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 September 2000
STMicroelectronics N.V.
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(Translation of registrant's name into English)
Route de Pre-Bois, ICC Bloc A, 1215 Geneva 15, Switzerland
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(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
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[If "Yes" is marked, indicate below the file number assigned to the
Registrant in connection with Rule 12g3-2(b): 82-______]
Enclosure:
A press release dated October 18, 2000 announcing STMicroelectronics'
third quarter 2000 results.
[GRAPHIC OMITTED]
C899H
CONTACT: Investor Relations Europe
Benoit de Leusse
Investor Relations Manager, Europe
Tel: +33.4.50.40.24.30
Fax: +33.4.50.40.25.80
Press Relations:
Maria Grazia Prestini
Corporate Press Relations Manager
Tel: +39.039.603.59.01
Fax: +33.4.50.40.25.32
Jean-Benoit Roquette / Lorie Lichtlen
Morgen-Walke Europe
Tel: +33.1.47.03.68.10
Fax: +33.1.47.03.93.08
STMicroelectronics Reports Record Third Quarter
Revenues and Profits
ST Announces First $2 Billion Quarter in its History
o Third Quarter Revenues of $2,042.0 Million Up 60.3% Year-Over-Year
and 8.8% Sequentially
o Gross Margin Exceeds 47%; Operating Income Margin A Record 25%
o Net Income Surpasses $415 Million, Up 207% Year-Over-Year and 23.4%
Sequentially; Posts Record Net Income Margin of 20.3%
o Earnings Per Diluted Share Reach $0.45, Up 200% Over Third Quarter
1999 and 22% Sequentially
Geneva, October 18, 2000 - STMicroelectronics (NYSE:STM) today reported record
financial results for the third quarter and nine months ended September 30,
2000.
Third Quarter 2000 Results
- --------------------------
Net revenues for the third quarter totaled a record $2,042.0 million,
representing a year-over-year increase of 60.3% from the $1,274.2 million
recorded in the 1999 third quarter and an 8.8% sequential increase over second
quarter revenue of $1,877.3 million. Net revenues in the third quarter included
approximately $30 million from the acquisition of Nortel Networks' Silicon
Semiconductor Production Operations and Wafer Scale Integration Inc. which were
completed on June 19 and on September 18 respectively. Excluding these
acquisitions, net revenues increased 7.4 % sequentially. Sales of differentiated
products equaled $1,283.7 million, representing 62.9% of third quarter revenues.
Differentiated product sales increased 61.4% year-over-year and 7.4% over the
second quarter.
Commenting on the Company's record revenues, Mr. Pasquale Pistorio, President
and Chief Executive Officer, said, "ST set a new revenue milestone in the third
quarter. We exceeded the $2 billion quarterly mark for the first time in our
Company's history. This very strong performance reflects our ongoing focus on
and execution of the key components of our strategy. We continued to emphasize
differentiated products, which represented yet again over 60% of ST's quarterly
revenue. Sales to each of our end markets, namely: automotive, consumer,
computer, telecom, and industrial, increased in the third quarter, with telecom
and industrial including smart cards, posting sequential gains of 15.3% and
20.3%, respectively. Particularly noteworthy was the strong demand for ST
products serving mobility and connectivity related applications. We also
remained focused on having a strong presence in all key regions of the world. In
the third quarter, net revenues were well balanced geographically, with Europe
representing 32.7% of net revenues, the Americas 24.3%, Asia-Pacific 33.1%,
Japan 5.4% and Region Five accounting for 4.5% of net revenues."
ST posted record levels of profitability in the third quarter, with gross
margin, operating margin and net earnings setting new records for the Company.
Third quarter gross profit totaled $964.9 million, a gain of 90.2% over the
year-ago quarter and a 10.2% sequential increase. Gross margin was 47.3 %
compared to 46.6% in the prior quarter and 39.8% in the 1999 third quarter.
The Company posted a strong increase in operating income in comparison to
both the year-ago and prior quarters. Operating income reached $511.8 million,
representing a threefold year-over-year increase and a sequential increase of
23.1% over the $415.8 million reported in the 2000 second quarter. Operating
margin was 25.1% compared to 22.1% in the prior quarter and 13.3% in the 1999
third quarter.
