Duiven, the Netherlands, June 18, 2007 - BE Semiconductor Industries N.V. ("the Company" or "Besi") (Euronext: BESI), a leading manufacturer of assembly equipment for the semiconductor industry, today announced that based on preliminary estimates, it anticipates that its revenue and orders for the second quarter of 2007 will be approximately 5% and 10-15% below its respective revenue and orders for the first quarter of 2007. It also announced an operational restructuring focused on the consolidation of certain global manufacturing and sales and service activities in order to streamline its operations, reduce subsidiary overhead and improve profitability. The new organization structure will also facilitate the adoption of common system platforms offering the potential to significantly improve Besi’s operating efficiency and working capital management in the future.
Besi estimates that the anticipated revenue shortfall versus the first quarter of 2007 and guidance for the second quarter of 2007 is due primarily to delays in customer acceptance of certain RFID system orders. The Company believes that the order shortfall versus levels achieved in the first quarter of 2007 is due primarily to lower than anticipated orders for its die sorting systems and, to a lesser extent, lower orders for singulation and RFID plating systems as a result of demand for assembly equipment that is generally softer than previously anticipated. Guidance for the second quarter of 2007 was for orders to be flat to up 5% versus the first quarter of 2007.
One component of the restructuring involves the net reduction of approximately 35 employees in the Netherlands (of whom 16 are fixed contract employees), approximately 40 employees in the US and approximately 10 employees in other regions. In total, the work force reduction represents approximately 7% of Besi’s worldwide fixed headcount at March 31, 2007. At present, Besi anticipates that it will incur charges not exceeding approximately € 5 million in connection with the restructuring of which approximately € 3 million is anticipated to be recorded in the second quarter of 2007 and the remainder of which is expected to be incurred during the third and fourth quarters of 2007. Of the total anticipated charges, the Company estimates that (i) approximately € 3.3 million relates to severance and social charges involved in the proposed workforce reduction as well as lease termination costs and legal/advisory fees in connection with the restructuring, (ii) approximately € 0.9 million relates primarily to the write-off of inventory in connection with the common platform initiative at Fico Netherlands and Fico Asia and the transfer of inventory and
production activities between Datacon and Laurier and (iii) approximately € 0.8 million relates to the write-off of patents and trademarks at Laurier in connection with an evaluation of its current product portfolio. The personnel terminations and production transfer contemplated by the restructuring are anticipated to occur primarily during the second half of 2007.
The Company anticipates that the restructuring will generate potential annual pre tax cost savings of approximately € 6 million commencing in 2008. However, the combination of charges related to the restructuring and the Company’s anticipated revenue shortfall in the second quarter of 2007 will result in Besi’s incurring a net loss for the quarter.
The restructuring plan involves principally three operating activities: 1) the integration of Besi’s Laurier subsidiary, located in Londonderry, New Hampshire, USA with its Datacon subsidiary, located in Radfeld, Austria, 2) the consolidation of all Besi’s packaging equipment product activities and 3) the consolidation and integration of all sales and customer support services for die bonding, die sorting and packaging equipment products in one global organization. In addition, as part of the streamlining process, the Company will seek to develop common system platforms for its Datacon die bonding/sorting products and its Fico packaging equipment products in order to better standardize production across its various assembly operations. In this manner, management hopes to achieve incremental process, cost, purchasing and working capital efficiencies which should serve to reduce subsidiary overhead and inventory levels and expedite delivery times to customers.
As part of the restructuring, Besi will integrate the operations of its Laurier and Datacon subsidiaries in the second half of 2007 wherein all Laurier die sorting products will continue to be supported under the Datacon brand name. It is anticipated that Laurier’s Londonderry, New Hampshire facility will be maintained and that remaining personnel will support and advance research and development and customer service functions for Besi die sorting and vision products. At present, it is contemplated that all current die sorting production activities will be transferred to Datacon’s Radfeld, Austria facility or Besi’s Malaysian manufacturing operations.
The restructuring of Besi’s packaging equipment operations involves the consolidation and integration of its Fico molding, trim and form and singulation equipment units at its facility in Duiven, the Netherlands. It is contemplated that design, engineering, development and business management functions of these three units will be consolidated under one management structure in order to simplify product design and decision making and reduce subsidiary overhead.
The re-organization of the Company’s sales and customer support activities focuses on the integration of sales and marketing activities for each of its die sorting, die bonding and packaging equipment systems whereby sales and customer support personnel and offices will be consolidated worldwide through the establishment of global Besi sales and customer support organizations. As a result, redundant sales and support overhead can be reduced and the Company’s management structure can be greatly simplified.
In commenting on the announcement, President and Chief Executive Officer Richard W. Blickman noted: “We are disappointed with our estimated shortfall in revenue and orders versus guidance for the second quarter of 2007. This disappointment relates primarily to orders for our die sorting, singulation and RFID plating systems and points to pockets of weakness in the assembly equipment market currently. However, our principal die bonding and packaging equipment sales and orders are still on track to meet expectations for the second quarter.
In addition, by means of the restructuring we have positioned Besi so that it can realize its profit objectives in a highly cyclical and ever changing semiconductor equipment landscape. The management board believes that the best manner to achieve our targets at present is to centralize certain management functions and to reduce redundant production and administrative overhead wherever possible in our global operations. By these measures, we ultimately hope to achieve an integrated and streamlined global organization structure under the Besi umbrella while maintaining the separate integrity and quality of our Datacon, Fico and Meco equipment brands. We also believe that the adoption of common system platforms by our die handling and packaging equipment operations holds the potential to significantly improve Besi’s operating efficiency and working capital management in the future.”
The Company expects to report second quarter and half year 2007 results on July 26, 2007.