EX-99.1 2 a6k-q3x2013.htm 6-K 6K -Q3-2013


Almere, The Netherlands
October 31, 2013

ASM INTERNATIONAL N.V. REPORTS
THIRD QUARTER 2013 RESULTS

ASM International N.V. (NASDAQ: ASMI and Euronext Amsterdam: ASM) reports today its third quarter 2013 operating results (unaudited) in accordance with US GAAP.

Following the close of the sale on March 15, 2013 of a 12% share in ASMPT, the entity in which the Back-end segment is organized, ASMI's shareholding is reduced to 40.08%. As a consequence, as from March 15, 2013 the results of ASMPT are deconsolidated. From that date onwards the net result of ASMPT is reported on the line 'result from investments'. In the second quarter of 2013 a purchase price allocation took place resulting in the recognition and subsequent amortization of certain intangible assets.

FINANCIAL HIGHLIGHTS
The pro-forma figures show ASMI numbers whereby ASMPT is deconsolidated.
EUR million
Pro-forma
Q3 2012

Q2 2013

Q3 2013

New orders
64.3

128.4

112.2

Net sales
96.1

128.6

116.4

Gross profit margin %
31.4
%
39.3
%
39.1
%
Operating results
(1.6
)
16.2

11.6

Result from investments (excl. amortization and fair value purchase price allocation)
13.3

9.2

10.8

Remeasurement gain, realized gain on sale of ASMPT shares, amortization and fair value adjustments
—

(40.8
)
(17.2
)
Net earnings
4.9

(23.4
)
(0.9
)
Normalized net earnings (excl. remeasurement gain, realized gain on sale of ASMPT shares, amortization and fair value adjustments)
4.9

17.4

16.3


•
Net sales for the third quarter 2013 decreased with 9% compared to the second quarter and increased with 21% year-on-year, mainly driven by (PE)ALD sales which were subsequently higher than in the comparable period last year, but below the Q2 level.

•
Result from operations for the third quarter 2013 includes restructuring costs of €1.0 million compared to €0.7 million included in the second quarter.


1 of 3





COMMENT
Commenting on the results, Chuck del Prado, President and Chief Executive Officer of ASM International said:
"Q3 was again a strong quarter for ASMI. Sales came in 9% lower than the very strong second quarter, slightly better than expected. Our book to bill ratio remained at 1.0. Both sales and order intake were driven by (PE)ALD demand in the most advanced technology nodes. Margins remained healthy, leading to a 10% operating result. We also saw strong improvement in our operational cash flow due to lower working capital requirements for the quarter. Our result from investments excluding 'PPA-effects' improved due to better results in ASMPT".

OUTLOOK
Our sales in Q4, on a currency comparable level, are expected to show a single digit increase compared to Q3. Q4 order intake, on a currency comparable level, is expected to show a low double digit increase as compared to Q3.




About ASM International
ASM International NV, headquartered in Almere, the Netherlands, its subsidiaries and participations design and manufacture equipment and materials used to produce semiconductor devices. ASM International, its subsidiaries and participations provide production solutions for wafer processing (Front-end segment) as well as for assembly & packaging and surface mount technology (Back-end segment) through facilities in the United States, Europe, Japan and Asia. ASM International's common stock trades on NASDAQ (symbol ASMI) and the Euronext Amsterdam Stock Exchange (symbol ASM). For more information, visit ASMI's website at www.asm.com.

Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: All matters discussed in this statement, except for any historical data, are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These include, but are not limited to, economic conditions and trends in the semiconductor industry generally and the timing of the industry cycles specifically, currency fluctuations, corporate transactions, financing and liquidity matters, the success of restructurings, the timing of significant orders, market acceptance of new products, competitive factors, litigation involving intellectual property, shareholder and other issues, commercial and economic disruption due to natural disasters, terrorist activity, armed conflict or political instability, epidemics and other risks indicated in the Company's filings from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, the Company's reports on Form 20-F and Form 6-K. The Company assumes no obligation nor intends to update or revise any forward-looking statements to reflect future developments or circumstances.

ASM International will host an investor conference call and web cast on Friday, November 1, 2013 at 15:00 Continental European Time (10:00 a.m. - US Eastern Time).

The teleconference dial-in numbers are as follows:
•
United States:         +1 212 444 0412
•
International:         + 44 (0)20 3427 1919
•
The Netherlands:     + 31 (0)20 716 8295
•
Access Code:         9228211

A simultaneous audio web cast will be accessible at www.asm.com.

The teleconference will be available for replay, beginning one hour after completion of the live broadcast, for a duration of 7 days starting on November 1, 2013.

2 of 3



The replay dial-in numbers are:
•
United States:         +1 347 366 9565
•
England:         + 44 (0)20 3427 0598
•
The Netherlands:    +31 (0)20 708 5013
•
Access Code:         9228211


CONTACT

Investor contact:

Victor Bareño
T: +31 88 100 8500
E: victor.bareno@asm.com

Mary Jo Dieckhaus
T: +1 212 986 2900
E: maryjo.dieckhaus@asm.com

Media contact:

Ian Bickerton
T: +31 625 018 512

3 of 3


ANNEX 1

OPERATING AND FINANCIAL REVIEW
THIRD QUARTER 2013

The pro-forma figures show ASMI numbers whereby ASMPT is deconsolidated. Result from investments reflects ASMI's share in the net earnings of ASMPT. In the pro-forma results for Q3, 2012 a share of 52% is presented. For Q3, 2013 the actual 40% shareholding is reflected.

