Q2-24 Revenue of € 151.2 Million and Net Income of € 41.9 MillionOrders of € 185.2 Million Up 64.5% vs. Q2-23H1-24 Revenue and Net Income of € 297.5 million and € 75.9 Million, RespectivelyOrders of € 313.0 Million Up 22.9% vs. H1-23 DUIVEN, the Netherlands, July 25, 2024 (GLOBE NEWSWIRE) -- BE Semiconductor Industries N.V. (the "Company" or "Besi") (Euronext Amsterdam: BESI; OTC markets: BESIY), a leading manufacturer of assembly equipment for the semiconductor industry, today announced its results for the second quarter and first half year ended June 30, 2024. Key Highlights Q2-24 Revenue of € 151.2 million up 3.3% vs. Q1-24 due primarily to higher shipments for photonics and 2.5D assembly applications. Down 7.0% vs. Q2-23 principally due to continued weakness in smartphone end markets partially offset by growth in hybrid bonding and other advanced packaging applications Orders of € 185.2 million up 45.0% vs. Q1-24 and 64.5% versus Q2-23 principally due to significant growth in hybrid bonding, photonics and 2.5D assembly solutions for AI applications partially offset by ongoing weakness in automotive end markets Gross margin of 65.0% decreased by 2.2 points vs. Q1-24 and by 0.6 points vs. Q2-23 due primarily to product mix Net income of € 41.9 million increased 23.2% vs. Q1-24 primarily due to a € 10.0 million decrease in share-based compensation. Vs. Q2-23, net income decreased 20.3% due principally to lower revenue and increased R&D spending in support of wafer level assembly activities. Q2-24 net margin rose to 27.7% vs. 23.2% in Q1-24 but declined versus the 32.4% reported in Q2-23 Net cash of € 74.4 million at quarter end was flat compared to Q2-23 and reflected the payment of € 171.5 million in dividends and the conversion into equity of € 89.9 million of Convertible Notes in Q2-24 Key Highlights H1-24 Revenue of € 297.5 million increased 0.5% vs. H1-23 principally due to higher demand for hybrid bonding and other AI-related advanced packaging systems offset by lower revenue for high-end mobile applications Orders of € 313.0 million up 22.9% vs. H1-23 due to increased demand for hybrid bonding, photonics and 2.5D assembly solutions partially offset by lower bookings for automotive and mobile applications Gross margin of 66.1% increased by 1.1 point versus H1-23 Net income of € 75.9 million decreased € 11.2 million, or 12.9%, vs. H1-23 primarily due to € 9.1 million higher share-based compensation and € 7.1 million higher R&D spending. Similarly, net margin decreased to 25.5% versus 29.5% in H1-23 Q3-24 Outlook    Revenue expected to be flat (plus or minus 5%) vs. € 151.2 million reported in Q2-24 Gross margin expected to range between 64-66% vs. 65.0% realized in Q2-24 Operating expenses expected to decrease 0-5% vs. € 49.0 million in Q2-24 (€ millions, except EPS) Q2-2024 Q1-2024 Δ Q2-2023 Δ HY1-2024 HY1-2023 Δ Revenue 151.2 146.3 +3.3% 162.5 -7.0% 297.5 295.9 +0.5% Orders 185.2 127.7 +45.0% 112.6 +64.5% 313.0 254.6 +22.9% Gross Margin 65.0% 67.2% -2.2% 65.6% -0.6 66.1% 65.0% +1.1 Operating Income 49.3 40.7 +21.1% 62.9 -21.6% 90.0 104.6 -14.0% Net Income 41.9 34.0 +23.2% 52.6 -20.3% 75.9 87.1 -12.9% Net Margin 27.7% 23.2% +4.5 32.4% -4.7 25.5% 29.5% -4.0 EPS (basic) 0.53 0.44 +20.5% 0.68 -22.1% 0.97 1.12 -13.4% EPS (diluted) 0.53 0.44 +20.5% 0.66 -19.7% 0.97 1.09 -11.0% Net Cash and Deposits 74.4* 180.9 -58.9% 74.0* +0.5% 74.4* 74.0* +0.5% * Reflects cash dividend payments of € 171.5 million and € 222.1 million in Q2-24 and Q2-23, respectively. Richard W. Blickman, President and Chief Executive Officer of Besi, commented: "Besi reported second quarter revenue, gross margin and operating profit at the high end of guidance with significant order growth realized for hybrid bonding and other AI related applications. For the quarter, revenue of € 151.2 million and net income of € 41.9 million increased by 3.3% and 23.2%, respectively, versus Q1-24. Versus Q2-23, revenue and net income declined by 7.0% and 20.3%, respectively. Sequential and year over year comparisons highlighted contrasting growth trends for AI and mainstream assembly equipment markets in recent quarters. Since H2-23, we have seen significant order growth from high performance computing applications including 2.5D, 3D and photonics assembly solutions in support of a broad based expansion of generative AI demand. Such growth has been partially offset by a slower recovery, as expected, in mainstream assembly markets and in China, particularly for high end smartphones, automotive and industrial applications. In general, post pandemic inventory levels at semiconductor producers still remain elevated despite gradually increasing utilization rates. Order trends this first half year highlighted