FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2002
STMicroelectronics N.V.
-----------------------------------------------
(Translation of registrant's name into English)
Route de Pre-Bois, ICC Bloc A, 1215 Geneva 15, Switzerland
----------------------------------------------------------
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F]
Form 20-F X Form 40-F
--- ---
[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934]
Yes No X
--- ---
[If "Yes" is marked, indicate below the file number assigned to the
Registrant in connection with Rule 12g3-2(b): 82-______]
Enclosures:
A press release dated April 22, 2002 announcing STMicroelectronics' First
Quarter Revenues and Earnings.
(STMICROELECTRONICS)(STM) STMicroelectronics Reports 2002 First Quarter Revenues
and Earnings
- First quarter revenues total $1.36 billion.
- First quarter gross profit and gross margin were $452 million and
33.4%, respectively.
ST ranked world's 3rd largest semiconductor company in 2001 by
Gartner/Dataquest, up from the 6th position in 2000.
GENEVA--(BUSINESS WIRE)--April 22, 2002--STMicroelectronics (NYSE:
STM)
STMicroelectronics (NYSE: STM) today reported financial results for the
first quarter ended March 30, 2002.
First Quarter 2002 Results
Net revenues for the first quarter were $1,355.2 million, within the range
of the guidance the Company provided in its year-end 2001 earnings release
issued on January 22, 2002. This represented a 6.4% sequential decline from the
$1,447.9 million reported in the 2001 fourth quarter, and was well below the
$1,921.1 million of last year's first quarter. Revenues from differentiated
products were $952.5 million, accounting for 70.3% of net revenues for the
period.
Gross profit was $452.0 million, a modest sequential decline from the prior
quarter's $459.5 million, and a decrease of 47% from the $855.8 million reported
in the first quarter of 2001. Gross margin was 33.4%, 170 basis points above the
31.7% of the 2001 fourth quarter, an improvement over our guidance issued in
January 2002, but below the 44.5% reported in the comparable year-ago period.
Pasquale Pistorio, President and Chief Executive Officer, commented, "As
anticipated, the sequential decline in net revenues from the 2001 fourth quarter
was primarily attributable to seasonal factors as well as pricing pressures
resulting from industrywide overcapacity. Order flow accelerated significantly
in the last month of the quarter, during which time we also experienced a degree
of price stabilization that benefited memory and other product families".
Mr. Pistorio continued, "We were very pleased by the level of operating
leverage that was achieved in the period, illustrated by a sequential gross
profit decline of only 1.6% on a 6.4% decrease in revenues compared to the
fourth quarter of 2001. This better-than-expected performance resulted from
significant yield improvements and higher overall fab utilization rates.
Importantly, the expansion in gross margin was achieved without an increase in
inventories."
Operating income was $60.3 million, compared to the prior quarter's $70.6
million and year-ago quarter's $412.3 million. Net income equaled $32.9 million
for the 2002 first quarter compared to $45.0 million in the 2001 fourth quarter,
and $340.8 million in the first quarter of 2001. Earnings per diluted share were
$0.04, compared to $0.05 in the 2001 fourth quarter, and $0.38 in the comparable
year-ago period.
The following tables provide additional detail on 2002 first quarter net
revenues:
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Q1 2002 Revenue Breakdown By Application
Amount
(Millions USD$) % of Net Revenue
--------------- ----------------
Automotive $168.5 12.4%
Consumer 290.1 21.4%
Computer 327.9 24.2%
Telecom 396.7 29.3%
Industrial & Other 172.0 12.7%
Sequential revenue gains were achieved by automotive and consumer, which
were up 5.2% and 2.2%, respectively, from fourth quarter 2001 levels. Telecom
posted a sequential decline of 19.8% to which contributed some inventory
realignment based on revised forecasts for the year by certain of our customers.
Computer and industrial & others, which includes smart cards, declined 2.1% and
1.2%, respectively.