The following table shows the operating performance for the third quarter of 2013 as compared to the second quarter of 2013 and the third quarter of 2012 on a pro-forma basis:
EUR million
Pro-forma Q3 2012

Q2 2013

Q3 2013

Change
Q2 2013
to
Q3 2013

Change
Q3 2012
to
Q3 2013

New orders
64.3

128.4

112.2

(13
)%
74
 %
Backlog
57.3

117.0

111.4

(5
)%
94
 %
Book-to-bill
0.7

1.0

1.0

 
 
 
 
 
 
 
 
Net sales
96.1

128.6

116.4

(9
)%
21
 %
Gross profit
30.1

50.5

45.6

(10
)%
51
 %
Gross profit margin %
31.4
 %
39.3
%
39.1
%
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
(16.3
)
(18.6
)
(18.2
)
(2
)%
12
 %
Research and development expenses
(15.4
)
(15.0
)
(14.8
)
(1
)%
(4
)%
Restructuring expenses
—

(0.7
)
(1.0
)
43
 %
n/a

 
 
 
 
 
 
Operating result
(1.6
)
16.2

11.6

(4.6
)
13.2

Operating margin %
(1.7
)%
12.6
%
9.9
%
 
 
 
 
 
 
 
 
Financing costs
(8.6
)
(4.8
)
(4.0
)
0.8

4.6

Income tax
1.9

(3.4
)
(2.0
)
1.4

(3.9
)
Result from investments
13.3

9.2

10.8

1.6

(2.5
)
Remeasurement gain, realized gain on sale of ASMPT shares, amortization and fair value adjustments
—

(40.8
)
(17.2
)
23.6

(17.2
)
 
 
 
 
 
 
Net earnings
4.9

(23.4
)
(0.9
)
22.5

(5.8
)
Normalized net earnings (excl. remeasurement gain, realized gain on sale of ASMPT shares, amortization and fair value adjustments)
4.9

17.4

16.3

(1.1
)
11.4

 
 
 
 
 
 
Net earnings per share, diluted
€
0.09

€
(0.37
)
€
(0.01
)
€
0.36

€
(0.10
)
Normalized net earnings per share, diluted
€
0.09

€
0.28

€
0.26

€
(0.02
)
€
0.17





1


Results

The backlog decreased from €117 million at the end of the second quarter to €111 million (€113 million on a currency comparable level) as per September 30, 2013. The book-to-bill ratio remained at a level of 1.0.

The following table shows the level of new orders for the third quarter of 2013 and the backlog at the end of the third quarter of 2013, compared to the second quarter of 2013 and the third quarter of 2012:
EUR million
Q3 2012

Q2 2013

Q3 2013

% Change
Q2 2013
to
Q3 2013

% Change
Q3 2012
to
Q3 2013

Backlog at the beginning of the quarter
92.2

119.9

117.0

(2
)%
27
%
New orders for the quarter
64.3

128.4

112.2

(13
)%
74
%
Net sales for the quarter
(96.1
)
(128.6
)
(116.4
)
(9
)%
21
%
FX-effect for the quarter
(3.1
)
(2.7
)
(1.3
)
 
 
 
 
 
 
 
 
Backlog at the end of the quarter
57.3

117.0

111.4

(5
)%
94
%
 
 
 
 
 
 
Book-to-bill ratio
(new orders divided by net sales)
0.7

1.0

1.0

 
 

Net sales for the third quarter 2013 decreased with 9% compared to the second quarter and increased with 21% year-on-year, mainly driven by (PE)ALD sales which were subsequently higher than in the comparable period last year, but below the Q2 level. The impact of currency changes was a decrease of 2% quarter to quarter and a decrease of 6% year-over-year.

The gross profit margin in the third quarter was stable at a 39% level (Q2 39.3%, Q3 39.1%). This resulted from continued positive mix effects and better loading of our factories. For Q3 2012 gross profit margin was 31.4%. The impact of currency changes on gross profit was a decrease of 2% quarter to quarter and a decrease of 9% year-over-year.

Selling, general and administrative expenses decreased with 2% compared to the previous quarter. As a percentage of sales SG&A expenses increased to 16%, compared to 15% for the previous quarter. For the third quarter of 2012 this was 17%. The impact of currency changes on SG&A expenses was a decrease of 1% quarter to quarter and a decrease of 4% year-over-year.

Research and development expenses decreased with 1% compared to the previous quarter. As a percentage of sales R&D expenses increased to 13%, compared to 12% for previous quarter. For the third quarter of 2012 this was 16%.The impact of currency changes on R&D expenses was a decrease of 2% quarter to quarter and a decrease of 10% year-over-year.

Operating result was affected by currency changes with a decrease of 3% quarter to quarter.

Result from investments include our 40.08% share in net earnings of ASMPT. In Q3 ASMPT showed a sales increase of 7% compared to Q2, from €283 million to €302 million, 4% below the level of Q3, 2012 of €313 million. Net earnings increased from €23.0 million in Q2 to €26.8 million (on a 100% basis) in Q3. Q3 last year, also on a 100% basis, showed net earnings at €25.6million.

The sale of the 11.88% stake caused ASMI's cease of control on ASMPT and required deconsolidation of ASMPT. According to general accepted accounting principles (both US GAAP and IFRS) the accounting of this sale consists of two separate transactions.
•
a sale of a 51.96% subsidiary
•
a purchase of a 40.08% associate.

The sale transaction resulted in a substantial gain. This gain consists of two elements, the realized gain on the sale of the 11.88% stake of €245 million and an unrealized remeasurement gain on the remaining 40.08% of the shares of approximately €1.1 billion.

The purchase of the associate has been recognized at fair value, being the value of the ASMPT shares on the day of closing of the purchase transaction. Both US GAAP and IFRS require that the composition of such a fair value needs to be determined through a purchase price allocation process ('PPA'). This process took place in the second quarter of 2013. The PPA resulted in the recognition of intangible assets for customer relationship, technology, trade name and product names. For inventories and property, plant & equipment a fair value adjustment was recognized.

