Revenue and Net Income Up by 30.7% and 163.5%, Respectively, vs. Q3-15
YTD-2016 Net Income Up 23.7% vs. YTD-2015
New Share Repurchase Program Initiated
DUIVEN, the Netherlands, Oct. 27, 2016 (GLOBE NEWSWIRE) -- BE Semiconductor Industries N.V. (the “Company" or "Besi") (Euronext Amsterdam:BESI) (OTC: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, 2016.
Key Highlights Q3-16
- Revenue of € 94.3 million, down 13.5% vs. Q2-16 but above guidance. Decrease primarily due to lower demand by Asian subcontractors after first half capacity build. Up 30.7% vs. Q3-15 primarily due to higher die attach demand for mobile applications
- Orders of € 78.1 million, down 22.3% vs. Q2-16 due to lower demand for mobile, automotive and high end server applications and typical seasonal factors but up 4.2% vs. Q3-15
- Gross margin of 50.5% vs. 50.9% in Q2-16 at upper end of guidance. Up 1.8% vs Q3-15 (48.7%)
- Net income of € 16.6 million down € 7.4 million vs. Q2-16 but up € 10.3 million vs. Q3-15. Net margin of 17.6% vs. 8.7% in Q3-15 due to revenue growth and increased efficiency of business model
- Net cash increased by € 22.9 million (+21.0%) vs. Q3-15
- September 2015 buyback program completed. New 1.0 million share buy-back program initiated
Key Highlights YTD-16
- Revenue of € 282.3 million, up 4.0% vs. YTD-15 primarily as a result of higher die attach system demand by Asian customers for new advanced packaging capacity
- Orders up 4.2% primarily due to increased demand by Chinese and Taiwanese subcontractors and more favourable industry conditions
- Gross margin rose to 50.3% vs. 48.5% principally as a result of market position and increased material and labor cost efficiencies
- Net income of € 48.6 million up € 9.3 million vs. YTD-15. Net margins increased to 17.2% vs. 14.5% YTD-15. Adjusted net income up € 12.5 million vs. YTD-15
- Q4-16 revenue expected to decrease 10-15% vs. Q3-16 reflecting typical seasonal patterns
|(€ millions, except EPS)||Q3-|
|Adjusted Net Income*||16.7||23.1||-27.7||%||6.5||+156.9||%||48.5||36.0||+34.7||%|
* Adjusted net income excludes € 1.0 million upward revaluation of tax loss carry forwards in Q2-16, € 0.1 million, € 0.1 million and € 0.7 million of restructuring charges in Q3-16, Q2-16 and Q1-16, respectively and € 0.2 million and € 3.3 million of net restructuring benefits in Q2-15 and Q1-15, respectively.
Richard W. Blickman, President and Chief Executive Officer of Besi, commented:
“Besi reported another solid quarter with Q3-16 revenue and profit exceeding expectations and strong cash flow generation. Revenue increased by 30.7% vs. Q3-15 primarily due to increased investment by customers in mobile and automotive advanced packaging capacity in a market environment more favorable than a year ago. Similarly, Besi’s seasonal 13.5% quarterly revenue decrease vs. Q2-16 improved significantly from last year’s 30.9% sequential quarterly revenue decrease. Net income of € 16.6 million increased by 163.5% vs. Q3-15 as revenue expanded and we realized increased efficiencies from our business model due to our strong market position and ongoing strategic initiatives. In addition, net margins more than doubled to reach 17.6% vs. Q3-15. Further, net cash grew to € 131.9 million in Q3-16 due to strong profit generation and enhanced working capital management efforts particularly in the areas of supply chain management and inventory control.
Besi’s solid profit and cash flow generation have enabled us to significantly enhance shareholder value in recent years. In October 2016, we completed a 1.0 million share buyback aggregating € 22.5 million. Since 2012, Besi has spent a total of € 157 million on dividends and share repurchases using excess cash resources. Given our outlook and prospects, we have initiated a new share buyback program up to a maximum of 1.0 million shares (2.7% of shares outstanding) through October 2017.
