uiven, the Netherlands, October 27, 2011 - BE Semiconductor Industries N.V. ("the Company" or "Besi") (NYSE Euronext: BESI; OTCQX: BESIY), a leading manufacturer of assembly equipment for the semiconductor industry, today announced its results for the third quarter ended September 30, 2011.

Key Highlights

* Q3-11 revenue of € 75.6 million at high end of prior guidance (€ 71.9-€ 76.4 million)
* Orders of € 75.1 million down 9.0% sequentially vs. Q2-11. Book to bill ratio of 1.0x. Customer caution in adding new capacity partially offset by strength in orders for advanced packaging applications
* Gross margins of 40% in Q3-11 vs. 41.2% in Q2-11. Above prior guidance (37-39%) due to favorable shift in product mix to advanced packaging applications
* Net income of € 4.9 million in Q3-11 vs. € 8.8 million in Q2-11. Above expectations
* Year to date revenue of € 256.5 million and pre tax profit of € 30.9 million increased by 4.0% and 2.8%, respectively, vs. 2010
* Net cash increases to € 49.6 million vs. € 45.7 million in Q2-11 including € 12.4 million share repurchase
* 12% headcount reduction over next 12 months to align cost structure with current market realities to achieve € 8.5 million of annualized cost savings

(€ millions; except EPS) Q3-2011 Q2-2011 Delta Q3-2010 Delta
Revenue 75.6 89.9 -15.9% 100.6 -24.9%
Operating income (loss) 6.7 12.0 -44.2% 19.5 -65.6%
EBITDA 9.5 14.8 -35.8% 22.2 -57.2%
Net income (loss) 4.9 8.8 -44.3% 15.0 -67.3%
EPS (diluted) 0.13 0.25 -48.0% 0.39 -66.7%
Orders 75.1 82.5 -9.0% 88.1 -14.8%
Backlog 65.8 66.3 -0.8% 123.5 -46.7%
Cash flow (deficit) from ops. 19.8 8.9 122.5% 10.5 88.6%
Cash 76.6 61.8 23.9% 55.0 39.3%
Total debt 27.0 16.1 67.7% 49.9 -45.9%

Richard W. Blickman, President and Chief Executive Officer of Besi, commented: “We are pleased to report that our third quarter revenue, gross margins and net income met or exceeded our expectations. Revenue of € 75.6 million was at the upper end of guidance and we achieved a book to bill ratio of 1.0x despite customer concerns as to the health of the global economy. Orders for Q3-11 decreased by 9.0% sequentially which was better than our internal expectations given the current industry environment as we were able to sustain or increase orders from Asian subcontractors for component and flip chip die bonding systems and ultra-thin molding equipment. Such equipment is essential to support advanced packaging applications such as tablets and leading edge handheld devices.

Net income of € 4.9 million for the quarter was better than anticipated due to higher than forecasted gross margins for our component and flip chip die bonding systems and lower sequential operating expenses. Gross margins of 40% in Q3-11 were roughly equal to Q3-10 despite a 25% year over year revenue decline illustrating the structural transformation of the company as we’ve shifted our product mix to higher margin advanced packaging applications, improved our scalability and reduced our cost base via our ongoing Asian production transfer and 2010 product line restructurings.

We generated strong cash flow from operations this quarter (€ 19.8 million) which was utilized primarily to buy in 2.6 million shares for approximately € 12.4 million. Since inception of our buy-back program in May, we’ve bought a total of 3.1 million shares at an average price of € 4.76 to reduce a substantial portion of the dilution from our convertible note redemption. Even with the share repurchases in Q3-11, our net cash increased sequentially by € 3.9 million to € 49.6 million.