The amortization of the recognized intangible assets and the depreciation of the fair value adjustment for property, plant & equipment negatively impacted net earnings with €5.6 million in Q3. For 2013 a total amortization and depreciation amount is to be expected of €17 million. The annualized amount of this amortization will remain on a level of approximately €23 million until 2017 and then decreases.

2




The fair value adjustments for inventories and tax related issues will have a non-recurring negative impact on net earnings in 2013 of €39 million, of which €28 million in the second quarter and €11 million in the third quarter.

Cash flow, balance sheet, liquidity and capital resources

Cash flow. The following table shows the cash flow statement on a comparable basis. The ASMPT numbers have been deconsolidated:
 
Pro-forma

 
 
EUR million
Q3 2012

Q2 2013

Q3 2013

Net earnings
(8.4
)
(23.4
)
(0.9
)
Adjustments to cash from operating activities
 
 
 
Depreciation and amortization
5.0

5.1

5.1

Income tax
(2.5
)
3.0

0.7

Amortization PPA intangibles and fair value adjustments
—

40.7

17.2

Result from investments
—

(9.2
)
(10.8
)
Other adjustments
2.0

1.2

1.2

 
 
 
 
Changes in other assets and liabilities
 
 
 
Accounts receivable
0.2

(25.4
)
19.7

Inventories
0.5

0.1

3.3

Accounts payable
(7.3
)
(1.3
)
(1.1
)
Other assets and liabilities
(13.5
)
9.8

(0.1
)
Net cash provided (used) by operating activities
(24.0
)
0.6

34.4

 
 
 
 
Capital expenditures
(2.0
)
(0.2
)
(2.0
)
Divestment subsidiaries
—

—

—

Other
(0.3
)
0.3

1.6

Net cash provided (used) in investing activities
(2.3
)
0.1

(0.4
)
 
 
 
 
Bank positions
(0.1
)
—

—

Loans
(12.0
)
—

—

Purchase treasury shares
—

—

—

Shares issued
0.4

0.1

0.2

Dividend paid and capital repaid to shareholders ASMI
(0.1
)
(31.7
)
(269.7
)
Dividend received from investments
13.4

4.7

5.6

Net cash provided (used) in financing activities
1.6

(26.9
)
(263.9
)

3


Balance sheet. The following table shows the balance sheet on a comparable basis. The ASMPT numbers have been deconsolidated and ASMI's share in the net assets of ASMPT is reported as investment:
 
Pro-forma

Pro-forma

 
EUR million
September 30,
2012

December 31,
2012

September 30,
2013

Cash and cash equivalents
184.9

145.1

303.6

Accounts receivable
58.3

62.6

64.4

Inventories
123.1

122.1

117.2

Other current assets
22.8

20.3

19.9

Total current assets
389.1

350.0

505.1

 
 
 
 
Investments and associates
384.6

373.7

1,339.4

Property, plant and equipment
59.7

63.8

51.4

Goodwill
11.4

11.6

11.4

Other non-current assets
50.4

34.2

27.6

Total non-current assets
506.1

483.3

1,429.8

 
 
 
 
Total assets
895.2

833.4

1,934.9

 
 
 
 
Accounts payable
34.6

45.2

39.0

Short-term debt
0.7

—

—

Other current liabilities
43.4

42.7

54.9

Total current liabilities
78.7

87.9

93.9

 
 
 
 
Long-term debt
5.0

—

—

Convertible subordinated debt
138.6

—

—

Pension liabilities
5.4

3.6

3.1

Total non-current liabilities
149.0

3.6

3.1

 
 
 
 
Shareholders' equity
667.5

741.9

1,837.9

 
 
 
 
Total liabilities and shareholders' equity
895.2

833.4

1,934.9


Net working capital consisting of accounts receivable, inventories, other current assets, accounts payable, accrued expenses, advance payments from customers and deferred revenue, decreased from €134 million on June 30, 2013 to €108 million at September 30, 2013. The number of outstanding days of working capital, measured against quarterly sales, decreased from 94 days at June 30, 2013 to 84 days on September 30, 2013.

Sources of liquidity. On September 30, 2013, the Company’s principal sources of liquidity consisted of €304 million in cash and cash equivalents and €150 million in undrawn bank lines.


4


OPERATING AND FINANCIAL REVIEW
NINE MONTHS ENDED SEPTEMBER 30, 2013

The following table shows the operating performance for the nine months ended September 30, 2013, compared to the same period of the previous year on a pro-forma basis:
EUR million
Pro-forma Nine months ended September 30, 2012

Pro-forma Nine months ended September 30, 2013

Change

New orders
230.6

346.5

50
 %
Backlog
57.3

111.4

94
 %
Book-to-bill
0.8

1.1

 
 
 
 
 
Net sales
277.3

325.0

17
 %
Gross profit
90.0

126.2

40
 %
Gross profit margin %
32.4
 %
38.8
%
 
 
 
 
 
Selling, general and administrative expenses
(46.3
)
(52.1
)
13
 %
Research and development expenses
(44.4
)
(43.3
)
(2
)%
Restructuring expenses
—

(1.9
)
n/a

 
 
 
 
Operating result
(0.7
)
28.9

29.6

Operating margin %
(0.3
)%
8.9
%
 
 
 
 
 
Financing costs
(13.2
)
(6.2
)
7.0

Income tax
4.3

(5.9
)
(10.2
)
Result from investments
38.5

19.4

(19.1
)
Remeasurement gain, realized gain on sale of ASMPT shares, amortization and fair value adjustments
—

1,349.6

1,349.6

 
 
 
 
Net earnings
28.9

1,385.9

1,357.0

Normalized net earnings (excl. remeasurement gain, realized gain on sale of ASMPT shares, amortization and fair value adjustments)
28.9

36.3

7.4

 
 
 
 
Net earnings per share
€0.52
€21.71
€21.19
Normalized net earnings per share
€0.52
€0.57
€0.05


5


Results

The backlog at the end of September increased with 94% to a level of €111 million, compared to September 30 last year. The book-to-bill was 1.1.

