Asyst Technologies to Partner With Solectron in Outsourced Manufacturing Strategy; Company Also Affirms Guidance for Second Fiscal Quarter.Business Editors and High Tech Writers FREMONT, Calif.--(BUSINESS WIRE)--Sept. 5, 2002 Asyst Technologies, Inc., (Nasdaq:ASYT), a leading provider of integrated automation solutions that maximize semiconductor manufacturing productivity, today announced that it is executing a global supply chain strategy that will result in the phased outsourcing of most of its manufacturing operations to Solectron Corporation (NYSE NYSE See: New York Stock Exchange :SLR (1) (Scalable Linear Recording) A line of magnetic tape drives from Tandberg Data that evolved from the QIC Data Cartridge format. See QIC. (2) (Single Lens Reflex) A camera that uses the same lens for viewing and shooting. ) under a five-year supply agreement. Solectron will assume operational control of most of Asyst's manufacturing operations, which will be transitioned to Solectron's facilities in North America and Asia over the next 6 to 12 months. In addition, Solectron will purchase from the company approximately $20 million of inventory to support production. The company's approximately $20 million of remaining inventory consists primarily of finished goods and spare parts. Of Asyst's approximately 1,200 worldwide employees, 260 are engaged in the company's core U.S. manufacturing operations. Of these 260, approximately 80 will remain with Asyst as part of its new product operations, sustaining operations and supply chain management. The remaining 180 will join Solectron as part of the transition. Asyst will continue to manage its robotics manufacturing operations in Nagoya, Japan. Stephen Schwartz, 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. of Asyst, said, "Our transition to a leveraged manufacturing model will provide three clear benefits to Asyst and to our customers. First, it allows Asyst to focus on its core competency of developing innovative automation technology that enhances our customers' productivity. Second, by teaming with a world-class manufacturing organization, we are positioned to build upon every metric of customer satisfaction, including on-time delivery, quality, and reliability, while assuring no disruption in current customer commitments. And third, we have made our cost structure more variable, which gives us the opportunity to improve our financial performance through the upturns and downturns of the semiconductor industry cycles." Schwartz continued, "This transition is being driven by Fred Tiso, who joined us earlier this year as senior vice president of manufacturing operations. He has successfully transitioned and led the outsourced manufacturing of tens of billions of dollars worth of production at companies such as Ascend and Lucent, resulting in reduced costs and improved customer satisfaction. We are pleased to have Fred's leadership for this significant strategic initiative." As a benefit of its outsourcing strategy, Asyst will vacate To annul, set aside, or render void; to surrender possession or occupancy. The term vacate has two common usages in the law. With respect to real property, to vacate the premises means to give up possession of the property and leave the area totally devoid of contents. certain facilities and cease use of certain other fixed assets, which will result in charges totaling $9 million to $11 million to be incurred over the next two to three quarters. As part of its strategy and separate from the Solectron agreement, the company also plans to sell its Advanced Machine Programming, Inc. (AMP) and SemiFab Inc. manufacturing subsidiaries. The company will treat AMP and SemiFab as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for accounting purposes. Also today, the company affirmed its prior guidance for its second fiscal quarter ending Sept. 30, 2002, which calls for net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of approximately $70 million, a 25% increase over the first fiscal quarter, 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 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. (from continuing operations) at or near break even, and cash burn (driven primarily by increases in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying related to higher sales) of less than $5 million. Despite this recent strong performance, the company expects its near-term future results to track more in line with its equipment industry peers. (See the footnote describing pro forma adjustments.) Pro Forma Adjustments: Pro forma adjustments include the impact of charges related to the company's move to an outsourced manufacturing model, amortized acquisition-related stock-based compensation, the amortization of acquired intangible assets, in-process research and development costs of acquired businesses, and related tax effect. About Asyst Asyst Technologies, Inc. is a leading provider of integrated automation systems for the semiconductor manufacturing industry, which enable semiconductor manufacturers to increase their manufacturing productivity and protect their investment in silicon wafers during the manufacture of integrated circuits, or ICs. Encompassing isolation systems, work-in-process materials management, substrate-handling robotics, automated transport and loading systems, and connectivity automation software, Asyst's modular, interoperable solutions allow chipmakers and original equipment manufacturers, or OEMs, to select and employ the value-assured, hands-off manufacturing capabilities that best suit their needs. Asyst's homepage is http://www.asyst.com "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under 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 Except for statements of historical fact, the statements in this press release are forward-looking. Such statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include, but are not limited to: the company's ability to successfully outsource its manufacturing, reduce costs, or improve financial performance in a cyclical industry Cyclical Industry A term describing an industry that is sensitive to the business cycle and price changes. Many cyclical industries produce durable goods such as raw materials and heavy equipment. ; the volatility of semiconductor industry cycles, failure to respond to rapid demand shifts, dependence on a few significant customers, the transition of the industry from 200mm wafers to 300mm wafers, risks associated with the acceptance of new products and product capabilities, including our Plus Portal systems, competition in the semiconductor equipment industry, failure to efficiently integrate acquired companies, failure to retain employees, and other factors more fully detailed in the Company's 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. for the year ended March 31, 2002 and quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2002, filed with the Securities and Exchange Commission |
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