ICOS Vision Systems Corporation N.V.

Transcription

1 Beyond bounderies Annual Report 2000 ICOS Vision Systems Corporation N.V.

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3 FINANCIAL HIGHLIGHTS Years ended December 31, (In thousands, except earnings per share) Operating results: Net Revenues $29,837 $29,790 $34,641 $35,243 $48,331 $97,574 Income from Operations 8,087 4,885 6,758 1,775 7,466 31,108 Net Income 4,481 3,192 4,884 (104) 5,491 20,610 Basic and Diluted Earnings per Share $0.69 $0.48 $0.63 $(0.01) $0.52 $1.96 Weighted Average Shares Outstanding 6,485 6,654 7,725 10,450 10,508 10,508 Balance sheet data: Cash and Cash Equivalents $1,326 $2,784 $20,300 $17,955 $13,422 $20,844 Working Capital 5,973 6,877 26,414 28,968 31,379 50,119 Total Assets 19,643 16,887 38,003 44,281 48,760 76,242 Short-term Debt 1, , Long-term Debt 3,697 3,341 2,472 1, Stockholders Equity 5,110 7,177 28,621 35,315 36,667 55,470 Net Revenues ($ millions) Net Income ($ millions) Earnings per Share ($) ICOS ANNUAL REPORT 2000 PAGE 3

4 To our shareholders: The challenge for ICOS is to ride the waves of the fast changing, growing, but cyclical semiconductor equipment industry. In 1998, we witnessed one of the most severe downturns in 25 years for the semiconductor industry. In 1999, the market began to recover, especially during the second half of the year. ICOS not only benefited from, but also made use of, this market cycle and increased its revenues by 37% in The market boom continued in 2000, and ICOS again increased its revenues, this time by 102% compared to 1999 revenues. This fantastic performance also reflects the market share gains for our Component Inspector business. Starting from the first quarter of 1999, ICOS was able to increase its revenues sequentially, leading to an increase of revenues from $7.2 million in the first quarter of 1999 to revenues of $28.2 million in the third quarter of Unfortunately, due to softening market conditions, this record revenue level could not be sustained in the last quarter of 2000, where revenues were $24.6 million. Revenues during 2000 increased 102% to a record $97.6 million, compared to $48.3 million in 1999, primarily reflecting the continued market recovery until the last quarter and market share gains in our Component Inspector business. Income from operations and net income were $31.1 million and $20.6 million, respectively. Revenue growth was led by South-East Asia which contributed 43% to total revenues, followed by Europe with 32%, Japan with 19%, and the United States with 6%. In terms of product lines, our Component Inspector business clearly continued to dominate our performance this year, with an impressive 141% revenue increase over Accordingly, Component Inspectors accounted for 60% of total revenues, while System Level products and Board Level products accounted for 22% and 18% of total revenues, respectively. ICOS ANNUAL REPORT 2000 PAGE 4

5 We at ICOS keep a clear focus on developing next-generation products, both in anticipation of customer needs and in response to customer requests. In order to be able to offer ever increasing performance with our products, we invested $7.6 million in research and development this year, an increase of 36% compared to the previous year. During 2000, our investments in new product development and enhanced product functionality yielded new customer wins and a substantial expansion of our share of the Component Inspector market. In the year 2000, the Company introduced a new type of Component Inspector, the CI Derived from the previous model CI-8250, the new machine can handle the inspection of four components in parallel. This capability can significantly increase inspection throughput for smaller components. For certain types of components, the inspection throughput exceeds 10,000 units per hour. Also during last year, ICOS introduced the LLIM, a System Level inspection module for two and three dimensional inspection of leadless components, a device type that is rapidly gaining market interest. The Company s three dimensional inspection techniques were further refined. 3D STEREO was introduced as an improvement of the successful CyberSTEREO technology. We believe the 3D STEREO technology gives ICOS a distinct competitive advantage in the marketplace. By offering 3D STEREO and an optional tape output on all of our automatic Component Inspector models, we gained new customers and market share. In addition to introducing the CI-8450, our high-end high throughput Component Inspector, we introduced the CI-5250, a mid-range Component Inspector that was derived from the CI-5150 product, but offers higher inspection speeds. ICOS is now undertaking to integrate the new DSP-based vision board, the ICOS6000, that should deliver a significant speed advantage at a lower cost in its System Level and Component Inspector products. ICOS benefited significantly from the upturn in the semiconductor equipment market during most of 2000 and is prepared to weather a business downturn, should it continue. We have strong relationships with our customers worldwide, and we intend to strengthen our relationships with the customers we gained last year. We have a global marketing and support organization in place. We have the support of a number of key subcontractors, which enables us to rapidly tailor production volumes in a fast changing market. We continue to develop and introduce new products and product enhancements that give us entry into complementary markets and strengthen our presence in existing market segments. We have gained market share and believe we can continue to do so. Finally, and most importantly, we have talented and motivated employees who, through their ownership of ICOS stock, have a direct stake in the Company s success. In conclusion, we want to thank our dedicated and talented team members. These individuals were the source of our stellar 2000 successes and we expect that they will maintain and strengthen ICOS position as a leading supplier of vision and inspection solutions for the semiconductor back-end and electronic assembly industries. Jos Verjans, President, C.E.O., Chairman of the Board. PAGE 5