The following table shows the level of new orders for the nine months ended September 30, 2013 and the backlog for the same period of 2012:
 
Nine months ended September 30,
 
 
EUR million
2012

2013

% Change

Backlog at the beginning of the year
105.1

91.7

(13
)%
New orders
230.6

346.5

50
 %
Net sales
(277.3
)
(325.0
)
17
 %
FX-effect
(1.1
)
(1.7
)
 
 
 
 
 
Backlog as per reporting date
57.3

111.4

94
 %
 
 
 
 
Book-to-bill ratio
(new orders divided by net sales)
0.8

1.1

 

Net sales for the nine months ended September 30, 2013 increased with 17% year on-year, mainly driven by higher (PE)ALD sales.The impact of currency changes was a decrease of 3%.

The gross profit margin for the nine months ended September 30, 2013 increased 6%. This increase resulted from positive mix effects and improved efficiency. The impact of currency changes on gross profit was a decrease of 5% year-over-year.

Selling, general and administrative expenses for the nine months ended September 30, 2013 increased with 13% compared to the previous year. As a percentage of sales SG&A was 16%. For the comparable period of 2012 this was 17%. The impact of currency changes on SG&A expenses was a decrease of 2% year-over-year.

Research and development expenses for the nine months ended September 30, 2013 decreased with 2% compared to the previous year. As a percentage of sales R&D was 13%. For the comparable period of 2012 this was 16%. The impact of currency changes on R&D expenses was a decrease of 6% year-over-year.

Operating result was affected by currency changes with a decrease of 8% year-over-year.

The sale of the 11.88% stake caused ASMI's cease of control on ASMPT and required deconsolidation of ASMPT. According to general accepted accounting principles (both US GAAP and IFRS) the accounting of this sale consists of two separate transactions.
•
a sale of a 51.96% subsidiary
•
a purchase of a 40.08% associate

The sale transaction resulted in a substantial gain. This gain consists of two elements, the realized gain on the sale of the 11.88% stake of €245 million and an unrealized remeasurement gain on the remaining 40.08% of the shares of approximately €1.1 billion.

The purchase of the associate has been recognized at fair value, being the value of the ASMPT shares on the day of closing of the purchase transaction. Both US GAAP and IFRS require that the composition of such a fair value needs to be determined through a purchase price allocation process ('PPA'). This process took place in the second quarter of 2013. The PPA resulted in the recognition of intangible assets for customer relationship, technology, trade name and product names. For inventories and property, plant & equipment a fair value adjustment was recognized.

The amortization of the recognized intangible assets and the depreciation of the fair value adjustment for property, plant & equipment negatively impacted net earnings with €11 million. For 2013 a total amortization and depreciation amount is to be expected of €17 million. The annualized amount of this amortization will remain on a level of approximately €23 million until 2017 and then decreases.

The fair value adjustments for inventories and tax related issues will have a non-recurring negative impact on net earnings in 2013 of €39 million, of which €28 million in the second quarter and €11 million in the third quarter.


6


ANNEX 2

RECONCILIATION RESULTS TO ASMI CONSOLIDATED

The results of Back-end were consolidated until March 15, 2013. From that date on the net result of ASMPT is reported on the line "result from investments".

THIRD QUARTER
EUR million, except earnings per share
Q3 2012

Q2 2013

Q3 2013

% Change
Q2 2013
to
Q3 2013

% Change
Q3 2012
to
Q3 2013

Net sales
409.3

128.6

116.4

(9
)%
(72
)%
Gross profit
125.4

50.5

45.6

(10
)%
(64
)%
Gross profit margin %
30.6
%
39.3
%
39.1
%
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
(53.6
)
(18.6
)
(18.2
)
(2
)%
(66
)%
Research and development expenses
(40.0
)
(15.0
)
(14.8
)
(1
)%
(63
)%
Restructuring expenses
—

(0.7
)
(1.0
)
43
 %
n.a

Result from operations
31.9

16.2

11.6

n/a

n.a

 
 
 
 
 
 
Net earnings 1)
4.9

(23.4
)
(0.9
)
2,250
 %
(580
)%
Net earnings per share, diluted in euro 1)
€0.09
€(0.37)
€(0.01)
36
 %
(10
)%
1) allocated to the shareholders of the parent

Net Sales
EUR million
Q3 2012

Q2 2013

Q3 2013

% Change
Q2 2013
to
Q3 2013

% Change
Q3 2012
to
Q3 2013

Front-end
96.1

128.6

116.4

(9
)%
21
 %
Back-end
313.2

—

—

n/a

n/a

ASMI consolidated
409.3

128.6

116.4

(9
)%
(72
)%

Gross Profit (Margin)
EUR million
Gross profit
Gross profit
margin
Increase or
(decrease)
percentage points
 
Q3 2012

Q2 2013

Q3 2013

Q3 2012

Q2 2013

Q3 2013

Q2 2013
to
Q3 2013

Q3 2012
to
Q3 2013

Front-end
30.1

50.5

45.6

31.4
%
39.3
%
39.1
%
(0.2
)ppt
7.7
ppt
Back-end
95.3

—

—

30.4
%
—
%
—
%
n/a

n/a

ASMI consolidated
125.4

50.5

45.6

30.6
%
39.3
%
39.1
%
(0.2
)ppt
8.5
ppt


7


Selling, General and Administrative Expenses
EUR million
Q3 2012

Q2 2013

Q3 2013

% Change
Q2 2013
to
Q3 2013

% Change
Q3 2012
to
Q3 2013

Front-end
16.3

18.6

18.2

(2
)%
12
 %
Back-end
37.2

—

—

n/a

n/a

ASMI consolidated
53.6

18.6

18.2

(2
)%
(66
)%

Research and Development Expenses
EUR million
Q3 2012

Q2 2013

Q3 2013

% Change
Q2 2013
to
Q3 2013

% Change
Q3 2012
to
Q3 2013

Front-end
15.4

15.0

14.8

(1
)%
(4
)%
Back-end
24.5

—

—

n/a

n/a

ASMI consolidated
40.0

15.0

14.8

(1
)%
(63
)%

Result from Operations
EUR million
Q3 2012

Q2 2013

Q3 2013

Change
Q2 2013
to
Q3 2013

Change
Q3 2012
to
Q3 2013

Front-end
 
 
 
