increased revenue and gross margin more than offset € 4.0 million of higher operating expenses, principally associated with increased share-based compensation expense.Financial Condition Q2 2020Q1 2020ΔQ2 2019ΔH1 2020H1 2019 Δ Total Cash and Deposits366.6427.6-14.3%361.7\+ 1.4%366.6361.7\+ 1.4% Net Cash and Deposits93.6148.3-36.9%86.1\+ 8.7%93.686.1\+ 8.7% Cash flow from Ops.22.926.6-13.9%(2.7)nm49.445.1\+ 9.5% At the end of Q2-20, cash and deposits aggregated € 366.6 million. As compared to Q1-20, Besi’s net cash and deposits decreased by € 54.7 million due primarily to the payment of (i) € 73.5 million in cash dividends to shareholders, (ii) € 4.3 million of capitalized development spending and (ii) € 3.1 million of share repurchases which was partially offset by cash flow from operations of € 22.9 million. Net cash of € 93.6 million at quarter end grew € 7.5 million (+ 8.7%) versus June 30, 2019. During the quarter, € 7.0 million principal amount of the 2016 Convertible Notes were converted into 351,186 ordinary shares. As a result, the principal outstanding amount of the 2016 Convertible Notes declined from € 125.0 million to € 118.0 million.Share Repurchase Activity / Extension and Increase of Share Repurchase Program During the quarter, Besi repurchased 90,844 of its ordinary shares at an average price of € 33.54 per share for a total of € 3.1 million. Cumulatively, as of June 30, 2020, 3.2 million shares have been purchased under the current € 75 million share repurchase program at an average price of € 22.58 per share for a total of € 73.3 million. As of such date, Besi held approximately 7.3 million shares in treasury at an average cost of € 15.48, equal to 9.1% of its outstanding shares.Besi will extend the duration of its current share buyback program until October 30, 2021 and increase the total amount from € 75 million to € 125 million. The share repurchase program was initiated for capital reduction purposes and to help offset dilution related to Besi's 2016 and 2017 Convertible Notes and shares issued under employee stock plans. It will be funded using Besi's available cash resources and be effective immediately. At present, Besi has authority until October 30, 2021 to purchase up to 10% of its outstanding shares (approximately 8.0 million shares).The share repurchase program will be executed in accordance with industry best practices and in compliance with European buyback rules and regulations and may be suspended or discontinued at any time. Besi has engaged an independent broker for the program and all purchases will be executed through Euronext Amsterdam (the “Main Exchange”) and Multilateral Trading Facilities as defined by Directive 2014/65 / EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (each being referred to as “Exchanges”) and subject to the rules of the relevant Exchange. The timing and amount of any shares repurchased under this program will be determined by the independent broker independently of, and without influence by, Besi. The maximum purchase price to be paid per share under the program will not exceed the higher of the last independent trade price of the shares and the highest current independent bid price of the shares on the venue to which the purchase was carried out. Any repurchased shares will be available in the future for use in connection with Besi's stock plans and other general corporate purposes, including acquisitions. The information included in this press release is made public under the Market Abuse Regulation (No. 596/2014 / EU).Prospective Member of the Supervisory Board Effective August 1, 2020, Dr. Laura Oliphant will join Besi's Supervisory Board as a prospective member. It is the Board’s intention to nominate her for appointment as a member of the Supervisory Board at Besi’s 2021 AGM (April 2021). Dr. Oliphant (57) has extensive experience in the semiconductor, semiconductor equipment and other technology industries as a senior manager, investor and board director. Currently, she is an independent consultant with Serendibite Partners, where she provides expertise to early stage businesses, Fortune 500 companies and venture capital firms. Previously, Dr. Oliphant served as CEO of Translarity, Inc., a venture backed, advanced probe card startup focused on RF applications. Prior thereto, she was with Intel Corporation for almost 25 years including as an Investment Director of Intel Capital and as a Supply Chain Program Manager in Intel's supplier management organization. Dr. Oliphant currently