The current industry slowdown continues with only limited visibility available. Based on our current backlog and customer feedback, we expect that our revenue will decline by approximately 8-12% in Q4-11 vs. Q3-11 and that we’ll remain profitable. Continued spending by customers on our line of advanced packaging systems should help counter some of the prevailing headwinds. Nevertheless, we will reduce our headcount (primarily temporary production workers) by approximately 12% over the next 12 months to reduce our cost structure by approximately € 8.5 million in recognition of current market realities.”

Third Quarter Results of Operations
Besi’s Q3-11 revenue of € 75.6 million decreased by € 14.3 million (15.9%) as compared to Q2-11 due to lower die attach shipments which were partially offset by increased sales of packaging equipment, principally increased molding systems. Shipments for the quarter were at the high end of prior guidance but were adversely affected on a sequential basis by an industry slowdown which began in Q2-11. Revenue decreased by € 25.0 million (24.9%) as compared to Q3-10 due primarily to lower shipments of mainstream die bonding systems partially offset by increased shipments of systems for advanced packaging applications in the tablet and handset markets.

Orders for Q3-11 were € 75.1 million, a decrease of € 7.4 million, or 9.0%, as compared to Q2-11. The quarterly sequential decrease was primarily focused on continued caution by customers to add new capacity in light of global economic developments. Order weakness was experienced in each of Besi’s principal product groups but was partially offset by sustained or increased orders for advanced packaging applications. Orders declined by € 13 million, or 14.8%, from Q3-10 primarily due to decreased demand for die attach and plating systems partially offset by increased bookings for advanced packaging applications. On a customer basis, the sequential order decrease in Q3-11 reflected a € 12.0 million (33.1%) decrease by IDMs partially offset by a € 4.6 million (10.0%) order increase by subcontractors. Backlog at September 30, 2011, was € 65.8 million, a decrease of € 0.5 million, or 0.8%, as compared to June 30, 2011.

Besi’s gross margin decreased to 40.0% in Q3-11 as compared to 41.2% in Q2-11 due to the 16% sequential revenue decline. Q3-11 gross margins were above prior guidance (37%-39%) due to higher than anticipated component and flip chip die bonding gross margins. The Q3-11 gross margin was roughly equal to Q3-10 (40.1%) in spite of a 25% year over year revenue reduction due to a product mix shift to higher margin advanced packaging systems as well as benefits realized from Besi’s ongoing Asian production transfer and 2010 product line restructurings.

Besi’s operating expenses were € 23.6 million in Q3-2011 as compared to € 25.0 million in Q2-2011 and € 20.9 million in Q3-10 and were lower than prior guidance (€ 23.8 million). Lower sequential quarterly operating expenses were primarily due to (i) lower stock based compensation expense, (ii) the absence of a one-time bonus accrual in Q2-11 and (iii) lower development spending partially offset by higher costs related to the increase of the Swiss franc vs. the euro. As compared to Q3-10, Besi’s operating expenses increased by € 2.7 million primarily due to (i) higher costs related to the increase of the Swiss franc vs. the euro, (ii) higher incentive stock based compensation and (iii) increased development and sales and marketing personnel. Besi capitalized € 2.1 million of development expenses in Q3-11 as compared to € 2.3 million in Q2-11. As a % of revenue, total operating expenses were 31.2% in Q3-11 as compared to 27.9% in Q2-11 and 20.8% in Q3-10.

Financial expense (income), net declined from income of € 0.2 million in Q2-11 to expense of € 0.2 million in Q3-11 primarily as a result of the absence of an interest expense accrual benefit in Q2-11 related to the convertible note redemption. Financial expense (income), net was an expense of € 1.1 million in Q3-10.

Q3-11 net income of € 4.9 million decreased by € 3.9 million from € 8.8 million in Q2-11 primarily due to the 16% sequential revenue decline which could not be offset by cost reductions. Q3-11 net income declined by € 10.1 million as compared to € 15.0 million in Q3-10 primarily due to a 25% year over year revenue reduction, increased operating expenses and a higher effective tax rate (25.5% vs. 18.4%) due to a change in the profit mix contributed by Besi’s European subsidiaries.