 
 
Before special items
(1.6
)
16.9

12.6

(4.3
)
14.2

Restructuring expenses
—

(0.7
)
(1.0
)
(0.3
)
(1.0
)
After special items
(1.6
)
16.2

11.6

(4.6
)
13.2

 
 
 
 
 
 
Back-end
33.6

—

—

—

(33.6
)
ASMI consolidated
31.9

16.2

11.6

(4.6
)
(20.3
)

Net Earnings allocated to the shareholders of the parent
EUR million
Q3 2012

Q2 2013

Q3 2013

Change
Q2 2013
to
Q3 2013

Change
Q3 2012
to
Q3 2013

Front-end
 
 
 
 
 
Before special items
(8.4
)
8.8

6.6

(2.2
)
15.0

Restructuring expenses
—

(0.7
)
(1.0
)
(0.3
)
(1.0
)
After special items
(8.4
)
8.1

5.6

(2.5
)
14.0

 
 
 
 
 
 
Back-end
 
 
 
 
 
Until March 15, 2013 consolidated
13.3

—

—

—

(13.3
)
As from March 15, 2013 as a 40% investment
—

9.2

10.8

1.6

10.8

Total
13.3

9.2

10.8

1.6

(2.5
)
 
 
 
 
 
 
Realized gain on the sale of 11.88% of the ASMPT shares
—

(78.4
)
—

78.4

—

Unrealized remeasurement gain on the remaining 40.08% of the ASMPT shares
—

71.6

—

(71.6
)
—

 Amortization intangibles recognized in purchase price allocation
—

(34.0
)
(17.2
)
16.8

(17.2
)
 
 
 
 
 
 
Total net earnings allocated to the shareholders of the parent
4.9

(23.4
)
(0.9
)
22.5

(5.8
)


8


NINE MONTHS ENDED SEPTEMBER 30, 2013
 
Nine months ended September 30,
 
EUR million, except earnings per share
2012

2013

% Change

Net sales
1,098.2

485.3

(56
)%
Gross profit
352.6

164.6

(53
)%
Gross profit margin %
32.1
%
33.9
%
 
 
 
 
 
Selling, general and administrative expenses
(148.6
)
(77.7
)
(48
)%
Research and development expenses
(111.7
)
(60.4
)
(46
)%
Restructuring expenses
—

(1.9
)
n/a

Result from operations
92.3

24.6

(73
)%
 
 
 
 
Net earnings 1)
28.9

1,385.9

n/a

Net earnings per share, diluted in euro 1)
€0.52
€21.61
n/a

1) allocated to the shareholders of the parent

Net Sales
 
Nine months ended September 30,
 
EUR million
2012

2013

% Change

Front-end
277.3

325.0

17
 %
Back-end
820.9

160.3

(80
)%
ASMI consolidated
1,098.2

485.3

(56
)%


Gross Profit (Margin)
 
Nine months ended September 30,
 
 
Gross profit
Gross profit margin
Increase or
(decrease)
percentage points

EUR million
2012

2013

2012

2013

Front-end
90.0

126.2

32.4
%
38.8
%
6.4
ppt
Back-end
262.6

38.4

32.0
%
24.0
%
(8.0
)ppt
ASMI consolidated
352.6

164.6

32.1
%
33.9
%
1.8
ppt


Selling, General and Administrative Expenses
 
Nine months ended September 30,
 
EUR million
2012

2013

% Change

Front-end
46.3

52.1

13
 %
Back-end
102.3

25.6

(75
)%
ASMI consolidated
148.6

77.7

(48
)%



9


Research and Development Expenses
 
Nine months ended September 30,
 
EUR million
2012

2013

% Change

Front-end
44.4

43.3

(2
)%
Back-end
67.3

17.1

(75
)%
ASMI consolidated
111.7

60.4

(46
)%


Result from Operations
 
Nine months ended September 30,
 
EUR million
2012

2013

Change

Front-end
 
 
 
 -Before special items
(0.7
)
30.8

31.5

 -Restructuring expenses
—

(1.9
)
(1.9
)
 -After special items
(0.7
)
28.9

29.6

 
 
 
 
Back-end
93.0

(4.3
)
(97.3
)
 
 
 
 
ASMI consolidated
92.3

24.6

(67.7
)


Net Earnings allocated to the shareholders of the parent
 
Nine months ended September 30,
 
EUR million
2012

2013

Change

Front-end
 
 
 
Before special items
(9.7
)
18.7

28.4

Restructuring expenses
—

(1.9
)
(1.9
)
After special items
(9.7
)
16.8

26.5

 
 
 
 
Back-end
 
 
 
Until March 15, 2013 consolidated
38.5

(2.8
)
(41.3
)
As from March 15, 2013 as a 40% investment
—

22.2

—

Total
38.5

19.4

(19.1
)
 
 
 
 
Realized gain on the sale of 11.88% of the ASMPT shares
—

245.2

245.2

Unrealized remeasurement gain on the remaining 40.08% of the ASMPT shares
—

1,104.5

1,104.5

 
 
 
 
Total net earnings allocated to the shareholders of the parent
28.9

1,385.9

1,357.0



10


ANNEX 3

ASM INTERNATIONAL N.V.
CONSOLIDATED STATEMENTS OPERATIONS
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2012

2013

2012

2013

EUR thousand, except earnings per share
(unaudited)

