Toolex Improves Gross Margin and Maintains Net Profit in Difficult Markets.Business Editors EINDHOVEN Eindhoven (īnt`hō'fən), city (1994 pop. 196,130), North Brabant prov., S Netherlands, on the Dommel River. It is an industrial center and rail junction. , The Netherlands--(BUSINESS WIRE)--March 8, 2001 Toolex International N.V. (AEX AEX See: Amsterdam Exchange : TLXI, Nasdaq:Txlaf) reports net revenue for 2000 of EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 246.7 million, a 7% increase versus the previous year (EUR 230.4 million). Excluding extra-ordinary items earnings amounted to EUR 20.4 million, and were at the same level as the 1999 figures, resulting in earnings per share of EUR 0.74. Net profit, after extra-ordinary items, rose by 35.2% to EUR 27.5 million (1999: EUR 20.4 million), resulting in earnings per share of EUR 1.01. The optical media equipment market experienced a year that differed significantly from 1999. Investment levels worldwide in Recordable media equipment dropped dramatically after the first quarter, only to revive To renew. For example, revival is the act of renewing the legal force of a contract or debt, either by acknowledging it or by giving a new promise, when the contract or debt is no longer a sufficient foundation for a lawsuit because it is barred by the running of the Statute moderately in the last months of the year. All suppliers focused on minimizing their stock levels, thus creating severe price erosion. DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. related equipment sales rose by 92,6% and have been the main area of growth for Toolex in 2000. Here also prices came under pressure in Q4. Leon Leon Medieval kingdom, northwestern Spain. Leon proper included the cities of León, Salamanca, and Zamora—the adjacent areas of Vallodolid and Palencia being disputed with Castile, originally its eastern frontier. Giesen, 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. , Toolex International, commented: "The optical media equipment market has been, and will be on the short term in rough weather. In light of this we are happy that we have been able to maintain acceptable profit levels. The time has come for Toolex to further professionalize pro·fes·sion·al·ize tr.v. pro·fes·sion·al·ized, pro·fes·sion·al·iz·ing, pro·fes·sion·al·iz·es To make professional. pro·fes and right-size the organization. We already started this process in 2000, and will conclude it in 2001." Key figures In million Euro 2000 1999 change Revenues 246.7 230.4 7.1 % Operating result 32.6 31.4 3.8 % Net Profit 27.5 20.4 34.8 % Net profit before extra-ordinary items 20.4 20.4 0.0 % Earnings per share (EUR) 1.01 0.74 36.5 % EPS before extra-ordinary items 0.74 0.74 0.0 % Sales Revenues are evenly spread over Toolex' three regions. With EUR 85.0 million (EUR 69.0 million in 1999), 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). accounted for 34% of
total worldwide revenues. Both pre-recorded and mastering sales
contributed to the growth of 23.1% compared to 1999. Asia was the only
region where 1999 sales could not be reached. Mainly due to lower
investment levels in the recordable equipment segment in both Taiwan and
Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. . Asian sales amounted to EUR 84.8 million, a 25.8% decline
compared to last year's EUR 114.3 million. The investments Toolex
has made to improve its market position in the America's have
started to show returns. With a full year growth percentage of 63.3%
compared to 1999 sales, the America's are now at similar levels as
the other two regions, claiming 32% of total Toolex revenues worldwide.