Q1 2002 Geographic Revenue Breakdown
By Customers' Region of Origin
Amount
(Millions USD$) % of Net Revenue
---------------- ----------------
Europe $575.0 42.4%
North America 465.8 34.4%
Japan 89.4 6.6%
Asia/Pac 181.5 13.4%
Emerging Markets 43.5 3.2%
By Location of Order Shipment
Amount
(Millions USD$) % of Net Revenue
--------------- ----------------
Europe $401.1 29.6%
North America 200.5 14.8%
Japan 45.1 3.3%
Asia/Pac 593.4 43.8%
Emerging Markets 115.1 8.5%
The geographic distribution of sales reflected the continued migration of
industry wide manufacturing to the Asia/Pac region.
Q1 2002 Revenue Breakdown by Product Family
Amount
(Millions USD$) % of Net Revenue
---------------- ----------------
Differentiated Products $952.5 70.3%
Standard & Commodities 78.3 5.8%
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Micro & Memories 170.9 12.6%
Discretes 153.4 11.3%
Discretes showed a modest 1% sequential revenue increase due to a slight
firming of prices. Also, both Differentiated Products and Standard and
Commodities posted sequential revenue performance better than that of the
Company as a whole, registering revenue declines of 5.9% and 3.3%, respectively.
Micro and Memories' 15.8% sequential decline was primarily attributable to
increasing price erosion from fourth quarter 2001 levels.
Q1 2002 Revenue Breakdown By Product Group:
Amount
(Millions USD$) % of Net Revenue
--------------- ----------------
TPA $656.2 48.4%
DSG 218.4 16.1%
MPG 235.1 17.3%
CMG 224.0 16.5%
OTHER 21.5 1.6%
CMG (Consumer & Microcontroller Groups) gained 5.6% on a sequential basis
reflecting the strength of its market position in set-top boxes and better DVD
sales. DSG (Discrete & Standard Products Group) and Other were basically flat
with the fourth quarter 2001. TPA (Telecom and Peripherals/Automotive Groups)
was down 8% sequentially, and MPG (Memory Products Group) declined 16.8%
sequentially for reasons discussed earlier.
In the 2002 first quarter, research and development expenses increased
modestly to $223.7 million compared with $220.8 million in the fourth quarter of
2001, but decreased from the $272.1 million in the comparable year-ago period.
R&D costs represented 16.5% of revenues in the 2002 first quarter compared with
15.2% of revenues in the 2001 fourth quarter, and 14.2% of revenues in the first
quarter of 2001.
Selling, general and administrative expenses were $141.5 million for the
2002 first quarter compared to $140.3 million in the prior quarter, and $176.8
million in the similar year-ago period. As a percentage of net revenues, SG&A
expenses were 10.4% compared to 9.7% in the fourth quarter of 2001, and 9.2% in
the 2001 first quarter.
In the first quarter of 2002, the Company incurred charges of $9.6 million
primarily associated with the previously announced closing of its Rancho
Bernardo and Ottawa fabs. Other income and expenses totaled $16.9 million,
primarily reflecting start-up costs of almost $30 million related to ST's new 8"
wafer fab in Singapore and the expansion at Catania M5.
"In the first quarter, ST continued to tightly control discretionary
spending while maintaining programs that will fuel the Company's future growth.
In the aggregate, SG&A and R&D costs totaled $365.2 million, virtually flat on a
sequential basis and 18.7% below first quarter 2001 levels. At the same time, ST
continued to fund its core R&D programs, 12" wafer projects and the expansion of
our leading-edge technology capacity," Mr. Pistorio said.
At March 30, 2002, ST had cash and cash equivalents and marketable
securities of $2.44 billion and long-term debt of $2.77 billion (84%
3
of which consisted of convertible debt). Shareholders' equity was $6.13 billion.
Capital expenditures were $270.1 million in the 2002 first quarter, above the
$137 million reported for the fourth quarter of 2001, and significantly below
the $729.6 million reported for the year-ago first quarter.