Besi’s nine month 2016 results also demonstrate solid financial and strategic progress and the operating leverage in our business model. While revenue grew by 4.0% vs. the 2015 period, net income of € 48.6 million grew by 23.7% vs. YTD-15 and was roughly equal to our net income for all of 2015. Revenue growth this year has benefited from increased investment by Chinese and Taiwanese subcontractors to expand advanced packaging capacity, the favourable influence of a new technology cycle to further shrink device geometries and the expansion of Besi’s market position in the major supply chains. Net income development has benefited from top line growth, higher gross margins from increased labor and material cost efficiencies and the execution of strategic initiatives to control operating expenses.
The industry outlook for the second half and full year 2016 has improved significantly versus initial estimates for the year. Leading industry analysts estimate that the current upturn will continue into 2017 assuming stable global macro-economic conditions and further capacity upgrades by leading IDMs and Asian subcontractors. Based on current backlog levels, Q4-16 revenue is anticipated to decline by 10-15% vs. Q3-16 which is in line with Besi’s sequential patterns in recent years.”
Third Quarter Results of Operations
|Book to Bill Ratio||0.8x||0.9x||-0.1||1.0x||-0.2|
Besi’s 13.5% sequential revenue decrease was primarily due to lower die attach demand by Asian subcontractors for mobile applications after a large first half capacity build and typical seasonal factors partially offset by strength in automotive applications. Q3-16 revenue was above prior guidance (-15-20% vs. Q2-16) and increased by 30.7% vs. Q3-15. Growth vs. Q3-15 was primarily due to significantly higher demand for die attach systems by Taiwanese and Chinese subcontractors for mobile applications, with particular strength in sales of epoxy die bonding systems for fingerprint sensor applications.
Orders decreased by 22.3% vs. Q2-16 primarily as a result of lower customer demand for mobile, automotive and high end server applications and typical seasonal influences. Per customer type, subcontractor orders decreased sequentially in Q3-16 by € 15.5 million, or 31.1%, while IDM orders decreased by € 6.9 million, or 13.6%. However, orders increased by 4.2% vs. Q3-15 reflecting general strength in both die attach and packaging systems although order growth varied per individual product.
|Financial Expense/ (Income), net||0.9||0.5||+80.0||%||(0.8||)||NM|
Besi’s gross margin in Q3-16 decreased sequentially by 0.4% primarily as a result of higher labor and freight costs partially offset by increased material cost efficiencies. As compared to Q3-15, the 1.8% gross margin increase was primarily due to labor and material cost efficiencies as well as foreign exchange benefits from the decrease of the MYR vs. the euro.
Besi’s Q3-16 operating expenses decreased by € 0.9 million vs. Q2-16 and were within prior guidance (0 to -5%) primarily as a result of € 2.1 million lower personnel related expenses partially offset by higher advisory and consulting costs. Operating expenses decreased by € 0.5 million vs. Q3-15 due primarily to lower temporary personnel and R&D costs partially offset by higher advisory and consulting costs. Total headcount at September 30, 2016 decreased by 0.5% vs. September 30, 2015 as higher Asian fixed and temporary production and administrative personnel were more than offset by continued decreases in European headcount.
* Adjusted net income excludes € 1.0 million upward revaluation of tax loss carry forwards in Q2-16 and € 0.1 million of restructuring charges in each of Q2-16 and Q3-16.
Besi’s Q3-16 net income decreased by € 7.4 million sequentially due primarily to (i) a 13.5% revenue decrease, (ii) slightly lower gross margins and (iii) an increased effective tax rate partially offset by lower operating expenses. As compared to Q3-15, net income increased by € 10.3 million primarily as a result of a 30.7% revenue increase, improved gross margins, reduced operating expenses and a lower effective tax rate. Besi’s effective tax rate was 11.1%, 6.9% (10.8% as adjusted) and 13.3% in Q3-16, Q2-16 and Q3-15, respectively. In Q2-16, the effective tax rate was favorably influenced by a € 1.0 million upward revaluation of net operating loss carry forwards at Besi Switzerland.
