AMIS Holdings, Inc. Reports Second Quarter 2006 Financial Results; Revenue Increased 9% Sequentially, Surpassing $150 Million for the First Time; Six Month Backlog Increased 9% Sequentially to a Record $184 Million.POCATELLO, Idaho Pocatello (IPA: [po kə tɛ lo]) is the county seat and largest city of Bannock CountyGR6 -- 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), 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 its financial results for the second quarter and six months ended July July: see month. 1, 2006. Financial Results Second quarter 2006 revenue was $150.7 million, an increase of nine percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen and 23 percent compared to the second quarter of 2005. Second quarter 2005 revenue did not include revenues from the acquisition of the Flextronics semiconductor business, which occurred in September September: see month. 2005. Gross margin for the second quarter of 2006 was 45.2 percent, representing a decline of 30 basis points sequentially and 390 basis points year over year. Gross margin for the second quarter of 2005 included a 220 basis point net reduction in cost of revenue that was primarily the result of a capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. and employment investment grant from the Belgian Belgian having some relationship to Belgium. Belgian barge dog see schipperke. Belgian black pied cattle black, Belgian dairy cattle. Belgian blue dual-purpose cattle; blue, white or blue roan. government. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was 9.1 percent in the second quarter of 2006, a decline of 20 basis points sequentially and 670 basis points year over year. On a non-GAAP basis, operating margin for the second quarter of 2006 was 15.1 percent, flat sequentially, but down 250 basis points year over year. Non-GAAP operating margin for the second quarter of 2006 and 2005 excludes amortization of acquisition-related intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . In addition, the Company began expensing stock options in the first quarter of 2006, and second quarter 2006 non-GAAP 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. excludes $2.1 million of stock-based compensation expense. Net income for second quarter 2006 was $8.1 million, or $0.09 per 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. share, compared to net income of $11.3 million or $0.13 per diluted share for the same period in 2005. Non-GAAP net income for second quarter 2006 was $15.1 million or $0.17 per diluted share, compared to $12.9 million or $0.15 per diluted share in second quarter 2005. Second quarter 2006 and 2005 non-GAAP net income exclude amortization of acquisition-related intangibles and restructuring charges, net of tax effects. Non-GAAP earnings per share for the second quarter of 2006 also excludes stock-based compensation expense of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.02 per diluted share. Non-GAAP net income in the second quarter of 2005 includes a $2.8 million net reduction in cost of revenue from the Belgian government grant discussed above as well as a charge to income taxes of $2.3 million to write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. the Company's deferred tax assets based on a lower blended blend v. blend·ed or blent , blend·ing, blends v.tr. 1. To combine or mix so that the constituent parts are indistinguishable from one another: U.S. statutory rate 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 SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 109, "Accounting for Income Taxes." Revenue for the first six months of 2006 was $289.3 million, an increase of 21 percent compared to the first six months of 2005. Net income for the first six months of 2006 was $16.5 million, or $0.18 per diluted share, as compared to net income of $0.2 million, or $0.00 per diluted share, for the same period of 2005. Non-GAAP net income for the first six months of 2006 was $29.6 million, or $0.33 per diluted share, compared to non-GAAP net income of $23.5 million or $0.27 per diluted share in the first six months of 2005. Non-GAAP net income for the first six months of 2006 excludes the same items described above for the second quarter of 2006. Non-GAAP net income for the first six months of 2005 excludes charges related to debt refinancing Refinancing An extension and/or increase in amount of existing debt. activities in the first quarter 2005 in addition to the adjustments described above for the second quarter of 2005. "I am pleased with the operational improvements we made in the second quarter," stated 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 chief executive officer. "We succeeded in increasing delivery performance which helped us realize a record level of revenue during the quarter. Though more work remains to be done to optimize optimize - optimisation operations, results from the quarter highlight our ability to grow the top line. I am encouraged by the strength of our 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. entering the third quarter, and I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our ability to grow revenue sequentially for the reminder of the year, driven primarily by anticipated growth in the automotive market as well as continued strength in the industrial market." The Company generated 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. during the quarter of $17.2 million, bringing cash at the end of the quarter to $108.5 million, a sequential One after the other in some consecutive order such as by name or number. increase of $5.6 million. Capital expenditures during second quarter 2006 were $9.8 million. Business Outlook "Steady progress is being made in improving our operational performance," said David Henry