Summarizing ST's first quarter 2002 performance, Mr. Pistorio commented, "We
are encouraged by our ability to post financial results that met and/or exceeded
the guidance we provided in mid-January of this year. ST's leadership positions
in key product categories and targeted applications, combined with the
efficiency of our global manufacturing machine, enabled the Company to leverage
its infrastructure to benefit profitability."
Outlook
Looking ahead, Mr. Pistorio said "Based upon available backlog information
and current order rate trends, we believe that ST's revenues bottomed-out in the
2002 first quarter, and that the Company is positioned to post double-digit
sequential revenue growth of approximately 10% in the 2002 second quarter.
Importantly, this projected revenue gain is expected to reflect strengthened
demand from virtually all of our end-markets, which would significantly increase
companywide fab utilization rates. Within this scenario, ST's ability to
leverage its infrastructure could add 200 to 300 basis points to gross margin in
the second quarter as compared with first quarter levels. Such performance," Mr.
Pistorio continued, "could affect second quarter earnings to an even greater
extent, reflecting the benefits of ST's reduced cost structure."
"Over a longer term horizon, we believe that ST enjoys a very favorable
competitive position in those targeted applications which are likely to lead the
market recovery in unit growth. Thus, while global economic and business
conditions remain the key variables affecting semiconductor industry
performance, we believe that ST will continue to gain market share in the
markets we serve," Mr. Pistorio noted.
Summary of Recent Transactions and Developments
- On February 14, 2002, ST strengthened its position in the DSL sector,
announcing the acquisition of the intellectual property and products of
Tioga Technologies for Digital Subscriber Line (xDSL) chipsets.
- Also on February 14, 2002, ST and Alcatel announced a new co-operation
agreement for the development of future GSM/GPRS chipsets for mobile
phones and other wireless connectivity applications. Under the terms of
the agreement, Alcatel is transferring to ST its team of mobile phone
integrated circuit designers. ST will get access to the know-how and
intellectual property developed by this group and related to GSM/GPRS.
- On March 5, 2002, STMicroelectronics, Royal Philips Electronics and
Taiwan Semiconductor Manufacturing Company Ltd. announced that the three
companies reached an agreement to jointly develop breakthrough
technology in Crolles, France based on a new advanced 90-nm
(0.09-micron) CMOS process, which includes the development of CMOS
processes to the next technology node at 65-nm and beyond.
4
- At the Company's Annual General Meeting held on March 27, 2002,
shareholders approved all the proposed resolutions, including:
- The re-appointment of the current Supervisory Board members - Messrs
Dullieux, Dunn, Gallo, Gavois, Noblanc, Ovi, Steve, de Waard and
White - for a three-year term.
- The re-appointment of Mr. Pasquale Pistorio to a three-year term as
ST's President and Chief Executive Officer.
- The distribution of a cash dividend of $0.04 per share, consistent
with the prior year's cash dividend payment. Effective April 22,
2002, STMicroelectronics shares were quoted ex dividend on all
markets on which they are listed (New York, Paris and Milan). For
holders of shares listed on the NYSE, the record date for the
distribution of dividends will be April 24, 2002, and payment date
will be April 29, 2002
- Following the Shareholders' Meeting, the Supervisory Board
which also met on March 27, 2002 decided to appoint:
(a) Mr. Bruno Steve as its Chairman
(b) Mr. Jean-Pierre Noblanc as its Vice Chairman
- On April 12, 2002, it was announced that Motorola is to join ST and
Philips to develop advanced process technologies at the 300mm wafer
Crolles2 site, significantly enhancing the strength of the existing R&D
alliance.
- On April 15, 2002, ST and Alcatel announced the signing of an agreement
for ST's acquisition of Euro 350 million-revenue Alcatel
Microelectronics. As part of the Euro 390 million cash transaction, the
two companies intend to enter into cooperation for the joint development
of DSL chip-sets that will also be made available to the open market.