Nine Month Results of Operations
*Adjusted net income excludes € 1.0 million upward revaluation of tax loss carry forwards and € 0.9 million of restructuring charges in YTD-16 and € 3.3 million of net restructuring benefits in YTD-15.
For the first nine months, Besi’s revenue and orders increased by 4.0% and 4.2%, respectively, vs. YTD-15 primarily due to increased demand by Chinese and Taiwanese subcontractors for Besi’s range of high end and mainstream assembly solutions and more favourable industry conditions. Orders by subcontractors and IDMs each represented 50% of Besi’s total YTD-16 orders vs. 39% and 61%, respectively, in YTD-15.
Besi’s net income increased by € 9.3 million vs. YTD-15 due primarily to a (i) 4% revenue increase, (ii) 1.8% gross margin improvement and (iii) 2.8% reduction in its effective tax rate partially offset by the absence of restructuring benefits of € 3.3 million recorded in YTD-15. On an adjusted basis, Besi’s YTD-16 net income increased by €12.5 million vs.YTD-15 and adjusted net margins increased to 17.2% vs. 13.3%.
|Cash flow from Ops.||30.1||15.1||+99.3||%||20.3||+48.3||%||65.3||54.0||20.9||%|
At the end of Q3-16, Besi’s cash and cash equivalents increased by € 21.2 million vs. Q2-16 to reach € 153.3 million and net cash increased by € 21.2 million to reach € 131.9 million. As compared to Q3-15, Besi’s net cash increased by € 22.9 million, or 21.0%. Besi generated cash flow from operations of € 30.1 million in Q3-16 which was utilized to fund (i) € 6.0 million of share repurchases, (ii) € 1.6 million of capitalized development spending and (iii) € 1.2 million of net capital expenditures. For the nine month 2016 period, Besi generated € 65.3 million of cash flow from operations, an increase of 20.9% vs.YTD-15 primarily as a result of higher profitability and a reduction in working capital needs to support sales growth.
During the quarter, Besi repurchased 231,000 of its ordinary shares at an average price of € 27.06 per share for a total of € 6.3 million. Post quarter-end, Besi repurchased 46,169 additional shares at an average price of € 31.21 to successfully conclude its September 2015 share repurchase program. Since program inception, Besi purchased a total of 1.0 million shares for a total of € 22.5 million.
New Share Repurchase Program
Besi announced the initiation of a new program to repurchase up to a maximum of 1.0 million of its ordinary shares (2.7% of its shares outstanding at October 27, 2016) from time to time on the open market. At present, Besi has authority until October 30, 2017 to purchase up to 10% of its shares outstanding (approximately 3.7 million shares). The repurchase program was initiated for capital reduction purposes and to help offset dilution associated with share issuance under employee stock plans and will be funded using Besi’s available cash resources.
The repurchase program will be implemented 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 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 Euronext Amsterdam. Furthermore, such price will not exceed 110% of the average of the highest quoted price for the shares on the five trading days prior to the date of purchase, as published in the Daily Official List of Euronext Amsterdam. Any repurchased shares will be available in the future for use in connection with its 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).
Based on its September 30, 2016 backlog and feedback from customers, Besi forecasts for Q4-16 that:
- Revenue will decrease by 10-15% vs. the € 94.3 million reported in Q3-16.
- Gross margins will range between 49-51% vs. the 50.5% realized in Q3-16.
- Operating expenses will increase by 0-5% vs. the € 28.2 million reported in Q3-16.
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 5871. To access the audio webcast and webinar slides, please visit www.besi.com.
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, computer, 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 (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.
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, backlog, 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; failure to adequately decrease costs and expenses as revenues decline; loss of significant customers; lengthening of the sales cycle; acts of terrorism and violence; 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; potential instability in foreign capital markets; the risk of failure to successfully manage our diverse operations; those additional risk factors set forth in Besi's annual report for the year ended December 31, 2015; any inability to attract and retain skilled personnel; 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|
|Nine Months Ended|
|Cost of sales||46,678||37,033||140,330||139,837|
|Selling, general and administrative expenses||19,288||18,609||59,404||56,592|
|Research and development expenses||8,870||10,097||27,122||29,447|
|Total operating expenses||28,158||28,706||86,526||86,039|
|Financial expense (income), net||856||(847||)||1,579||584|
|Income before taxes||18,620||7,245||53,859||44,908|
|Income tax expense||2,064||966||5,295||5,637|
|Net income (loss) per share – basic||0.44||0.16||1.29||1.04|
|Net income (loss) per share – diluted||0.43||0.16||1.27||1.02|
|Number of shares used in computing per share amounts:|
(1) The calculation of diluted income per share assumes the exercise of equity settled share based payments.
