GlobeNewswire Inc | Apr 30, 2021 03:41AM EDT

April 30, 2021

Revenue of 143.2 Million and Net Income of 37.6 Million Up 56.8% and 170.5%, Respectively, vs. Q1-20

Orders of 327.1 Million, Up 107.9% vs. Q4-20 and 175.8% vs. Q1-20

DUIVEN, The Netherlands, April 30, 2021 (GLOBE NEWSWIRE) -- BE Semiconductor Industries N.V. (the Company" or "Besi") (Euronext Amsterdam: BESI; OTC markets: BESIY, Nasdaq International Designation), a leading manufacturer of assembly equipment for the semiconductor industry, today announced its results for the first quarter ended March 31, 2021.

Key Highlights

-- Revenue of 143.2 million, up 30.5% versus Q4-20 primarily due to higher shipments for high end mobile applications with 5G features and functionality. At lower end of prior guidance as some scheduled Q1-21 shipments were delivered in Q2-21 due to certain supply chain constraints. Up 56.8% versus Q1-20 -- Orders of 327.1 million, up 107.9% and 175.8% versus Q4-20 and Q1-20, respectively, due primarily to higher bookings for mobile, automotive and high-performance computing applications -- Gross margin of 58.2% roughly equal to Q4-20 (58.3%) and up 1.5 points versus Q1-20 due to more favorable product mix and increased production efficiencies -- Operating income rose 18.9% and 157.4% versus Q4-20 and Q1-20, respectively, due primarily to significantly higher revenue levels and ongoing initiatives to limit overhead growth -- Net income of 37.6 million versus 44.6 million in Q4-20, down 7.0 million versus Q4-20 due to absence of 11.2 million tax benefit recorded in Q4-20 and higher share-based compensation. Up 23.7 million (+170.5%) versus Q1-20 -- Cash and deposits of 605.8 million rose 41.7% versus Q1-20. Similarly, net cash of 216.2 million increased 45.8% versus Q1-20

Outlook

-- Q2-21 revenue expected to grow approximately 30-40% versus Q1-21. Gross margin anticipated to range between 58-60%

(? millions, except EPS) Q1-2021 Q4-2020 ? Q1-2020 ?Revenue 143.2 109.7 +30.5% 91.3 +56.8%Orders 327.1 157.3 +107.9% 118.6 +175.8%Operating Income 48.4 40.7 +18.9% 18.8 +157.4%EBITDA 52.6 45.5 +15.6% 24.0 +119.2%Net Income* 37.6 44.6 -15.7% 13.9 +170.5%EPS (basic) 0.51 0.62 -17.7% 0.19 +168.4%EPS (diluted) 0.47 0.55 -14.5% 0.19 +147.4%Net Cash & Deposits 216.2 198.7 +8.8% 148.3 +45.8%

* Includes 11.2 million deferred tax benefits in Q4-20 and share-based compensation expense of 9.8 million, 1.5 million and 5.8 million in Q1-21, Q4-20 and Q1-20, respectively.

Richard W. Blickman, President and Chief Executive Officer of Besi, commented:

Besis Q1-21 results highlighted the strength and resilience of our business as we scale production to meet strong demand for our advanced packaging equipment in a challenging environment. Revenue increased by 30.5% versus Q4-20 and by 56.8% versus Q1-20 due primarily to a new smart phone cycle featuring enhanced 5G features and functionality as well as a recovery in sales for automotive applications. Revenue was at the lower end of guidance as some shipments scheduled for Q1-21 were delivered in Q2-21 due to certain supply chain constraints.

Net income for the quarter was 37.6 million, an increase of 23.7 million, or 170.5% versus Q1-20. Adjusted to exclude deferred tax benefits recognized in Q4-20 and share-based compensation expense, net income reached 47.4 million in Q1-21, an increase of 35.8% versus Q4-20 and 140.6% versus Q1-20. On such basis, net margins grew to 33.1% in Q1-21 versus 31.8% in Q4-20 and 21.6% in Q1-20. Strong profit growth was due primarily to significantly higher revenue levels combined with disciplined overhead management which has limited baseline operating expenses to a narrow range of between approximately 23-26 million in each of the past eleven quarters. Further, baseline operating expenses as a percentage of revenue declined from 27.8% in Q1-20 to 18.2% in Q1-21, highlighting the significant operating leverage in our business model. Upward gross margin development in Q1-21 was limited by adverse forex influences from a weaker dollar versus the euro and additional costs incurred to rapidly scale production capacity.

