IVIS Icos Vision Systems Corp (MM)

ICOS Vision Systems Corporation NV (Nasdaq and Euronext: IVIS), a world leader in vision solutions, today announced its unaudited financial results for the third quarter ended September 30, 2006. Revenues for the three months ended September 30, 2006 were � 20.9 million, representing a decrease of approximately 30% over second quarter revenues of � 29.8 million, and an increase of 6% compared to the � 19.7 million reported for the third quarter of 2005. Income from operations for the third quarter of 2006 was � 2.8 million, 66% lower than the second quarter�s operating income of � 8.4 million and 34% lower than the � 4.3 million reported for the third quarter of 2005. Net income for the third quarter of 2006 was � 3.0 million, or 28 Eurocents per share, compared to net income of � 7.1 million, or 67 Eurocents per share, for the second quarter of 2006 and to net income of � 3.3 million, or 31 Eurocents per share, for the third quarter of 2005. Revenues for the nine months ended September 30, 2006 were � 84.0 million, representing an increase of 62% over � 52.0 million for the same period in 2005. Income from operations for the first nine months of 2006 was � 22.0 million compared to � 9.4 million for the same period last year. Net income for the first nine months of 2006 was � 18.9 million, or � 1.79 per share, compared to net income of � 7.1 million, or 67 Eurocents per share, for the first nine months of 2005. �Revenue during the third quarter declined towards the lower end of our guidance, as market demand weakened during the quarter. Consistent with our past response to periods of soft demand and our business strategy, we did not ease up on investments in new product development, particularly for our Wafer Inspector products, which continue to gain market acceptance,� said Anton DeProft, ICOS� President and Chief Executive Officer. �Despite the softening of the market and higher R&D spending, we still turned in a healthy bottom line, illustrating the flexibility of our operational model.� Mr. DeProft concluded, �For the fourth quarter we do not anticipate any easing of market conditions, with customers further curtailing capital equipment investments. In contrast to these soft market conditions, we expect strengthening sales of our new Wafer Inspector products, reflecting new and existing customer adoption. Taken together, we believe revenues in the fourth quarter will be similar or only slightly down from the third quarter. In addition, given higher initial production costs for the wafer inspector and the anticipated product configuration mix, we expect gross margin will fall in the range between 54% and 57%.� About ICOS ICOS designs and manufactures inspection equipment for the semiconductor packaging industry. It is a world-leading supplier of equipment for the final visual control of chips before they are used in various applications, such as PC�s, cars or portable phones. ICOS� systems perform two- and three-dimensional (2D and 3D) inspections as part of the final visual quality control step in the manufacturing of chips, wafers, flexible tapes for flat panel displays, sockets, substrates and solar cells. Aside from its complete systems, ICOS also offers inspection subsystems for integration in other equipment. ICOS' headquarters are located in Leuven, Belgium and it has R&D centers in Belgium, Germany and Hong Kong and sales and support offices in Japan, the USA, Singapore, Korea and Hong Kong and production facilities in Belgium, Hong Kong and China. �Safe Harbor� Statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking information that involves risks and uncertainties, including statements regarding the Company's plans, objectives, expectations and intentions. Such statements include, without limitation, statements regarding: market conditions and the Company�s expected financial performance in the fourth quarter of 2006; the Company�s long term business strategy and opportunities; and the Company�s expectations for the results of that strategy in light of those opportunities. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, without limitation, the risk that the Company's dependence on the cyclical semiconductor and electronic assembly industries; uncertainties inherent in the development of new products and the enhancement of existing products, including technical and regulatory risks, cost overruns and delays; the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated; the Company's ability to predict accurately the demand for its products, and products under development, and to develop strategies to address its markets successfully; risks relating to technological change and the introduction of new products by the Company's competitors; risks relating to intellectual property and the inherent uncertainty of law suits alleging patent infringement that have been filed or threatened against, or filed by, the Company; risks relating to the conduct of the business worldwide, risks related to currency exchanges and other risks referred to in our most recent annual report on form 20-F and other filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company�s expectations or any change in events, conditions or circumstances on which any such statement is based. ICOS Vision Systems Corporation NV can be found on the World Wide Web at www.icos.be Consolidated Statements of Operations according to US GAAP (in thousands of EURO, except for share and per share data) � ICOS Vision Systems Corporation NV Three months Nine months � ended September 30, ended September 30, � 2006� 2005� 2006� 2005� � (unaudited (unaudited) (unaudited) (unaudited) � � � � � Revenues 20,870� 19,684� 84,022� 51,952� Cost of goods sold 8,933� 7,572� 33,260� 20,375� Gross profit 11,937� 12,112� 50,762� 31,577� Operating expenses: � � � � Research & development 3,831� 2,733� 10,991� 8,030� Selling, general & administrative 5,265� 5,064� 17,801� 14,165� Total operating expenses 9,096� 7,797� 28,792� 22,195� Income from operations 2,841� 4,315� 21,970� 9,382� Other income : � � � � Interest income, net 359� 176� 887� 441� Other income 35� 47� 112� 136� Foreign currency exchange gain (loss) 63� (43) 373� (441) Net other income 457� 180� 1,372� 136� Net income before taxes 3,298� 4,495� 23,342� 9,518� Income taxes 293� 1,226� 4,430� 2,462� Net income 3,005� 3,269� 18,912� 7,056� � � � � � Basic earnings per share 0.28� 0.31� 1.79� 0.67� Weighted average number of shares 10,563,303� 10,540,810� 10,565,117� 10,531,958� Diluted earnings per shares 0.28� 0.31� 1.77� 0.66� Diluted weighted average number of shares 10,669,258� 10,709,276� 10,672,921� 10,705,835� CONSOLIDATED BALANCE SHEETS according to US GAAP (in thousands of EURO) � ICOS Vision Systems Corporation NV September 30, 06 December 31, 05 ASSETS (unaudited) (unaudited) Current Assets � � Cash and cash equivalents 61,163� 50,728� Trade accounts receivable, net 23,497� 26,542� Inventories, net 26,026� 25,368� Prepaid expenses and other current assets 4,377� 3,430� Total current assets 115,063� 106,068� Net property and equipment 10,849� 10,131� Intangible assets 3,321� 4,257� Other assets 2,093� 2,071� Total Assets 131,326� 122,527� LIABILITIES AND STOCKHOLDERS� EQUITY � � Current Liabilities � � Trade accounts payable 6,361� 12,994� Short-term borrowings & current portion long-term debt 630� 638� Other current liabilities 17,088� 14,375� Total current liabilities 24,079� 28,007� Long-term debt, excluding current portion 3,376� 3,852� Other long-term liabilities 1,584� 1,587� Total liabilities 29,039� 33,446� STOCKHOLDERS� EQUITY � � Common stock 3,271� 3,247� Additional paid-in-capital 22,807� 22,524� Treasury stock (3,323) -� Retained earnings 82,694� 63,782� Accumulated other comprehensive income (loss) (3,162) (472) Total stockholders� equity 102,287� 89,081� Total liabilities and stockholders� equity 131,326� 122,527� CONSOLIDATED STATEMENTS OF CASH FLOWS according to US GAAP � ICOS Vision Systems Corporation NV Three months ended Nine months ended (in thousands of Euro) Sept 2006 Sept 2005 Sept 2006 Sept 2005 Cash flows from operating activities (unaudited) (unaudited) (unaudited) (unaudited) Net income 3,005� 3,269� 18,912� 7,056� Adjustments to reconcile net income to net cash provided by operating activities: � � � � Depreciation and amortization 600� 513� 1,703� 1,503� Allowance for doubtful debts 44� 6� 327� 105� Deferred tax expense (benefit) 166� 497� (231) 611� Loss on disposal of property and equipment -� 1� -� 20� Stock based compensation expense 8� -� 24� -� Changes in assets and liabilities: � � � � Decrease (increase) in trade accounts receivable 1,795� (640) 1,524� (878) Decrease (increase) in inventories 1,191� (2,014) (1,687) (1,263) Decrease (increase) in prep. expenses and other current assets (54) (4) � � Decrease (increase) in other assets (53) 96� (144) 72� (Decrease) increase in trade accounts payable (1,983) 793� (6,535) 1,910� (Decrease) increase in other current liabilities 2,706� 1,417� 3,317� (81) (Decrease) increase in other long-term liabilities 22� (12) 282� (93) Net cash provided by operating activities 7,447� 3,922� 16,075� 9,460� Cash flows from investing activities � � � � Additions to property and equipment (399) (102) (1,400) (540) Net cash used in investing activities (399) (102) (1,400) (540) Cash flows from financing activities � � � � Repayment of borrowings (218) (142) (551) (457) Proceeds from borrowing -� -� 66� -� Payment for purchase of own shares (2,707) -� (3,323) -� Proceeds from shares issued in connection with the exercise of stock options -� -� 283� 61� Net cash used in financing activities (2,925) (142) (3,525) (396) Increase in cash and cash equivalents 4,123� 3,678� 11,150� 8,524� Impact of exchange rate movements on cash (32) 15� (715) 161� Cash and cash equivalents at beginning of period 57,072� 47,171� 50,728� 42,179� Cash and cash equivalents at end of period 61,163� 50,864� 61,163� 50,864� ICOS Vision Systems Corporation NV (Nasdaq and Euronext: IVIS), a world leader in vision solutions, today announced its unaudited financial results for the third quarter ended September 30, 2006. Revenues for the three months ended September 30, 2006 were EUR 20.9 million, representing