increased demand for Besi's systems used in AI and other advanced packaging applications. Bookings of € 185.2 million in Q2-24 and € 313.0 million in H1-24 represented increases of 64.5% and 22.9%, respectively, versus prior year periods. Moreover, we estimate that approximately 50% of our orders over the past 12 months were AI related. In addition, we received orders for 29 hybrid bonding systems in Q2-24 from two customers for estimated delivery in Q4-24 and Q1-25 further highlighting the increased market adoption of this new process technology. Substantially all of such orders were for our latest generation 100 nm accuracy system to be used in 3D logic applications. We anticipate additional orders in H2-24 as customers ramp capacity for high volume manufacturing in 2025. In addition, we received an important second order this quarter for our TCB Next system. Besi continues to navigate an extended assembly downturn at high levels of profitability as a result of increased 2.5D and 3D order momentum with gross and net margins realized of 65.0% and 27.7%, respectively, in Q2-24. For H1-24, gross margins improved to 66.1% versus 65.0% in H1-23. The reduction in our net margin to 25.5% this first half year primarily reflected a 24% increase in development spending and increased share based compensation versus H1-23. The R&D increase was associated with next generation hybrid bonding development targeting sub-100 nm placement accuracy, the ongoing build out of Besi's hybrid bonding and TCB capabilities in anticipation of expanded logic and memory adoption and enhancements to our current product portfolio for the next market upcycle. Our financial position is healthy with net cash of € 74.4 million at quarter end (equal to 13% of our last twelve months revenue) post the capital allocation of € 186.3 million in the form of dividends and share repurchases during the quarter and the conversion of € 89.9 million of Convertible Notes into ordinary shares. On July 17, 2024, we successfully completed an offering of € 350 million of 4.5% Senior Notes due 2031 to further solidify our capital base and help fund growth over the next decade at attractive terms. We are encouraged about Besi's prospects given expanded hybrid bonding adoption for both logic and HBM applications, traction gained in the marketplace by our next generation TCB system and continued demand growth for our flip chip and multi module die attach systems for 2.5D applications. In addition, we anticipate additional share gains in the next market upturn as node sizes shrink further and placement accuracy increases. All such trends play to the strengths of Besi's core competencies. For Q3-24, we forecast that revenue will be flat plus or minus 5% versus Q2-24 with gross margins ranging between 64%-66% based on our projected product mix. Aggregate operating expenses are forecast to decrease by 0-5% versus Q2-24." Share Repurchase Activity During the quarter, Besi repurchased approximately 105,000 of its ordinary shares at an average price of € 140.84 per share or a total of € 14.8 million. Cumulatively, as of June 30, 2024, a total of € 39.2 million has been purchased under the current € 60 million share repurchase program at an average price of € 138.09 per share. As of June 30, 2024, Besi held approximately 1.4 million shares in treasury equal to 1.8% of its shares outstanding. Convertible NotesAt June 30, 2024, Besi's Convertible Notes outstanding equaled € 200.1 million. During the quarter, € 89.9 million of Convertible Notes due 2027 were converted into approximately 1.8 million shares. Senior Note OfferingOn July 17, 2024, Besi completed the issuance of € 350 million of 4.5% Senior Notes due July 15, 2031 via a private placement to institutional investors. The Notes may not be called by the Issuer until January 15, 2031 and are listed on the International Stock Exchange. The net proceeds from the offering are anticipated to be used for general corporate purposes including potential acquisitions. In connection with the issuance, Besi received corporate credit ratings of ‘BB+'; Outlook Stable and ‘BB+' with a Stable Outlook from S&P Global Ratings and Fitch Ratings, respectively. Investor and media conference callA conference call and webcast for investors and media will be held today at 4:00 pm CET (10:00 am EDT). To register for the conference call and/or to access the audio webcast and webinar slides, please visit www.besi.com. Important Dates Publication Q3/Nine-month results October 24, 2024 Publication Q4/Full year results February 2025   Basis of Presentation The accompanying Consolidated Financial Statements 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 2023 Annual Report, which is available