Our liquidity position continued to expand in Q1-21 with cash and deposits of 605.8 million growing 41.7% versus Q1-20 despite a working capital investment of 35.6 million necessary to finance the rapid expansion of our order book. Similarly, net cash of 216.2 million increased by 45.8% versus Q1-20.

The industry upturn which started in Q4-20 accelerated in Q1-21. Orders reached a record 327.1 million, an increase of 208.5 million, or 175.8%, versus Q1-20 and 169.8 million, or 107.9%, versus the 157.3 million recorded in Q4-20. For the six-month period ending March 31, 2021, orders were 484.4 million, more than double the comparable six-month period comprising Q4-19 and Q1-20. Order strength in Q1-21 reflected a surge in demand across all Besis product groups and end user markets with particular strength in demand for high end smart phones. In addition, there was significant order growth for automotive applications versus Q4-20 and increased demand for high end logic devices used in high performance computing applications such as AI and data centers. Bookings during the quarter also included initial orders for Besis hybrid bonding systems from industry leading customers.

At present, our strategic priorities focus primarily on ramping production to meet customer delivery dates and expanding development activities for Besis wafer level assembly efforts. The industry faces unique production challenges currently as demand accelerates and supply chains are adversely affected by shortages of a variety of essential and non-essential components and transportation and logistics issues amidst the ongoing global pandemic. We have navigated these challenges well via our dual sourcing strategy and inventory stocking of critical parts in order to minimize potential bottlenecks. In addition, we successfully added 264 temporary Asian production personnel between year-end and the end of the quarter to help meet the order surge. Similarly, we are expanding development activities for both our hybrid bonding efforts with Applied Materials, Inc. and our <10 nanometer advanced packaging portfolio as customers seek to build leading edge capacity for next generation applications. Further, we are developing plans to expand our US and Taiwanese development and service footprint in connection with the capex expansion plans announced by a number of our customers.

For Q2-21, we estimate that revenue will increase by 30-40% versus Q1-21 with gross margin levels between 58% and 60%. Operating expenses are anticipated to decrease by 0-5% versus the 34.9 million realized in Q1-21. Industry analysts continue their positive outlook for assembly equipment sales in 2021 based on the recently announced capex plans of leading industry customers. Besis incoming order trends to date in Q2-21 remain favorable including incremental orders for hybrid bonding systems which supports our constructive outlook for this emerging process technology.

First Quarter Results of Operations

? millions Q1-2021 Q4-2020 ? Q1-2020 ?Revenue 143.2 109.7 +30.5% 91.3 +56.8%Orders 327.1 157.3 +107.9% 118.6 +175.8%Book to Bill Ratio 2.3 1.4 +0.9 1.3 +1.0

Q1-21 revenue of 143.2 million increased by 30.5% versus Q4-20 due primarily to increased shipments for high-end smartphone applications with enhanced 5G features and functionality and by 56.8% versus Q1-20 primarily as a result of increased shipments for mobile and, to a lesser extent, automotive applications.

Orders for Q1-21 were 327.1 million, an increase of 169.8 million, or 107.9%, versus the 157.3 million recorded in Q4-20 and an increase of 208.5 million, or 175.8%, versus Q1-20. Order strength in Q1-21 reflected a surge in demand across all Besis product groups and end user markets. By customer type, subcontractor orders increased sequentially by 116.6 million, or 146.3%, versus Q4-20 and represented approximately 60% of total orders during the quarter. IDM orders increased by 53.2 million, or 68.6%, and represented approximately 40% of total orders.