a decrease of approximately 30% over second quarter revenues of EUR 29.8 million, and an increase of 6% compared to the EUR 19.7 million reported for the third quarter of 2005. Income from operations for the third quarter of 2006 was EUR 2.8 million, 66% lower than the second quarter's operating income of EUR 8.4 million and 34% lower than the EUR 4.3 million reported for the third quarter of 2005. Net income for the third quarter of 2006 was EUR 3.0 million, or 28 Eurocents per share, compared to net income of EUR 7.1 million, or 67 Eurocents per share, for the second quarter of 2006 and to net income of EUR 3.3 million, or 31 Eurocents per share, for the third quarter of 2005. Revenues for the nine months ended September 30, 2006 were EUR 84.0 million, representing an increase of 62% over EUR 52.0 million for the same period in 2005. Income from operations for the first nine months of 2006 was EUR 22.0 million compared to EUR 9.4 million for the same period last year. Net income for the first nine months of 2006 was EUR 18.9 million, or EUR 1.79 per share, compared to net income of EUR 7.1 million, or 67 Eurocents per share, for the first nine months of 2005. "Revenue during the third quarter declined towards the lower end of our guidance, as market demand weakened during the quarter. Consistent with our past response to periods of soft demand and our business strategy, we did not ease up on investments in new product development, particularly for our Wafer Inspector products, which continue to gain market acceptance," said Anton DeProft, ICOS' President and Chief Executive Officer. "Despite the softening of the market and higher R&D spending, we still turned in a healthy bottom line, illustrating the flexibility of our operational model." Mr. DeProft concluded, "For the fourth quarter we do not anticipate any easing of market conditions, with customers further curtailing capital equipment investments. In contrast to these soft market conditions, we expect strengthening sales of our new Wafer Inspector products, reflecting new and existing customer adoption. Taken together, we believe revenues in the fourth quarter will be similar or only slightly down from the third quarter. In addition, given higher initial production costs for the wafer inspector and the anticipated product configuration mix, we expect gross margin will fall in the range between 54% and 57%." About ICOS ICOS designs and manufactures inspection equipment for the semiconductor packaging industry. It is a world-leading supplier of equipment for the final visual control of chips before they are used in various applications, such as PC's, cars or portable phones. ICOS' systems perform two- and three-dimensional (2D and 3D) inspections as part of the final visual quality control step in the manufacturing of chips, wafers, flexible tapes for flat panel displays, sockets, substrates and solar cells. Aside from its complete systems, ICOS also offers inspection subsystems for integration in other equipment. ICOS' headquarters are located in Leuven, Belgium and it has R&D centers in Belgium, Germany and Hong Kong and sales and support offices in Japan, the USA, Singapore, Korea and Hong Kong and production facilities in Belgium, Hong Kong and China. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking information that involves risks and uncertainties, including statements regarding the Company's plans, objectives, expectations and intentions. Such statements include, without limitation, statements regarding: market conditions and the Company's expected financial performance in the fourth quarter of 2006; the Company's long term business strategy and opportunities; and the Company's expectations for the results of that strategy in light of those opportunities. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, without limitation, the risk that the Company's dependence on the cyclical semiconductor and electronic assembly industries; uncertainties inherent in the development of new products and the enhancement of existing products, including technical and regulatory risks, cost overruns and delays; the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated; the Company's ability to predict accurately the demand for its products, and products under development, and to develop strategies to address its markets successfully; risks relating to technological change and the introduction of new products by the Company's competitors; risks relating to intellectual property and the inherent uncertainty of law suits alleging patent infringement that have been filed or threatened against, or filed by, the Company; risks relating to the conduct of the business worldwide, risks related to currency exchanges and other risks referred to in our most recent annual report on form 20-F and other filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based. ICOS Vision Systems Corporation NV can be found on the World Wide Web at www.icos.be -0- *T Consolidated Statements of Operations according to US GAAP (in thousands of EURO, except for share and per share data) ICOS Vision Systems Three months Nine