The new agreement also calls for STMicroelectronics to become a
preferred supplier of Alcatel, thus expanding their long-standing
strategic alliance. Simultaneously, ST announced that it had signed an
agreement with Idaho-based AMIS for the latter to purchase the just
acquired mixed-signal business activities of Alcatel Microelectronics
from ST. This second transaction covers Alcatel Microelectronics'
mixed-signal ASIC business and development groups, including two Alcatel
Microelectronics fabrication facilities located in Oudenaarde, Belgium,
approximately 1,000 employees and the associated process technologies.
- Based upon 2001 revenues, STMicroelectronics was ranked the world's 3rd
largest semiconductor company by Gartner-Dataquest, moving up
significantly from its ranking as 6th largest in 2000. The Company was
also ranked no.3 and no.2 respectively by industry analysts IC Insights
and iSuppli.
Products, Technology and Design Wins
During the first quarter of 2002, ST continued to reinforce its capabilities
as a world leading System-on-Chip (SoC) provider and an
5
enabler of convergence. In addition to launching innovative new products and
further strengthening its expertise in key markets via agreements with important
partners in communications and digital consumer, ST released details of two
cooperations that position the Company at the forefront of CMOS technology
development.
The Joint Development Agreement between ST, Philips and TSMC, the world's
largest semiconductor foundry, for the development of advanced 90nm
(0.09-micron) CMOS process technology will give ST customers early access to an
industry-leading process and design platform that is quickly transferable to
high-volume production. This was complemented by a subsequent announcement that
Motorola would join ST and Philips in an alliance that has three of the world's
top ten chip manufacturers cooperating on the development of advanced CMOS
processes up to the 32nm node.
In the field of digital consumer, ST signed a five-year agreement with
Thomson Multimedia to cooperate in the development of SoCs for DVD, digital TV
and digital set-top boxes. In addition, ST released details of a new front-end
DVD chip that was developed in cooperation with Thomson Multimedia and allows ST
to offer the world's most highly integrated solution for DVD players.
In the digital TV arena, ST introduced a new hardware and software platform
that bridges the gap between conventional analog TV and the forthcoming digital
TV technology. Also during the quarter, ST signed an agreement with Philips to
develop solutions for applying Multimedia Home Platform (MHP) technology in
set-top boxes and digital TV sets. Important design wins were achieved in Europe
(Katek GmbH and Grundig UK) for satellite and terrestrial TV applications of the
OMEGA digital set-top box decoder family.
In the communications sector, the two agreements signed with Alcatel,
coupled with the acquisition of the xDSL (Digital Subscriber Line) product range
and IP of Tioga Technologies, not only immediately makes ST the world leader in
the ADSL (Asymmetric DSL) chipset market but also strongly reinforces ST's
design and IP resources in both wireless and wireline communications. For the
emerging VDSL (Very-high-data rate DSL) market, ST, together with four other
companies, announced the Discrete Multi-Tone (DMT) VDSL initiative, which has
the goal of producing interoperable DMT-based semiconductors to meet
international standards for broadband VDSL. ST also announced the creation of a
new Division to address the market for wireless infrastructure equipment.
In the field of mobile multimedia, ST was one of the first companies to join
the recently formed Open Mobile Alliance (OMA), which has been created to
support interoperability and standardization in new services for 2.5 and 3G
mobile communications. In addition, ST signed a letter of intent with
Imagination Technologies for the co-development of a mobile multimedia
entertainment platform.
In the computer peripheral arena, ST continued to make major progress in
printers, mass storage and LCD monitors. Printer design wins included a new
combo motor driver for inkjet applications and a complex chipset for POS
(Point-of-Sale) terminals, which promises to be a growing opportunity. Design
wins in the data storage field included a preamplifier, a power IC in BCD6
technology and an SoC device for a high-value desktop drive.
The market for LCD monitors is expected to overtake the traditional CRT
monitor market by 2006. During the quarter, ST achieved significant design wins
for its LCD display engine ICs at Samsung, LG, Benq and AOC, the world's four
biggest manufacturers of LCD monitors, placing it in a strong position to
achieve leadership in
6
one of the industry's fastest growing markets.
