AMIS Holdings, Inc. Reports Fourth Quarter and 2003 Results.Business Editors/High-Tech Writers POCATELLO Pocatello (pōkətĕl`ō), city (1990 pop. 46,080), seat of Bannock co., SE Idaho, between mountains on the Portneuf River near its junction with the Snake (there dammed to form the American Falls Reservoir); inc. 1889. , Idaho--(BUSINESS WIRE)--Feb. 12, 2004 AMIS A·mis , Kingsley 1922-1995. British writer best known for his novels, including Lucky Jim (1954) and Jake's Thing (1978). Holdings, Inc. (Nasdaq:AMIS): -- Record revenue in fourth quarter and 2003 -- 2003 annual revenue grew 32% from 2002 -- Gross margins for year increased 590 basis points over 2002 -- Non-GAAP fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for fourth quarter was $0.12, exceeded consensus estimates of $0.11 AMIS Holdings, Inc. ("AMIS" or "Company") (Nasdaq:AMIS), parent company of AMI Semiconductor AMI Semiconductor is a company engaged the design and manufacture of customer specific integrated circuit solutions, including solutions for the automotive, medical and industrial markets. Among its products are products that integrate processing of analog and digital signals. , a leader in the design and manufacture of integrated mixed-signal solutions, today reported record results for the fourth quarter and year ended Dec. 31, 2003. Financial Results Fourth quarter 2003 revenue was $125.5 million, an increase of 7% over the third quarter 2003 revenue and 22% above the fourth quarter of last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) was $19.8 million for the fourth quarter of 2003, an increase of 173% over third quarter operating income of $7.3 million and 276% over fourth quarter 2002 operating income of $5.3 milion. GAAP net income for the fourth quarter of 2003 was $3.4 million, an increase of 103% over third quarter net income of $1.7 million and 13% over the fourth quarter 2002 net income of $3.0 million. GAAP earnings per share for the fourth quarter was $0.04 on a fully diluted basis. For fiscal 2003, AMIS reported revenue of $454.2 million, an increase of 32% over 2002 revenue of $345.3 million. Operating income on a GAAP basis was $30.2 million compared to $17.6 million in 2002. Net loss for 2003 was $0.4 million compared to net income of $5.1 million in 2002. AMIS also reports operating income and net income, as well as earnings per share, on a non-GAAP basis. AMIS believes the non-GAAP information better reflects the ongoing operational performance of the Company and therefore provides better comparability between periods. Non-GAAP earnings exclude unusual items such as non-cash costs related to impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges and the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of deferred financing charges related to various debt redemptions, cash charges related to the early redemption of $70 million of the Company's senior subordinated notes, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs and related tax effects. Non-GAAP operating income for the fourth quarter was $21.5 million compared to $18.7 million in the third quarter and $5.7 million in the fourth quarter of 2002. Net income on a non-GAAP basis was $10.5 million in the fourth quarter compared to $9.2 million in the third quarter and $3.2 million in the fourth quarter of 2002. Fourth quarter non-GAAP EPS was $0.12 on a fully diluted basis. Non-GAAP operating income for 2003 increased to $63.3 million or 247% over 2002 non-GAAP operating income of $18.3 million. Non-GAAP net income increased to $28.7 million for 2003, an increase of 422% over the 2002 non-GAAP net income of $5.5 million. During the fourth quarter, AMIS had sequential revenue growth across all three product lines. Integrated mixed-signal products increased 1%, mixed-signal foundry A semiconductor manufacturer that makes chips for third parties. It may be a large chip maker that sells its excess manufacturing capacity or one that makes chips exclusively for other companies. services was up 5% and structured digital products grew 25% over third quarter 2003 revenue levels. Gross margin in the fourth quarter was 45.3%, an increase of 140 basis points over the third quarter gross margin. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for the fourth quarter was $24.1 million and capital expenditures were $6.5 million. Free cash flow during the fourth quarter was $17.6 million, an increase of 338% over the third quarter and 96% over the fourth quarter of 2002. Cash balances at Dec. 31, 2003 were $119.1 million, an increase of $56.9 million from the Dec. 31, 2002 balance of $62.2 million. "AMIS had a great fourth quarter and full year 2003," said Christine King Christine Elizabeth King is a British historian and university administrator. She is currently Vice-Chancellor and Chief Executive of Staffordshire University.