AMIS Holdings, Inc. Reports Second Quarter Results.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): --Record revenue in second quarter --Gross margins for the quarter increased for the sixth consecutive quarter, improving 310 basis points year over year --Operating margins increased to 18.7 percent --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 second quarter grew 13 percent to $0.18 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 results for the second quarter ended June June: see month. 26, 2004. Financial Results Second quarter 2004 revenue was $134.5 million, an increase of five percent over the first quarter 2004 revenue and 24 percent above the second quarter of last year. Gross margin for the second quarter of 2004 was 46.8 percent, an increase of 100 basis points sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen and 310 basis points year over 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. was $25.2 million for the second quarter of 2004, compared to first quarter operating income of $22.2 million and an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $6.7 million in the second quarter of 2003. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 18.7 percent in the second quarter, up 140 basis points sequentially. Second quarter 2003 results included an 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. charge of $20.0 million. Excluding this charge, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma operating income grew 89 percent year over year. There were no pro forma adjustments to the 2004 information. Net income for the second quarter of 2004 increased 14 percent sequentially to $15.4 million, or $0.18 per fully diluted share, compared to net income of $13.5 million, or $0.16 per fully diluted share for the first quarter of 2004 and a net loss of $7.3 million or $(0.49) per share for the second quarter of 2003. Excluding the impairment charge and the related tax effects, pro forma net income in the second quarter of 2003 was $4.6 million, or $(0.23) per share. Revenue for the first six months of 2004 increased 24.4 percent to $262.8 million from $211.2 million in the first six months of 2003. Net income for the first six months of 2004 was $28.9 million, or $0.33 per fully diluted share, compared to a net loss of $5.5 million in the first six months of 2003, or $(0.79) per share. This is an increase of 221 percent when compared to pro forma net income for the first six months of 2003 of $9.0 million, or $(0.47) per share. Pro forma net income and loss per share for the first six months of 2003 exclude an impairment charge, 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 fees, settlement of hedge transactions, and the tax effects related to each of these. Earnings per share for the second quarter and first six months of 2003, on both a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and a pro forma basis, were impacted by a preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividend. "AMIS generated record-breaking Adj. 1. record-breaking - surpassing any previously established record; "a record-breaking high jump"; "record-breaking crowds" best - (superlative of `good') having the most positive qualities; "the best film of the year"; "the best solution"; "the best time for revenue in the second quarter of 2004 and revenue growth for the sixth consecutive quarter," 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 chief executive officer. "Our record revenue was driven by our integrated mixed-signal product line, which increased seven percent sequentially. This growth was centered in the automotive and industrial end markets. Structured digital products improved nine percent sequentially, driven by higher revenues in the communications and military end markets. Our 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 revenue decreased three percent sequentially, due to the expected decline in STMicroelectronics This article needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. revenue related to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of a take-or-pay foundry arrangement." 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 second quarter was $19.0 million and capital expenditures were $6.5 million. Cash at June 26, 2004 was $127.5 million, up $10.8 million sequentially. "I am very pleased with our second quarter financial results," stated King. "We continue to sustain our margin growth through operational efficiencies. However, bookings dropped on a run-rate basis from our record first quarter level. Six-month 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. has returned to year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. levels. We continue to see strength in the automotive and industrial end markets. We also had excellent computing computing - computer and military orders during the quarter, but we expect this to be offset by softness in the communications market, due to the STMicroelectronics business as well as in the medical end market. In summary, the fundamentals of our business remain strong." Business Outlook "We expect our third quarter revenue to be roughly flat as compared to second quarter, due to the decline in STMicroelectronics revenue related to the expiration of a take-or-pay foundry arrangement," said David Henry
David Henry (b.February 24, 1975 in Denver, Colorado)is an IFBB professional bodybuilder. , senior vice president and chief financial officer. "Excluding revenues from STMicroelectronics, we expect revenue to be up two to three percent in third quarter, as compared to second quarter. We anticipate gross margins and operating margins to each improve 50 basis points over the second quarter, which will help offset an anticipated increase in our effective tax rate to between 27 percent and 29 percent in the third quarter. 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 about $0.18. We continue to expect capital expenditures for the year to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. seven percent of annual revenues. Depreciation and amortization is planned to be about $10.8 million in the third quarter." Conference Call 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. 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 Senior Vice President and CFO See Chief Financial Officer. David Henry will conduct a conference call on July July: see month. 29, 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 will be available on the Company's Web site until close of business August 12. 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, 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 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 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. 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 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. 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 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. Annual Report and Form 10-Q Form 10-Q See 10-Q. Quarterly Reports 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.
AMIS Holdings, Inc.