(unaudited)

(unaudited)

(unaudited)

 
 
 
 
 
Net sales
409,284

116,429

1,098,165

485,329

Cost of sales
(283,857
)
(70,878
)
(745,564
)
(320,712
)
Gross profit
125,428

45,551

352,600

164,617

 
 
 
 
 
Operating expenses:
 
 
 
 
Selling, general and administrative
(53,556
)
(18,211
)
(148,592
)
(77,708
)
Research and development
(39,951
)
(14,821
)
(111,684
)
(60,358
)
Restructuring expenses
—

(964
)
—

(1,949
)
Total operating expenses
(93,506
)
(33,996
)
(260,275
)
(140,015
)
Earnings from operations
31,922

11,555

92,326

24,602

Net interest expense
(3,112
)
(303
)
(8,314
)
(1,353
)
Accretion of interest
(1,221
)
—

(3,724
)
(10
)
Foreign currency exchange losses
(5,835
)
(3,705
)
(2,518
)
(4,308
)
Result from investments
—

(6,464
)
—

1,371,895

Earnings before income taxes
21,754

1,082

77,769

1,390,826

Income tax expense
(4,631
)
(1,957
)
(13,542
)
(7,552
)
Net earnings
17,123

(875
)
64,227

1,383,275

 
 
 
 
 
Allocation of net earnings:
 
 
 
 
    Shareholders of the parent
4,908

(875
)
28,882

1,385,868

    Minority interest
12,215

—

35,345

(2,593
)
 
 
 
 
 
Net earnings per share, allocated to the shareholders of the parent:
 
 
 
 
    Basic net earnings
0.09

(0.01
)
0.52

21.94

    Diluted net earnings (1)
0.09

(0.01
)
0.52

21.61

 
 
 
 
 
Weighted average number of shares used in
 
 
 
 
computing per share amounts (in thousands):
 
 
 
 
    Basic
54,989

63,171

55,175

63,171

    Diluted (1)
55,433

63,171

55,545

64,144

 
 
 
 
 
Outstanding shares:
54,992

63,195

54,992

63,195

 
 
 
 
 
(1) The calculation of diluted net earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in earnings of the Company. Only instruments that have a dilutive effect on net earnings are included in the calculation. The assumed conversion results in adjustment in the weighted average number of common shares and net earnings due to the related impact on interest expense. The calculation is done for each reporting period individually. The possible increase of common shares caused by employee stock options for the three month ended September 30, 2013 with 845,138 common shares and for the nine month ended September 30, 2013 with 972,776 common shares, adjustments have been reflected in the diluted weighted average number of shares and net earnings per share for this period.
 
 
 
 
 
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.

11



ASM INTERNATIONAL N.V.
CONSOLIDATED BALANCE SHEETS
 
 
December 31,

September 30,

 
2012

2013

EUR thousand
 
(unaudited)

Assets
 
 
 
 
 
Cash and cash equivalents
290,475

303,611

Accounts receivable, net
304,840

64,357

Inventories, net
403,400

117,226

Income taxes receivable
890

1,173

Deferred tax assets
17,967

4,919

Other current assets
79,979

13,203

Total current assets
1,097,551

504,489

 
 
 
Pledged cash
20,000

—

Debt issuance costs
735

394

Deferred tax assets
5,955

1,330

Other intangible assets
13,915

6,569

Goodwill, net
51,888

11,421

Investments
278

278

Associates
—

1,339,090

Other non current assets
10,828

639

Assets held for sale
5,998

5,212

Evaluation tools at customers
16,922

14,085

Property, plant and equipment, net
275,436

51,424

Total Assets
1,499,506

1,934,930

 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
Notes payable to banks
61,675

—

Accounts payable
151,761

39,022

Other current payables
170,683

47,787

Income taxes payable
27,625

7,139

Deferred tax liability - current
36

—

Current portion of long-term debt
6,316

—

Total current liabilities
418,096

93,948

 
 
 
Pension liabilities
12,540

3,111

Deferred tax liabilities
952

—

Provision for warranty
5,298

—

Long-term debt
12,632

—

Total Liabilities
449,518

97,059

 
 
 
Total Shareholders' Equity
741,876

1,837,871

 
 
 
Non-controlling interest
308,112

—

Total Equity
1,049,988

1,837,871

 
 
 
Total Liabilities and Equity
1,499,506

1,934,930

 
 
 
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.

12



ASM INTERNATIONAL N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2012

2013

2012

2013

EUR thousand
(unaudited)

(unaudited)

(unaudited)

(unaudited)

Cash flows from operating activities:
 
 
 
 
Net earnings
17,123

(875
)
64,227

1,383,276

Adjustments to reconcile net earnings to net cash from operating activities:
 
 
 
 
Depreciation and amortization
15,099

4,966

41,996

23,274

Amortization of debt issuance costs
380

109

1,153

341

Compensation expense employee stock option plan
7,862

1,197

16,919

4,001

Additional non-cash interest
1,221

—

3,724

10

Associates
—

6,464

—

(1,371,895
)
Income taxes
724

738

(20,914
)
1,847

Deferred income taxes
(2,514
)
(38
)
(12,159
)
(1,171
)
Changes in other assets and liabilities:
 
 
 
 
Inventories
10,780

3,289

(53,104
)
(27,813
)
Accounts receivable
(20,880
)
19,741

(29,032
)
12,669

Accounts payable
(33,497
)
(1,082
)
17,443

4,761

Other current assets
(16,108
)
(137
)
(37,858
)
7,228

Net cash provided (used) by operating activities
(19,810
)
34,373

(7,605
)
36,526

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Capital expenditures
(14,100
)
(2,026
)
(48,506
)
(8,970
)
Purchase of intangible assets
(700
)
—