Net income for the 2000 third quarter reached a record $415.3 million,
increasing 206.9% on a year-over-year basis and 23.4% on a sequential basis.
Diluted earnings per share were $0.45 compared to $0.37 in the prior quarter and
$0.15 in the year-ago period. All per share data have been adjusted to reflect
the two-for-one stock split effected in June 1999 and the three-for-one stock
split effected in May 2000.
Mr. Pistorio commented, "ST continued to achieve substantial operating leverage
in the third quarter, posting a 23.4% sequential increase in net income on an
8.8% sequential revenue gain. Our record profitability, which was 20.3% of net
revenues, is attributable to favorable product mix, high fab utilization rates,
a better pricing environment and overall operating efficiencies."
Selling, general and administrative expenses were $174.0 million for the 2000
third quarter. Selling, general and administrative expenses increased
approximately 27.2% in comparison to the year-ago period, however, declined as a
percentage of net revenues, to 8.5% from 10.7%.
Research and development expenses totaled $259.8 million, representing a 26.4%
increase over the year-ago third quarter and a sequential increase of 6.0%.
Summarizing, Mr. Pistorio commented, "Our strategic customer alliances, which
accounted for $859 million, or 42% of third quarter revenues, the competitive
position of our product portfolio and excellent execution were key contributors
to ST's strong third quarter performance."
Nine-Month Results
- ------------------
Net revenues for the nine months ended September 30, 2000 were $5,621.5 million,
a 57.1% increase over the $3,578.1 million reported in the 1999 nine-month
period. Net income increased 172.8% to $990.2 million, or $1.08 per diluted
share, from the $363.0 million, or $0.41 per diluted share earning in the
comparable year-ago period. All per share figures have been adjusted to reflect
the two-for-one stock split effected in June 1999 and the three-for-one stock
split effected in May 2000.
Gross profit increased 81.9% to $2,557.7 million from the $1,406.0 million
reported for the 1999 period. Gross margin expanded to 45.5% from 39.3% in last
year's first nine months.
Research and development expenditures were $740.0 million compared to $601.8
million in the 1999 nine-month period. As a percentage of sales, R&D
expenditures declined from 16.8% to 13.2%.
Selling, general and administrative expenses increased 32.2% to $510.6 million,
but declined to 9.1% of net revenues from 10.8%.
Operating income increased 168.6% to $1,219.5 million from the $454 million
reported in the comparable year-ago period. Operating margin reached 21.7%
compared to 12.7%.
At September 30, 2000 shareholders' equity was $5,517.0 million; cash and cash
equivalents and marketable securities totaled $1,013.8 million; long-term debt
was $1,129.5 million (a large portion of which consists of convertible debt).
Capital expenditures were $2,303.9 million for the 2000 nine-month period,
compared to $811.4 million in the first nine months of 1999.
Outlook
- -------
"As we move into the fourth quarter," Mr. Pistorio commented, "ST's order rates
and backlog remain strong, indicating that the fourth quarter will be another
period of record financial performance. Sequential revenue growth is expected to
be in the high single digits. In addition we believe both the gross margin and
operating margin ratios should be slightly above third quarter levels.
"Looking ahead to 2001, while industry analysts are forecasting a market growth
between 25% and 30%, we believe ST is positioned to grow faster than the overall
semiconductor market due to our strong product portfolio, strategic
partnerships, global manufacturing presence and continued investment in research
and development as well as our focus on broadband access and multimedia
applications."
Mr. Pistorio concluded, "Capital expenditures for 2000 are expected to be above
$3 billion and, based on present market growth expectations, we plan to continue
to invest significantly in 2001, with the intrinsic flexibility of our proven
modular investment strategy. These investments are calibrated to bring on
additional capacity in the fourth quarter of 2000 and over the course of
2001-2002, enabling ST to fully benefit from both the projected market growth
and the Company's leadership position in system-on-chip solutions for high
growth applications."