[1] , president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "The successful integration of our acquisition of the mixed-signal business of Alcatel Alcatel Société Alsacienne de Constructions Atomiques, de Télécomunications et d'Electronique Microelectronics microelectronics, branch of electronic technology devoted to the design and development of extremely small electronic devices that consume very little electric power. , combined with our sales and marketing efforts and the revitalized re·vi·tal·ize tr.v. re·vi·tal·ized, re·vi·tal·iz·ing, re·vi·tal·iz·es To impart new life or vigor to: plans to revitalize inner-city neighborhoods; tried to revitalize a flagging economy. economy resulted in record revenues for the fourth quarter and 2003. During the past 12 months, we have improved our gross margin by 590 basis points through increased utilization of our fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. facilities and strength in our product mix. We also continued building for the future by increasing our design wins for 2003 by 34% from 2002." Business Outlook "We expect our first quarter revenue to range from $124 million to $127 million," said King. "Going into the first quarter, we had approximately 78% of this revenue recorded in backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. . Our gross margin should approximate 45%. Additionally, we anticipate operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: to be flat to slightly higher than fourth quarter. Net interest expense should be approximately $4.6 million. The effective tax rate for the quarter is expected to be 22% to 25%, the cash tax rate to be approximately 17% and fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of is expected to be $0.14, based on a share count of 86.6 million shares. Cap ex is planned to be approximately 6% to 7% of annual revenues and is expected to be weighted toward the first part of the year. Depreciation and amortization will be about $10 million in the first quarter." Organizational Announcement Today AMIS is announcing that Brent Brent, outer borough (1991 pop. 226,100) of Greater London, SE England. The area is a rail and industrial center. Its manufactures include automobile parts, clocks and watches, and electrical equipment. Jensen Noun 1. Jensen - modernistic Danish writer (1873-1950) Johannes Vilhelm Jensen , chief financial officer, is leaving the Company to pursue other interests. Brent will work as a consultant for AMIS, providing continuity while the search for his replacement is ongoing. On an interim basis, Mike Salvati will act as AMI Semiconductor's CFO See Chief Financial Officer. and will lead the Company's finance organization while the search continues for a CFO to provide financial leadership through the next phase of the Company's growth. Mike has been working with Brent and AMIS as a consultant for several months. Mike has over 25 years of financial and business experience, including experience as a partner at KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen LLP LLP - Lower Layer Protocol , Chief Financial Officer of Culligan Culligan is an international water purification business based in Rosemont, Illinois. For more than 65 years, Culligan has specialized in softeners, filtration systems and bottled water for the home and office. Water Technologies, Inc. and Global Exchange Services and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. at National Financial Partners, Inc. Mike has also worked as a consultant to Francisco Francisco may refer to:
"We are confident that with Mike's Mike's may be:
Conference Call President and Chief Executive Officer Chris King For other persons named Chris King, see Chris King (disambiguation). Christopher Donnell King (born July 24 1969 in Newton Grove, North Carolina) is an American professional basketball player, most notably for the NBA. along with Brent Jensen and Mike Salvati will conduct a conference call on Feb. 12, 2004 at 5 p.m. ET, to discuss the Company's earnings and operations. Investors and other interested parties may listen to a live audio webcast of the conference call by visiting the investor relations Investor relations The process by which the corporation communicates with its investors. section of the AMIS Web site at http://www.amis.com. A webcast replay is expected to be available on the Company's Web site until close of business Feb. 26. About AMI Semiconductor AMI Semiconductor (AMIS) is a leader in the design and manufacture of silicon solutions for the real world. As a widely recognized innovator in state-of-the-art integrated mixed-signal products, mixed-signal foundry services and structured digital products AMIS is committed to providing customers with the optimal value, quickest time-to-market semiconductor solutions. Offering unparalleled manufacturing flexibility and dedication to customer service, AMI Semiconductor operates globally with headquarters in Pocatello, Idaho Pocatello (IPA: [po kə tɛ lo]) is the county seat and largest city of Bannock CountyGR6 , European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. corporate offices in Oudenaarde, Belgium, and a network of sales and design centers located in the key markets of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Europe and the Asia Pacific region. For more information, please visit the AMIS Web site at www.amis.