Pro forma Condensed Consolidated Statements of Operations
(In millions - Unaudited)
Three Months Six Months
Ended Ended
------------------------------
June June June June
26, 28, 26, 28,
2004 2003 2004 2003
------ ------- ------- -------
Revenue
Integrated mixed signal products $73.3 $60.5 $142.0 $117.3
Mixed signal foundry services 30.7 27.0 62.3 53.0
Structured digital products 30.5 20.9 58.5 40.9
------ ------- ------- -------
Total revenue 134.5 108.4 262.8 211.2
Cost of revenue 71.5 61.0 141.0 121.4
------ ------- ------- -------
Gross profit 63.0 47.4 121.8 89.8
Operating expenses:
Research & development 18.8 16.9 38.3 34.9
Selling, general and administrative 19.0 17.2 36.1 31.7
------ ------- ------- -------
37.8 34.1 74.4 66.6
------ ------- ------- -------
Pro forma operating income 25.2 13.3 47.4 23.2
Non-operating expenses, net 4.9 6.8 9.7 10.9
------ ------- ------- -------
Income before income taxes 20.3 6.6 37.7 12.3
Provision for income taxes 4.9 2.0 8.8 3.3
------ ------- ------- -------
Pro forma net income $15.4 $4.6 $28.9 $9.0
====== ======= ======= =======
Pro forma earnings per share
Basic $0.19 $(0.23) $0.35 $(0.47)
Diluted $0.18 $(0.23) $0.33 $(0.47)
Weighted average shares
Basic 82.5 46.7 82.3 46.7
Diluted 86.3 46.7 86.3 46.7
Note: 2003 Pro forma EPS is based on net loss available to common
shareholders of approximately $10.8 million in the second quarter and
$22.2 million in the first six months
Key Pro Forma Ratios
---------------------------------------
Pro forma gross margin 46.8% 43.7% 46.3% 42.5%
Pro forma operating margin 18.7% 12.3% 18.0% 11.0%
Pro forma condensed consolidated statements of operations are
presented because we use them as an additional measure of our
operating performance. Pro forma net income and pro forma 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.
Pro forma condensed consolidated statements of operations are intended
to present our operating results, excluding items described below,
for the periods presented. During the three and six months ended
June 28, 2003 the items included the write-off of deferred financing
fees, settlement of hedge transactions, an impairment charge and the
tax effects related to these items. We believe that these excluded
charges are nonrecurring that the exclusion of these charges
enhances comparability between the current period and the prior
period.
AMIS Holdings, Inc.
Reconciliation of Operating Income (Loss) to Pro Forma Operating
Income
(In millions - Unaudited)
Three Months Six Months
Ended Ended
------------------------------
Jun Jun Jun Jun
26, 28, 26, 28,
2004 2003 2004 2003
------ ------- ------- -------
Operating income (loss) $25.2 $(6.7) $47.4 $3.2
Adjustments to reconcile operating
income (loss) to pro forma operating
income:
Impairment charge -- 20.0 -- 20.0
------ ------- ------- -------
Pro forma operating income $25.2 $13.3 $47.4 $23.2
====== ======= ======= =======
AMIS Holdings, Inc.
Reconciliation of Net Income (Loss) to Pro Forma Net Income
(In millions - Unaudited)
Three Months Six Months
Ended Ended
------------------------------
Jun Jun Jun Jun
26, 28, 26, 28,
2004 2003 2004 2003
------ ------- ------- -------
Net income (loss) $15.4 $(7.3) $28.9 $(5.5)
Adjustments to reconcile net income
(loss) to pro forma net income:
Impairment charge -- 20.0 -- 20.0
Write-off of deferred financing
fees -- -- -- 3.7
Settlement of hedge transactions -- -- -- 0.8
Related tax effects -- (8.1) -- (10.0)
------ ------- ------- -------
Pro forma net income $15.4 $4.6 $28.9 $9.0
====== ======= ======= =======
AMIS Holdings, Inc.
