- Record revenue in 2004 of $517.3 million
- 2004 revenue in target end markets increased 19 percent year over year
- Gross margins for the fourth quarter increased for the eighth consecutive quarter
Pocatello, Idaho – January 27, 2005 – AMIS Holdings, Inc. (“AMIS” or “Company”) (NASDAQ: AMIS), parent company of AMI Semiconductor, a leader in the design and manufacture of integrated mixed-signal solutions, today reported results for the fourth quarter and full year ended December 31, 2004.
Fourth quarter 2004 revenue was $123.3 million, a decrease of six percent sequentially and two percent below the fourth quarter of last year. Gross margin for the fourth quarter of 2004 was 49.1 percent, an increase of 60 basis points sequentially and 370 basis points year over year.
Operating margin was 10.9 percent in the fourth quarter of 2004, a decrease of 880 basis points sequentially primarily driven by charges for restructuring and in process research and development related to the Dspfactory acquisition which did not occur in the third quarter. Excluding these and other charges, on a pro forma basis, operating margin was 19.1 percent, a decrease of 80 basis points sequentially and an increase of 180 basis points year over year.
Net income for the fourth quarter of 2004 decreased 55 percent sequentially to $7.3 million, or $0.08 per fully diluted share, compared to net income of $16.2 million, or $0.19 per fully diluted share for the third quarter of 2004 and net income of $3.4 million or $0.04 per fully diluted share in the fourth quarter of 2003. Pro forma net income in the fourth quarter of 2004 was $14.2 million or $0.16 per fully diluted share, compared to pro forma net income of $16.3 million or $0.19 per fully diluted share in the third quarter of 2004 and pro forma net income of $10.6 million, or $0.12 per fully diluted share in the fourth quarter of 2003.
Revenue for 2004 increased 14 percent to $517.3 million from $454.2 million in 2003. Net income for 2004 was $52.4 million, or $0.60 per fully diluted share, compared to a net loss of $0.4 million in 2003, or $(0.84) per share. Pro forma net income for 2004 was $59.6 million or $0.69 per fully diluted share, compared to pro forma net income of $31.5 million or $(0.27) per share in 2003. Earnings per share amounts in 2003 were impacted by a preferred stock dividend. Pro forma operating margin, net income and EPS exclude amortization of acquisition-related intangible assets, in-process research and development, restructuring and impairments, nonrecurring charges and other items, net of the related tax effects. See related financial highlights in this press release for a reconciliation of GAAP earnings to non-GAAP financial measures.
“Despite a difficult fourth quarter, AMIS achieved record revenues in 2004,” said Christine King, president and chief executive officer. “Growth in our target markets of automotive, medical and industrial was 19 percent for 2004 compared to 2003, which was offset by weakness in communications, particularly in the second half. We also increased our three year design win revenue in these target end markets 12 percent year over year from 2003 to 2004. Finally, during the fourth quarter of 2004, we completed our acquisition of Dspfactory, Ltd., which increases our presence in the medical end market and which helped generate record medical revenue in the fourth quarter.”
Operating cash flow for the fourth quarter was $30.8 million and capital expenditures were $11.3 million. Cash at December 31, 2004 was $161.7 million, a decrease of $2.7 million sequentially, which includes a $27.2 million cash payment for the Dspfactory acquisition and related expenses.
“We expect our first quarter 2005 revenue to be down six to eight percent as compared to fourth quarter due to continued weakness in the communications market and an inventory buildup at several key customers,” said David Henry, senior vice president and chief financial officer. “Based on recent ordering patterns, we believe the first quarter will represent the trough in our 2005 revenues. The beneficial effect of incremental product mix improvements, which have been a key driver of our gross margin expansion in the second half of 2004, will not recur in the first quarter of 2005. Additionally, we expect a further decrease in factory utilization in the first quarter. As a result, we anticipate first quarter gross margins to be down approximately 300 to 400 basis points sequentially. We expect pro forma operating margins will be down 500 to 600 basis points sequentially, as we will continue to invest in research and development during this challenging market environment. We anticipate our effective tax rate to be between 10 percent and 12 percent in the first quarter. Pro forma fully diluted earnings per share in the first quarter is expected to be in the range of $0.10 to $0.12. Pro forma operating margin and pro forma earnings per share exclude anticipated pre-tax charges of approximately $1.5 to $2.0 million in the first quarter for amortization of acquisition-related intangibles and charges as a result of our previously announced restructuring plan. We expect capital expenditures for 2005 to be approximately eight percent of annual revenues. Depreciation and amortization is expected to be about $12.0 million in the first quarter.”
President and CEO Christine King along with Senior Vice President and CFO David Henry will conduct a conference call on January 27, 2005 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 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 February 10.
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 corporate offices in Oudenaarde, Belgium, and a network of sales and design centers located in the key markets of the North America, Europe and the Asia Pacific region.
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Forward Looking Statements
Statements in this press release other than statements of historical fact are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act 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, risks associated with international operations and the other risks and uncertainties discussed in the Company’s Form 10-K Annual Report for the year ended December 31, 2003, Form 10-Q Quarterly Reports and other reports filed with the SEC. The Company does not intend to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.