DRUNEN, Netherlands, Oct. 31 /PRNewswire-FirstCall/ -- BE
Semiconductor Industries N.V. ("the Company" or "Besi") (Nasdaq:
BESI; Euronext: BESI), a leading manufacturer of assembly equipment
for the semiconductor industry, today announced its financial
results for the third quarter ended September 30, 2006. Net sales
for the third quarter of 2006 were euro 47.3 million, representing
an increase of 9.7% as compared to net sales of euro 43.1 million
in the third quarter of 2005 and a decrease of 5.0% as compared to
net sales of euro 49.8 million in the second quarter of 2006. The
year-over-year sales increase was due to a 24.6% increase in sales
of assembly equipment for leadframe applications, primarily plating
equipment, as well as a 3.9% increase in equipment sales for array
connect applications, principally die bonding equipment. The sales
level in the third quarter of 2006 versus the second quarter of
2006 was at the low end of the Company's guidance due primarily to
customers delaying delivery of certain orders for packaging
equipment which we believe will be delivered in the fourth quarter
of 2006. Besi's net income for the third quarter of 2006 was euro
2.3 million or euro 0.07 per basic and diluted share, compared to
net income of euro 1.3 million, or euro 0.04 per basic and diluted
share for the same period last year. The year-over-year net income
improvement reflects improved industry conditions as well as cost
and manufacturing efficiencies realized from Besi's operational
restructuring in 2005. Net income for the second quarter of 2006
was euro 4.9 million or euro 0.15 and euro 0.13 per basic and
diluted share, respectively. Net income for the second quarter of
2006 included euro 2.6 million (euro 0.08 per basic share and euro
0.06 per diluted share) of net gains primarily related to the sale
of certain non-core activities and net tax benefits associated with
such sale, partially offset by charges arising from a reversal of
certain tax assets. Net bookings for the third quarter of 2006 were
euro 44.5 million, an increase of 4.2% as compared to euro 42.7
million of net bookings for the third quarter of 2005 primarily due
to a 28.6% increase in orders for leadframe applications,
principally plating equipment. Bookings decreased by euro 2.0
million, or 4.3%, in the third quarter of 2006 as compared to the
second quarter of 2006 due primarily to an 11.5% decrease in orders
for array connect applications, principally packaging and
singulation equipment, partially offset by a 13.3% increase in
orders for leadframe applications, principally plating equipment.
On a customer basis, bookings in the third quarter of 2006 as
compared to the second quarter of 2006 reflected a 10.5% increase
in orders by subcontractors and a 13.0% decrease in orders by
independent device manufacturers. Backlog at September 30, 2006 was
euro 65.9 million as compared to euro 68.7 million at June 30,
2006, representing a decrease of 4.1%. Approximately 73% and 27% of
backlog at September 30, 2006 was represented by array connect and
leadframe assembly applications, respectively, approximately equal
to the composition of the backlog at June 30, 2006. The
book-to-bill ratio was 0.94 in the third quarter of 2006 as
compared to 0.99 in the third quarter of 2005 and 0.93 in the
second quarter of 2006. Besi's gross margin for the third quarter
of 2006 was 40.8% as compared to 37.3% for the third quarter of
2005 due primarily to higher gross margins realized for die bonding
equipment in array connect applications and plating equipment in
leadframe applications. While this represents a decline in
comparison to the 42.2% gross margin achieved in the second quarter
of 2006, gross margin was at the high end of guidance for the third
quarter of 2006, primarily due to better than anticipated margins
realized in the sale of die bonding and plating equipment. Besi's
operating expenses were euro 15.0 million, or 31.7% of net sales,
in the third quarter of 2006, as compared to euro 13.6 million, or
31.6% of net sales in the third quarter of 2005 primarily due to
increased warranty and service costs related to new product
introductions and higher advisory expenses related to compliance
with the regulatory requirements of the Sarbanes-Oxley Act of 2002.