(2,982
)
(433
)
Disposal of investments
—

—

—

298,307

Proceeds from sale of property, plant and equipment
252

1,611

629

2,663

Net cash used in investing activities
(14,548
)
(414
)
(50,859
)
291,568

 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Notes payable to banks, net
18,567

—

45,441

(39,349
)
Net proceeds from long-term debt
—

—

—

18,980

Repayments of long-term debt and subordinated debt
(11,956
)
—

(14,130
)
(1,538
)
Sale (Purchase) of treasury shares
—

—

(13,361
)
—

Purchase of treasury shares ASMPT
—

—

(3,552
)
—

Proceeds from issuance of common shares
422

211

1,760

1,236

Proceeds from non consolidated investments
—

5,551

—

10,277

Dividend to minority shareholders ASMPT
(12,182
)
—

(27,024
)
—

Dividend to shareholders ASMI
(97
)
—

(27,519
)
(31,681
)
Capital distribution
—

(269,667
)
—

(269,667
)
Net cash provided (used) in financing activities
(5,246
)
(263,906
)
(38,385
)
(311,742
)
Exchange rate effects
3,192

(1,884
)
3,918

(3,215
)
Net increase (decrease) in cash and cash equivalents
(36,412
)
(231,831
)
(92,931
)
13,137

Cash and cash equivalents at beginning of period
333,732

535,442

390,250

290,475

Cash and cash equivalents at end of period
297,317

303,611

297,317

303,611

 
 
 
 
 
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.

13



ASM INTERNATIONAL N.V.
DISCLOSURE ABOUT SEGMENTS AND RELATED INFORMATION (1/3)
The Company organizes its activities in two operating segments, Front-end and Back-end.
The Front-end segment manufactures and sells equipment used in wafer processing, encompassing the fabrication steps in which silicon wafers are layered with semiconductor devices. The segment is a product driven organizational unit comprised of manufacturing, service, and sales operations in Europe, the United States, Japan and Southeast Asia.
 
The Back-end segment manufactures and sells equipment and materials used in assembly and packaging, encompassing the processes in which silicon wafers are separated into individual circuits and subsequently assembled, packaged and tested. The segment is organized in ASM Pacific Technology Ltd., in which the Company held a majority interest until March 15, 2013. As per March 15, 2013 the Company holds a 40.08% share in ASMPT. Per the same date control on ASMPT ceased and the numbers are deconsolidated. The remaining shares are listed on the Stock Exchange of Hong Kong. The segment's main operations are located in Hong Kong, Singapore, the People's Republic of China, Malaysia and Germany.
 
 
 
 
 
Three months ended September 30, 2012
 
 
Front-end

Back-end

Total

EUR thousand
(unaudited)

(unaudited)

(unaudited)

Net sales to unaffiliated customers
96,072

313,212

409,284

Gross profit
30,135

95,292

125,428

Earnings (loss) from operations
(1,648
)
33,569

31,922

Net interest income (expense)
(3,163
)
52

(3,112
)
Accretion of interest
(1,201
)
(20
)
(1,221
)
Foreign currency exchange losses
(4,279
)
(1,556
)
(5,835
)
Income tax income (expense)
1,877

(6,508
)
(4,631
)
Net earnings
(8,414
)
25,537

17,123

 
 
 
 
Net earnings allocated to:
 
 
 
  Shareholders of the parent
 
 
4,908

  Minority interest
 
 
12,215

 
 
 
 
Capital expenditures and purchase of intangible assets
2,296

12,504

14,801

Depreciation and amortization
4,597

10,501

15,099

 
Three months ended September 30, 2013
 
 
(unaudited)

(unaudited)

(unaudited)

Net sales to unaffiliated customers
116,429

—

116,429

Gross profit
45,551

—

45,551

Earnings from operations
11,555

—

11,555

Net interest expense
(303
)
—

(303
)
Foreign currency exchange losses
(3,705
)
—

(3,705
)
Result from investments
—

(6,464
)
(6,464
)
Income tax expense
(1,957
)
—

(1,957
)
Net earnings (loss)
5,589

(6,464
)
(875
)
 
 
 
 
Net earnings allocated to:
 
 
 
  Shareholders of the parent
 
 
(875
)
  Minority interest
 
 
—

 
 
 
 
Capital expenditures and purchase of intangible assets
2,026

—

2,026

Depreciation and amortization
4,966

—

4,966

 
 
 
 
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.

14



ASM INTERNATIONAL N.V.
DISCLOSURE ABOUT SEGMENTS AND RELATED INFORMATION (2/3)

 
Nine months ended September 30, 2012
 
 
Front-end

Back-end

Total

EUR thousand
(unaudited)

(unaudited)

(unaudited)

Net sales to unaffiliated customers
277,305

820,859

1,098,165

Gross profit
89,980

262,620

352,600

Earnings from operations
(702
)
93,028

92,326

Net interest income (expense)
(8,778
)
463

(8,314
)
Accretion of interest
(3,511
)
(213
)
(3,724
)
Foreign currency exchange losses
(947
)
(1,570
)
(2,518
)
Income tax income (expense)
4,276

(17,818
)
(13,542
)
Net earnings (loss)
(9,663
)
73,890

64,227

 
 
 
 
Net earnings allocated to:
 
 
 
  Shareholders of the parent
 
 
28,882

  Minority interest
 
 
35,345

 
 
 
 
Capital expenditures and purchase of intangible assets
13,795

37,694

51,489

Depreciation and amortization
12,810

29,186

41,996

 
 
 
 
Cash and cash equivalents
184,902

112,416

297,317

Pledged cash
—

20,000

20,000

Capitalized goodwill
11,421

41,042

52,462

Other intangible assets
9,483

4,215

13,698

Other identifiable assets
346,823

884,247

1,231,070

Total assets
552,628

1,061,920

1,614,548

Total debt
144,293

85,060

229,353

Headcount in full-time equivalents ¹
1,702

16,681

18,383

 
 
 
 
(1) Headcount includes those employees with a fixed contract, and is exclusive of temporary workers.
 
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.
 

15


ASM INTERNATIONAL N.V.
DISCLOSURE ABOUT SEGMENTS AND RELATED INFORMATION (3/3)
 
Nine months ended September 30, 2013
 
 
Front-end

Back-end

Total

EUR thousand
(unaudited)

(unaudited)²

(unaudited)

Net sales to unaffiliated customers
325,043

160,286

485,329

Gross profit
126,227

38,390

164,617

Earnings from operations
28,889

(4,287
)
24,602

Net interest expense
(1,041
)
(312
)
(1,353
)
Accretion of interest
—

(10
)
(10
)
Foreign currency exchange gains (losses)
(5,156
)
847

(4,308
)
Result from investments
—

1,371,895

1,371,895

Income tax expense
(5,915
)
(1,637
)
(7,552
)
Net earnings
16,778

1,366,497

1,383,275

 
 
 
 
Net earnings allocated to:
 
 
 
  Shareholders of the parent
 
 
1,385,868

  Minority interest
 
 
(2,593
)
 
 
 
 
Capital expenditures and purchase of intangible assets
2,942

6,460

9,402

Depreciation and amortization
14,682

8,591

23,274

 
 
 
 
Cash and cash equivalents
303,611

—

303,611

Capitalized goodwill
11,421

—

11,421

Other intangible assets
6,569

—

6,569

Investments & Associates
278

1,339,090

1,339,368

Other identifiable assets
273,961

—

273,961

Total assets
595,840

1,339,090

1,934,930

Total debt
—

—

—

Headcount in full-time equivalents ¹
1,503

—

1,503

 
 
 
 
(1) Headcount includes those employees with a fixed contract, and is exclusive of temporary workers.
(2) Operational results and cash flow numbers relate to the period January 1, 2013 - March 15, 2013.
 
 
 
 
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.





16



ASM INTERNATIONAL N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
Basis of Presentation
ASM International N.V, ("ASMI") follows accounting principles generally accepted in the United States of America ("US GAAP").
Amounts are rounded to the nearest thousand euro; therefore amounts may not equal (sub) totals due to rounding.
 
Principles of Consolidation
The Consolidated Financial Statements include the accounts of ASMI and its subsidiaries, where ASMI holds a controlling interest. The non-controlling interest of third parties is disclosed separately in the Consolidated Financial Statements. All intercompany profits, transactions and balances have been eliminated in consolidation.
 
Change in accounting policies
No significant changes in accounting policies incurred during the third quarter of 2013.


17


ASM INTERNATIONAL N.V.
RECONCILIATION US GAAP - IFRS
Accounting principles under IFRS
 
 
 
 
 
ASMI’s primary consolidated financial statements are and will continue to be prepared in accordance with US GAAP. However, ASMI is required under Dutch law to report its Consolidated Financial Statements in accordance with International Financial Reporting Standards (“IFRS”). As a result of the differences between IFRS and US GAAP that are applicable to ASMI, the Consolidated Statement of Operations and Consolidated Balance Sheet reported in accordance with IFRS differ from those reported in accordance with US GAAP. The major differences relate to development costs, goodwill, pensions and inventory obsolescence reserve.
The reconciliation between IFRS and US GAAP is as follows:
 
 
 
Net earnings
 
 
Three months ended September 30,
 
Six months ended September 30,
 
EUR million, except per share
2012 (unaudited)

2013 (unaudited)

2012 (unaudited)

2013 (unaudited)

US GAAP, net earnings allocated to common shares
4.9

(0.9
)
28.9

1,385.9

Adjustments for IFRS
 
 
 
 
Reversal inventory write downs
0.1

—

0.1

0.4

Tax rate difference on eliminated intercompany profit
—

—

(0.6
)
0.2

Goodwill
—

—

—

9.5

Development expenses
2.2

0.3

8.5

1.3

Debt issuance fees
0.1

0.1

0.3

0.3

Total adjustments
2.4

0.4

8.3

11.7

IFRS
7.3

(0.5
)
37.2

1,397.6

IFRS allocation of net earnings for common shares:
 
 
 
 
Continued operations
(6.0
)
(0.5
)
(0.8
)
(10.1
)
Discontinued operations 1)
13.3

—

38.0

1,407.7

 
1) Discontinued operations include the ASMI share in net earnings of ASMPT until March 15, 2013, net result on the sale of ASMI's 12% share and the remeasurement gain on the remaining ASMI share.
 
 
 
 
 
Net earnings per share, diluted:
 
 
 
 
Continued operations
€(0.11)
€(0.01)
€(0.01)
€(0.16)
Discontinued operations
€0.24
€0.00
€0.68
€21.95
Total operations
€0.13
€(0.01)
€0.67
€21.79
 
 
 
 
 
 
 
 
Shareholders' equity
 
 
 
 
September 30,

September 30,

 
 
 
2012

2013

EUR million
 
 
 (unaudited)

 (unaudited)

US GAAP
 
 
978.0

1,837.9

Adjustments for IFRS:
 
 
 
 
Goodwill
 
 
(10.7
)
(0.9
)
Debt issuance fees
 
 
(0.8
)
(0.4
)
Reversal inventory write downs
 
 
1.7

2.3

Development expenses
 
 
53.6

49.9

Tax rate difference on eliminated intercompany profit
 
 
(0.4
)
—

Pension plans
 
 
(0.2
)
(0.3
)
Total adjustments
 
 
43.2

50.6

IFRS
 
 
1,021.2

1,888.5

 
 
 
 
 
Amounts are rounded to the nearest million euro; therefore amounts may not equal (sub) totals due to rounding.


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