With respect to the funding of the investment plan, the Company is currently
monitoring the conditions of the financial market to take the best opportunity
on how to raise funds in the range of $1.0 to 1.5 billion.
Products, Technology and Design Wins
- -----------------------------------
In the third quarter, ST introduced a number of important new products and
secured significant design wins that reinforced its success in key markets such
as automotive, consumer, telecom and disk drive applications, and also extended
its worldwide network of product and technology development partners,
particularly in multimedia applications and broadband access.
In the Telecommunications field, in July, ST announced plans to develop an
Enhanced G.Lite ADSL (Asymmetrical Digital Subscriber Line) chipset for the mass
market through a joint project with Nortel Networks. This will allow ST to offer
a fully G.992.2 compliant and interoperable G.lite-optimized chipset for both
head-end and CPE (Customer Premises Equipment) equipment. In addition, driven by
accelerating worldwide demand for broadband Internet access, the success of ST's
current ADSL chipsets has continued, with third quarter shipments exceeding the
total shipments in the first half of 2000. ST is also strengthening its presence
in the fast-growing and strategically important optical networks market with
major development work with Nortel Networks.
Another important design win in the telecom field was a substantial contract
from a major telecom company in China to develop and supply integrated circuits
for a new voice line card.
In Digital Consumer, in September, details of plans between ST and Norwegian
company Nera were disclosed. The companies are planning to develop chipsets and
related software for providing turnkey interactive broadband solutions for set
top boxes. Access technologies supported will include two-way satellite
communications for interactive TV and high-speed Internet access via satellite.
Also in the STB market, in the third quarter ST shipped approximately 1.8
million of its STi5512 back-end decoders, primarily for use in STBs for BSkyB,
Canal+, OnDigital and NEWS services worldwide. In addition, Pace and other major
European manufacturers qualified the STi5512 for BSkyB's second-generation
digiboxes.
Additionally, ST reinforced the market leadership of its STi5500 (OMEGA) family
of STB back-end decoders with the introduction of the STi5518, which retains all
of the features of the STi5500 but adds support for Dolby Digital and MP3 audio
decoding as well as additional logic to ease the connection of hard disk drives,
making the device ideal for emerging 'convergence' products that offer features
such as pausing and time-shifting of live TV.
Also in consumer, the partnership between ST and Hitachi to develop advanced
processor cores for next-generation consumer multimedia products continued to
flourish, with the first major ST50 design completed and WindowsCE ported to the
ST40 and demonstrated to customers.
In Automotive, thanks to the availability in volume production of a proven,
rugged technology for microcontrollers with embedded Flash memory, ST has
achieved significant design wins in the automotive field for functions such as
engine and transmission control. New business awarded in this quarter includes
microcontrollers for BMW in Germany and a dual-core microcontroller for a major
European customer. In this quarter ST also delivered working samples of the new
Xcore system-on-chip to DaimlerChrysler.
ST has also been awarded a contract to develop a complex system-on-chip with
both a powerful DSP - the ST120, based on the ST100 core - and a 32-bit micro
core for a new traffic information system being developed by Cue Corporation in
the US.
In September, ST introduced the Superl0 DSP-MCU core for Automotive, Disk Drive
and Consumer Applications. The Superl0 is a highly advanced evolution of the
ST10 microcontroller core, more than doubling the performance and adding DSP
instructions.
In the area of Computer Peripherals, in September, ST announced two important
additions to its HDD IC portfolio. Aimed at 'dual servo' disk drives where
micropositioning will be used to increase drive density, the L6670 Rotational
Accelerometer System is a device containing both a micromachined
Micro-Electro-Mechanical System (MEMS) sensor plus an interface chip, while the
L6660 is a Piezoelectric actuator driver built in 90V BCD technology. ST has
also been awarded a design win from Seagate for the most advanced System-on-Chip
solution for high-volume low-cost hard disk drives. The chip will be the first
to integrate the hard disk controller, the new Superl0 micro/DSP core and the
read/write channel. Other design wins in the HDD market include a
superintegrated hard disk controller and a 'smooth drive' motor control solution
to reduce acoustic noise in a desktop hard disk drive.
