Q2-17 Revenue of € 170.0 Million and Net Income of € 52.4 Million Are Up 56% and 118%, Respectively, vs. Q2-16
H1-17 Revenue and Net Income Up 49% and 140%, Respectively, vs. H1-16
DUIVEN, the Netherlands, July 27, 2017 (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 second quarter and first half year ended June 30, 2017.
Key Highlights Q2-17
- Revenue of € 170.0 million, up 54.3% vs.Q1-17 and 56.0% vs. Q2-16 due primarily to favorable industry conditions and higher die bonding shipments for smart phone applications. Above guidance
- Orders of € 130.1 million, down 45.7% vs. Q1-17 post large capacity build in Q1-17 but up 29.5% vs. Q2-16 due to broad based growth with particular focus on cloud server and automotive applications
- Gross margin rose to 57.3%. Above guidance. Up 1.6% vs. Q1-17 and 6.4% vs. Q2-16 primarily due to Besi’s strong market position, increased production efficiencies and a more favorable product mix
- Net income of € 52.4 million grew 116%, or € 28.1 million, vs. Q1-17 and 118%, or € 28.4 million, vs. Q2-16 due to strong revenue growth, continued gross margin improvement and cost controls
- Net margins also increased significantly to 30.8% vs. 22.0% in both Q1-17 and Q2-16
- Net cash and deposits increased by € 20.8 million, or 18.8% year over year to reach € 131.5 million
Key Highlights H1-17
- Revenue of € 280.2 million, up 49.0% vs. H1-16 due to substantially higher sales of die bonding systems for smart phone, and to a lesser extent, automotive applications.
- Orders increased by 81.0% due to improved industry conditions and increased demand for Besi’s advanced packaging systems serving smart phone, automotive and cloud server applications
- Gross margin rose to 56.7% vs. 50.2% principally as a result of increased production efficiencies and forex benefits
- Net income of € 76.7 million grew € 44.7 million vs. H1-16 (+140%) and exceeded full year 2016 by 17.5%. Net margin expanded to 27.4% vs. 17.0% in H1-16
- Q3-17 revenue estimated to decrease 5-15 % vs. Q2-17 consistent with typical H2 seasonal trends. Revenue and operating income expected to substantially exceed Q3-16 levels
|(€ millions, except EPS)||Q2-|
|Net Cash and Deposits||131.5||175.7||-25.2||%||110.7||+18.8||%||131.5||110.7||+18.8||%|
Richard W. Blickman, President and Chief Executive Officer of Besi, commented: “Besi’s Q2-17 and half year 2017 performance substantially exceeded comparable prior year results due to ongoing strength in the assembly equipment industry this year, market share gains by our advanced packaging portfolio and the increased efficiency and scalability of our business model. First half revenue of € 280.2 million and orders of € 369.9 million rose by 49.0% and 81.0%, respectively, reflecting a strong customer build out of advanced packaging capacity in 2017 for leading edge smart phone, automotive and cloud server applications. First half net income of € 76.7 million rose by 140.0% vs. H1-16 and exceeded by 17.5% our net income for all of 2016. Similarly, net margins expanded from 17.0% in H1-16 to 27.4% in H1-17 as a result of higher gross margins combined with a tight control of fixed cost overhead development.
Besi’s Q2-17 results were also strong as we posted revenue of € 170.0 million and net income of € 52.4 million (up 56% and 118%, respectively, year over year). Revenue growth was primarily due to increased demand by IDMs and their respective supply chains for Besi’s die bonding equipment to assemble next generation mobile devices with enhanced features. Growth exceeded expectations primarily due to earlier than anticipated customer deliveries of certain die bonding systems originally scheduled for Q3-17. During the quarter, shipments reached a record 496 units as we successfully ramped our Asian supply chain, expanded our Malaysian and Chinese production capabilities and further reduced cycle times to customers.
In addition, orders grew by 29.5% vs. Q2-16 as customers increased demand for a broad array of Besi’s die bonding, packaging and plating systems serving multiple end user markets. Operating profit growth also exceeded expectations as gross margins reached 57.3% while fixed cost development was well contained. As such, Besi’s net margin reached 30.8%, the first time we have crossed that profitability threshold. In addition, net cash and deposits increased by € 20.8 million, or 18.8%, vs. Q2-16 despite the working capital required to support our large revenue ramp and increased dividend payments.
Consistent with typical second half seasonal trends, Besi expects Q3-17 revenue to decline by 5-15% vs. Q2-17 but that Q3-17 revenue and operating income will substantially exceed Q3-16 levels given our current backlog and increased operating efficiency vs. last year. At present, the industry environment remains positive with ongoing investment in a new technology upgrade cycle and specific applications such as smart phones, automotive, cloud server and high end memory.”