|Consolidated Balance Sheets|
|(euro in thousands)||September 30,|
|Cash and cash equivalents||153,264||132,075||169,756||157,818|
|Income tax receivable||371||279||686||446|
|Other current assets||12,225||10,134||10,957||6,055|
|Total current assets||316,628||309,522||322,079||298,836|
|Property, plant and equipment||24,419||25,016||26,355||26,718|
|Other intangible assets||37,950||38,696||41,309||40,374|
|Deferred tax assets||16,213||17,441||17,684||18,545|
|Other non-current assets||2,500||2,721||2,696||2,711|
|Total non-current assets||126,343||129,236||131,505||133,890|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|Notes payable to banks||8,004||8,000||8,000||8,000|
|Current portion of long-term debt |
and financial leases
|Total current liabilities||87,012||90,543||82,007||67,379|
|Other long-term debt and|
|Deferred tax liabilities||6,125||6,158||6,180||6,201|
|Other non-current liabilities||16,542||16,245||13,355||13,574|
|Total non-current liabilities||33,779||35,755||32,887||33,127|
|Total liabilities and equity||442,971||438,758||453,584||432,726|
|Consolidated Cash Flow Statements|
|(euro in thousands)||Three Months Ended |
|Nine Months Ended |
|Cash flows from operating activities:|
|Depreciation and amortization||3,526||3,774||11,010||10,651|
|Share based compensation expense||1,160||801||6,233||4,508|
|Other non-cash items||(3||)||-||-||380|
|Gain on curtailment||-||-||-||(5,520||)|
|Changes in working capital||7,190||10,187||(6,122||)||86|
|Income tax received (paid)||(1,336||)||(991||)||(1,479||)||(1,968||)|
|Interest received (paid)||88||105||207||400|
|Net cash provided by operating activities|
|Cash flows from investing activities:|
|Capitalized development expenses||(1,572||)||(1,229||)||(4,851||)||(4,101||)|
|Proceeds from sale of equipment||7||-||7||-|
|Net cash used in investing activities||(2,804||)||(2,269||)||(7,144||)||(7,655||)|
|Cash flows from financing activities:|
|Proceeds from (payments of) bank lines of credit||4||1,811||4||6,910|
|Proceeds from (payments of) debt and financial leases|| |
|Dividends paid to shareholders||-||-||(45,420||)||(56,877||)|
|Reissuance (purchase) of treasury shares||(6,000||)||-||(17,459||)||399|
|Net cash provided by (used in) financing activities||(5,996||)||1,474||(62,875||)||(50,153||)|
|Net increase (decrease) in cash and cash equivalents|
|Effect of changes in exchange rates on cash and|
|Cash and cash equivalents at beginning of the|
|Cash and cash equivalents at end of the period||153,264||132,834||153,264||132,834|
|Supplemental Information (unaudited)|
|(euro in millions, unless stated otherwise)|
|EU / USA||33.2||35||%||26.1||25||%||31.0||43||%||27.0||35||%||19.0||24||%||20.7||19||%||24.5||26||%|
|EU / USA||34.4||33||%||23.9||26||%||30.7||41||%||21.2||27||%||26.0||25||%||16.1||16||%||16.4||21||%|