Q1-2021 Q4-2020 ? Q1-2020 ?Gross Margin 58.2% 58.3% -0.1 56.7% +1.5Operating Expenses* 34.9 23.3 +49.8% 33.0 +5.8%Financial Expense, net 4.5 3.8 +18.4% 2.6 +73.1%EBITDA 52.6 45.5 +15.6% 24.0 +119.2%

* Includes 9.8 million, 1.5 million and 5.8 million of share-based compensation expense in Q1-21, Q4-20and Q1-20, respectively.

Besis gross margin reached 58.2% in Q1-21, roughly equal to Q4-20 (58.3%). The Q1-21 gross margin was adversely influenced by forex effects from the decrease of the US dollar versus the euro and additional costs incurred to align Besis production levels with significantly increased order volume. Versus Q1-20, Besis gross margin increased by 1.5 points due primarily to a more favorable product mix and improved capacity utilization despite adverse forex effects from the decrease of the US dollar versus the euro.

Q1-21 operating expenses increased by 11.6 million (+49.8%) versus Q4-20 due primarily to 8.3 million of higher share-based compensation expense and, to a lesser extent, increased sales related expenses associated with Besis 30.5% sequential revenue growth. Operating expenses grew by 1.9 million, or 5.8%, versus Q1-20 primarily due to 4.0 million higher share-based compensation expense.

Financial expense, net, increased by 0.7 million versus Q4-20 primarily due to increased hedging costs associated with increased bookings. Versus Q1-20, financial expense, net increased by 1.9 million due primarily to the issuance of the 0.75% Convertible Notes issued in August 2020.

Q1-2021 Q4-2020 ? Q1-2020 ?Net Income 37.6 44.6 -15.7% 13.9 +170.5%Net Margin 26.3% 40.7% -14.4 15.2% +11.1Tax Rate 14.3% -21.2% +35.5 14.4% -0.1 As adjusted*:Net Income 47.4 34.9 +35.8% 19.7 +140.6%Net Margin 33.1% 31.8% +1.3 21.6% +11.5Tax Rate 11.7% 8.8% +2.9 10.6% +1.1

* As adjusted to exclude 11.2 million deferred tax benefits in Q4-20 and share-based compensation expense of 9.8 million, 1.5 million and 5.8 million in Q1-21, Q4-20 and Q1-20, respectively.

Besis Q1-21 net income decreased by 7.0 million versus Q4-20 due to the absence of 11.2 million of deferred tax assets recognized in Q4-20 and 8.3 million of increased share-based compensation expense. Excluding such items, adjusted Q1-21 net income increased by 35.8% to reach 47.4 million. As compared to Q1-20, net income increased by 23.7 million (+170.5%) due primarily to a 56.8% year over year revenue increase and increased gross margins partially offset by 1.9 million, or 5.8%, operating expense growth.

Financial Condition

Q1-2021 Q4-2020 ? Q1-2020 ?Total Cash and Deposits 605.8 598.7 +1.2% 427.6 +41.7%Net Cash and Deposits 216.2 198.7 +8.8% 148.3 +45.8%Cash flow from Operations 26.2 51.7 -49.3% 26.6 -1.5%

Total cash and deposits of 605.8 million at the end of Q1-21 grew by 1.2% versus Q4-20 and 41.7% versus Q1-20, due to the issuance of the Convertible Notes in August 2020 and increased cash flow from operations. Besis net cash of 216.2 million at the end of Q1-21 increased by 17.5 million (+8.8%) versus year end and by 67.9 million (+45.8%) versus Q1-20. During the quarter, Besi generated cash flow from operations of 26.2 million which was used to fund (i) 10.1 million of share repurchases, 5.9 million of capitalized development spending and (iii) 1.4 million of capital expenditures.

Favourable net cash development in Q1-21 was also positively influenced by the conversion of 13.3 million principal amount of Besis Convertible Notes due 2023. An additional 49.1 million of Convertible Notes were converted in April 2021, resulting in a principal balance outstanding of 47.6 million. As such, Besis shares outstanding have increased from 72.9 million at December 31, 2020 to 75.5 million at April 30, 2021.