David Henry (b.February 24, 1975 in Denver, Colorado)is an IFBB professional bodybuilder. , senior vice president and chief financial officer. "Action plans have been implemented and we expect continued improvement during the rest of the year. Our guidance for the third quarter of 2006 is as follows: --Revenue is expected to be up 2 percent sequentially; --Gross margin is expected to be approximately 45 percent; --Non-GAAP operating margin is expected to be approximately 15 percent; --On a non-GAAP basis, our effective tax rate for the third quarter is expected to be 17 to 19 percent; --Non-GAAP 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 approximately $0.17; --Pre-tax stock-based compensation expense is expected to be in the range of $2.3 - $2.5 million, or approximately $0.02 per diluted share; --Capital expenditures for the year are expected to remain at approximately eight percent of annual revenues." Conference Call and Webcast Information Christine King, 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. , along with David Henry, senior vice president and CFO See Chief Financial Officer. , will host a conference call on July 27, 2006 at 5 p.m. ET, to discuss the Company's second quarter financial results and its updated business outlook. The web simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. of this call will be available under the investor relations Investor relations The process by which the corporation communicates with its investors. section of the Company's web site at http://www.amis.com. A webcast replay will be available at that same location until close of business August 10, 2006. 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 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, 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 Oudenaarde (ou'dənär`də), Fr. Audenarde, commune (1991 pop. 27,162), East Flanders prov., W Belgium, on the Scheldt River. It is a textile center and a rail junction. , Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. , and a network of sales and design centers located in the key markets of the North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and the Asia Pacific region.Additional Information Regarding Non-GAAP Financial Measures Management presents the non-GAAP financial measures presented in this release because we use them as an additional measure of our operating performance and we believe that these excluded charges enhance comparability between current and prior periods. Please see the reconciliation of each of these non-GAAP financial measures to its closest GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measure in the financial statements that accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. this release. Non-GAAP net income and non-GAAP earnings per share should not be considered as alternatives to net income, earnings per share or other consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: operations data prepared in accordance with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, , as indicators of our operating performance or as a measure of liquidity. Forward Looking Statements Statements in this press release other than statements of historical fact are "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " 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. These 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. include the expectation of sequential revenue growth through the balance of 2006, gross margin outlook in the third quarter, and guidance on third quarter 2006 revenue, gross margin, non-GAAP operating margin, effective tax rate, non-GAAP earnings per share, stock compensation expense, and capital expenditures. These forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements. These risks include failure to operate our manufacturing facilities on a cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. basis and in a manner that avoids manufacturing defects and unnecessary scrap, the availability of required capacity at our key subcontractors, manufacturing underutilization, changes in the conditions affecting our target markets, fluctuations in customer demand, timing and success of new products, competitive conditions in the semiconductor industry, failure to successfully integrate the recently-acquired Flextronics business, loss of key personnel, general economic and political uncertainty, conditions in the semiconductor industry, and other risks and uncertainties identified in reports filed from time to time by the Company with the Securities and Exchange Commission, including its most recent Quarterly Report on Form 10-Q Form 10-Q See 10-Q. and Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . The Company does not intend 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.
AMIS Holdings, Inc.
Condensed Consolidated Statements of Operations
(In millions - Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
---------- ------- -------- -------
Revenue $150.7 $122.5 $289.3 $238.4
Cost of revenue 82.6 62.3 158.2 124.5
---------- ------- -------- -------
Gross profit 68.1 60.2 131.1 113.9
Operating expenses:
Research & development 26.8 21.8 50.9 42.7
Selling, general and
administrative 20.6 16.9 40.4 33.1
Amortization of acquisition-
related intangibles 4.3 1.2 8.4 2.4
Restructuring and impairment
charges 2.7 1.0 4.8 1.3
---------- ------- -------- -------
54.4 40.9 104.5 79.5
---------- ------- -------- -------
Operating income 13.7 19.3 26.6 34.4
Non-operating expenses, net 4.6 2.2 8.8 41.6
---------- ------- -------- -------
Income (loss) before income taxes 9.1 17.1 17.8 (7.2)
Provision (benefit) for income
taxes 1.0 5.8 1.3 (7.4)
---------- ------- -------- -------
Net income $8.1 $11.3 $16.5 $0.2
========== ======= ======== =======
Earnings per share
Basic $0.09 $0.13 $0.19 $0.00
Diluted $0.09 $0.13 $0.18 $0.00
Weighted average shares
Basic 87.6 85.6 87.2 85.4
Diluted 89.2 87.9 89.2 87.9
Key Ratios & Information:
-------------------------
Gross margin 45.2% 49.1% 45.3% 47.8%
Operating margin 9.1% 15.8% 9.2% 14.4%
AMIS Holdings, Inc.