Second Quarter Results of Operations
|Book to Bill Ratio||0.8x||2.2x||-1.4||0.9x||-0.1|
Besi’s Q2-17 revenue increased by 54.3% and 56.0% vs. Q1-17 and Q2-16, respectively. Growth was primarily due to a more favorable industry environment and a significant expansion by IDMs and their respective supply chains of die bonding capacity for next generation mobile devices with enhanced features. In addition, Besi experienced broad based growth for automotive and high end cloud server applications. Q2-17 revenue exceeded prior guidance (+40-50%) primarily due to earlier than anticipated customer deliveries of certain die attach systems.
Orders of € 130.1 million were down 45.7% vs. Q1-17 as customers scaled back demand for next generation mobile devices after the large Q1-17 capacity build. However, orders grew by 29.5% vs. Q2-16 reflecting broad based growth across Besi’s portfolio for a variety of end user markets with a particular emphasis on die bonding systems for cloud server and automotive applications. Per customer type, IDM orders decreased sequentially by € 113.4 million, or 57.7%, while subcontractor orders increased by € 3.7 million, or 8.5%. IDM and subcontractor orders represented 64% and 36%, respectively, of total Q2-17 bookings.
|Financial Expense/(Income), net||2.6||2.0||+30.0||%||0.5||+420||%|
Besi’s gross margin of 57.3% in Q2-17 increased by 1.6 points vs. Q1-17 and exceeded prior guidance (54-56%). The sequential gross margin improvement was principally due to increased labor efficiencies and a more favorable product mix. Such benefits were partially offset by adverse forex influences due primarily to the decrease in the value of the USD vs. the euro. Gross margin increased by 6.4 points vs. Q2-16 principally due to increased material and labor efficiencies as well as forex benefits from the increase in the value of the USD vs. the euro.
Q2-17 operating expenses increased by € 3.6 million, or 11.8%, vs. Q1-17 and were within prior guidance (+10-15%). The sequential increase was due primarily to higher warranty, service and other variable expenses related to substantially higher sales levels. Operating expenses grew by € 5.0 million, or 17.2%, vs. Q2-16 due primarily to higher variable sales related expenses and, to a lesser extent, higher service and R&D related personnel expenses. Total headcount at June 30, 2017 increased by 6.5% vs. March 31, 2017 and by 20.1% vs. year end 2016 principally as a result of higher Asian temporary production personnel in support of the large H1-17 order ramp and expanded Asian operations.
Financial expense, net increased by € 0.6 million vs. Q1-17 due primarily to higher foreign exchange losses and by € 2.1 million vs. Q2-16 principally as a result of higher interest expense associated with Besi’s issuance of € 125 million of Convertible Notes in December 2016.
* In Q2-16, the effective tax rate was favorably influenced by a € 1.0 million upward revaluation of net operating loss carryforwards at Besi Switzerland. Excluding this benefit, the effective tax rate was 10.8%.
Besi’s net income grew to € 52.4 million in Q2-17, an increase of € 28.1 million, or 116%, vs. Q1-17 and € 28.4 million, or 118%, vs. Q2-16. Net income growth was principally due to substantially higher revenue levels, continued gross margin improvement and ongoing cost control efforts. Similarly, net margins increased to 30.8% in Q2-17 vs. 22.0% in both Q1-17 and Q2-16.
Half Year Results of Operations
* In Q2-16, the effective tax rate was favorably influenced by a € 1.0 million upward revaluation of net operating loss carryforwards at Besi Switzerland. Excluding this benefit, the effective tax rate was 11.9%.
First half revenue of € 280.2 million and orders of € 369.9 million rose by 49.0% and 81.0%, respectively, vs. H1-16 reflecting favorable industry conditions as well as a strong customer build out of advanced packaging capacity in 2017 for leading edge smart phone, automotive and cloud server applications. Orders by IDMs and subcontractors represented 76% and 24%, respectively, of Besi’s total H1-17 orders vs. 47% and 53%, respectively, in H1-16.
Similarly, Besi’s H1-17 net income of € 76.7 million increased by € 44.7 million vs. H1-16 due primarily to (i) the 49.0% year over year revenue increase and (ii) a gross margin increase of 6.5 points principally associated with higher material and labor efficiencies and forex benefits. Such benefits were partially offset by a 10.8% increase in operating expenses principally related to higher sales levels and a 5.2% increase in Besi’s effective tax rate.
|Net Cash and Deposits||131.5||175.7||-25.2||%||110.7||+18.8||%||131.5||110.7||+18.8||%|
|Cash flow from Ops.||29.5||18.6||+58.6||%||15.1||+95.4||%||48.1||35.2||+36.6||%|
At the end of Q2-17, cash and deposits aggregated € 263.1 million, a decrease of € 46.0 million vs. Q1-17 due to the payment of the annual dividend in Q2-17. Similarly, net cash and deposits decreased by € 44.2 million to reach € 131.5 million. Excluding the € 65.3 million Q2-17 dividend payment, net cash and deposits increased by € 21.1 million sequentially. As compared to Q2-16, Besi’s net cash and deposits increased by € 20.8 million, or 18.8%. Besi generated cash flow from operations of € 29.5 million in Q2-17 which, along with cash on hand, was utilized to fund (i) € 65.3 million of dividend payments, (ii) € 5.0 million of share repurchases, (iii) € 2.2 million of debt reduction, (iv) € 1.8 million of capitalized development spending and (v) € 0.8 million of capital expenditures.