2000 1999
Pre-recorded 76.3 31% 53.5 23%
Recordable 59.7 24% 96.7 42%
Mastering 54.0 22% 40.4 18%
Service & other 56.7 23% 39.8 17%
--------- --------- --------- ---------
TOTAL 246.7 100% 230.4 100%
========= =========
Europe 85.0 34% 69.0 30%
Asia 84.8 34% 114.3 50%
The Americas 76.9 32% 47.1 20%
--------- --------- --------- ---------
TOTAL 246.7 100% 230.4 100%
========= =========
Pre-recorded Toolex realised sales growth of 42.6% compared to the 1999 figures in the pre-recorded segment. Particularly in 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. and Europe, where most of the content owners are located, sales increased sharply. In total 59 dedicated DVD lines were shipped to customers and 58 CD lines of which 10 double lines. Several of the CD lines have DVD-5 capabilities. Recordable The market for recordable media equipment showed a big downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. compared to 1999. The total world market is believed to have more than halved halve tr.v. halved, halv·ing, halves 1. To divide (something) into two equal portions or parts. 2. To lessen or reduce by half: halved the recipe to serve two. 3. . Toolex reports a decrease of 38.3% in recordable sales. During the last quarter of 2000 Toolex focused, as its competitors, on reducing stock levels of finished CD-R (CD-Recordable) A writable CD technology using a type of compact disc that can be recorded, but not erased (CD-Rs are "write once" discs). CD-R discs are used to master CD-ROMs, to back up data and to make copies of data for distribution. lines, thus resulting in heavy price-pressure. Toolex management estimates that its market share in recordable equipment has increased to over 25%, compared to 20% in 1999. Mastering The Toolex Mastering division was able to increase sales with 33.7% compared to 1999, despite some price erosion on standard products. With 22% of total sales, Mastering is a stable factor. During 2000, the fifth high-end Deep-UV recorder was delivered to technological frontrunners in the industry. The AM-200 remains the industry standard for pre-recorded formats with 27 lines sold. Market share was kept above 50%. Service & others Service and other sales increased with 42.5%. Peripheral equipment sales remained stable but service sales on the installed base and other sales increased sharply. The divestment divestment to strip one's investment from an entity. of some activities in 2000 will have a negative effect in this segment in 2001. In 2000 other sales includes revenues from a non-exclusive access fee to Toolex' worldwide customer base and know-how transfer. This fee amounts to EUR 7 million. Toolex intends to market such access to its customers base, on a regular basis in the future. Gross Margin The gross margin over the full year ended on 37.1% of sales. On equipment sales the average margin was 34.3%, a full percent lower than 1999's 35.3%. Price pressure in all areas could only partially be offset by cost-price reductions. Service and other sales pulled up margin with its traditionally higher margins. Expenses The total operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. level increased by 14.5% to 59 million Euro, mainly driven by higher R&D budgets. With the extra-ordinary gains that Toolex received from divesting some of its activities, additional funds were granted to R&D programs in areas where Toolex believes the future core technologies of the industry lie, e.g. multi-layer sputtering A popular method for adhering thin films onto a substrate. Sputtering is done by bombarding a target material with a charged gas (typically argon) which releases atoms in the target that coats the nearby substrate. It all takes place inside a magnetron vacuum chamber under low pressure. and re-writable process know-how. In total around 5 million extra R&D was spent. G&A expenses were influenced by non-recurring items such as the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of the headquarters in the Netherlands and the USA, a prior period credit on social security premiums in Sweden and the high exchange rate of the US dollar and the Hong Kong dollar Noun 1. Hong Kong dollar - the basic unit of money in Hong Kong dollar - the basic monetary unit in many countries; equal to 100 cents to the Euro. Extra-ordinary gains & losses Extra-ordinary gains were booked to an amount of EUR 16.2 million, on balance the result of the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. of aeco N.V., the sale of Toolex France to Plasmon Plc, the sale of Apex, the management buy-out buy·out also buy-out n. 1. The purchase of the entire holdings or interests of an owner or investor. 