Reconciliations between GAAP and non-GAAP measures
(In millions - Unaudited)
We prospectively adopted FAS 123(R) beginning in the first quarter of
2006; therefore, equivalent stock-based compensation expense is not
reflected in prior periods.
Reconciliation of Cost of Revenue to Non-GAAP Cost of Revenue
Three Months Ended Six Months Ended
------------------ -----------------
July 1, July 1,
2006 2006
------------------ -----------------
Cost of Revenue $82.6 $158.2
Adjustments to reconcile cost of
revenue to non-GAAP cost of revenue:
Share-based compensation (0.3) (0.3)
------------------ -----------------
Non-GAAP Cost of Revenue $82.3 $157.9
================== =================
Reconciliation of Gross Profit to Non-GAAP Gross Profit
Three Months Ended Six Months Ended
------------------ -----------------
July 1, July 1,
2006 2006
----------------- -----------------
Gross Profit $68.1 $131.1
Adjustments to reconcile gross
profit to non-GAAP gross profit:
Share-based compensation 0.3 0.3
----------------- -----------------
Non-GAAP Gross Profit $68.4 $131.4
================= =================
Reconciliation of Research and Development to Non-GAAP Research and
Development
Three Months Ended Six Months Ended
----------------- -----------------
July 1, July 1,
2006 2006
----------------- -----------------
Research and Development $26.8 $50.9
Adjustments to reconcile research
and development to non-GAAP
research and development:
Share-based compensation (0.8) (1.6)
----------------- -----------------
Non-GAAP Research and Development $26.0 $49.3
================= =================
Reconciliation of Selling, General and Administrative to Non-GAAP
Selling, General and Administrative
Three Months Ended Six Months Ended
------------------- ----------------
July 1, July 1,
2006 2006
------------------ ----------------
Selling, General and
Administrative $20.6 $40.4
Adjustments to reconcile selling,
general and administrative to
non-GAAP selling, general and
administrative:
Share-based compensation (1.0) (2.0)
------------------ ----------------
Non-GAAP Selling, General and
Administrative $19.6 $38.4
================== ================
Reconciliation of Operating Income to Non-GAAP Operating Income
Three Months Ended Six Months Ended
------------------- ----------------
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
--------- --------- -------- -------
Operating income $13.7 $19.3 $26.6 $34.4
Adjustments to reconcile operating
income to non-GAAP operating income:
Amortization of
acquisition-related
intangible assets 4.3 1.2 8.4 2.4
Restructuring and
impairment charges 2.7 1.0 4.8 1.3
Share-based compensation 2.1 - 3.9 -
--------- --------- -------- -------
Non-GAAP operating income $22.8 $21.5 $43.7 $38.1
========= ========= ======== =======
Reconciliation of Net Income to Non-GAAP Net Income
Three Months Ended Six Months Ended
------------------- ----------------
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
--------- --------- -------- -------
Net income $8.1 $11.3 $16.5 $0.2
Adjustments to reconcile net
income to non-GAAP net income:
Amortization of acquisition-
related intangible assets 4.3 1.2 8.4 2.4
Restructuring and impairment
charges 2.7 1.0 4.8 1.3
Costs associated with the
tender of 10 3/4% notes - - - 28.0
Write-off of deferred
financing and other costs - - - 6.8
Share-based compensation 2.1 - 3.9 -
Related tax effects (2.1) (0.6) (4.0) (15.2)
------ ------ ------- ------
Non-GAAP net income $15.1 $12.9 $29.6 $23.5
====== ====== ======= ======
AMIS Holdings, Inc.