Operating expenses declined by euro 1.6 million, or 9.6%, in the
third quarter of 2006 as compared to the second quarter of 2006
primarily due to lower research and development expenses and
foreign currency charges. At September 30, 2006, cash and cash
equivalents increased to euro 74.4 million as compared to euro 70.5
million at June 30, 2006. Total debt and capital leases at
September 30, 2006 was euro 85.7 million. Net debt declined by euro
2.2 million from June 30, 2006 to September 30, 2006. Comments
Richard W. Blickman, President and Chief Executive Officer of the
Company, commented: "This was another successful quarter for the
Company in the profitable development of our assembly equipment
operations. Our gross margin and operating expense levels were
better than we expected which contributed to our operating income
in the third quarter of 2006 being roughly equivalent to that
achieved in the second quarter of 2006 despite the reduction in
sequential sales. Our operating margins reached 9.0% this quarter
as compared to 5.8% in the comparable period of the prior year. We
saw particular strength this quarter in our plating operations,
including the first order for a RFID flex antenna plating system
from a major European manufacturer." Outlook Based on current
backlog and anticipated customer shipment schedules, Besi expects
that net sales in the fourth quarter of 2006 will be an increase of
between 0% and 5% as compared to the third quarter of 2006. Orders
for the fourth quarter of 2006 are expected to be flat to down 5%
in comparison to the third quarter of 2006 depending primarily on
the timing of placement of assembly equipment orders by
subcontractors for their first half 2007 equipment needs. The
Company continues to believe that sales and order trends reflect a
cautious attitude toward new equipment purchases on the part of
customers, particularly subcontractors, reflecting their careful
monitoring of inventory and capacity levels. Besi anticipates that
quarterly sales and order levels will continue to fluctuate based
on customer capital spending trends. Besi expects that its gross
margins will range between 39%-41% in the fourth quarter of 2006.
In addition, operating expenses for the fourth quarter of 2006 are
expected to increase by 5% to 10% as compared to the third quarter
of 2006, primarily as a result of increased research and
development expenses. Capital expenditures are forecast to be
approximately euro 1.0 million in the fourth quarter of 2006,
roughly equivalent to expenditures in the third quarter of 2006.
Capital expenditures are forecast to reach euro 3.2 million for the
full year 2006 as compared to euro 6.4 million in the prior year.
Investor Conference Call / Webcast Details Besi will host a
conference call to discuss the results for the third quarter of
2006 on Tuesday, October 31, 2006 at 4:00 p.m. Continental European
Time (3:00 p.m. London Time, 10:00 a.m. New York Time). Interested
participants may call (31) 20 531 5856 for the teleconference. A
live webcast of the conference call will be available at Besi's
website (http://www.besi.com/). A replay of the call will be
available approximately one hour after the end of the call through
Tuesday November 7, 2006. To access the replay, please dial (31) 70
315 4300 and use the pass code 125922#. About BE Semiconductor
Industries N.V. BE Semiconductor Industries N.V. designs, develops,
manufactures, markets and services die sorting, flip chip and
multi-chip die bonding, packaging and plating equipment for the
semiconductor industry's assembly operations. Its customers consist
primarily of leading U.S., European, Asian, Korean and Japanese
semiconductor manufacturers and subcontractors which utilize its
products for both array connect and conventional leadframe
manufacturing processes. Besi reports its financial statements in
accordance with United States generally accepted accounting
principles, or US GAAP, in accordance with applicable United States
regulations. However, European Union regulations require Besi to
also report its financial statements in accordance with
international financial reporting standards, or IFRS, as adopted
and endorsed by the European Union. The Company's IFRS Consolidated
Balance Sheets, Consolidated Statements of Operations, Consolidated
Cash Flow Statements and some additional information regarding the
differences between IFRS and US GAAP (including a reconciliation of
net income and equity from US GAAP to IFRS) are made available on
the Company's website at http://www.besi.com/. Caution Concerning
Forward Looking Statements This press release contains
forward-looking statements, which are found in various places
throughout the press release, including 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
words "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" constitutes forward looking
statements. While these forward looking statements represent our
judgments and future 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 our expectations. These factors include, but are
not limited to, those listed or discussed in Besi's Annual Report
on Form 20-F for the year ended December 31, 2005, as well as the
risk that anticipated orders may not materialize or that orders
received may be postponed or canceled, generally without charges;
the volatility in the demand for semiconductors and our products
and services; acts of terrorism and violence; overall global
economic conditions; 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 expanding
and more diverse operations; and other key factors that could
adversely affect our businesses and financial performance contained
in our filings and reports, including those with the United States
Securities and Exchange Commission. We are under no obligation to
(and expressly disclaim any such obligation to) update or alter our
forward-looking statements whether as a result of new information,
future events or otherwise. Contacts: Richard W. Blickman Cor te
Hennepe President & CEO Director of Finance Tel. (31) 416
384345 Tel. (31) 416 384345 David Pasquale The Ruth Group Tel. (1)
646 536-7006 Consolidated Statements of Operations (Euro in
thousands, except share and per share data) Three Months Ended Nine
Months Ended September 30, September 30, (unaudited) (unaudited)
2005 2006 2005 2006 Net sales 43,060 47,324 116,657 141,646 Cost of
sales 26,985 28,037 77,893 84,303 Gross profit 16,075 19,287 38,764
57,343 Selling, general and administrative expenses 8,805 10,435
28,251 31,761 Research and development expenses 3,968 3,853 14,134
12,736 Restructuring charges (release) - - 1,718 (255) Amortization
of intangible assets 819 751 2,973 2,258 Total operating expenses
13,592 15,039 47,076 46,500 Operating income (loss) 2,483 4,248
(8,312) 10,843 Other income - - - 1,216 Interest expense, net (776)
(830) (2,056) (2,348) Income (loss) before taxes and minority
interest 1,707 3,418 (10,368) 9,711 Income tax expense (benefit)
427 1,093 (2,592) 1,390 Income (loss) before minority interest
1,280 2,325 (7,776) 8,321 Minority interest (17) (24) (26) (104)
Net income (loss) 1,263 2,301 (7,802) 8,217 Net income (loss) per
share - basic 0.04 0.07 (0.24) 0.25 Net income (loss) per share -
diluted 0.04 0.07 (0.24) 0.23 Number of shares used in computing
per share amounts: - basic 32,735,002 32,766,704 32,702,334
32,755,873 - diluted 32,768,035 41,857,929(1) 32,702,334
41,844,876(1) (1) The calculation of the diluted income per share
assumes conversion of the Company's 5.5% outstanding convertible
notes due 2012 into 8,975,610 ordinary shares, which would have a
dilutive effect. The financial information has been prepared in
accordance with US GAAP. Consolidated Balance Sheets (Euro in
thousands) December 31, 2005 September 30, 2006 (unaudited) ASSETS
Cash and cash equivalents 72,950 74,371 Accounts receivable 31,456
41,667 Inventories 53,779 61,032 Other current assets 12,737 13,164
Total current assets 170,922 190,234 Property, plant and equipment
40,398 37,814 Goodwill 68,864 66,389 Other intangible assets 14,619
12,202 Other non-current assets 6,233 8,770 Total assets 301,036
315,409 LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable to banks
5,693 752 Current portion of long-term debt and capital leases
15,457 17,830 Accounts payable 14,916 17,375 Accrued liabilities
17,663 19,813 Total current liabilities 53,729 55,770 Convertible
notes 46,000 46,000 Other long-term debt and capital leases 15,636
21,151 Deferred tax liabilities 821 643 Other non-current
liabilities 3,261 3,309 Total non-current liabilities 65,718 71,103
Minority interest 178 274 Total shareholders' equity 181,411
188,262 Total liabilities and shareholders' equity 301,036 315,409
The financial information has been prepared in accordance with US
GAAP. Consolidated Cash Flow Statements (Euro in thousands) Three
Months Ended Nine Months Ended September 30, September 30,
(unaudited) (unaudited) 2005 2006 2005 2006 Cash flows from
operating activities: Net income (loss) 1,263 2,301 (7,802) 8,217
Depreciation and amortization 2,258 1,997 7,253 6,134 Other
non-cash items (230) 723 (2,449) (1,775) Changes in working capital
(6,898) (1,928) (13,223) (13,094) Net cash provided by (used in)
operating activities (3,607) 3,093 (16,221) (518) Cash flows from
investing activities: Capital expenditures (982) (885) (5,472)