Share Repurchase ActivityBesi repurchased 169,545 of its ordinary shares during Q1-21 at an average price of 59.45 per share for a total of 10.1 million. Cumulatively, as of March 31, 2021, a total of 3.7 million shares have been purchased under the current 125 million share repurchase plan at an average price of 25.67 per share for a total of 94.9 million. As of March 31, 2021, Besi held approximately 5.2 million shares in treasury at an average cost of 17.78, equal to 6.6% of its shares outstanding.

Outlook Based on its current outlook and feedback from customers and suppliers, Besi estimates for Q2-21 that:

-- Revenue will increase by approximately 30-40% versus the 143.2 million reported in Q1-21 -- Gross margin will range between 58%-60% versus the 58.2% realized in Q1-21 -- Operating expenses will decrease by approximately 0-5% versus the 34.9 million reported in Q1-21

Investor and media conference callA conference call and webcast for investors and media will be held today at4:00 pm CEST (10:00 am EDT). The dial-in for the conference call is (31) 20 5315851. To access the audio webcast and webinar slides, please visit www.besi.com.

Important Dates 2021? Besi AGM* April 30, 2021? Analyst Meeting June 10, 2021? Publication Q2/semi-annual results July 27, 2021? Publication Q3/nine-month results October 26, 2021? Publication Q4/full year results February 2022 Dividend Information**? Proposed ex-dividend date May 4, 2021? Proposed record date May 5, 2021? Proposed payment of 2020 dividend Starting May 7, 2021 * Virtual AGM meeting commencing at 10:00 am CET** Subject to approval at Besi?s AGM

Basis of presentationThe condensed financial statements included in this press release have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union. Reference is made to the Summary of Significant Accounting Policies to the Notes to the Consolidated Financial Statements as included in our 2020 Annual Report which is available on www.besi.com.

AboutBesiBesi is a leading supplier of semiconductor assembly equipment for the global semiconductor and electronics industries offering high levels of accuracy, productivity and reliability at a low cost of ownership. The Company develops leading edge assembly processes and equipment for leadframe, substrate and wafer level packaging applications in a wide range of end-user markets including electronics, mobile internet, cloud server, computing, automotive, industrial, LED and solar energy. Customers are primarily leading semiconductor manufacturers, assembly subcontractors and electronics and industrial companies. Besis ordinary shares are listed on Euronext Amsterdam (symbol: BESI). Its Level 1 ADRs are listed on the OTC markets (symbol: BESIY Nasdaq International Designation) and its headquarters are located in Duiven, the Netherlands. For more information, please visit our website at www.besi.com.

Contacts: Richard W. Blickman, President & CEO CFF CommunicationsHetwig van Kerkhof, SVP Finance Frank JansenTel. (31) 26 319 4500 Tel. (31) 20 575 4024investor.relations@besi.com besi@cffcommunications.nl

CautionConcerningForwardLookingStatementsThis press release contains statements about management's future expectations, plans and prospects of our business that constitute forward-looking statements, which are found in various places throughout the press release, including, but not limited to, statements relating to expectations of orders, net sales, product shipments, expenses, timing of purchases of assembly equipment by customers, gross margins, operating results and capital expenditures. The use of words such as anticipate, estimate, expect, can, intend, believes, may, plan, predict, project, forecast, will, would, and similar expressions are intended to identify forward looking statements, although not all forward looking statements contain these identifying words. The financial guidance set forth under the heading Outlook contains such forward looking statements. While these forward looking statements represent our judgments and expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from those contained in forward looking statements, including any inability to maintain continued demand for our products; failure of anticipated orders to materialize or postponement or cancellation of orders, generally without charges; the volatility in the demand for semiconductors and our products and services;the extent and duration of the COVID-19 pandemic and measures taken to contain the outbreak, and the associated adverse impacts on the global economy, financial markets, and our operations as well as those of our customers and suppliers; failure todevelop new and enhanced products and introduce them at competitive price levels;failure to adequately decrease costs and expenses as revenues decline; loss of significant customers, including through industry consolidation or the emergence of industry alliances; lengthening of the sales cycle; acts of terrorism and violence;disruption or failure of our information technology systems;inability to forecast demand and inventory levels for our products; the integrity of product pricing and protection of our intellectual property in foreign jurisdictions; risks, such as changes in trade regulations, currency fluctuations, political instability and war, associated with substantial foreign customers, suppliers and foreign manufacturing operations, particularly to the extent occurring in the Asia Pacific region; potential instability in foreign capital markets; the risk of failure to successfully manage our diverse operations; any inability to attract and retain skilled personnel, including as a result of restrictions on immigration, travel or the availability of visas for skilled technology workers as a result of the COVID-19 pandemic; those additional risk factors set forth in Besi's annual report for the year endedDecember 31, 2020and other key factors that could adversely affect our businesses and financial performance contained in our filings and reports, including our statutory consolidated statements. We expressly disclaim any obligation to update or alter our forward-looking statements whether as a result of new information, future events or otherwise.