In the automotive field, ST introduced a chipset for digital car radio
tuning system, based on a powerful dual 24-bit DSP platform. This will start
production in Q4 2002 for a major Japanese OEM. In the key powertrain segment,
ST achieved a new design win at a German automotive customer for a controller
realized in 0.18-micron technology with embedded Flash memory. Also in the
audio/automotive area, ST announced that it is developing a second-generation
DDX digital audio amplifier chipset.
In the area of Flash memory, ST introduced new 32-Mbit and 64-Mbit Flash
devices built with 0.15-micron technology and aimed primarily at digital
consumer applications. In the field of smart cards, ST qualified and started the
production ramp-up of a device designed with Schlumberger for secure PC access
control.
Some of the above statements that are not historical facts, including
without limitation certain statements made in the paragraph entitled "outlook"
are statements of future expectations and other forward-looking statements
(within the meaning of Section 27A of the U.S. Securities Act of 1933, as
amended) that are based on management's current views and assumptions and that
involve known and unknown risks and uncertainties that could cause actual
results or performances to differ materially from those in such statements. In
particular, in addition to the factors described above, other important factors
that could cause actual results to differ materially from the expectations of
the Company or its management include the following:
(i) business and economic conditions and trends in the
semiconductor and end-user markets as well as in the various
geographic regions;
(ii) excess manufacturing capacity in the semiconductor industry;
(iii) possible disruption in commercial activities occasioned by
major events in the world such as armed conflict or
terrorism;
(iv) changes in order patterns from key customers, and reduced
end-user purchases relative to expectations;
(v) competitive factors such as the timely development of new products as
well as new design and process technologies in line with customer
requirements;
(vi) pricing pressures;
(vii) excess or obsolete inventory.
Unfavorable changes in any of the above or other factors listed under "Risk
Factors" from time to time in the Company's SEC reports including the Annual
Report on Form 20-F for the year ended December 31, 2000, which was filed with
the SEC on May 15, 2001, and in particular, the factors listed on page 3 of such
Form 20-F, could materially affect the Company.
Conference Call Information
Management of STMicroelectronics will conduct a conference on April 23rd,
2002, at 10 a.m. Eastern Time (U.S. ET), 4 p.m. Central Europe Time (CET), to
discuss operating performance for the first quarter of 2002. A broadcast of the
conference call will be available live on the Internet at: www.vcall.com. The
broadcast will be available until May 3rd, 2002.
7
About STMicroelectronics
STMicroelectronics, the world's third largest semiconductor company, is a
global leader in developing and delivering semiconductor solutions across the
spectrum of microelectronics applications. An unrivaled combination of silicon
and system expertise, manufacturing strength, Intellectual Property (IP)
portfolio and strategic partners positions the Company at the forefront of
System-on-Chip (SoC) technology and its products play a key role in enabling
today's convergence trends. The Company's shares are traded on the New York
Stock Exchange, on Euronext Paris and on the Milan Stock Exchange. In 2001, the
Company's net revenues were $6.36 billion and net earnings were $257.1 million.
Further information can be found at www.st.com.
STMicroelectronics N.V.
Consolidated Statement of Income
(in millions of U.S. dollars, except per share data ($))
Three Months Ended
------------------------------
Mar. 30, Mar. 31,
2002 2001
---------- ----------
Net sales 1,346.0 1,906.0
Other revenues 9.2 15.1
NET REVENUES 1,355.2 1,921.1
Cost of sales (903.2) (1,065.3)
GROSS PROFIT 452.0 855.8
Selling, general & administrative (141.5) (176.8)
Research & development (223.7) (272.1)
Other income and expenses (16.9) 5.4
Impairment and restructuring charges (9.6) 0.0
Total Operating Expenses (391.7) (443.5)
OPERATING INCOME 60.3 412.3
Net interest income (expense) (15.4) 3.1
Equity in earnings of joint ventures (3.9) 0.0
INCOME BEFORE INCOME
TAXES AND MINORITY INTERESTS 41.0 415.4
Income tax expense (7.6) (74.2)
INCOME BEFORE MINORITY INTERESTS 33.4 341.2
Minority interests (0.5) (0.4)
NET INCOME 32.9 340.8
EARNINGS PER SHARE (BASIC) 0.04 0.38
EARNINGS PER SHARE (DILUTED) 0.04 0.38
NUMBER OF WEIGHTED AVERAGE
SHARES USED IN CALCULATING
DILUTED EARNINGS PER SHARE 897.5 951.5
STMicroelectronics N.V.
CONSOLIDATED BALANCE SHEET
As at March 30, Dec. 31,
8
In millions of U.S. dollars 2002 2001
(Unaudited) (Audited)
------------ ----------
ASSETS
Current assets:
Cash and cash equivalents 1,234.3 2,438.8
Marketable securities 1,203.8 5.4
Trade accounts and notes receivable 941.6 902.4
Inventories 712.2 742.5
Other receivables and assets 513.1 468.5
--------- --------
Total current assets 4,605.0 4,557.6
Goodwill, net 66.5 63.0
Other intangible assets, net 156.1 149.6
Property, plant and equipment, net 5,692.5 5,888.2
Investments and other non-current assets 134.7 139.1
--------- --------
6,049.8 6,239.9
Total assets 10,654.8 10,797.5
--------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdrafts 32.6 32.8
Current portion of long-term debt 98.6 96.5
Trade accounts and notes payable 745.2 936.1
Other payables and accrued liabilities 419.9 409.5
Accrued and deferred income tax 194.6 212.4
--------- --------
Total current liabilities 1,490.9 1,687.3
Long-term debt 2,770.7 2,771.5
Reserves for pension
and termination indemnities 119.6 115.8
Other non-current liabilities 111.8 112.2
--------- --------
3,002.1 2,999.5
Total liabilities 4,493.0 4,686.8
Commitment and contingencies
Minority interests 36.5 36.0
Common Stock 1,142.4 1,142.4
Capital surplus 1,837.0 1,836.0
Accumulated result 4,231.5 4,198.6
Accumulated other comprehensive loss -852.3 -869.0
Treasury stock -233.3 -233.3
---------- ---------
Shareholders' equity 6,125.3 6,074.7
---------- ---------
Total liabilities
and shareholders' equity 10,654.8 10,797.5
---------- ---------
STMicroelectronics N.V.
Selected Consolidated Financial Data
9
(In millions of U.S. dollars)
Consolidated Balance Sheet Data Mar. 30, Dec. 31,
(End of period) 2002 2001
-------- --------
Cash, cash equivalents
and marketable securities 2,438.1 2,444.2
Working capital 807.2 555.4
Total assets 10,654.8 10,797.5
Short-term debt (including
current portion of long-term debt) 131.2 129.3
Long-term debt
(excluding current portion) 2,770.7 2,771.5
Shareholders' equity 6,125.3 6,074.7
Consolidated Operating Data Mar. 30, Mar. 31,
(Three months ended) 2002 2001
------- --------
Payment for
purchases of tangible assets 270.1 729.6
Net cash from operating activities 309.5 788.6
Net operating cash flow 14.1 (11.2)
Depreciation and amortization 319.6 332.4
CONTACT: STMicroelectronics
Investor Relations Europe:
Benoit de Leusse, +33.4.50.40.24.30
Fax: +33.4.50.40.25.80
or
Investor Relations USA:
Stan March, 212/821-8939
Fax: 212/821-8923
or
Media Relations Europe:
Maria Grazia Prestini, +33.4.50.40.25.32
Fax: +33.4.50.40.25.40
or
Media Relations USA:
Michael Markowitz, 212/821-8959
Fax: 212/821-8922
10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
STMicroelectronics N.V. has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: April 23, 2002 STMicroelectronics N.V.
By: /s/ Pasquale Pistorio
----------------------------------
Name: Pasquale Pistorio
Title: President and Chief
Executive Officer