2. The purchase of a company or business: of the Symcon group and the sale of the Alpha Plating business to Technotrans, all net of related expenses of these divestments. Extra-ordinary expenses were booked as a result of reorganization the Toolex group. Net of taxes a total amount of EUR 9.1 million is recorded for the closing of all molding activities in Sweden, the Toolex Optical activities in Avon and the Firetrac activities in Irvine and the announced reshaping of the remaining organization. Balance sheet The balance sheet total increased with 40.5% to EUR 225.4 million, compared to EUR 160.3 million at 1999 year-end. The increase is a result of high investments in working capital. High inventory levels for the start-up Start-up The earliest stage of a new business venture. of the molding activities in the Netherlands and a remaining number of CD-R lines on stock, are the biggest increases in inventory. Also receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed increased from EUR 83.0 million at year-end 1999 to EUR 117.4 million at year-end 2000. This is mainly caused by the fact that customers demand more and more financing facilities and extended payment terms. Outlook The market for optical media equipment is generally expected to show only moderate growth, if any, in the year 2001. The 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. at year end, after adjustment for on hold orders, amounted to EUR 101.8 million. Order intake for the total year was EUR 230.7 million. Particularly the first half year will be marked by lower volumes. Only when the market for equipment for recordable media will pick up can growth be expected. Toolex management believes this will take place in the second part of 2001. Price pressure on equipment for all formats will remain and strict value engineering and cost price management must protect margins. For this reason Toolex is in the process of reshaping its organization so it can use its capacities to the fullest. The business unit structure will be changed towards an organization that shares resources and focuses on the different Product-Market Combinations within the one optical media market. All activities will be marketed under the Toolex name. Toolex management stays with its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. target of 15% growth of revenues and 10% net profit on revenues. Taking the current market 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 into account management expects revenue growth in 2001 to be below the long term target.
Consolidated Profit & Loss account
(in Euros million)
2000 1999
Net sales 246.7 230.4
Cost of goods sold 155.1 147.5
----------- -----------------
Gross margin 91.6 82.9
Marketing & Sales expenses 11.5 11.7
Research & Development expenses 19.1 12.8
General & Administrative expenses 28.4 27.0
----------- -----------------
Operating result 32.6 31.4
Interest en other financial expenses (5.6) (3.6)
Pretax result 27.0 27.8
Taxes (6.1) (6.5)
Minority shares (0.5) (0.9)
----------- -----------------
NET RESULT ORDINARY BUSINESS 20.4 20.4
Extra-ordinary profits 16.2 -
Extra-ordinary expenses (10.8) -
Tax on extra-ordinary items 1.7 -
NET RESULT 27.5 20.4
=========== =================
Consolidated balance sheet
(in Euros millions)
31 Dec. 00 31 Dec. 99
ASSETS
Fixed Assets 16.0 10.5
Inventory 90.5 60.6
Receivables 117.4 83.0
Cash 1.5 6.2
---------- -----------------
TOTAL ASSETS 225.4 160.3
========== =================
LIABILITIES & SHAREHOLDERS' EQUITY
Shareholders' equity 55.6 35.2
Provisions 16.0 15.1
Long term liabilities 32.1 27.2
Current liabilities 121.7 82.8
---------- -----------------
LIABILITIES & SHAREHOLDERS' EQUITY 225.4 160.3
========== =================
Additional financial data
Shareholders' equity (in Euros millions)
1 January 2000 35.2
Net profit over the year 2000 27.5
Currency Translation Differences (7.1)
-------------------
31 December 2000 55.6
Earnings per share 2000 1999
Number of outstanding shares 27,401,520 27,354,000
Earnings per share (Dutch GAAP) 27.401.080 1.01 0.74
All financial results in this press release are expressed in Dutch 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 (Dutch GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). This press release contains certain 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. and information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the future operations of Toolex International, that are based on the beliefs of Toolex management as well as assumptions made by and information currently available to Toolex. When used in this document, the words "anticipate", "believe", "estimate" and "expect" and similar expressions, as they relate to Toolex International, or their respective management, are intended to identify forward-looking statements. Such statements reflect the current views of Toolex with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance and achievements that may be expresses or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, introduction of competing products by other companies, lack of acceptance of new products by Toolex' International's targeted customers, changes in business strategy and various other factors, both referenced and not referenced in this press release. Should one or more risks or uncertainties materialise Verb 1. materialise - come into being; become reality; "Her dream really materialized" materialize, happen hap, happen, occur, come about, take place, go on, pass off, fall out, pass - come to pass; "What is happening?"; "The meeting took place off without , or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. |
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