Consolidated Statements of Operations

(euro in thousands, except share and per share data) Three Months Ended March 31, (unaudited) 2021 2020 Revenue 143,203 91,339Cost of sales 59,924 39,591 Gross profit 83,279 51,748 Selling, general and administrative expenses 26,666 23,522Research and development expenses 8,258 9,431 Total operating expenses 34,924 32,953 Operating income 48,355 18,795 Financial expense, net 4,477 2,612 Income before income tax 43,878 16,183 Income tax expense 6,271 2,331 Net income 37,607 13,852 Net income per share ? basic 0.51 0.19Net income per share ? diluted 0.47 0.19 Number of shares used in computing per share amounts: - basic 73,264,733 72,169,423- diluted^ 1 85,435,033 82,700,840

Consolidated Balance Sheets

March 31, December(euro in thousands) 2021 31, 2020 (unaudited) (audited)ASSETS Cash and cash equivalents 347,979 375,406Deposits 257,847 223,299Trade receivables 147,737 93,218Inventories 61,709 51,645Other current assets 17,655 11,964 Total current assets 832,927 755,532 Property, plant and equipment 27,739 27,840Right of use assets 8,958 9,873Goodwill 44,851 44,484Other intangible assets 54,078 50,660Deferred tax assets 21,177 21,924Other non-current assets 1,078 1,043 Total non-current assets 157,881 155,824 Total assets 990,808 911,356 Trade payables 65,351 44,017Other current liabilities 83,155 57,469 Total current liabilities 148,506 101,486 Long-term debt 389,614 399,956Lease liabilities 6,348 6,952Deferred tax liabilities 12,905 12,840Other non-current liabilities 18,887 18,895 Total non-current liabilities 427,754 438,643 Total equity 414,548 371,227 Total liabilities and equity 990,808 911,356

Consolidated Cash Flow Statements

(euro in thousands) Three Months Ended March 31, (unaudited) 2021 2020 Cash flows from operating activities: Income before income tax 43,878 16,183 Depreciation and amortization 4,209 5,175 Share-based payment expense 9,794 5,844 Financial expense, net 4,477 2,612 Changes in working capital (35,567 ) (2,875 )Income tax paid (301 ) (106 )Interest paid (262 ) (274 ) Net cash provided by operating activities 26,228 26,559 Cash flows from investing activities: Capital expenditures (1,388 ) (872 )Proceeds from sale of property 54 - Capitalized development expenditures (5,905 ) (3,697 )Repayments of (investments in) deposits (35,770 ) 50,000 Net cash provided by (used in) investing activities (43,009 ) 45,431 Cash flows from financing activities: Proceeds from bank lines of credit - 32 Proceeds from (payments on) debts 527 (11 )Payments on lease liabilities (890 ) (873 )Purchase of treasury shares (10,097 ) (3,145 ) Net cash used in financing activities (10,460 ) (3,997 ) Net change in cash and cash equivalents (27,241 ) 67,993 Effect of changes in exchange rates on cash and cash equivalents (186 ) 1,248Cash and cash equivalents at beginning of the period 375,406 278,398 Cash and cash equivalents at end of the period 347,979 347,639

Supplemental Information (unaudited) (euro in millions, unless stated otherwise)