serves on the board of directors of the following US and European corporations: Aehr Test Systems (NASDAQ: AEHR, Fremont, CA), Feasible Inc. (Emeryville, CA), Novelda AS (Oslo, Norway) and Numascale AS (Oslo, Norway). She has a PhD in Chemical Engineering from the University of California, Berkeley and is a holder of the National Association of Corporate Directors Board Leadership Fellowship. Novelda AS (Oslo, Norway) and Numascale AS (Oslo, Norway). She has a PhD in Chemical Engineering from the University of California, Berkeley and is a holder of the National Association of Corporate Directors Board Leadership Fellowship. Novelda AS (Oslo, Norway) and Numascale AS (Oslo, Norway). She has a PhD in Chemical Engineering from the University of California, Berkeley and is a holder of the National Association of Corporate Directors Board Leadership Fellowship.OutlookBased on its June 30, 2020 order backlog and feedback from customers, Besi forecasts for Q3-20 that: * Revenue will decrease by approximately 10-25% vs. € 124.3 million reported in Q2-20. * Gross margin will range between 58-60% vs. the 62.0% realized in Q2-20. * Operating expenses will decrease by 10-15% vs. the € 28.6 million reported in Q2-20.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 EDT). The dial-in for the conference call is (31) 20 531 5851. To access the audio webcast and webinar slides, please visit www.besi.com .Basis of Presentation The accompanying condensed Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union. Reference is made to the Summary of Significant Accounting Policies to the Notes to the Consolidated Financial Statements as included in our 2019 Annual Report, which is available on www.besi.comAbout 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.www.besi.com .Contacts: Richard W. Blickman, President & CEOSBB Communications Hetwig van Kerkhof, SVP FinanceFrank Jansen Tel. (31) 26 319 4500Tel. (31) 20 575 4024 investor.relations@besi.combesi@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, 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; the extent and duration of the COVID-19 pandemic and measures taken to contain the outbreak, and the associated adverse impacts on the global economy, financial markets, and our operations as well as those of our customers and suppliers; 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, 2019 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. 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, 2019 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. 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, 2019 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. Consolidated Statements of Operations(euro in thousands, except share and per share data) Three Months Ended June 30, (unaudited)Six Months Ended June 30, (unaudited) 2020 201920202019 Revenue124,26792,708215,606174,107 Cost of sales47,28240,80586,87376,733 Gross profit76,98551,903128,73397,374 Selling, general and administrative expenses20,13617,49943,65839,184 Research and development expenses8,4289,27717,85918,321 Total operating expenses28,56426,77661,51757,505 Operating income48,42125,12767,21639,869 Financial expense, net2,6913,2225,3037,139 Income before taxes45,73021,90561,91332,730 Income tax expense5,9092,9618,2404,319 Net income39,82118,94453,67328,411 Net income per share - basic0.550.260.740.39 Net income per share - diluted0.500.250.690.38 Number of shares used in computing per share amounts: \- basic72,536,29673,025,75472,352,85973,142,645 \- diluted 182,563,06283,287,49782,631,95183,568,974 Consolidated Balance Sheets(euro in thousands)June 30, 2020 (unaudited)March 31, 2020 (unaudited)December 31, 2019 (audited) ASSETS Cash and cash equivalents251,621347,639278,398 Deposits115,00080,000130,000 Trade receivables117,15891,79781,420 Inventories52,12246,87246,578 Other current assets12,76814,59813,854 Total current assets548,669580,906550,250 Property, plant and equipment27,14229,06730,383 Right of use assets9,67810,26411,132 Goodwill45,26245,42345,289 Other intangible assets46,10144,38042,593 Deferred tax assets13,22514,60714,978 Other non-current assets1,0941,0972,255 Total non-current assets142,502144,838146,630 Total assets691,171725,744696,880 Notes payable to banks-487476 Current portion of long-term debt91513515 Accounts payable45,93934,31030,278 Accrued liabilities51,38261,76955,359 Total current liabilities97,41297,07986,628 Long-term debt272,932278,299277,067 Lease liabilities6,4387,1047,859 Deferred tax liabilities8,4808,3768,858 