Second quarter net sales of € 153.1 million, up 30.0% from net sales of the previous quarter and up 8.7% from net sales of the second quarter of 2002;
Second quarter net loss of € (6.2) million or € (0.13) per share as compared to a net loss of € (8.3) million or € (0.17) per share for the previous quarter and a net loss of € (6.4) million or € (0.13) per share for the second quarter of 2002;
Second quarter bookings of € 111.8 million, down 25.4% from the previous quarter caused by a lower level of bookings in the Front-end operations. Six months bookings of € 261.7 million, compared to € 277.3 million in first half of 2002; a decrease of 5.6%;
Quarter-end backlog of € 133.7 million, down 23.6% from the previous quarter, Book-to-Bill ratio for the second quarter of 0.73; Over the first six months the Front-end Book-to-Bill ratio was 0.89, whilst Back-end achieved a 1.05 Book-to-Bill ratio.
Impacted negatively by strength of Euro versus the US Dollar and Japanese Yen.
ASM International N.V. (NASDAQ: ASMI and Euronext Amsterdam: ASM) reported today the operating results for the second quarter of 2003. The net loss for the second quarter amounted to € (6.2) million, or € (0.13) diluted net loss per share compared to a net loss of € (6.4) million or € (0.13) diluted net loss per share for the second quarter of 2002.
For the six months ended June 30, 2003 the net loss amounted to € (14.6) million or € (0.29) diluted net loss per share, compared to a net loss of € (18.6) million or € (0.38) diluted net loss per share for the same period in 2002.
Net sales
Net sales for the second quarter of 2003 amounted to € 153.1 million, an increase of 8.7% compared to net sales of € 140.9 million for the second quarter of 2002 and an increase of 30.0% compared to the sales level of € 117.8 million for the first quarter of 2003.
Net sales for the first half of 2003, amounted to € 270.9 million, an increase of 12.2% compared to € 241.4 million net sales for the first half of 2002. Net sales of the company's Front-end wafer processing equipment amounted to € 146.0 million compared to € 122.2 million for the first half of 2002, an increase of 19.4%. Net sales for the Back-end assembly and packaging equipment and materials amounted to € 124.9 million compared to € 119.2 million for the first half of 2002, an increase of 4.8%.
The economic environment continues to impact the semiconductor equipment industry, which has been in a downturn since late 2000. Although there are positive signs for an increase in semiconductor sales, semiconductor manufacturers are still not ready for large capital investments resulting in a very volatile ordering pattern.
In the Front-end operations sales for the first half of 2003 were strong in Epitaxy and PECVD products for new technology and 300mm systems at top-tier customers. ASMI also has seen an increase in the Front-end for capacity driven sales of 200mm systems. In the Back-end operations most equipment purchases were related to technological advancements such as fine pitch wire bonding, 300mm wafer die bonding, stacked die packaging, flip chip and new package types like QFN.
The strong Euro against the Japanese yen, the US dollar and US dollar related currencies did negatively impact ASMI's consolidated net sales levels as expressed in Euro. The growth in sales would have been as high as 32.2%, if the first half of 2003 exchange rates were applied to the first half of 2002 sales levels expressed in their original local currencies.
Operations
The gross profit margin for the second quarter of 2003 amounted to 32.4% of net sales, 5.4 percentage points below the gross profit margin of 37.8% of net sales in the second quarter of 2002, and at the same level of the 32.4% gross profit margin realized in the first quarter of 2003. The gross profit margin for the first half of 2003 amounted to 32.4%, a decrease of 3.4 percentage points compared to 35.8% gross profit margin for the first half of 2002. The stable gross profit margin in the second quarter of 2003, as compared to the first quarter of 2003, was a combination of the higher sales volumes resulting in better utilization of manufacturing capacity offset by lower margins due to competitive price pressure, product mix and the impact of lower US dollar exchange rates, in particular in the Front-end operations. Similarly the competitive price pressure, the product mix and the US dollar impact resulted in a decrease of gross margin for the first half of 2003 compared to the first half of 2002.
Selling, general and administrative expenses were € 24.3 million in the second quarter of 2003 compared to € 28.6 million in the second quarter of 2002, a decrease of 15.0%, and slightly above the level of € 24.0 million in the first quarter of 2003. Selling, general and administrative expenses for the first half of 2003 were € 48.3 million, a decrease of 5.2% compared to € 51.0 million in the first half of 2002. As a percentage of net sales, selling, general and administrative expenses were 17.8% in the first half of 2003, compared to 21.1% in the first half of 2002. The overall decrease in selling, general and administrative expenses is the result of cost control measures and the lower US dollar exchange rate.
Research and development expenses decreased from € 21.7 million or 15.4% of net sales in the second quarter of 2002 to € 20.2 million or 13.2% of net sales in the second quarter of 2003, and 10.0% above the € 18.4 million in research and development expenses in the first quarter of 2003. For the first half of 2003, research and development expenses decreased by 8.6% compared to the first half of 2002, and decreased as a percentage of net sales from 17.5% to 14.3%. The decrease is the result of cost control measures and the impact of the lower US dollar exchange rate, while at the same time ASMI continued its strong research and development commitment to the industry.
Earnings (loss) from operations amounted to earnings of € 5.1 million in the second quarter of 2003, an increase of 71.0% as compared to € 3.0 million in the same period of 2002. For the first half of 2003, earnings from operations amounted to € 0.8 million, compared to a loss from operations of € (6.8) million for the first half of 2002.
Net interest and other financial expenses increased from a net expense of € (2.3) million in the second quarter of 2002 to a net expense of € (3.3) million in the second quarter of 2003. In the first half of 2003 the net expense amounted to € (5.0) million compared to a net expense of € (4.6) million in the first half of 2002.
The increase is the result of higher net interest expenses resulting from increased borrowings, including the issuance of US$ 90.0 million in convertible subordinated debt in May 2003 and lower interest income on cash deposits due to lower interest rates. The lower US dollar exchange rate did have a positive effect on the level of net interest expenses. Currency transaction losses for the second quarter of 2003 were € (0.7) million compared to currency transaction losses of € (0.5) million in the second quarter of 2002. Currency transaction losses for the first half of 2003 were € (0.5) million compared to € (0.7) million in the first half of 2002.