During the quarter, Besi repurchased 120,369 of its ordinary shares at an average price of € 45.56 per share. Cumulatively as of June 30, 2017, a total of 413,445 shares have been purchased under its current 1.0 million share repurchase authorization at an average price of € 36.96 per share for a total of € 15.3 million.
Based on its June 30, 2017 backlog of € 166.0 million and feedback from customers, Besi forecasts for Q3-17 that:
- Revenue will decrease by 5-15% vs. the € 170.0 million reported in Q2-17 consistent with typical seasonal trends.
- Gross margins will range between 55-57% vs. the 57.3% realized in Q2-17.
- Operating expenses will be down 5%-10% vs. the € 34.1 million reported in Q2-17.
Assuming the midpoint of Q3-17 guidance, Besi forecasts that revenue and operating income will substantially exceed Q3-16 levels.
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 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.
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 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; 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; 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, 2016 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|
|Six Months Ended|
|Cost of sales||72,527||53,554||121,399||93,652|
|Selling, general and administrative expenses||25,454||19,629||47,665||40,116|
|Research and development expenses||8,678||9,504||17,013||18,252|
|Total operating expenses||34,132||29,133||64,678||58,368|
|Financial expense, net||2,604||549||4,562||723|
|Income before taxes||60,712||25,788||89,577||35,239|
|Income tax expense||8,316||1,792||12,901||3,231|
|Net income per share – basic||1.40||0.64||2.05||0.85|
|Net income per share – diluted||1.29||0.63||1.88||0.84|
|Number of shares used in computing per share amounts:|
|- diluted (1)||40,639,378||38,270,498||40,719,600||38,381,214|
(1) The calculation of diluted income per share assumes the exercise of equity settled share based payments and the conversion of the Convertible Notes.
|Consolidated Balance Sheets|
|(euro in thousands)||June 30,|
|Cash and cash equivalents||158,057||204,018||224,790|
|Income tax receivable||513||447||395|
|Other current assets||10,785||11,621||9,995|
|Total current assets||496,843||500,149||460,079|
|Property, plant and equipment||25,920||26,630||26,993|
|Other intangible assets||36,829||37,807||37,844|
|Deferred tax assets||11,271||13,472||14,265|
|Other non-current assets||2,555||2,585||2,521|
|Total non-current assets||121,679||126,232||127,490|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|Notes payable to banks||8,000||8,000||11,855|
|Current portion of long-term debt and financial leases||-||2,240||2,240|
|Total current liabilities||127,841||114,158||97,538|
|Other long-term debt and financial leases||123,533||123,104||122,603|
|Deferred tax liabilities||6,751||6,727||6,716|
|Other non-current liabilities||16,647||16,349||15,675|
|Total non-current liabilities||146,931||146,180||144,994|
|Total liabilities and equity||618,522||626,381||587,569|
|Consolidated Cash Flow Statements|
|(euro in thousands)||Three Months Ended|
|Six Months Ended|
|Cash flows from operating activities:|
|Depreciation and amortization||3,280||3,734||6,639||7,484|
|Share based compensation expense||2,070||1,888||4,630||5,073|
|Other non-cash items||430||5||857||3|
|Changes in working capital||(37,503||)||(17,209||)||(55,688||)||(13,312||)|
|Income tax received (paid)||(504||)||336||(1,013||)||(143||)|
|Interest received (paid)||(1,544||)||51||(1,456||)||119|
|Net cash provided by (used in) operating activities||29,545||15,142||48,108||35,186|
|Cash flows from investing activities:|
