BESI BE Semiconductor

DRUNEN, The Netherlands, April 19 /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 first quarter ended March 31, 2006. Net sales for the first quarter of 2006 were euro 44.5 million, representing an increase of 21.6% as compared to net sales of euro 36.6 million in the first quarter of 2005 and a decrease of 6.5% as compared to net sales of euro 47.6 million in the fourth quarter of 2005. The decrease in net sales in the first quarter of 2006 as compared to the fourth quarter of 2005 was in line with prior guidance and was due primarily to lower net sales of singulation and die bonding systems for array connect applications. Equipment sales for conventional leadframe applications were approximately the same in both the first quarter of 2006 and the fourth quarter of 2005. Besi's net income for the first quarter of 2006 was euro 1.0 million, or euro 0.03 per diluted share, as compared to a net loss for the first quarter of 2005 of euro 4.5 million, or a loss of euro 0.14 per diluted share, and net income of euro 2.6 million, or euro 0.07 per diluted share, in the fourth quarter of 2005. The year over year improvement in net income reflects improved industry conditions as well as cost and efficiency benefits realized from Besi's operational restructuring in 2005. Net bookings for the first quarter of 2006 were euro 59.7 million, an increase of 48.1% as compared to net bookings for the first quarter of 2005 of euro 40.3 million and an increase of 21.8% as compared to net bookings of euro 49.0 million in the fourth quarter of 2005. On a customer basis, order growth in the first quarter of 2006 as compared to the fourth quarter of 2005 resulted from a 49.3% increase in orders by independent device manufacturers ("IDMs"). Backlog at March 31, 2006 was euro 72.0 million as compared to euro 56.8 million at December 31, 2005, representing an increase of 26.8%. Approximately 70% and 30%, respectively, of backlog at March 31, 2006 was for array connect and leadframe assembly applications as compared to 76% and 24%, respectively, of backlog at December 31, 2005. The book-to-bill ratio was 1.34 in the first quarter of 2006 as compared to 1.10 in the first quarter of 2005 and 1.03 in the fourth quarter of 2005. Besi's gross margin for the first quarter of 2006 was 38.3% as compared to 28.0% for the first quarter of 2005 and 39.1% for the fourth quarter of 2005. Gross margins during the quarter exceeded guidance due primarily to better than anticipated efficiencies realized in the sale of its conventional leadframe products. Besi's operating expenses decreased to euro 14.9 million, or 33.5% of net sales, in the first quarter of 2006, as compared to euro 15.7 million, or 42.9% of net sales in the first quarter of 2005 and euro 15.5 million, or 32.6% of net sales, in the fourth quarter of 2005. The decrease in operating expenses was due primarily to the benefits of restructuring efforts that occurred during 2005, partially offset by higher research and development expenses for new product introductions which occurred in the first quarter of 2006. At March 31, 2006, cash and cash equivalents were euro 74.5 million as compared to euro 73.0 million at December 31, 2005. Total debt and capital leases at March 31, 2006 were euro 86.2 million as compared to euro 82.8 million at December 31, 2005. Comments Richard W. Blickman, President and Chief Executive Officer of the Company, commented: "The first quarter of 2006 was better than anticipated as we benefited from efficiencies realized from our operational restructuring last year as well as improved semiconductor industry conditions. We met or exceeded our guidance for sales and gross margins during the quarter and continued to reduce our operating expenses. We generated net income of euro 1.0 million in the first quarter of 2006 as compared to a net loss of euro 4.5 million in the comparable quarter of the prior year which underscores our accomplishments over the past twelve months in restructuring the business, integrating Datacon's operations, improving production efficiencies and shifting certain production capabilities to our Asian operations. Our profitability was further enhanced by the continued positive development in our gross margins for conventional leadframe applications. We also experienced a 21.8% increase in orders this quarter which was substantially higher than we had originally anticipated, principally due to an acceleration of certain systems orders into