months Corporation NV ---------------------- ----------------------- ----------------------- ended September 30, ended September 30, ---------------------- ----------------------- ----------------------- 2006 2005 2006 2005 ---------------------- ----------- ----------- ----------- ----------- (unaudited (unaudited) (unaudited) (unaudited) ---------------------- ----------- ----------- ----------- ----------- ---------------------- ----------- ----------- ----------- ----------- Revenues 20,870 19,684 84,022 51,952 ---------------------- ----------- ----------- ----------- ----------- Cost of goods sold 8,933 7,572 33,260 20,375 ---------------------- ----------- ----------- ----------- ----------- Gross profit 11,937 12,112 50,762 31,577 ---------------------- ----------- ----------- ----------- ----------- Operating expenses: ---------------------- ----------- ----------- ----------- ----------- Research & development 3,831 2,733 10,991 8,030 ---------------------- ----------- ----------- ----------- ----------- Selling, general & administrative 5,265 5,064 17,801 14,165 ---------------------- ----------- ----------- ----------- ----------- Total operating expenses 9,096 7,797 28,792 22,195 ---------------------- ----------- ----------- ----------- ----------- Income from operations 2,841 4,315 21,970 9,382 ---------------------- ----------- ----------- ----------- ----------- Other income : ---------------------- ----------- ----------- ----------- ----------- Interest income, net 359 176 887 441 ---------------------- ----------- ----------- ----------- ----------- Other income 35 47 112 136 ---------------------- ----------- ----------- ----------- ----------- Foreign currency exchange gain (loss) 63 (43) 373 (441) ---------------------- ----------- ----------- ----------- ----------- Net other income 457 180 1,372 136 ---------------------- ----------- ----------- ----------- ----------- Net income before taxes 3,298 4,495 23,342 9,518 ---------------------- ----------- ----------- ----------- ----------- Income taxes 293 1,226 4,430 2,462 ---------------------- ----------- ----------- ----------- ----------- Net income 3,005 3,269 18,912 7,056 ---------------------- ----------- ----------- ----------- ----------- ---------------------- ----------- ----------- ----------- ----------- Basic earnings per share 0.28 0.31 1.79 0.67 ---------------------- ----------- ----------- ----------- ----------- Weighted average number of shares 10,563,303 10,540,810 10,565,117 10,531,958 ---------------------- ----------- ----------- ----------- ----------- Diluted earnings per shares 0.28 0.31 1.77 0.66 ---------------------- ----------- ----------- ----------- ----------- Diluted weighted average number of shares 10,669,258 10,709,276 10,672,921 10,705,835 ---------------------- ----------- ----------- ----------- ----------- *T -0- *T CONSOLIDATED BALANCE SHEETS according to US GAAP (in thousands of EURO) ICOS Vision Systems Corporation NV September 30, 06 December 31, 05 ------------------------------------ ---------------- --------------- ASSETS (unaudited) (unaudited) ------------------------------------ ---------------- --------------- Current Assets ------------------------------------ ---------------- --------------- Cash and cash equivalents 61,163 50,728 ------------------------------------ ---------------- --------------- Trade accounts receivable, net 23,497 26,542 ------------------------------------ ---------------- --------------- Inventories, net 26,026 25,368 ------------------------------------ ---------------- --------------- Prepaid expenses and other current assets 4,377 3,430 ------------------------------------ ---------------- --------------- Total current assets 115,063 106,068 ------------------------------------ ---------------- --------------- Net property and equipment 10,849 10,131 ------------------------------------ ---------------- --------------- Intangible assets 3,321 4,257 ------------------------------------ ---------------- --------------- Other assets 2,093 2,071 ------------------------------------ ---------------- --------------- Total Assets 131,326 122,527 ------------------------------------ ---------------- --------------- LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ ---------------- --------------- Current Liabilities ------------------------------------ ---------------- --------------- Trade accounts payable 6,361 12,994 ------------------------------------ ---------------- --------------- Short-term borrowings & current portion long-term debt 630 638 ------------------------------------ ---------------- --------------- Other current liabilities 17,088 14,375 ------------------------------------ ---------------- --------------- Total current liabilities 24,079 28,007 ------------------------------------ ---------------- --------------- Long-term debt, excluding current portion 3,376 3,852 ------------------------------------ ---------------- --------------- Other long-term liabilities 1,584 1,587 ------------------------------------ ---------------- --------------- Total liabilities 29,039 33,446 ------------------------------------ ---------------- --------------- STOCKHOLDERS' EQUITY ------------------------------------ ---------------- --------------- Common stock 3,271 3,247 ------------------------------------ ---------------- --------------- Additional paid-in-capital 22,807 22,524 ------------------------------------ ---------------- --------------- Treasury stock (3,323) - ------------------------------------ ---------------- --------------- Retained earnings 82,694 63,782 ------------------------------------ ---------------- --------------- Accumulated other comprehensive income (loss) (3,162) (472) ------------------------------------ ---------------- --------------- Total stockholders' equity 102,287 89,081 ------------------------------------ ---------------- --------------- Total liabilities and stockholders' equity 131,326 122,527 ------------------------------------ ---------------- --------------- *T -0- *T CONSOLIDATED STATEMENTS OF CASH FLOWS according to US GAAP ICOS Vision Systems Corporation NV Three months ended Nine months ended ------------------- ------------------------ ------------------------ (in thousands of Euro) Sept 2006 Sept 2005 Sept 2006 Sept 2005 ------------------- ------------ ----------- ----------- ------------ Cash flows from operating activities (unaudited) (unaudited) (unaudited) (unaudited) ------------------- ------------ ----------- ----------- ------------ Net income 3,005 3,269 18,912 7,056 ------------------- ------------ ----------- ----------- ------------ Adjustments to reconcile net income to net cash provided by operating activities: ------------------- ------------ ----------- ----------- ------------ Depreciation and amortization 600 513 1,703 1,503 ------------------- ------------ ----------- ----------- ------------ Allowance for doubtful debts 44 6 327 105 ------------------- ------------ ----------- ----------- ------------ Deferred tax expense (benefit) 166 497 (231) 611 ------------------- ------------ ----------- ----------- ------------ Loss on disposal of property and equipment - 1 - 20 ------------------- ------------ ----------- ----------- ------------ Stock based compensation expense 8 - 24 - ------------------- ------------ ----------- ----------- ------------ Changes in assets and liabilities: ------------------- ------------ ----------- ----------- ------------ Decrease (increase) in trade accounts receivable 1,795 (640) 1,524 (878) ------------------- ------------ ----------- ----------- ------------ Decrease (increase) in inventories 1,191 (2,014) (1,687) (1,263) ------------------- ------------ ----------- ----------- ------------ Decrease (increase) in prep. expenses and other current assets (54) (4) ------------------- ------------ ----------- ----------- ------------ Decrease (increase) in other assets (53) 96 (144) 72 ------------------- ------------ ----------- ----------- ------------ (Decrease) increase in trade accounts payable (1,983) 793 (6,535) 1,910 ------------------- ------------ ----------- ----------- ------------ (Decrease) increase in other current liabilities 2,706 1,417 3,317 (81) ------------------- ------------ ----------- ----------- ------------ (Decrease) increase in other long-term liabilities 22 (12) 282 (93) ------------------- ------------ ----------- ----------- ------------ Net cash provided by operating activities 7,447 3,922 16,075 9,460 ------------------- ------------ ----------- ----------- ------------ Cash flows from investing activities ------------------- ------------ ----------- ----------- ------------ Additions to property and equipment (399) (102) (1,400) (540) ------------------- ------------ ----------- ----------- ------------ Net cash used in investing activities (399) (102) (1,400) (540) ------------------- ------------ ----------- ----------- ------------ Cash flows from financing activities ------------------- ------------ ----------- ----------- ------------ Repayment of borrowings (218) (142) (551) (457) ------------------- ------------ ----------- ----------- ------------ Proceeds from borrowing - - 66 - ------------------- ------------ ----------- ----------- ------------ Payment for purchase of own shares (2,707) - (3,323) - ------------------- ------------ ----------- ----------- ------------ Proceeds from shares issued in connection with the exercise of stock options - - 283 61 ------------------- ------------ ----------- ----------- ------------ Net cash used in financing activities (2,925) (142) (3,525) (396) ------------------- ------------ ----------- ----------- ------------ Increase in cash and cash equivalents 4,123 3,678 11,150 8,524 ------------------- ------------ ----------- ----------- ------------ Impact of exchange rate movements on cash (32) 15 (715) 161 ------------------- ------------ ----------- ----------- ------------ Cash and cash equivalents at beginning of period 57,072 47,171 50,728 42,179 ------------------- ------------ ----------- ----------- ------------ Cash and cash equivalents at end of period 61,163 50,864 61,163 50,864 ------------------- ============ =========== =========== ============ *T