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements in this press release other than statements of historical fact are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The Company's future results could differ materially from the expectations discussed herein. Factors that could cause or contribute to such differences include general economic and political uncertainty, conditions in the semiconductor industry, changes in the conditions affecting our target markets, manufacturing underutilization, fluctuations in customer demand, raw material costs, exchange rates, timing and success of new products, competitive conditions in the semiconductor industry, and risks associated with international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . For a more comprehensive discussion of risks and uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our business, please read the discussions of these risks in the Company's Form S-1 registration statement filed with the SEC. The Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this press release. Non-GAAP Measures To supplement our consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP, we use the non-GAAP measures discussed below. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for or superior to GAAP results and may not be comparable with similarly titled measures reported by other companies. We define adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become as net income adjusted to exclude certain expenses including depreciation, amortization, interest, income taxes, non-recurring charges and other non-operating expenses. Adjusted EBITDA is provided to enhance the user's overall understanding of our current financial performance, our ability to service our debt and our prospects for the future and ability to fund future growth. Specifically, we believe adjusted EBITDA provides useful information to management, investors and debt holders and is a financial measure used by rating agencies to analyze and compare companies on the basis of operating performance and liquidity. Adjusted EBITDA has been reconciled to net income. We have provided non-GAAP operating income, non-GAAP net income and non-GAAP fully diluted earnings per share. Non-GAAP operating income is operating income less the restructuring, impairment and nonrecurring charges Nonrecurring Charge An expense occurring only once on a company's financial statement. Notes: An extraordinary item is an example of a nonrecurring charge. Also known as "nonrecurring item". line on the income statement. Non-GAAP net income is net income (loss) less the restructuring, impairment and nonrecurring charges line, various write-offs of deferred financing charges, the premium paid in association with the redemption of $70 million of the senior subordinated notes and the tax effects related to these charges (assuming a 41% effective tax rate) on the income statement. Non-GAAP fully diluted earnings per share is non-GAAP net income divided by the fully diluted shares outstanding. We believe that these excluded charges are nonrecurring and that the exclusion of these charges enhances comparability between the current period and past periods. Non-GAAP operating income has been reconciled to operating income, non-GAAP net income has been reconciled to net income (loss) and the calculation for non-GAAP fully diluted earnings per share has been provided. We have provided non-GAAP tax expense. This measure is tax expense less a 41% tax effect for the restructuring, impairment and nonrecurring charges line on the income statement, various write-offs of deferred financing charges and the premium paid in association with the redemption of $70 million of the senior subordinated notes. We believe that these charges are nonrecurring and that the exclusion of these charges enhances comparability between the current period and past periods. Non-GAAP tax expense has been reconciled to tax expense. We have provided free cash flow. This measure is operating cash flow less capital expenditures. We believe that this measure is useful as an indicator of our liquidity and is commonly used by debt holders. Free cash flow has been reconciled to operating cash flow.
AMIS Holdings, Inc.
Condensed Consolidated Statements of Operations
(In millions - Unaudited)
Three Months Twelve Months
Ended Ended
--------------- ---------------
Dec 31, Dec 31, Dec 31, Dec 31,
2003 2002 2003 2002
------- ------- ------- -------
Revenue
Integrated mixed signal
products $62.2 $58.6 $241.4 $167.2
Mixed signal foundry services 32.3 25.0 116.1 93.1
Structured digital products 31.0 18.9 96.7 85.0
------- ------- ------- -------
Total revenue 125.5 102.5 454.2 345.3
Cost of revenue 68.6 65.4 256.0 214.9
------- ------- ------- -------
Gross profit 56.9 37.1 198.2 130.4
Operating expenses:
Research & development 17.9 15.1 70.3 52.1
Selling, general and
administrative 17.5 16.3 64.6 60.1
Restructuring, impairment and
nonrecurring charges 1.7 0.4 33.1 0.6
------- ------- ------- -------
37.1 31.8 168.0 112.8
------- ------- ------- -------
Operating income 19.8 5.3 30.2 17.6
Non-operating expenses, net 15.8 2.3 38.7 11.3
------- ------- ------- -------
Income (loss) before income
taxes 4.0 3.0 (8.5) 6.3
Provision (benefit) for income
taxes 0.6 0.0 (8.1) 1.2
------- ------- ------- -------
Net income (loss) $3.4 $3.0 $(0.4) $5.1
======= ======= ======= =======
Earnings per share
Basic $0.04 NA NA NA
Diluted $0.04 NA NA NA
Weighted average shares
Basic 79.1 NA NA NA
Diluted 86.4 NA NA NA
Note: Results from 2003 are not comparable to 2002 principally as a
result of the June 2002 acquisition of the Mixed Signal Business
of Alcatel Microelectronics.