Other non-current liabilities18,22818,19717,960 Total non-current liabilities306,078311,976311,744 Total equity287,681316,689298,508 Total liabilities and equity691,171725,744696,880 Consolidated Cash Flow Statements(euro in thousands) Three Months Ended June 30, (unaudited)Six Months Ended June 30, (unaudited) 2020 2019 2020 2019 Cash flows from operating activities: Income before income tax45,730 21,905 61,913 32,730 Depreciation and amortization4,673 4,851 9,848 9,773 Share based payment expense2,189 1,630 8,033 5,341 Financial expense, net2,691 3,222 5,303 7,139 Changes in working capital(21,868)(17,757)(24,743)7,616 Income tax paid(8,479)(14,179)(8,753)(15,107) Interest paid(2,074)(2,385)(2,180)(2,434) Net cash provided by (used in) operating activities22,862 (2,713)49,421 45,058 Cash flows from investing activities: Capital expenditures(478)(235)(1,350)(863) Capitalized development expenses(4,285)(2,986)(7,982)(5,913) Repayments of (investments in) deposits(35,000)50,000 15,000 50,000 Net cash provided by (used in) investing activities(39,763)46,779 5,668 43,224 Cash flows from financing activities: Proceeds from (payments of) bank lines of credit(466)(3,175)(434)(2,812) Proceeds from (payments of) debt(405)22 (416)11 Payments of lease liabilities(896)(891)(1,769)(1,781) Dividends paid to shareholders(73,486)(122,419)(73,486)(122,419) Purchase of treasury shares(3,053)(12,682)(6,198)(25,520) Net cash used in financing activities(78,306)(139,145)(82,303)(152,521) Net increase (decrease) in cash and cash equivalents (95,207 ) (95,079 ) (27,214 ) (64,239 ) Effect of changes in exchange rates on cash and cash equivalents (811 ) (695 ) 437 429 Cash and cash equivalents at beginning of the period 347,639 327,503 278,398 295,539 Cash and cash equivalents at end of the period251,621 231,729 251,621 231,729 Supplemental Information (unaudited) (euro in millions, unless stated otherwise) REVENUEQ1-2019Q2-2019Q3-2019Q4-2019Q1-2020Q2-2020 Per geography: Asia Pacific58.6 72%68.6 74%67.3 75%63.8 69%77.6 85%105.7 85% EU / USA22.8 28%24.1 26%22.4 25%28.6 31%13.7 15%18.6 15% Total81.4 100%92.7 100%89.7 100%92.4 100%91.3 100%124.3 100% ORDERS Q1-2019Q2-2019Q3-2019Q4-2019Q1-2020Q2-2020 Per geography: Asia Pacific55.9 67%61.2 74%59.2 72%80.4 80%102.0 86%88.1 87% EU / USA27.5 33%21.5 26%23.0 28%20.1 20%16.6 14%13.2 13% Total83.4 100%82.7 100%82.2 100%100.5 100%118.6 100%101.3 100% Per customer type: IDM57.5 69%55.4 67%43.6 53%58.3 58%47.4 40%44.6 44% Subcontractors25.9 31%27.3 33%38.6 47%42.2 42%71.2 60%56.7 56% Total83.4 100%82.7 100%82.2 100%100.5 100%118.6 100%101.3 100% HEADCOUNTMar 31, 2019Jun 30, 2019Sep 30, 2019Dec 31, 2019Mar 31, 2020Jun 30, 2020 Fixed staff (FTE) Asia Pacific1,174 72%1,155 72%1,093 71%1,081 70%1,071 70%1,067 70% EU / USA452 28%450 28%453 29%453 30%458 30%455 30% Total1,626 100%1,605 100%1,546 100%1,534 100%1,529 100%1,522 100% Temporary staff (FTE) Asia Pacific11 16%54 49%34 39%8 13%42 46%121 72% EU / USA58 84%57 51%54 61%54 87%50 54%48 28% Total69 100%111 100%88 100%62 100%92 100%169 100% Total fixed and temporary staff (FTE)1,695 1,716 1,634 1,596 1,621 1,691 OTHER FINANCIAL DATAQ1-2019Q2-2019Q3-2019Q4-2019Q1-2020Q2-2020 Gross profit As reported45.5 55.9%51.9 56.0%49.4 55.1%52.0 56.3%51.7 56.7%77.0 62.0% Selling, general and admin expenses: As reported21.7 26.7%17.5 18.9%15.6 17.4%16.7 18.1%23.5 25.7%20.1 16.2% Research and development expenses: As reported9.0 11.1%9.3 10.0%8.6 9.6%8.5 9.2%9.4 10.3%8.4 6.8% Capitalization of R&D charges2.9 3.6%3.0 3.2%3.2 3.6%4.1 4.4%3.7 4.1%4.3 3.5% Amortization of intangibles(2.5)-3.1%(2.5)-2.7%(2.6)-2.9%(2.6)-2.8%(2.6)-2.8%(2.1)-1.7% R&D expenses as adjusted9.4 11.5%9.8 10.6%9.2 10.3%10.0 10.8%10.5 11.5%10.6 8.5% Financial expense (income), net: Interest expense (income), net2.4 2.4 2.7 2.5 2.5 2.5 Hedging results1.3 0.7 0.8 0.7 0.0 0.5 Foreign exchange effects, net0.2 0.1 (0.2) 0.1 0.1 (0.3) Total3.9 3.2 3.3 3.3 2.6 2.7 Operating income as% of net sales14.7 18.1%25.1 27.1%25.3 28.2%26.8 29.0%18.8 20.6%48.4 39.0% EBITDA as% of net sales19.7 24.2%30.0 32.4%30.2 33.7%31.9 34.5%24.0 26.3%53.1 42.7% Net income (loss) as% of net sales9.5 11.6%18.9 20.4%19.2 21.4%33.7 36.5%13.9 15.2%39.8 32.0% Income per share Basic0.13 0.26 0.26 0.47 0.19 0.55 Diluted0.13 0.25 0.25 0.43 0.19 0.50 ____________________1 ) The calculation of diluted income per share assumes the exercise of equity settled share based payments and the full conversion of the Convertible Notes
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