(2,171) Acquisition of subsidiaries, net of cash acquired (81) -
(61,943) - Proceeds from sale of assets and liabilities - - - 1,000
Proceeds from sale of equipment 20 34 660 374 Net cash (used in)
investing activities (1,043) (851) (66,755) (797) Cash flows from
financing activities: Payment of bank lines of credit (140) (2,248)
(12,725) (4,865) Proceeds from (payments of) debt and capital
leases (1,151) 3,808 5,059 8,009 Net proceeds from issuance of
convertible notes (31) - 43,695 - Proceeds from exercised stock
options 23 26 23 26 Net cash provided by (used in) financing
activities (1,299) 1,586 36,052 3,170 Net increase (decrease) in
cash and cash equivalents (5,949) 3,828 (46,924) 1,855 Effect of
changes in exchange rates on cash and cash equivalents (24) 20 622
(434) Cash and cash equivalents at beginning of the period 66,244
70,523 106,573 72,950 Cash and cash equivalents at end of the
period 60,271 74,371 60,271 74,371 The financial information has
been prepared in accordance with US GAAP. Supplemental Information
(unaudited) [reverse commas/periods] (Euro in millions, unless
stated otherwise) FINANCIAL Q1-2005 Q2-2005 Q3-2005 Q4-2005 Net
sales per productline: Array connect 22,1 60% 26,2 71% 30,9 72%
32,2 68% Leadframe 14,5 40% 10,8 29% 12,2 28% 15,4 32% Total 36,6
100% 37,0 100% 43,1 100% 47,6 100% Net sales per geographical area:
Asia Pacific 19,9 55% 19,7 53% 26,5 62% 24,5 51% Europe and ROW
12,9 35% 11,3 31% 12,2 28% 15,7 33% USA 3,8 10% 6,0 16% 4,4 10% 7,4
16% Total 36,6 100% 37,0 100% 43,1 100% 47,6 100% Gross margin 1):
Array connect 35,4% 38,4% 39,3% 41,9% Leadframe 31,7% 30,2% 34,5%
33,2% Total 33,9% 36,1% 37,9% 39,1% Operating income/ as % of net
sales (5,5) -15,0% (5,3) -14,3% 2,5 5,8% 3,1 6,5% EBITDA/ as % of
net sales (2,8) -7,7% (3,0) -8,1% 4,7 10,9% 5,3 11,1% ORDERS
Q1-2005 Q2-2005 Q3-2005 Q4-2005 Per productline: Array connect 27,7
69% 26,7 70% 30,8 72% 37,9 77% Leadframe 12,6 31% 11,4 30% 11,9 28%
11,1 23% Total 40,3 100% 38,1 100% 42,7 100% 49,0 100% Per
geographical Asia Pacific 22,8 57% 24,5 64% 26,7 63% 28,7 59%
Europe and ROW 14,7 36% 9,0 24% 10,0 23% 14,2 29% USA 2,8 7% 4,6
12% 6,0 14% 6,1 12% Total 40,3 100% 38,1 100% 42,7 100% 49,0 100%
Per customer type: IDM 24,2 60% 19,7 52% 27,5 64% 22,7 46%
Subcontractors 16,1 40% 18,4 48% 15,2 36% 26,3 54% Total 40,3 100%
38,1 100% 42,7 100% 49,0 100% Mar 31, 2005 June 30, 2005 Sept 30,
2005 Dec 31, 2005 Backlog: Array connect 37,1 68% 37,7 68% 37,7 68%
43,3 76% Leadframe 17,4 32% 18,0 32% 17,7 32% 13,5 24% Total 54,5
100% 55,7 100% 55,4 100% 56,8 100% HEADCOUNT 2) Mar 31, 2005 June
30, 2005 Sept 30, 2005 Dec 31, 2005 Europe 869 70% 844 67% 772 65%
743 64% Asia Pacific 291 23% 320 26% 329 28% 331 29% USA 88 7% 90
7% 83 7% 82 7% Total 1.248 100% 1.254 100% 1.184 100% 1.156 100%
FINANCIAL Q1-2006 Q2-2006 Q3-2006 Net sales per productline: Array
connect 29,1 65% 32,1 64% 32,1 68% Leadframe 15,4 35% 17,7 36% 15,2
32% Total 44,5 100% 49,8 100% 47,3 100% Net sales per geographical
area: Asia Pacific 28,5 64% 32,0 64% 26,6 56% Europe and ROW 11,4
26% 12,8 26% 14,9 32% USA 4,6 10% 5,0 10% 5,8 12% Total 44,5 100%
49,8 100% 47,3 100% Gross margin 1): Array connect 39,8% 42,9%
41,9% Leadframe 35,5% 40,5% 38,4% Total 38,3% 42,2% 40,8% Operating
income/ as % of net sales 2,2 4,9% 4,4 8,8% 4,2 9,0% EBITDA/ as %
of net sales 4,3 9,7% 6,4 12,9% 6,2 13,1% ORDERS Q1-2006 Q2-2006
Q3-2006 Per productline: Array connect 36,0 60% 33,0 71% 29,2 66%
Leadframe 23,7 40% 13,5 29% 15,3 34% Total 59,7 100% 46,5 100% 44,5
100% Per geographical Asia Pacific 38,7 65% 26,0 56% 25,6 58%
Europe and ROW 13,6 23% 13,4 29% 16,6 37% USA 7,4 12% 7,1 15% 2,3
5% Total 59,7 100% 46,5 100% 44,5 100% Per customer type: IDM 33,9
57% 29,3 63% 25,5 57% Subcontractors 25,8 43% 17,2 37% 19,0 43%
Total 59,7 100% 46,5 100% 44,5 100% Mar 31, 2006 June 30, 2006 Sept
30, 2006 Backlog: Array connect 50,2 70% 50,8 74% 47,9 73%
Leadframe 21,8 30% 17,9 26% 18,0 27% Total 72,0 100% 68,7 100% 65,9
100% HEADCOUNT 2) Mar 31, 2006 June 30, 2006 Sept 30, 2006 Europe
776 64% 775 62% 773 61% Asia Pacific 349 29% 388 32% 414 32% USA 81
7% 81 7% 82 6% Total 1.206 100% 1.244 100% 1.269 100% 1) Excludes
the cost of sales adjustment related to the Datacon Acquisition in
all 2005 quarters 2) Includes temporary personnel DATASOURCE: BE
Semiconductor Industries N.V. CONTACT: Richard W. Blickman,
President & CEO, or Cor te Hennepe, Director of Finance, both
of BE Semiconductor Industries N.V., +31-416-384345, ; or David
Pasquale of The Ruth Group, +1-646-536-7006, Web site:
http://www.besi.nl/ http://www.besi.com/
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