Key Ratios & Information:
-------------------------------
Gross margin 45.3% 36.2% 43.6% 37.8%
Operating margin 15.8% 5.2% 6.6% 5.1%
Adjusted EBITDA margin 25.3% 19.0% 23.8% 18.9%
Adjusted EBITDA $31.7 $19.5 $108.2 $65.2
Depreciation & amortization
expense $10.2 $13.8 $44.9 $47.0
Capital expenditures $6.5 $5.2 $26.5 $22.0
Operating cash flow $24.1 $14.2 $70.7 $81.1
Free cash flow $17.6 $9.0 $44.2 $59.1 Three
Months
Ended
Reconciliation of GAAP to Non- Sep 28,
GAAP Information: 2003
------------------------------- -------
GAAP operating income $19.8 $5.3 $30.2 $17.6 $7.3
Restructuring, impairment and
nonrecurring charges 1.7 0.4 33.1 0.6 11.4
------- ------- ------- ------- -------
Non-GAAP operating income 21.5 5.7 63.3 18.2 18.7
GAAP net income (loss) $3.4 $3.0 $(0.4) $5.1 $1.7
Restructuring, impairment and
nonrecurring charges 1.7 0.4 33.1 0.6 11.4
Other income (expense) 10.3 -- 16.2 -- 1.4
Associated tax effects (4.9) (0.2) (20.2) (0.2) (5.3)
------- ------- ------- ------- -------
Non-GAAP net income $10.5 $3.2 $28.7 $5.5 $9.2
======= ======= ======= ======= =======
Non-GAAP earnings per share
Basic $0.13 NA NA NA NA
Diluted $0.12 NA NA NA NA
Weighted average shares
Basic 79.1 NA NA NA NA
Diluted 86.4 NA NA NA NA
Reconciliation of Tax Expense
to Non-GAAP Tax Expense:
-------------------------------
Tax expense $0.6 $0.0 ($8.1) $1.2 ($2.0)
Associated tax effects
excluded from Non-GAAP net
income (4.9) (0.2) (20.2) (0.2) (5.3)
------- ------- ------- ------- -------
Non-GAAP tax expense $5.5 $0.2 $12.1 $1.4 $3.3
======= ======= ======= ======= =======
Reconciliation of Net Income
(Loss) to Adjusted EBITDA:
-------------------------------
Net income (loss) $3.4 $3.0 ($0.4) $5.1 $1.7
Non-operating expenses, net 15.8 2.3 38.7 11.3 7.6
Provision (benefit) for income
taxes 0.6 0.0 (8.1) 1.2 (2.0)
Depreciation and amortization
expense 10.2 13.8 44.9 47.0 9.6
Restructuring, impairment and
nonrecurring charges 1.7 0.4 33.1 0.6 11.4
------- ------- ------- ------- -------
Adjusted EBITDA $31.7 $19.5 $108.2 $65.2 $28.3
======= ======= ======= ======= =======
Reconciliation of Operating
Cash Flow to Free Cash Flow:
-------------------------------
Operating cash flow $24.1 $14.2 $70.7 $81.1 $2.7
Capital expenditures 6.5 5.2 26.5 22.0 10.1
------- ------- ------- ------- -------
Free cash flow $17.6 $9.0 $44.2 $59.1 ($7.4)
======= ======= ======= ======= =======
AMIS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In Millions)
Dec 31, Dec 31,
2003 2002
(unaudited)
----------- ----------
Assets
--------------------------
Current assets:
Cash and cash equivalents $119.1 $62.2
Accounts receivable, net 73.6 66.0
Inventories 45.6 39.4
Other current assets 29.7 32.0
----------- ----------
Total current assets 268.0 199.6
Property, plant and equipment, net 205.9 222.5
Other non-current assets, including intangibles 76.2 80.4
----------- ----------
Total assets $550.1 $502.5
=========== ==========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable and other accrued expenses $90.0 $76.2
Current portion of long-term debt 1.3 8.7
----------- ----------
Total current liabilities 91.3 84.9
Long-term debt, less current portion 253.4 151.4
Other long-term liabilities 0.4 3.1
Redeemable preferred stock 0.0 503.5
Stockholder's equity (deficit) 205.0 (240.4)
----------- ----------
Total liabilities and stockholders' equity
(deficit) $550.1 $502.5
=========== ==========
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