6 ICOS Vision Systems Corporation N.V. is a public company listed on the NASDAQ and the EASDAQ stock markets. Since its inception in 1982, ICOS has been concentrating on establishing long-term relationships with its customers and on developing innovative technology. Throughout the years, ICOS has grown to become a worldwide industry player for the visual inspection of semiconductor components, as well as for the alignment of integrated circuits ( ICs ) when they are finished and placed on printed circuit boards ( PCBs ) for use in all kinds of electronic applications. The manufacturing process of these semiconductors, from wafer to finished IC, is getting more complex. At the same time, the ICs being developed are thinner and smaller and used in more refined electronic applications (more connecting pins or balls are necessary with less space for them on the PCB). The trend to improve productivity and quality, while manufacturing and assembling are becoming more complex, drives the semiconductor manufacturers and electronic device assemblers to implement process control and inspection technologies in the manufacturing process. The result has been an increase in the demand for new inspection applications and the use of machine vision systems. ICOS was founded in 1982 as a spin-off of the Leuven University, in Belgium. During the 1980s, ICOS entered into its first semiconductor industry contracts, some of which are still in effect today. Since 1982, ICOS has brought several important innovations onto the market: a true greyscale vision system for IC placement in 1987, and several of the world's first highly accurate lead inspection systems for integration on IC manufacturing machines. KEY FACTS ABOUT ICOS In 1997, ICOS was introduced on the NASDAQ stock market, followed in 1998 by a dual listing on the European technology stock market, EASDAQ. Also in 1998, ICOS acquired Qtec, a German leader in IC inspection equipment for very specific stages in the IC production process. In both 1999 and 2000, ICOS received the VLSI 10 BEST award in the category "Test, Assembly and Specialty Equipment" in the worldwide VLSI Research Customer Satisfaction Survey. Today, with over 16,000 installed systems worldwide, ICOS is a leading choice for vision and inspection applications in the semiconductor industry. PAGE 6

7 Standing out in the crowd 1. ICOS products inspect the mark, the surface and the contact pins of many types of ICs. 2. Good IC. 3. IC with problem contact pins. ICOS ANNUAL REPORT 2000 PAGE 7

8 ICOS has a young team of dedicated and highly skilled professionals. At the end of 2000, ICOS numbered 200 colleagues worldwide. This gives us a very high employee productivity of about $500K/employee/year. The entire ICOS organization is aimed at maximum flexibility, to keep pace with the extremely fast evolution of our field, and to react immediately to new market needs. Thanks to a great inter-division support structure, the Marketing & Sales and Research & Development divisions are smoothly cooperating and well integrated with the rest of the company. Our General & Administration and Operations departments are constantly working at full speed to give backup and support to the other departments and our worldwide branches. This flexible, interactive structure allows us to respond immediately to both up- and downturns in the cyclical semiconductor industry. Mobile phones, computers, cars, space travel, they all have one thing in common: chips. Due to the increasing digitalization of our society, more and more chips are produced. Also, the semiconductor equipment market, the market of machines for producing chips, has known a similar growth, going from $261 million in 1972 to $6.26 billion in However, this growth is not linear and has had and always will have peaks and downturns. ICOS successfully uses the downturns in the industry to invest in new inspection technologies. In 1999, we introduced CyberSTEREO, right at the moment the market started to pick up from the 1998 downturn. This already resulted in record revenues for But again in 2000, we benefited from the combination of both our downturn investment and the revival of the semiconductor market. THE SEMICONDUCTOR MARKET Another important element behind ICOS growth strategy is to increase market share. This started in 1999 with the Component Inspector product line and continued throughout 2000 resulting in a 141% sales increase for this product line. Several new customers, former buyers of competitive products, are now successfully working with ICOS. By working closely with customers, ICOS maintains a high level of repeat sales. (For 2000, approximately 92% of revenues). Many repeat customers are leading end-users that have selected one or more of ICOS products for integration into their own equipment. PAGE 8

9 How we manage growth in a cyclical industry ICOS revenue has grown faster than the market: we attribute this success to our product performance and our ability to quickly and adequately support our products. The Semiconductor Equipment Market evolution Growth since Year TOTAL SEMI. EQPT. REVENUE Expon. (TOTAL SEMI. EQPT. REVENUE) Source: VLSI Research Inc, Growth Semi Equipment Market Revenues since 1994 Year Growth ICOS Revenues since 1994 Source: VLSI Research Inc, 2000 and company data. ICOS ANNUAL REPORT 2000 PAGE 9

10 ICOS Sales organization has a very specific approach towards customers. We do not have hard-selling sales people putting all their efforts into maximizing their sales without regard to longterm customer relationships. Instead we have developed a solid international network of highly skilled, reliable sales engineers who work towards establishing long-term partnerships with our customers. They keep a close eye on market requirements, and when a customer faces new production quality problems, our sales people, from the design stage on, think along with the customer towards the best possible ICOS inspection solution. This tradition of in-depth technical communication with customers enables us to keep research efforts in tune with market needs. Close interaction between the Sales and R&D departments allows us to provide our customers with quality solutions thus helping them to maintain their competitive advantage. ICOS develops and sells innovative machines for the inspection of ICs both during and after their production process. We offer both in-line and off-line inspection products. The in-line vision modules or System Level products can be integrated in the customer s production machines to inspect ICs while the production machine itself continues its main function (e.g. applying a mark to the ICs). The off-line, stand-alone ICOS Component Inspectors are very flexible, high-speed inspection systems for medium to high volume production lots of finished ICs. THE ICOS PRODUCTS The heart of all these inspection products is our vision board. It serves as the vision operator inside all our inspection machines but is also sold separately as a Board Level product for in-line use in customers machines (e.g. to ensure finished ICs are placed correctly on PCBs). Today, with over 16,000 installed systems worldwide, ICOS has become a leading choice for inspection applications in the semiconductor manufacturing industry. PAGE 10

11 Making our technology profitable for every customer 18% 22% 60% REVENUES BY PRODUCT LINE - YEAR 2000 Board Level: 18% System Level: 22% Component Inspector: 60% ICOS ANNUAL REPORT 2000 PAGE 11

12 A network of satisfied customers REVENUES BY GEOGRAPHY - YEAR 2000 Europe: 32% USA: 6% Japan: 19% 32% 6% 19% 43% South-East Asia: 43% For the second consecutive year, ICOS was selected among the 10-best test assembly and specialty equipment suppliers worldwide. ICOS ANNUAL REPORT 2000 PAGE 12

13 ICOS sales are spread over the four major worldwide geographic areas in the semiconductor industry (South-East Asia, Europe, Japan and the USA). To make sure every customer has access to product support in its area, we have a solid network of product specialists, local branches, distributors and representatives. The product specialists are a unique team of high-level ICOS engineers that are constantly on the move to serve our customers. Those versatile engineers are put through a stringent four month training program at the ICOS headquarters, during which they are thoroughly trained on ICOS products. They are located strategically around the globe and are available to give immediate technical assistance worldwide. In 1986, ICOS opened its first subsidiary in the USA. Today, the ICOS Inc. office is located in Santa Clara, California, near Silicon Valley. It employs seven people and contributed 6% of the total ICOS revenues last year. Our second subsidiary was opened in Japan in ICOS Japan Ltd. now employs 23 people and accounted for 19% of our worldwide revenues. Over the years, ICOS also opened several branches. In 1995, a branch was opened in Hong Kong, followed by Singapore one year later. Both the Hong Kong and Singapore branches were strategically chosen to cover specific countries in the large South-East Asia area, previously managed from headquarters. This entire area accounted for 43% of our 2000 revenues. ICOS WORLDWIDE The Hong Kong office has three people and coordinates sales and support for Hong Kong, China, and the Philippines. Taiwan and Korea are two more markets in the South-East Asia Region also operated through the Hong Kong office. In Taiwan we have two support engineers, in Korea one, supporting the local customers. Our Singapore branch employs 11 people and accounted for 14% of total revenues. It covers sales and support mainly for Singapore, Malaysia and Thailand. Qtec, acquired in 1998, is now our German subsidiary and operates mainly as a remote R&D division. Due to new market opportunities in South Korea, ICOS recently started preparations for a new branch office in Seoul, Korea. Operations of this branch are planned to start in the second half of PAGE 13

14 Research and Development are important driving forces for our company. They are essential for our business model. The skills, experience, initiative and responsibility of our R&D people form the foundation of ICOS leading technological position. Furthermore, ICOS multicultural organization facilitates the establishment of long-term partnerships with customers all over the world. From the design stage on, we think along with the customer and keep a close eye on market requirements. This tradition of in-depth communication with our customers enables us to keep our research efforts in tune with market needs. Several new products were introduced to the market during The CI-8450, presented at the SEMICON West trade show in San Jose, California in July, is the youngest and fastest addition to the ICOS stand-alone, fully automatic Component Inspector product line. In the System Level product line, a 2D and 3D inspection module for leadless devices was introduced. With this product, ICOS anticipates increasing production of this new chip design. ICOS NEW PRODUCT INTRODUCTIONS 2000 was also the year in which we entered the final stage in the development of our new vision board. We plan to integrate this new and faster vision board in both our in-line and off-line inspection products, resulting in a considerable speed increase for these products. PAGE 14

15 Research efforts in tune with market needs 1. CI-8450: high speed standalone Component Inspector. 2.LLIM: in-line inspection module for leadless devices. 3.ICOS6000: a new, faster heart for ICOS inspection products ICOS ANNUAL REPORT 2000 PAGE 15

16 CORPORATE INFORMATION BOARD OF DIRECTORS Jos Verjans President, Chief Executive Officer and Chairman of the Board Gust Smeyers Vice President of Research and Development and Director André Oosterlinck Director, President of the University of Leuven Exeter International N.V., represented by Paul de Vrée Director, Managing Director of Rendex N.V. Belgium VIV Management Services N.V., represented by Julien Smets Director, Managing Director VIV, until July 27, 2000 OFFICERS Jos Verjans President, Chief Executive Officer and Chairman of the Board Gust Smeyers Vice President of Research and Development and Director Guido Vervoort Vice President of Operations Koen Gutscoven Vice President of Marketing and Sales Kazunori Kijima President of ICOS Vision Systems Ltd. Robin Kam General Manager of ICOS Vision Systems NV, Singapore Branch Office Dale Christman President of ICOS Vision Systems, Inc. John Zabolitzky General Manager of ICOS Vision Systems GmbH Stephanus Wansleben General Manager of ICOS Vision Systems GmbH ICOS ANNUAL REPORT 2000 PAGE 16

17 CORPORATE HEADQUARTERS ICOS Vision Systems Corporation N.V., Research Park Haasrode, Zone 1, Esperantolaan 9, 3001 Heverlee, Belgium. STOCK EXCHANGE LISTING The Company s Common Stock is traded on the NASDAQ National Market and on the EASDAQ Market, under the symbol IVIS. ADDITIONAL INFORMATION Copies of the Company s Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission, will be available on request by contacting: Investor Relations ICOS Vision Systems Corporation N.V. Belgium Financial Information ICOS Vision Systems Corporation N.V. Mr. Dominique Vercammen, Finance Manager Belgium TRANSFER AGENT Information concerning lost stock certificates, change of address, account status, or other questions regarding your stock in ICOS Vision Systems Corporation N.V. should be directed to the Company s transfer agent: Mellon Investor Shareholder Services, L.L.C 85 Challenger Road Ridgefield Park, N.J INDEPENDENT PUBLIC ACCOUNTANTS KPMG Bedrijfsrevisoren, Brussels, Belgium. LEGAL COUNSELS Brown, Rudnick, Freed & Gesmer Boston, Massachusetts, USA Dieux, Geens, Cornelis Brussels, Belgium. PAGE 17

18 ANNUAL MEETING The annual meeting of shareholders of ICOS Vision Systems Corporation N.V. will be held: Tuesday, May 8, 2001 at 11:00 am Esperantolaan, 9, 3001 Heverlee, Belgium. STOCK PRICE INFORMATION The following table shows the reported quarterly high and low sales prices per share of the Company s common stock for the period of January 1, 1999, until December 31, 2000 as reported by the NASDAQ and EASDAQ stock markets. NASDAQ EASDAQ Fiscal year ended December 31, 2000 High Low High Low Quarter $43.00 $22.25 $41.25 $22.70 Quarter $38.75 $26.25 $37.62 $26.75 Quarter $45.00 $28.12 $42.67 $29.87 Quarter $33.00 $13.50 $32.50 $13.62 Fiscal year ended December 31, 1999 Quarter $15.62 $11.12 $15.38 $12.12 Quarter $18.12 $12.50$16.72 $12.97 Quarter $17.25 $15.00 $16.93 $15.30 Quarter $24.00 $15.12 $22.30 $15.62 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements in this annual report constitute forward looking statements, including statements regarding market conditions, planned product introductions, and the anticipated performance and market acceptance of the Company's planned and recently introduced products, as well as other statements about the Company s plans, objectives, expectations and intentions. The cautionary statement made in this note should be read as being applicable to all related forward-looking statements wherever they appear in this report. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the Company s dependence on the cyclical semiconductor and electronic assembly industries, possible quarterly fluctuations in operating results, risk associated with development of new products, rapid technological change, the early stage of market development of certain applications of the Company s products, the Company s reliance on OEM Customers and the lengthy sales cycles of those customers, dependence on limited sources of supply for certain components, dependence upon outside contractors, customer concentration, concentration of sales in Southeast Asian markets and the volatility of the economies in these markets, proprietary technology and intellectual property risks, the inherent uncertainty of lawsuits alleging patent infringement that have been filed against the Company, competition, risks associated with management of growth and possible future acquisitions, the ability of the Company to attract and retain key personnel, risks associated with multinational operations and currency exchange rate fluctuations, and other factors set forth from time to time in the Company s filings with the U.S. Securities and Exchange Commission. PAGE 18

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20 ICOS OFFICES EUROPE ICOS OFFICE US ICOS OFFICES ASIA ICOS Vision Systems Corporation N.V. Holding Company ICOS Vision Systems N.V. Headquarters Research Park Haasrode Zone 1 Esperantolaan Heverlee Belgium tel. (+32) fax (+32) ICOS Vision Systems GmbH (former Qtec) Bajuwarenring Oberhaching/Munich Germany tel. (+49) fax (+49) DISTRIBUTORS EUROPE AK Elektronik, Germany PTS Ltd., UK Technology Marketing AB, Sweden ICOS Vision Systems Inc Wyatt Drive Suite 13 Santa Clara CA tel. (+1) fax (+1) DISTRIBUTORS US Eberts Electronic Sales, TX CR Tech, WI High Tech Solutions, CA Ixxi, CA Peterson Sales & Associates, MN Psiber Systems Inc, OR Psiber Systems Inc., WA RMR Electronics, MA Semiquip Inc., FL Semiquip West, AZ TNT Electronics, TX ICOS Vision Systems Ltd. 13F, Yokohama Nishiguchi KN Bldg., Kitasaiwai Nishi-Ku, Yokohama, Japan tel. (+81) fax (+81) ICOS Vision Systems N.V. Hong Kong Branch Office 4F, Kras Asia Ind. Building 79, Hung To Road Kowloon, Hong Kong tel. (+852) fax (+852) ICOS Vision Systems N.V. Singapore Branch Office Tech Place II Block 5002 # Ang Mo Kio Avenue 5 Singapore tel. (+65) fax (+65) DISTRIBUTORS ASIA A.E.I. Technologies Co., Ltd., Thailand Aim-High, Korea Hauman Enterprises Co., Ltd., Taiwan Marubun Corporation, Japan Semateq Inc., Philippines Semis Technology Sdn. Bhd, Malaysia Teltec Pacific, Hong Kong BBC Communication /2001