on www.besi.com. Contacts:Richard W. Blickman, President & CEO        Leon Verweijen, SVP FinanceClaudia Vissers, Executive Secretary/IR coordinatorEdmond Franco, VP Corporate Development/US IR coordinatorTel. (31) 26 319 About Besi Besi 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. Besi's ordinary shares are listed on Euronext Amsterdam (symbol: BESI). Its Level 1 ADRs are listed on the OTC markets (symbol: BESIY) and its headquarters are located in Duiven, the Netherlands. For more information, please visit our website at www.besi.com. Caution Concerning Forward-Looking Statements This 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 and other global pandemics and the associated adverse impacts on the global economy, financial markets, global supply chains and our operations as well as those of our customers and suppliers; failure to develop 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; consolidation activity and industry alliances in the semiconductor industry that may result in further increased customer concentration, 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, conflict minerals 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 where we have a substantial portion of our production facilities; 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; those additional risk factors set forth in Besi's annual report for the year ended December 31, 2023 and 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   (€ thousands, except share and per share data) Three Months EndedJune 30,(unaudited) Six Months EndedJune 30,(unaudited)   2024 2023 2024 2023           Revenue 151,176 162,501 297,490 295,907 Cost of sales 52,908 55,947 100,951 103,665           Gross profit 98,268 106,554 196,539 192,242           Selling, general and administrative expenses 30,514 29,387 70,155 58,369 Research and development expenses 18,503 14,298 36,422 29,293           Total operating expenses 49,017 43,685 106,577 87,662           Operating income 49,251 62,869 89,962 104,580           Financial expense, net 1,045 1,671 1,634 3,216           Income before taxes 48,206 61,198 88,328 101,364           Income tax expense 6,261 8,597 12,404 14,215           Net income 41,945 52,601 75,924 87,149           Net income per share – basic 0.53 0.68 0.97 1.12 Net income per share – diluted 0.53 0.66 0.97 1.09 Number of shares used in computing per share amounts:- basic- diluted 1 79,281,53381,941,471 77,654,10682,916,642 78,231,43082,023,808 77,799,68183,346,349   Consolidated Balance Sheets   (€ thousands) June30, 2024(unaudited) March31, 2024(unaudited) December 31, 2023(audited) ASSETS               Cash and cash equivalents 127,234 232,053 188,477 Deposits 130,000 215,000 225,000 Trade receivables 174,601 150,192 143,218 Inventories 99,291 99,384 92,505 Other current assets 36,346 34,756 39,092         Total current assets 567,472 731,385 688,292         Property, plant and equipment 43,571 41,328 37,516 Right of use assets 16,821 16,901 18,242 Goodwill 45,710 45,613 45,402 Other intangible assets 92,627 90,241 93,668 Deferred tax assets 9,517 11,444 12,217 Other non-current assets 1,239 1,252 1,216         Total non-current assets 209,485 206,779 208,261         Total assets 776,957 938,164 896,553                         Current portion of long-term debt 3,033 984 3,144 Trade payables 51,620 52,382 46,889 Other current liabilities 73,023 100,606 87,200         Total current liabilities 127,676 153,972 137,233         Long-term debt 179,801 265,142 297,353 Lease liabilities 13,448 13,625 14,924 Deferred tax liabilities 10,396 12,136 12,959 Other non-current liabilities 11,352 12,914 12,671         Total non-current liabilities 214,997 303,817 337,907         Total equity 434,284 480,375 421,413         Total liabilities and equity 776,957 938,164 896,553   Consolidated Cash Flow Statements   (€ thousands) Three Months Ended June 30,(unaudited) Six Months Ended June 30,(unaudited)   2024 2023 2024 2023           Cash flows from operating activities:                   Income before income tax 48,206 61,198 88,328 101,364           Depreciation and amortization 6,980 6,414 13,793 12,907 Share based payment expense 6,916 5,452 23,816 14,725 Financial expense, net 1,045 1,671 1,634 3,216           Changes in working capital (46,694) (22,732) (49,945) (18,278) Interest (paid) received 3,893 644 5,062 1,493 Income tax paid (15,428) (23,912) (17,517) (25,299)           Net cash provided by operating activities 4,918 28,735 65,171 90,128           Cash flows from investing activities:         Capital expenditures (3,216) (2,323) (8,866) (3,458) Capitalized development expenses (4,912) (5,251) (9,575) (10,641) Repayments of (investments in) deposits 85,000