the first quarter of 2006 that had been anticipated to be received in the second and third quarters of 2006. Customers accelerated equipment expenditures this quarter to add incremental assembly production capabilities, particularly for conventional leadframe applications, in light of increased industry demand for wireless applications and personal computing devices and higher capacity utilization rates at customer production facilities." Outlook Based on current backlog and customer shipment schedules, Besi expects that its net sales will increase by approximately 15%-20% in the second quarter of 2006 as compared to the first quarter of 2006 primarily as a result of higher shipments of systems for array connect applications and, to a lesser extent, increased shipments of systems for leadframe assembly applications. Orders for the second quarter of 2006 are expected to decrease by approximately 20%-25% as compared to the first quarter of 2006 due to the impact of orders accelerated into the first quarter of 2006 from the second and third quarters of 2006 combined with lower orders generally anticipated for both conventional leadframe and array connect applications. Besi anticipates that quarterly order levels could continue to fluctuate this year based on customer capital spending trends. Besi expects that its gross margins will increase to a range of between 38%-40% in the second quarter of 2006 due to an increase in the proportion of its product mix represented by sales of array connect products. Besi anticipates that operating expenses for the second quarter of 2006 will increase by approximately 5% as compared to the first quarter of 2006. Capital expenditures are forecast to be approximately euro 1.0 million in the second quarter of 2006, up from euro 0.5 million in the first quarter of 2006. Investor Conference Call / Webcast Details Besi will host a conference call to discuss the results for the first quarter of 2006 on Wednesday, April 19, 2006 at 4:30 p.m. Continental European Time (3:30 p.m. London Time, 10:30 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 April 26, 2006. To access the replay, please dial (31) 70 315 4300 and use the pass code "123 940." 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 EU. 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, expenses, operating results and capital expenditures. The words "anticipate," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "would," and similar expressions are intended to identify forward looking statements, although not all forward looking statements contain these identifying words. 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 Three Months Ended March 31, and per share data) (unaudited) 2005 2006 Net sales 36,637 44,528 Cost of sales 26,371 27,475 Gross profit 10,266 17,053 Selling, general and administrative expenses 9,223 9,972 Research and development expenses 5,299 4,364 Restructuring release - (240) Amortization of intangible assets 1,223 755 Total operating expenses 15,745 14,851 Operating income (loss) (5,479) 2,202 Interest expense, net (572) (746) Income (loss) before taxes and minority interest (6,051) 1,456 Income tax expense (benefit) (1,513) 398 Income (loss) before minority interest (4,538) 1,058 Minority interest 6 (21) Net income (loss) (4,532) 1,037 Net income (loss) per share -- basic (0.14) 0.03 Net income (loss) per share -- diluted (0.14) 0.03 Number of shares of shares used in computing per share amounts: -- basic 32,642,553 32,738,208 -- diluted 32,642,553(1) 32,817,704(1) (1) The calculation of the diluted income per share does not assume conversion of the outstanding convertible notes, as such conversion would have an anti-dilutive effect. The financial information has been prepared in accordance with US GAAP. Consolidated Balance Sheets (Euro in thousands) December 31, March 31, 2006 2005 (unaudited) ASSETS Cash and cash equivalents 72,950 74,493 Accounts receivable 31,456 36,728 Inventories 53,779 56,365 Other current assets 12,737 15,049 Total current assets 170,922 182,635 Property, plant and equipment 40,398 39,278 Goodwill 68,864 68,631 Other intangible assets 14,619 13,806 Other non-current assets 6,233 6,340 Total assets 301,036 310,690 LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable to banks 5,693 3,914 Current portion of long-term debt and capital leases 15,457 16,974 Accounts payable 14,916 19,447 Accrued liabilities 17,663 18,376 Total current liabilities 53,729 58,711 Convertible notes 