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ASM INTERNATIONAL N.V. ISSUES LETTER TO SHAREHOLDERS

 BILTHOVEN, The Netherlands, June 4 /PRNewswire/ -- The following is a letter Arthur H. del Prado, president and chief executive officer of ASM International N.V. (NASDAQ: ASMIF), sent to shareholders today:
 A number of events have depressed operations and strained ASM International's financial position over the past several years, particularly since our last annual report to shareholders. Although management and the supervisory board have been working assiduously to restructure loss-producing operations and rebuild the capital base, we have not, as yet, completed this task.
 Because of certain current negotiations, we have decided, in agreement with our auditors, Deloitte & Touche, to delay publication of the 1992 annual report and request an extension of our annual shareholders meeting until a conclusive stage in these discussions has been reached. Under Netherlands law, we will hold a special meeting of shareholders on June 30, 1993, in Bilthoven, the Netherlands, to ask for approval for this course of action.
 We wish, therefore, to explain what has occurred over the past year and a half and outline certain issues warranting your review in order to evaluate ASM International's future.
 1992 Operating Loss
 First, an unusual combination of factors negatively impacted ASM's 1992 performance. While our consolidated back-end or assembly and encapsulation equipment business was profitable, led by our Asian- Pacific subsidiary, front-end, or wafer processing equipment operations were seriously hurt by the duration of the recession in the semiconductor equipment industry.
 The precipitous drop in industry sales in our major geographic and product markets hit our front-end product cycle at a vulnerable stage, deterring purchases of our more established products before new systems were fully on-stream. At the same time, the employment base was larger than warranted for the unprecedented extension of the industry downturn and delays in commitments for new generations of equipment. The charges associated with the restructuring of front-end operations were Dfls 15 million. Finally, during this period, we continued development funding of advanced systems. As a result, certain business units suffered significant operating losses.
 Including restructuring charges, ASM International recorded a loss of Dfls 73.6 million, or Dfls 9.72 per share, on an 18 percent decline in revenues to Dfls 417 million. Due to the substantial operating loss last year, the company's equity position was severely eroded. The company ended 1992 in a negative equity position.
 Front-End Restructuring
 During the year, we undertook a major reorganization of our worldwide front-end operations, which entailed the restructuring of three decentralized front-end operations in Europe, the United States and Japan into one unit. We designated worldwide product managers for each major wafer processing product line. We eliminate 300 positions, or some 12 percent of the total workforce and 33 percent of the front- end workforce, and consolidated many research activities. We scrutinized all development projects and product lines against customer needs. We will continue such actions in order to better posture the worldwide front-end operations for the future.
 1993 Outlook
 Year-end backlog was Dfls 175 million, compared to Dfls 178 million at the end of the prior year. At April 30, 1992, backlog stood at Dfls 224 million, compared to Dfls 208 million at April 30, 1992.
 ASM International will report a loss for the first three months of 1993 of approximately Dfls 9.5 million. We expect improvement as 1993 unfolds with ASM's second half performance better than the first six months. Our 1993 objective is to bring ASM's front-end operations to a substantially reduced loss position.
 Financial Position
 ASM's primary objective is to strengthen its operating base and financial structure which have been under pressure throughout the industry recession. A number of issues have, or may affect the company's financial position.
 In 1992, we restructured and refinanced the Dfls 26.8 million of 5 percent convertible and convertible subordinated debentures by issuing 17 percent Dfls 18.7 million subordinated mandatory convertible debentures and 13.75 percent Dfls 4.2 million debentures. Simultaneously, we arranged an additional Dfls 20 million loan from the majority debentureholders. At the closing, 2.0 million common shares were issued to debentureholders for Dfls 4.9 million of the principal amount of the outstanding debentures.
 Under terms of this debenture agreement, the company issued 1.3 million common shares as payment for interest and principal due at March 31, 1993. At the same time, the company negotiated a two-year call option on these shares at prices of $1.56 and $1.80 per share during the first and second years respectively.
 In March 1993, the company sold 5 percent of the issued share capital of ASM Pacific Technology Ltd., listed on the Hong Kong Stock Exchange. The position, generating approximately Dfls 10 million and a net gain of Dfls 6 million, represented 18 million shares sold at HK$ 2.425 per share. The transaction reduced ASM International's holdings in ASMPT to 60 percent.
 Our principal banks (Dutch) are reviewing the conditions of the financing arrangements presently available to ASM International. Such discussions are expected to be concluded in the near future.
 Refinancing Measures
 ASM International is also actively pursuing a number of capital generating alternatives, including joint ventures and divestiture of certain operations. Both the restructuring program and the divestiture activities are focusing on recapturing the equity position lost in 1992 and prior years.
 One of the steps recently taken was the decision of the supervisory board of directors to divest of ASM's Fico operations, the European headquartered tooling, molding and trim and form systems operations. The company has discussed the sale of ASM Fico with several potential buyers and believes the announcement of a transaction will be made shortly.
 Other steps will follow later in the year.
 ASM's Product Future
 As mentioned, we thoroughly reviewed all major front-end product lines with respect to their technologies and specific industry segment forecasts. We are convinced that our products address today's and future customer needs for the production of advanced semiconductor devices. In particular, we refer to the Epsilon One family of epitaxial reactors and the Paragon, a related family for polysilicon growth; the Advance 600, our cluster system; the Advance 300 VT, our vertical thermal processor; and the Eagle 10, our Japanese designed PECVD single wafer product.
 It is because of our conviction in the potential for all our major front-end product lines, which participate in markets expected to show annual double-digit growth over the next five years, that we have continued to commit so many resources to the reorganization of these global operations.
 We must not forget the equal promise of our back-end equipment operations of our majority-owned subsidiary, ASM Pacific Technology Ltd. ASMPT, the largest manufacturer of assembly and encapsulation equipment in Southeast Asia, outside Japan, reported record sales and profits for 1992. Over the past decade, ASMPT sales have increased nearly 500 percent and after-tax margins have expanded to over 10 percent per annum.
 We are facing many challenges as well as opportunities in the near future. The hard work of all those involved with our operating and financial restructuring is a vote of confidence in ASM International's future. We look to their continued support for our future success. We assure our shareholders we will appraise them as important events occur.
 NOTE: At Dec. 31, 1992 and March 31, 1993, one U.S. dollar equaled Dfls 1.815. At April 29, 1993 one U.S. dollar equaled Dfls 1.773.
 -0- 6/4/93
 /CONTACT: Hans-Peter Hukshorn, 011-31-30-298-540, or Mary Jo Dieckhaus, 212-686-8144, both for ASM International N.V./
 (ASMIF)


CO: ASM International N.V. ST: IN: SU:

TM-LD -- NY003 -- 5280 06/04/93 07:10 EDT
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