|Per customer type:|
|BACKLOG||Mar 31, 2015||Jun 30, 2015||Sep 30, 2015||Dec 31, 2015||Mar 31, 2016||Jun 30, 2016||Sep 30, 2016|
|HEADCOUNT||Mar 31, 2015||Jun 30, 2015||Sep 30, 2015||Dec 31, 2015||Mar 31, 2016||Jun 30, 2016||Sep 30, 2016|
|Fixed staff (FTE)|
|EU / USA||597||39||%||597||38||%||566||37||%||549||37||%||533||36||%||519||34||%||522||34||%|
|Temporary staff (FTE)|
|EU / USA||67||45||%||84||70||%||64||74||%||40||100||%||47||44||%||53||47||%||39||53||%|
|Total fixed and temporary staff (FTE)||1,680||1,684||1,628||1,539||1,590||1,638||1,620|
|OTHER FINANCIAL DATA||Q1-2015||Q2-2015||Q3-2015||Q4-2015||Q1-2016||Q2-2016||Q3-2016|
|Restructuring charges / (gains)||(0.7||)||-0.8||%||0.1||0.1||%||-||-||-||-||0.3||0.4||%||(0.0||)||-0.0||%||0.0||0.0||%|
|Gross profit as adjusted||45.8||48.2||%||50.0||47.9||%||35.1||48.7||%||38.9||50.0||%||39.2||49.6||%||55.5||50.9||%||47.6||50.5||%|
|Selling, general and admin expenses:|
|Amortization of intangibles||(0.2||)||-0.2||%||(0.3||)||-0.2||%||(0.2||)||-0.3||%||(0.6||)||-0.7||%||(0.2||)||-0.3||%||(0.3||)||-0.3||%||(0.3||)||-0.3||%|
|Restructuring gains / (charges)||1.0||1.1||%||(0.0||)||-0.0||%||(0.2||)||-0.2||%||(0.1||)||-0.1||%||(0.3||)||-0.4||%||(0.1||)||-0.1||%||(0.1||)||-0.1||%|
|SG&A expenses as adjusted||18.2||19.1||%||20.3||19.5||%||18.2||25.2||%||16.8||21.6||%||20.0||25.3||%||19.2||17.6||%||18.9||20.1||%|
|Research and development expenses:|
|Capitalization of R&D charges||1.5||1.6||%||1.4||1.3||%||1.2||1.7||%||1.5||2.0||%||1.8||2.3||%||1.5||1.4||%||1.6||1.7||%|
|Amortization of intangibles||(1.7||)||-1.8||%||(2.2||)||-2.1||%||(2.3||)||-3.1||%||(2.4||)||-3.1||%||(2.2||)||-2.8||%||(2.3||)||-2.1||%||(2.1||)||-2.2||%|
|Restructuring gains / (charges)||2.0||2.1||%||(0.1||)||-0.1||%||(0.0||)||-0.0||%||0.2||0.2||%||(0.0||)||-0.0||%||(0.0||)||-0.0||%||-||-|
|R&D expenses as adjusted||9.7||10.2||%||10.6||10.2||%||9.0||12.5||%||8.3||10.6||%||8.3||10.5||%||8.7||8.0||%||8.4||8.9||%|
|Financial expense (income), net:|
|Interest expense (income), net||(0.1||)||0.1||(0.0||)||0.0||(0.0||)||(0.0||)||0.0|
|Foreign exchange (gains) \ losses||1.1||0.3||(0.8||)||0.2||0.2||0.5||0.9|
|Operating income (loss)|
|as % of net sales||21.2||22.3||%||17.9||17.2||%||6.4||8.9||%||12.4||15.9||%||9.6||12.2||%||26.3||24.1||%||19.5||20.7||%|
|as % of net sales||24.4||25.7||%||21.6||20.7||%||10.2||14.1||%||16.9||21.7||%||13.4||17.0||%||30.1||27.6||%||23.0||24.4||%|
|Net income (loss)|
|as % of net sales||17.5||18.5||%||15.5||14.8||%||6.3||8.7||%||9.7||12.4||%||8.0||10.1||%||24.0||22.0||%||16.6||17.6||%|
|Income per share|
Contacts: Richard W. Blickman, President & CEO Cor te Hennepe, SVP Finance Tel. (31) 26 319 4500 email@example.com Citigate First Financial Frank Jansen Tel. (31) 20 575 4024 Frank.Jansen@citigateff.nl
Source:BE Semiconductor Industries N.V.