Asml announces 2012 first quarter results
Veldhoven, netherlands--(business wire)--asml holding nv (asml) (nasdaq:asml) (amsterdam:asml) today publishes 2012 first quarter results. q1 confirms asml is on track for eur 2.4 billion net sales in first half 2012 net sales expected to be stable in q3 at h1 levels first quarter 2012 highlights a twinscan nxt:1950i has surpassed the productivity milestone of more than 4,500 wafers in a single day at a customer manufacturing site, just six months after we set the record of more than 4,000 wafers per day. as part of our holistic lithography portfolio, our computational lithography unit brion introduced tachyon flexible mask optimization (tachyon fmo) which enables the seamless use of multiple optical proximity correction (opc) techniques in a single mask tapeout. of our new extreme ultraviolet (euv) lithography platform, all six nxe:3100 systems are now operational and printing wafers; the revenue for the sixth system installed in q1 2012 was recognized in q1 2012, one quarter earlier than expected. the number of exposed wafers on nxe:3100 systems increased to about 9,000 wafers. the nxe:3100 systems have achieved on-product overlay of 6 nm as well as dedicated chuck overlay of less than 2 nm. an euv light source supplier has demonstrated 30 watts at a high duty cycle with acceptable dose control for a sustained period of time. in addition, it demonstrated 50 watts of raw power, successfully applying pre-pulse technology. assembly and integration of our new nxe:3300b euv scanners - the volume production successor of the nxe:3100 - is ongoing, with first shipment expected in the fourth quarter of 2012 and revenue recognition expected starting early in 2013; to date a total of 11 nxe:3300b systems have been ordered; semiconductor device production using euv is expected to begin in 2013. outlook “our financial results in the first quarter were in line with guidance, supporting our expectation for first half 2012 net sales of about eur 2.4 billion. we see sales stability at current q1 levels for the next two quarters with clear indications that the logic segment will continue its strong demand trend for the remainder of the year,” said eric meurice, president and chief executive officer of asml. “the sales trend is driven mainly by demand from foundries and integrated device manufacturers (idms), which will represent the majority of our sales in the next two quarters. the demand for 28 nanometer (nm) from this logic segment continues to be large and structural; it will be accompanied by the start of pre-production capacity for 20 nm. later in the year, we expect to see technology demand for sub-20 nm nand memory and sub-30 nm dram memory. our sales will come mainly from twinscan nxt:1950i immersion technology and will be complemented by a sustained krf capacity build in logic as the new nodes require the capacity build-up of the full range of layers. our euv technology has made significant progress as evidenced by the press release highlights: we continue to improve the efficiency of the system to reach our objective of 60 wafers per hour in the second half of 2012. we are preparing the shipments of the first 11 production systems on order, the nxe:3300b, from q4 2012 to the summer of 2013. these units will serve our customers in their production recipe development. we have now started the negotiation of a new batch of orders for euv systems, targeted mainly for customer production ramps,” meurice said. for the second quarter 2012, asml expects net sales of about eur 1.2 billion, gross margin of about 43 percent, r&d costs at eur 145 million and sg&a costs at eur 55 million. update on share buy back program as part of asml’s policy to return excess cash to shareholders through dividend and regularly timed share buy backs, asml has announced its intention to purchase up to eur 1,130 million of its own shares in the two year period 2011-2012. since the start of this program in 2011 up to april 1, 2012 asml has purchased 29.8 million shares for a total consideration of eur 839.2 million. the repurchased shares have been, or will be cancelled. furthermore, asml has announced its intention to purchase up to 2.2 million of additional shares during 2012 for the purpose of covering outstanding employee stock and stock option plans. these shares will be held as treasury shares pending delivery pursuant to such plans. up to april 1, 2012 no shares had yet been purchased under this program. both share buy back programs will be executed within the limitations of the existing authority granted by the agm on april 20, 2011 and, if granted, of the authority proposed to future agms. both share buy back programs may be suspended, modified or discontinued at any time. all transactions under these programs are published on asml’s website (www.asml.com/investors) on a weekly basis. about asml asml is one of the world's leading providers of lithography systems for the semiconductor industry, manufacturing complex machines that are critical to the production of integrated circuits or chips. headquartered in veldhoven, the netherlands, asml is traded on euronext amsterdam and nasdaq under the symbol asml. asml has almost 8,000 employees on payroll (expressed in full time equivalents), serving chip manufacturers in more than 55 locations in 16 countries. more information about our company, our products and technology, and career opportunities is available on our website: www.asml.com investor and media conference call a conference call for investors and media will be hosted by ceo eric meurice and cfo peter wennink at 15:00 pm central european time / 09:00 am eastern u.s. time. dial-in numbers are: in the netherlands +31 10 29 44 290 and the us +1 212 444 0412 (us participants will have to quote the following confirmation code when dialing into the conference: 7061459). to listen to the conference call, access is also available via www.asml.com a replay of the investor and media call will be available on www.asml.com us gaap and ifrs financial reporting asml's primary accounting standard for quarterly earnings releases and annual reports is us gaap, the accounting standard generally accepted in the united states. quarterly us gaap consolidated statements of operations, consolidated statements of cash flows and consolidated balance sheets, and a reconciliation of net income and equity from us gaap to ifrs are available on www.asml.com in addition to reporting financial figures in accordance with us gaap, asml also reports financial figures in accordance