46,000 46,000 Other long-term debt and capital leases 15,636 19,287 Deferred tax liabilities 821 892 Other non-current liabilities 3,261 3,320 Total non-current liabilities 65,718 69,499 Minority interest 178 195 Total shareholders' equity 181,411 182,285 Total liabilities and shareholders' equity 301,036 310,690 The financial information has been prepared in accordance with US GAAP. Consolidated Cash Flow Statements (Euro in thousands) Three Months Ended March 31, (unaudited) 2005 2006 Cash flows from operating activities: Net income (loss) (4,532) 1,037 Depreciation and amortization 2,652 2,084 Other non-cash items 7 187 Changes in working capital (6,080) (4,839) Net cash used in operating activities (7,953) (1,531) Cash flows from investing activities: Capital expenditures (3,631) (530) Acquisition of subsidiaries, net of cash acquired (61,800) - Proceeds from sale of equipment 137 239 Net cash used in investing activities (65,294) (291) Cash flows from financing activities: Payment of bank lines of credit (3,910) (1,731) Proceeds from (payments of) debt and capital leases (459) 5,216 Net proceeds from issuance of convertible notes 43,717 - Net cash provided by financing activities 39,348 3,485 Net increase (decrease) in cash and cash equivalents (33,899) 1,663 Effect of changes in exchange rates on cash and cash equivalents 316 (120) Cash and cash equivalents at beginning of the period 106,573 72,950 Cash and cash equivalents at end of the period 72,990 74,493 The financial information has been prepared in accordance with US GAAP. Supplemental Information (unaudited) (Euro in million, unless stated otherwise) FINANCIAL INFORMATION Q1-2005 Q2-2005 Q3-2005 Net sales per productline: Array connect 22.1 60% 26.2 71% 30.9 72% Leadframe 14.5 40% 10.8 29% 12.2 28% Total 36.6 100% 37.0 100% 43.1 100% Net sales per geographical area: Asia Pacific 19.9 55% 19.7 53% 26.5 62% Europe and ROW 12.9 35% 11.3 31% 12.2 28% USA 3.8 10% 6.0 16% 4.4 10% Total 36.6 100% 37.0 100% 43.1 100% Gross margin(1): Array connect 35.4% 38.4% 39.3% Leadframe 31.7% 30.2% 34.5% Total 33.9% 36.1% 37.9% Operating income / as % of net sales (5.5) -15.0% (5.3) -14.3% 2.5 5.8% EBITDA / as % of net sales (2.8) -7.7% (3.0) -8.1% 4.7 10.9% FINANCIAL INFORMATION Q4-2005 Q1-2006 Net sales per productline: Array connect 32.2 68% 29.1 65% Leadframe 15.4 32% 15.4 35% Total 47.6 100% 44.5 100% Net sales per geographical area: Asia Pacific 24.5 51% 28.5 64% Europe and ROW 15.7 33% 11.4 26% USA 7.4 16% 4.6 10% Total 47.6 100% 44.5 100% Gross margin(1): Array connect 41.9% 39.8% Leadframe 33.2% 35.5% Total 39.1% 38.3% Operating income / as % of net sales 3.1 6.5% 2.2 4.9% EBITDA / as % of net sales 5.3 11.1% 4.3 9.7% ORDER INFORMATION Q1-2005 Q2-2005 Per productline: Array connect 27.7 69% 26.7 70% Leadframe 12.6 31% 11.4 30% Total 40.3 100% 38.1 100% Per geographical region: Asia Pacific 22.8 57% 24.5 64% Europe and ROW 14.7 36% 9.0 24% USA 2.8 7% 4.6 12% Total 40.3 100% 38.1 100% Per customer type: IDM 24.2 60% 19.7 52% Subcontractors 16.1 40% 18.4 48% Total 40.3 100% 38.1 100% ORDER INFORMATION Q3-2005 Q4-2005 Q1-2006 Per productline: Array connect 30.8 72% 37.9 77% 36.0 60% Leadframe 11.9 28% 11.1 23% 23.7 40% Total 42.7 100% 49.0 100% 59.7 100% Per geographical region: Asia Pacific 26.7 63% 28.7 59% 38.7 65% Europe and ROW 10.0 23% 14.2 29% 13.6 23% USA 6.0 14% 6.1 12% 7.4 12% Total 42.7 100% 49.0 100% 59.7 100% Per customer type: IDM 27.5 64% 22.7 46% 33.9 57% Subcontractors 15.2 36% 26.3 54% 25.8 43% Total 42.7 100% 49.0 100% 59.7 100% March 31, June 30, 2005 2005 Backlog: Array connect 37.1 68% 37.7 68% Leadframe 17.4 32% 18.0 32% Total 54.5 100% 55.7 100% Sept 30, Dec 30, March 31, 2005 2005 2006 Backlog: Array connect 37.7 68% 43.3 76% 50.2 70% Leadframe 17.7 32% 13.5 24% 21.8 30% Total 55.4 100% 56.8 100% 72.0 100% HEADCOUNT INFORMATION(2) March 31, June 30, Sept 30, 2005 2005 2005 Europe 850 69% 820 67% 754 65% Asia Pacific 291 24% 320 26% 329 28% USA 88 7% 90 7% 83 7% Total 1,229 100% 1,230 100% 1,166 100% HEADCOUNT INFORMATION(2) Dec 30, March 31, 2005 2006 Europe 723 64% 744 63% Asia Pacific 331 29% 348 30% USA 82 7% 81 7% Total 1,136 100% 1,173 100% (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, +31-416-384345, , or Cor te Hennepe, Director of Finance, +31-416-384345, , both of BE Semiconductor Industries N.V.; or David Pasquale of The Ruth Group, +1-646 536-7006, , for BE Semiconductor Industries N.V.

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