Nine Month Results of Operations 2011/2010
For the first nine months of 2011, Besi’s revenue increased by € 9.8 million or 4.0% to € 256.5 million as compared to the first nine months of 2010 primarily due to an increase in die attach system shipments for advanced packaging applications partially offset by a decrease in wire bonding shipments due to its 2010 product line restructuring. Orders for the first nine months of 2011 were € 245.9 million, down by € 73.2 million, or 22.9%, as compared to the same period in 2010 reflecting a less favorable global macro environment and semiconductor equipment industry conditions as compared to the cyclical peak reached in the summer of 2010. The order decline was focused primarily on lower bookings for die bonders for mainstream electronics and industrial applications partially offset by strength in bookings for advanced packaging applications such as tablets and handheld devices.

For the first nine months of 2011, Besi recorded net income of € 23.2 million (€ 0.65 per share diluted) a 16.5% decrease vs. € 27.8 million (€ 0.75 per share diluted) for the comparable period in 2010 while net margins decreased to 9.1% vs. 11.3% in 2010. The net income reduction was due to significantly higher effective tax rates in 2011 vs. 2010 (24.7% vs. 7.3%) due to the absence of a deferred tax benefit of € 4.8 million recognized in the 2010 period.

Headcount Reduction Plan
In order to align its cost structure with current market conditions, Besi announced a headcount reduction plan to reduce its company-wide personnel costs over the next 12 months by € 8.5 million on an annualized basis. The plan calls for a reduction of approximately 12% of Besi’s total worldwide headcount of 1,775 at September 30, 2011 of which approximately two thirds represents a decrease of temporary personnel and the balance primarily from contract personnel. Specifically, the plan focuses primarily on the reduction of temporary production personnel in Asia and, to a lesser extent, contract operations and overhead related personnel in Europe. The majority of the headcount reduction and cost savings will occur in 2012. Besi currently anticipates that it will incur charges not exceeding approximately € 3 million in connection with the proposed plan of which approximately € 0.2 million is anticipated to be recorded in Q4-11.

Share Repurchase Program
On May 20, 2011, Besi announced a share repurchase program according to which the Company may buy back up to a maximum of approximately 3.4 million ordinary shares from time to time until October 2012. In Q3-11, Besi purchased 2.6 million of its ordinary shares at a weighted average price of € 4.67 for a total purchase amount of € 12.4 million. Since inception of the program, a total of 3.1 million ordinary shares have been purchased at a weighted average price of € 4.76 for a total purchase amount of € 14.8 million. Besi’s shares outstanding, net of treasury shares, decreased from 39.4 million at June 30, 2011 to 36.9 million at September 30, 2011 as a result of the share repurchase program.

Financial Condition
Besi’s net cash position reached € 49.6 million at September 30, 2011, an increase of € 3.9 million from June 30, 2011. During the period, Besi generated cash flow from operations of € 19.8 million primarily as a result of operating and other related cash flow generated of € 10.1 million and a € 9.7 million reduction of working capital related to the quarterly sequential revenue decrease. Cash flow from operations was utilized primarily to (i) repurchase € 12.4 million of ordinary shares, (ii) fund € 2.1 million of capitalized development spending and (iii) make € 1.6 million of capital expenditures.

Outlook
Based on its September 30, 2011 backlog and feedback from customers, Besi forecasts for Q4-11 that:
• Revenue will decline by approximately 8-12% as compared to the € 75.6 million reported in Q3-11.
• Gross margins will range between 37.5%-39.5% as compared to the 40.0% realized in Q3-11.
• Operating expenses will be approximately equal to the € 23.6 million reported in Q3-11.
• Capital expenditures will be approximately equal to the € 1.6 million incurred in Q3-11.


tijd 09.07
De Smallcap 427,75 +4,18 +0,99% Besi EUR 4,99 +20ct