with ifrs for statutory purposes. the most significant differences between us gaap and ifrs that affect asml concern the capitalization of certain product development costs, the accounting of share-based payment plans, the accounting of income taxes and the accounting of reversal of inventory write-downs. asml’s quarterly ifrs consolidated income statement, consolidated statement of cash flows, consolidated statement of financial position and a reconciliation of net income and equity from us gaap to ifrs are available on www.asml.com the consolidated balance sheets of asml holding n.v. as of april 1, 2012, the related consolidated statements of operations and consolidated statements of cash flows for the quarter ended april 1, 2012 as presented in this press release are unaudited. regulated information this press release, the us gaap consolidated financial statements, the ifrs consolidated financial statements and the statutory interim report published on www.asml.com comprise regulated information within the meaning of the dutch financial markets supervision act (wet op het financieel toezicht). forward looking statements "safe harbor" statement under the us private securities litigation reform act of 1995: the matters discussed in this document may include forward-looking statements, including statements made about our outlook, realization of systems backlog, ic unit demand, financial results, average selling price, gross margin and expenses, dividend policy and intention to repurchase shares. these forward looking statements are subject to risks and uncertainties including, but not limited to: economic conditions, product demand and semiconductor equipment industry capacity, worldwide demand and manufacturing capacity utilization for semiconductors (the principal product of our customer base), including the impact of general economic conditions on consumer confidence and demand for our customers’ products, competitive products and pricing, the impact of manufacturing efficiencies and capacity constraints, the continuing success of technology advances and the related pace of new product development and customer acceptance of new products, our ability to enforce patents and protect intellectual property rights, the risk of intellectual property litigation, availability of raw materials and critical manufacturing equipment, trade environment, changes in exchange rates, available cash, distributable reserves for dividend payments and share repurchases, and other risks indicated in the risk factors included in asml’s annual report on form 20-f and other filings with the us securities and exchange commission. 167.8 3 3 asml - quarterly summary u.s. gaap consolidated statements of operations 1,2 3 3 asml - quarterly summary ratios and other data 1,2 asml - quarterly summary u.s. gaap consolidated statements of cash flows 1,2 asml - notes to the summary u.s. gaap consolidated financial statements basis of presentation asml follows accounting principles generally accepted in the united states of america (“u.s. gaap”). further disclosures, as required under u.s. gaap in annual reports, are not included in the summary consolidated financial statements. unless stated otherwise, the accompanying consolidated financial statements are stated in millions of euros (‘eur’). principles of consolidation the consolidated financial statements include the financial statements of asml holding n.v. and all of its subsidiaries and the variable interest entities in which asml is the primary beneficiary (together referred to as “asml” or the “company”). subsidiaries are all entities over which asml has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. all intercompany profits, balances and transactions have been eliminated in the consolidation. use of estimates the preparation of asml’s consolidated financial statements in conformity with u.s. gaap requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities on the balance sheet dates, and the reported amounts of revenue and expenses during the reported periods. actual results could differ from those estimates. recognition of revenues in general, asml recognizes revenue when all four revenue recognition criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; seller’s price to buyer is fixed or determinable; and collectability is reasonably assured. at asml, this policy generally results in revenue recognition from the sale of a system upon shipment. the revenue from the installation of a system is generally recognized upon completion of that installation at the customer site. each system undergoes, prior to shipment, a "factory acceptance test" in asml’s cleanroom facilities, effectively replicating the operating conditions that will be present on the customer's site, in order to verify whether the system will meet its standard specifications and any additional technical and performance criteria agreed with the customer, if any. a system is shipped, and revenue is recognized, only after all specifications are met and customer sign-off is received or waived. in case not all specifications are met and the remaining performance obligation is not essential to the functionality of the system but is substantive rather than inconsequential or perfunctory, a portion of the sales price is deferred. although each system's performance is re-tested upon installation at the customer's site, asml has never failed to successfully complete installation of a system at a customer’s premises. the main portion of asml’s revenue is derived from contractual arrangements with its customers that have multiple deliverables, which mainly include the sale of our systems, installation and training services and prepaid extended and enhanced (optic) warranty contracts. for each of the specified deliverables asml determines the selling price by using either vendor specific objective evidence (‘vsoe’), third party evidence (‘tpe’) or by best estimate of the selling price (‘besp’). when the company is unable to establish relative selling price using vsoe or tpe, the company uses besp in its allocation of arrangement consideration. the total arrangement consideration is allocated at inception of the arrangement to all deliverables on the basis of their relative selling price. the revenue relating to the undelivered elements of the arrangements is deferred at their relative selling prices until delivery of these elements. revenue from installation and training services is recognized when the services are completed. revenue from prepaid extended and enhanced (optic) warranty contracts is recognized over the term of the contract. foreign currency risk management the company uses the euro as its invoicing currency in order to limit the exposure to foreign currency movements. exceptions may occur on a customer by customer basis. to the extent that invoicing is done in a currency other than the euro, the company is exposed to foreign currency risk. it is the company’s policy to hedge material transaction exposures, such as forecasted sales and purchase transactions and accounts receivable and payable. the company hedges these exposures through the use of foreign exchange contracts. as of april 1, 2012, shareholders’ equity includes eur 1.4 million loss (net of taxes: eur 1.3 million loss; december 31, 2011: eur 4.4 million loss) representing the total anticipated loss to be charged to sales, and eur 1.3 million gain (net of taxes: eur 1.2 million gain; december 31, 2011: eur 10.3 million gain) to be released to cost of sales, which will offset the eur equivalent of foreign currency denominated forecasted sales and purchase transactions. asml – reconciliation u.s. gaap – ifrs 1,2 notes to the reconciliation from u.s. gaap to ifrs note 1 development expenditures under ifrs, asml applies ias 38, “intangible assets”. in accordance with ias 38, asml capitalizes certain development expenditures that are amortized over the expected useful life of the related product generally ranging between one and three years. amortization starts when the developed product is ready for volume production. under u.s. gaap, asml applies asc 730, “research and development”. in accordance with asc 730, asml charges costs relating to research and development to operating expense as incurred. note 2 share-based payments under ifrs, asml applies ifrs 2, “share-based payments” beginning from january 1, 2004. in accordance with ifrs 2, asml records as an expense the fair value of its share-based payments with respect to stock options and stock granted to its employees after november 7, 2002. under ifrs, at period end a deferred tax asset is computed on the basis of the tax deduction for the share-based payments under the applicable tax law and is recognized to the extent it is probable that future taxable profit will be available against which these deductible temporary differences will be utilized. therefore, changes in the company’s share price do affect the deferred tax asset at period-end and result in adjustments to the deferred tax asset. as of january 1, 2006, asml applies asc 718 “compensation- stock compensation” which requires companies to recognize the cost of employee services received in exchange for awards of equity instruments based upon the grant-date fair value of those instruments. asc 718’s general principle is that a deferred tax asset is established as the company recognizes compensation costs for commercial purposes for awards that are expected to result in a tax deduction under existing tax law. under u.s. gaap, the deferred tax recorded on share-based compensation is computed on the basis of the expense recognized in the financial statements. therefore, changes in the company’s share price do not affect the deferred tax asset recorded in the company’s financial statements. note 3 reversal of write-downs under ifrs, asml applies ias 2 (revised), “inventories”. in accordance with ias 2, reversal of a prior period write-down as a result of a subsequent increase in value of inventory should be recognized in the period in which the value increase occurs. under u.s. gaap, asml applies asc 330 “inventory”. in accordance with asc 330 reversal of a write-down is prohibited as a write-down creates a new cost basis. note 4 income taxes under ifrs, asml applies ias 12, “income taxes” beginning from january 1, 2005. in accordance with ias 12 unrealized net income resulting from intercompany transactions that are eliminated from the carrying amount of assets in consolidation give rise to a temporary difference for which deferred taxes must be recognized in consolidation. the deferred taxes are calculated based on the tax rate applicable in the purchaser’s tax jurisdiction. under u.s. gaap, the elimination of unrealized net income from intercompany transactions that are eliminated from the carrying amount of assets in consolidation give rise to a temporary difference for which prepaid taxes must be recognized in consolidation. contrary to ifrs, the prepaid taxes under u.s. gaap are calculated based on the tax rate applicable in the seller’s rather than the purchaser’s tax jurisdiction. "safe harbor" statement under the us private securities litigation reform act of 1995: the matters discussed in this document may include forward-looking statements, including statements made about our outlook, realization of systems backlog, ic unit demand, financial results, average selling price, gross margin and expenses, dividend policy and intention to repurchase shares. these forward looking statements are subject to risks and uncertainties including, but not limited to: economic conditions, product demand and semiconductor equipment industry capacity, worldwide demand and manufacturing capacity utilization for semiconductors (the principal product of our customer base), including the impact of general economic conditions on consumer confidence and demand for our customers’ products, competitive products and pricing, the impact of manufacturing efficiencies and capacity constraints, the continuing success of technology advances and the related pace of new product development and customer acceptance of new products, our ability to enforce patents and protect intellectual property rights, the risk of intellectual property litigation, availability of raw materials and critical manufacturing equipment, trade environment, changes in exchange rates, available cash, distributable reserves for dividend payments and share repurchases, and other risks indicated in the risk factors included in asml’s annual report on form 20-f and other filings with the us securities and exchange commission. 1 these financial statements are unaudited. 2 numbers have been rounded. 3 the calculation of diluted net income per ordinary share assumes the exercise of options issued under asml stock option plans and the issue of shares under asml share plans for periods in which exercises or issues would have a dilutive effect. the calculation of diluted net income per ordinary share does not assume exercise of such options or issue of shares when such exercises or issue would be anti-dilutive.