|Capitalized development expenses||(1,789||)||(1,503||)||(3,673||)||(3,279||)|
|Net cash used in investing activities||(2,632||)||(1,686||)||(30,637||)||(4,340||)|
|Cash flows from financing activities:|
|Proceeds from (payments of) bank lines of credit||-||-||(3,855||)||-|
|Proceeds from (payments of) debt and financial leases||(2,240||)||-||(2,166||)||-|
|Dividends paid to shareholders||(65,302||)||(45,420||)||(65,302||)||(45,420||)|
|Reissuance (purchase) of treasury shares||(5,000||)||(5,959||)||(12,500||)||(11,459||)|
|Net cash provided by (used in) financing activities||(72,542||)||(51,379||)||(83,823||)||(56,879||)|
|Net increase (decrease) in cash and cash equivalents||(45,629||)||(37,923||)||(66,352||)||(26,033||)|
|Effect of changes in exchange rates on cash and cash equivalents||(332||)||242||(381||)||290|
|Cash and cash equivalents at beginning of the period||204,018||169,756||224,790||157,818|
|Cash and cash equivalents at end of the period||158,057||132,075||158,057||132,075|
* Reclassification from financing activities in Q1-17 to investing activities in Q2-17
|Supplemental Information (unaudited)|
|(euro in millions, unless stated otherwise)|
|EU / USA||19.0||24||%||20.7||19||%||24.5||26||%||17.7||19||%||20.9||19||%||57.6||34||%|
|EU / USA||26.0||25||%||16.1||16||%||16.4||21||%||21.9||24||%||86.3||36||%||20.3||16||%|
|Per customer type:|
|BACKLOG||Mar 31, 2016||Jun 30, 2016||Sep 30, 2016||Dec 31, 2016||Mar 31, 2017||Jun 30, 2017|
|HEADCOUNT||Mar 31, 2016||Jun 30, 2016||Sep 30, 2016||Dec 31, 2016||Mar 31, 2017||Jun 30, 2017|
|Fixed staff (FTE)|
|EU / USA||523||36||%||510||34||%||511||34||%||508||33||%||505||31||%||505||30||%|
|Temporary staff (FTE)|
|EU / USA||57||46||%||62||41||%||50||47||%||47||39||%||55||21||%||67||20||%|
|Total fixed and temporary staff (FTE)||1,590||1,638||1,620||1,669||1,883||2,005|
|OTHER FINANCIAL DATA||Q1-2016||Q2-2016||Q3-2016||Q4-2016||Q1-2017||Q2-2017|
|Restructuring charges / (gains)||0.3||0.4||%||(0.0||)||-0.0||%||0.0||0.0||%||0.0||0.0||%||0.0||0.0||%||(0.0||)||-0.0||%|
|Gross profit as adjusted||39.2||49.6||%||55.5||50.9||%||47.6||50.5||%||49.5||53.2||%||61.4||55.7||%||97.4||57.3||%|
|Selling, general and admin expenses:|
|Amortization of intangibles||(0.2||)||-0.3||%||(0.3||)||-0.3||%||(0.3||)||-0.3||%||(0.3||)||-0.3||%||(0.1||)||-0.1||%||(0.1||)||-0.1||%|
|Restructuring gains / (charges)||(0.3||)||-0.4||%||(0.1||)||-0.1||%||(0.1||)||-0.1||%||(0.0||)||0.0||%||(0.0||)||0.0||%||0.0||0.0||%|
|SG&A expenses as adjusted||20.0||25.3||%||19.2||17.6||%||18.9||20.1||%||20.8||22.3||%||22.1||20.1||%||25.4||14.9||%|
|Research and development expenses:|
|Capitalization of R&D charges||1.8||2.3||%||1.5||1.4||%||1.6||1.7||%||1.9||2.0||%||1.9||1.7||%||1.8||1.1||%|
|Amortization of intangibles||(2.2||)||-2.8||%||(2.3||)||-2.1||%||(2.1||)||-2.2||%||(2.1||)||-2.3||%||(2.0||)||-1.8||%||(2.0||)||-1.2||%|
|Restructuring gains / (charges)||(0.0||)||-0.0||%||(0.0||)||-0.0||%||-||-||-||-||-||-||-||-|
|R&D expenses as adjusted||8.3||10.5||%||8.7||8.0||%||8.4||8.9||%||8.5||9.1||%||8.2||7.4||%||8.5||5.0||%|
|Financial expense (income), net:|
|Interest expense (income), net||(0.0||)||(0.0||)||0.0||0.3||1.1||1.2|
|Foreign exchange (gains) \ losses||0.2||0.5||0.9||(0.3||)||0.9||1.4|
|Operating income (loss)|
|as % of net sales||9.6||12.2||%||26.3||24.1||%||19.5||20.7||%||19.7||21.2||%||30.8||27.9||%||63.3||37.2||%|
|as % of net sales||13.4||17.0||%||30.1||27.6||%||23.0||24.4||%||23.3||25.0||%||34.2||31.0||%||66.6||39.2||%|
|Net income (loss)|
|as % of net sales||8.0||10.1||%||24.0||22.0||%||16.6||17.6||%||16.7||18.0||%||24.3||22.0||%||52.4||30.7||%|
|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 firstname.lastname@example.org
Source:BE Semiconductor Industries N.V.