Condensed Consolidated Statements of Operations
(In millions - Unaudited)
Three Months Six Months
Ended Ended
------------------------------
Jun Jun Jun Jun
26, 28, 26, 28,
2004 2003 2004 2003
------ ------- ------- -------
Revenue
Integrated mixed signal products $73.3 $60.5 $142.0 $117.3
Mixed signal foundry services 30.7 27.0 62.3 53.0
Structured digital products 30.5 20.9 58.5 40.9
------ ------- ------- -------
Total revenue 134.5 108.4 262.8 211.2
Cost of revenue 71.5 61.0 141.0 121.4
------ ------- ------- -------
Gross profit 63.0 47.4 121.8 89.8
Operating expenses:
Research & development 18.8 16.9 38.3 34.9
Selling, general and administrative 19.0 17.2 36.1 31.7
Impairment charge 0.0 20.0 0.0 20.0
------ ------- ------- -------
37.8 54.1 74.4 86.6
------ ------- ------- -------
Operating income 25.2 (6.7) 47.4 3.2
Non-operating expenses, net 4.9 6.8 9.7 15.4
------ ------- ------- -------
Income (loss) before income taxes 20.3 (13.5) 37.7 (12.2)
Provision (benefit) for income taxes 4.9 (6.2) 8.8 (6.7)
------ ------- ------- -------
Net income (loss) $15.4 $(7.3) $28.9 $(5.5)
====== ======= ======= =======
Earnings per share
Basic $0.19 $(0.49) $0.35 $(0.79)
Diluted $0.18 $(0.49) $0.33 $(0.79)
Weighted average shares
Basic 82.5 46.7 82.3 46.7
Diluted 86.3 46.7 86.3 46.7
Note: 2003 EPS is based on net loss available to common shareholders
of approximately $22.6 million in the second quarter and $36.7
million in the first six months
Key Ratios & Information:
---------------------------------------
Gross margin 46.8% 43.7% 46.3% 42.5%
Operating margin 18.7% -6.2% 18.0% 1.5%
AMIS Holdings, Inc.
Condensed Consolidated Balance Sheets
(In Millions)
June December
26, 31,
2004 2003
(unaudited)
----------- --------
Assets
-------------------------------------------------
Current assets:
Cash and cash equivalents $127.5 $119.1
Accounts receivable, net 93.4 73.6
Inventories 43.2 45.6
Deferred tax assets 9.1 9.0
Prepaid expenses and other current assets 20.4 20.7
----------- --------
Total current assets 293.6 268.0
Property, plant and equipment, net 202.4 205.9
Goodwill, net 1.2 1.2
Other intangibles, net 17.5 18.0
Deferred tax assets 36.2 38.6
Other long-term assets 17.1 18.4
----------- --------
Total assets $568.0 $550.1
=========== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $1.3 $1.3
Accounts payable 25.6 34.8
Accrued expenses 51.1 54.1
Income taxes payable 4.5 1.1
----------- --------
Total current liabilities 82.5 91.3
Long-term debt, less current portion 253.1 253.4
Other long-term liabilities 0.4 0.4
----------- --------
Total liabilities 336.0 345.1
Stockholder's equity:
Common stock 0.8 0.8
Additional paid-in capital 512.1 510.7
Accumulated deficit (294.1) (323.0)
Deferred stock-based compensation (0.4) (0.5)
Accumulated other comprehensive income 13.6 17.0
----------- --------
Total stockholders' equity 232.0 205.0
Total liabilities and stockholders' equity $568.0 $550.1
=========== ========
AMIS Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In Millions - Unaudited)
Six Months
Ended
---------------
June June
26, 28,
2004 2003
------- -------
Cash flows from operating activities
Net income (loss) $28.9 $(5.5)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 21.1 24.9
Amortization of deferred financing costs 0.6 0.6
Stock-based compensation expense 1.0 0.3
Write-off of deferred financing charges and loss on
settlement of derivatives -- 4.5
Impairment of long-term asset -- 20.0
Deferred income taxes 2.1 (11.9)
Loss on sale of property, plant and equipment -- 0.2
Interest on stockholder notes receivable -- (0.2)
Changes in operating assets and liabilities:
Accounts receivable (21.5) 2.3
Inventories 1.6 0.6
Prepaid expenses and other assets 1.0 3.2
Accounts payable and other accrued expenses (7.0) 4.9
------- -------
Net cash provided by operating activities 27.8 43.9
Cash flows from investing activities
Purchases of property, plant and equipment (16.2) (10.0)
Proceeds from sale of property, plant and equipment 0.1 --
Purchases of other intangibles (1.5) --
------- -------
Net cash used in investing activities (17.6) (10.0)
Cash flows from financing activities
Payments on long-term debt (0.3) (120.2)
Proceeds from issuance of senior subordinated notes -- 200.0
Payment to settle derivatives -- (0.8)
Deferred financing costs -- (7.3)
Payments on long-term payables -- (0.2)
Proceeds from exercise of stock options 0.5 --
Redemption of preferred stock -- (80.7)
------- -------
Net cash used in financing activities 0.2 (9.2)
Effect of exchange rate changes on cash and cash
equivalents (2.0) 2.2
------- -------
Net increase in cash and cash equivalents 8.4 26.9
Cash and cash equivalents at beginning of period 119.1 62.2
------- -------
Cash and cash equivalents at end of period $127.5 $89.1
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