Non-GAAP Condensed Consolidated Statements of Operations
(In millions - Unaudited)
Three Months Ended Six Months Ended
------------------- -----------------
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
----------- ------- --------- -------
Revenue $150.7 $122.5 $289.3 $238.4
Cost of revenue 82.3 62.3 157.9 124.5
----------- ------- --------- -------
Gross profit 68.4 60.2 131.4 113.9
Operating expenses:
Research & development 26.0 21.8 49.3 42.7
Selling, general and
administrative 19.6 16.9 38.4 33.1
----------- ------- --------- -------
45.6 38.7 87.7 75.8
----------- ------- --------- -------
Non-GAAP operating income 22.8 21.5 43.7 38.1
Non-operating expenses, net 4.6 2.2 8.8 6.8
----------- ------- --------- -------
Income before income taxes 18.2 19.3 34.9 31.3
Provision for income taxes 3.1 6.4 5.3 7.8
----------- ------- --------- -------
Non-GAAP net income $15.1 $12.9 $29.6 $23.5
=========== ======= ========= =======
Non-GAAP earnings per share
Basic $0.17 $0.15 $0.34 $0.28
Diluted $0.17 $0.15 $0.33 $0.27
Weighted average shares
Basic 87.6 85.6 87.2 85.4
Diluted 89.2 87.9 89.2 87.9
Key Ratios
----------
Non-GAAP gross margin 45.4% 49.1% 45.4% 47.8%
Non-GAAP operating margin 15.1% 17.6% 15.1% 16.0%
Non-GAAP condensed consolidated statements of operations are presented
because we use them as an additional measure of our operating
performance and we believe that these excluded charges enhance
comparability between current and prior periods. Non-GAAP net income
and non-GAAP earnings per share should not be considered as
alternatives to net income, earnings per share or other consolidated
operations data prepared in accordance with accounting principles
generally accepted in the United States of America, as indicators of
our operating performance or as a measure of liquidity.
AMIS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In Millions)
July 1, December 31,
2006 2005
(unaudited)
------------ ------------
Assets
------
Current assets:
Cash and cash equivalents $108.5 $96.7
Accounts receivable, net 110.2 99.9
Inventories 76.0 64.3
Deferred tax assets 3.5 4.5
Prepaid expenses and other current assets 28.8 31.7
------------ ------------
Total current assets 327.0 297.1
Property, plant and equipment, net 203.5 203.8
Goodwill, net 85.0 72.6
Other intangibles, net 88.5 92.5
Deferred tax assets 54.4 50.3
Other long-term assets 20.0 23.4
------------ ------------
Total assets $778.4 $739.7
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $3.2 $3.2
Accounts payable 45.0 48.8
Accrued expenses 60.9 62.7
Foreign deferred tax liability 1.9 2.7
Income taxes payable 1.3 0.7
------------ ------------
Total current liabilities 112.3 118.1
Long-term debt, less current portion 313.1 314.7
Other long-term liabilities 5.6 8.2
------------ ------------
Total liabilities 431.0 441.0
Stockholder's equity:
Common stock 0.9 0.9
Additional paid-in capital 548.3 534.4
Accumulated deficit (233.5) (250.0)
Deferred stock-based compensation - (0.2)
Accumulated other comprehensive income 31.7 13.6
------------ ------------
Total stockholders' equity 347.4 298.7
Total liabilities and stockholders' equity $778.4 $739.7
============ ============
AMIS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In Millions)
Six Months Ended:
------------------------
July 1, July 2,
2006 2005
(unaudited) (unaudited)
------------ -----------
Cash flows from operating activities
Net income $16.5 $0.2
Adjustments to reconcile net income to net
cash provided by (used in):
Depreciation and amortization 33.0 24.0
Amortization of deferred financing costs 0.4 0.5
Stock-based compensation expense 3.9 0.2
Write-off of deferred financing costs - 6.7
Benefit from deferred income taxes (2.2) (10.3)
Loss on disposition of property, plant and
equipment 0.1 -
Noncash impact of change in value of
derivative (0.7) -
Changes in operating assets and
liabilities:
Accounts receivable (6.7) (3.5)
Inventories (8.8) (4.4)
Prepaid expenses and other assets 1.5 (2.1)
Accounts payable and other accrued
expenses (9.7) (19.6)
----------- -----------
Net cash provided by (used in) operating
activities 27.3 (8.3)
Cash flows from investing activities
Purchases of property, plant and equipment (17.6) (14.1)
Deposit on pending purchase of a business - (5.0)
Change in restricted cash - (1.4)
Change in other assets (2.0) (5.0)
----------- -----------
Net cash used in investing activities (19.6) (25.5)
Cash flows from financing activities
Payments on long-term debt (1.6) (254.0)
Proceeds from bank borrowings - 210.0
Debt issuance costs (0.1) -
Deferred financing costs - (2.9)
Proceeds from derivative 0.6 -
Proceeds from exercise of stock options 1.4 2.1
----------- -----------
Net cash provided by (used in) financing
activities 0.3 (44.8)
Effect of exchange rate changes on cash and
cash equivalents 3.8 (7.3)
----------- -----------
Net increase (decrease) in cash and cash
equivalents 11.8 (85.9)
Cash and cash equivalents at beginning of
period 96.7 161.7
----------- -----------
Cash and cash equivalents at end of period $108.5 $75.8
=========== ===========
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion