1995 ANNUAL REPORT
SGS-THOMSON Microelectronics N.V.
Selected Consolidated Financial Data
The table below sets forth selected consolidated financial data for the Company for each of the years in the five-year period ended December 31, 1995. Such data have been derived from the consolidated financial statements of the Company. Consolidated financial statements for each of the years in the three-year period ended December 31, 1995, audited by Arthur Andersen & Co., independent public accountants, are included elsewhere in this annual report.
The following information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Consolidated Financial Statements and the related notes thereto included elsewhere in this annual report.
| Twelve months ended December 31, | ||||||
| (in millions except per share data) | 1991(1) | 1992 | 1993(1) | 1994(1) | 1995(1) | |
| Consolidated Statement of Income Data: | ||||||
| Net sales | $ 1,362.3 | $ 1,550.6 | $ 2,007.7 | $ 2,602.2 | $ 3,520.7 | |
| Other revenues | 11.7 | 17.5 | 29.8 | 42.7 | 33.7 | |
| Net revenues | 1,374.0 | 1,568.1 | 2,037.5 | 2,644.9 | 3,554.4 | |
| Cost of sales(2) | (995.2) | (1,051.6) | (1,248.4) | (1,528.7) | (2,096.0) | |
| Gross profit(2) | 378.8 | 516.5 | 789.1 | 1,116.2 | 1,458.4 | |
| Operating expenses: | ||||||
| Selling, general and administrative | (262.3) | (270.0) | (302.5) | (339.9) | (413.2) | |
| Research and development(3) | (245.3) | (260.9) | (270.9) | (338.3) | (440.3) | |
| Restructuring costs | (23.6) | (38.9) | (49.9) | (37.0) | (13.0) | |
| Other income and expenses(3) | 120.5 | 105.1 | 49.7 | 32.0 | 59.1 | |
| Total operating expenses | (410.7) | (464.7) | (573.6) | (683.2) | (807.4) | |
| Operating profit (loss) | (31.9) | 51.8 | 215.5 | 433.0 | 651.0 | |
| Net interest expenses | (70.3) | (65.2) | (37.8) | (21.0) | (16.8) | |
| Gain on disposal of an investment | 0 | 18.7 | 0 | 0 | 0 | |
| Equity in earnings of affiliates | 2.1 | 0 | 0 | 0 | 0 | |
| Profit (loss) before tax | (100.1) | 5.3 | 177.7 | 412.0 | 634.2 | |
| Income tax | (2.5) | (2.3) | (17.6) | (49.5) | (108.3) | |
| Profit (loss) before minority interests | (102.6) | 3.0 | 160.1 | 362.5 | 525.9 | |
| Minority interests(4) | 0 | 0 | 0 | 0 | 0.6 | |
| Net earnings (loss) | $ (102.6) | $ 3.0 | $ 160.1 | $ 362.5 | $ 526.5 | |
| Net earnings (loss) per share(5) | $ (1.93) | $ 0.06 | $ 1.92 | $ 3.04 | $ 4.03 | |
| Weighted average shares outstanding | 53.3 | 53.6 | 83.5 | 119.4 | 130.6 | |
| Consolidated Balance Sheet Data (end of period): | ||||||
| Cash, cash equivalents and marketable securities | $ 48.4 | $ 99.5 | $ 327.4 | $ 461.5 | $ 758.4 | |
| Working capital | 549.7 | 467.7 | 390.0 | 291.1 | 417.4 | |
| Total assets | 1,896.5 | 1,842.3 | 2,240.9 | 3,224.7 | 4,486.0 | |
| Short-term debt (including current portion of long-term debt) | 340.8 | 360.6 | 231.1 | 322.5 | 492.8 | |
| Long-term debt (excluding current portion)(1) | 612.6 | 547.6 | 374.8 | 277.2 | 200.7 | |
| Shareholders' equity(1) | 479.9 | 412.9 | 1,004.0 | 1,680.0 | 2,661.7 | |
| Consolidated Operating Data: | ||||||
| Capital expenditures(6) | $ 181.2 | $ 196.0 | $ 445.9 | $ 779.7 | $ 1,001.9 | |
| Net cash from operating activities | 129.2 | 198.7 | 460.9 | 728.1 | 825.1 | |
| Depreciation of property, plant and equipment(6) | 207.9 | 209.8 | 229.4 | 288.0 | 392.4 | |
(1)In October 1995, the Company completed a second
public offering with net proceeds to the Company of approximately $371.6
million. In December 1994, the Company completed an Initial Public Offering with
net proceeds to the Company of approximately $198.7 million.
In 1993, the Company received a $500 million capital contribution that was
effected in two steps, $250 million in May and $250 million in September. The
Company also received a $100 million capital contribution in each of 1988, 1989
and 1991.
(2)Cost of sales is net of certain third-party funding for industrialization costs (which include certain costs incurred to bring prototype products to the production stage) included therein. See Note 20 to the Consolidated Financial Statements. For a discussion of certain significant charges reflected in cost of sales in 1993, 1994 and 1995, see "Management's Discussion and Analysis of Financial Condition and Results of Operations--Results of Operations."
(3)Other income and expenses include, among other things, third-party funding for research and development, the expenses for which are reflected in research and development expenses, as well as foreign currency gains and losses, fab start-up costs, patent license payments received and patent costs incurred. The Company's reported research and development expenses do not include design center, process engineering, pre-production or industrialization costs.
(4)In 1994, the Company created a joint venture with a subsidiary of the Shenzhen Electronics Group ("SEG"). The Company owns a 60% interest in the joint venture, with a subsidiary of SEG owning the remaining 40%.
(5) Net earnings (loss) per share amounts have been restated to reflect a 40:1 stock split effected in connection with the Initial Public Offering.
(6)Capital expenditures are net of certain third-party funding, the effect of which is to decrease depreciation.