REVENUE Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Per geography: Asia Pacific 77.6 85 % 105.7 85 % 86.6 80 % 91.1 83 % 113.4 79 % EU / USA 13.7 15 % 18.6 15 % 21.7 20 % 18.6 17 % 29.8 21 % Total 91.3 100 % 124.3 100 % 108.3 100 % 109.7 100 % 143.2 100 % ORDERS Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Per geography: Asia Pacific 102.0 86 % 88.1 87 % 75.9 80 % 122.7 78 % 253.2 77 % EU / USA 16.6 14 % 13.2 13 % 19.0 20 % 34.6 22 % 73.9 23 % Total 118.6 100 % 101.3 100 % 94.9 100 % 157.3 100 % 327.1 100 % Per customer type:IDM 47.4 40 % 44.6 44 % 43.7 46 % 77.6 49 % 130.8 40 % Subcontractors 71.2 60 % 56.7 56 % 51.2 54 % 79.7 51 % 196.3 60 % Total 118.6 100 % 101.3 100 % 94.9 100 % 157.3 100 % 327.1 100 % HEADCOUNT Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Fixed staff (FTE)Asia Pacific 1,071 70 % 1,067 70 % 1,054 70 % 1,060 70 % 1,070 70 % EU / USA 458 30 % 455 30 % 459 30 % 463 30 % 468 30 % Total 1,529 100 % 1,522 100 % 1,513 100 % 1,523 100 % 1,538 100 % Temporary staff (FTE)Asia Pacific 42 46 % 121 72 % 95 63 % 35 37 % 299 82 % EU / USA 50 54 % 48 28 % 57 37 % 60 63 % 64 18 % Total 92 100 % 169 100 % 152 100 % 95 100 % 363 100 % Total fixedand temporary 1,621 1,691 1,665 1,618 1,901 staff (FTE) OTHER Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 FINANCIAL DATA Gross profit 51.7 56.7 % 77.0 62.0 % 65.9 60.8 % 64.0 58.3 % 83.3 58.2 % Selling,general and adminexpenses:As reported 23.5 25.7 % 20.1 16.2 % 16.3 15.1 % 15.8 14.4 % 26.7 18.6 % Share-basedcompensation (5.8 ) -6.3 % (2.2 ) -1.8 % (1.0 ) -1.0 % (1.5 ) -1.4 % (9.8 ) -6.8 % expenseSG&A expenses 17.7 19.4 % 17.9 14.4 % 15.3 14.1 % 14.3 13.0 % 16.9 11.8 % as adjusted Research anddevelopment expenses::As reported 9.4 10.3 % 8.4 6.8 % 7.6 7.0 % 7.4 6.8 % 8.3 5.8 % Capitalization 3.7 4.1 % 4.3 3.5 % 4.3 4.0 % 5.4 4.9 % 5.9 4.1 % of R&D chargesAmortization (2.6 ) -2.8 % (2.1 ) -1.7 % (2.1 ) -2.0 % (2.2 ) -2.0 % (1.7 ) -1.2 % of intangiblesR&D expenses 10.5 11.5 % 10.6 8.5 % 9.8 9.0 % 10.6 9.7 % 12.5 8.7 % as adjusted Financialexpense (income), net:Interestexpense 2.6 2.5 3.1 3.6 3.4 (income), netHedging 0.7 0.5 0.3 0.3 0.7 resultsForeignexchange (0.7 ) (0.3 ) (0.2 ) (0.1 ) 0.4 effects, net Total 2.6 2.7 3.2 3.8 4.5 Operating income (loss)as % of 18.8 20.6 % 48.4 39.0 % 42.0 38.8 % 40.7 37.1 % 48.4 33.8 % net sales EBITDA as % of 24.0 26.3 % 53.1 42.7 % 46.5 42.9 % 45.5 41.5 % 52.6 36.7 % net sales Net income (loss)as % of 13.9 15.2 % 39.8 32.0 % 34.0 31.3 % 44.6 40.7 % 37.6 26.3 % net sales Income per shareBasic 0.19 0.55 0.47 0.62 0.51 Diluted 0.19 0.50 0.43 0.55 0.47

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(1) The calculation of diluted income per share assumes the exercise of equity-settled share-based payments and the conversion of all Convertible Notes