Other notable successes in the computer peripherals field included contracts
with two leading printer manufacturers to develop system-on-chip solutions with
embedded DRAM memory for the 'digital printer engines' used in inkjet printers.
With these new contracts ST is now the chosen supplier at three out of the four
leading manufacturers.
Additionally, ST has gained several design wins from PC-based graphics card
manufacturers in Taiwan and China for its new KYRO 3D graphics and video
accelerator.
In the fast growing area of Flash memories, ST's strategy of developing
innovative differentiated and value-added products was reflected by the
acquisition of WSI and the introduction of a 64Mbit device that is built with
ST's advanced multibit cell technology and includes dedicated features that make
it particularly effective in set-top box and networking applications.
The acquisition of WSI allows ST to offer configurable memory systems,
integrating multiple memory types and control logic, which represent the
ultimate step in term of value-added memories.
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 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 due to, amongst other
factors:
(i) inability to meet customer demand, (ii) new product developments and
technological changes, (iii) manufacturing risks, (iv) inability to achieve
timely ramp up of new production capacity, (v) the highly cyclical nature of the
semiconductor industry, (vi) changes in customer order patterns and
requirements, and (vii) currency fluctuations.
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 Form 20F
for the year ended December 31, 1999 which was filed with the SEC on June 27,
2000, could materially affect the Company.
Conference Call Information
- ---------------------------
Management of STMicroelectronics will conduct a conference call with analysts
and institutional investors on October 18, 2000, at 3:00 p.m. (London time) to
discuss operating performance for the third quarter of 2000. A broadcast of the
conference call will be available live on the Internet at:
http://webcast.themeetingson.com/webcast.jsp?reservation=16569199
The broadcast will be available until November 18, 2000.
AboutSTMicroelectronics
STMicroelectronics(formerly SGS-THOMSON Microelectronics) is a global
independent semiconductor company, whose shares are traded on the New York
Stock Exchange, on the ParisBourse and on the Milan Stock Exchange. The
Company designs, develops, manufactures and markets a broad range of
semiconductor integrated circuits (ICs) and discrete devices used in a wide
variety of microelectronic applications, including telecommunications systems,
computer systems, consumer products, automotive products and industrial
automation and control systems. Further information on ST can be found at
www.st.com.
STMicroelectronics N.V.
CONSOLIDATED STATEMENT OF INCOME
(In millions of US dollars, except per share data ($))
Three Months Ended Nine Months Ended
------------------ -----------------
Sept. 30, Oct. 2, Sept. 30, Oct. 2
2000 1999 2000 1999
---- ---- ---- ----
Net sales $ 2,027.3 $ 1,266.5 $ 5,589.6 $ 3,552.5
Other revenues 14.7 7.7 31.9 25.6
--------- --------- ---------- -----------
NET REVENUES 2,042.0 1,274.2 5,621.5 3,578.1
Cost of sales (1,077.1) (766.8) (3,063.8) (2,172.1)
--------- --------- ---------- -----------
GROSS PROFIT 964.9 507.4 2,557.7 1,406.0
Selling, general & administrative (174.0) (136.8) (510.6) (386.2)
Research & development (259.8) (205.5) (740.0) (601.8)
Other income & expenses (19.3) 5.0 (87.6) 36.0
--------- --------- ---------- -----------
Total Operating Expenses (453.1) (337.3) (1,338.2) (952.0)
OPERATING INCOME 511.8 170.1 1,219.5 454.0
Net interest income (expense) 7.3 8.2 37.7 17.9
INCOME BEFORE INCOME
TAXES
AND MINORITY INTERESTS 519.1 178.3 1,257.2 471.9
Income tax expense (103.6) (41.6) (265.6) (106.9)
--------- --------- ---------- -----------
INCOME BEFORE MINORITY 415.5 136.7 991.6 365.0
INTERESTS
Minority Interests (0.2) (1.4) (1.4) (2.0)
--------- --------- --------- ----------
NET INCOME $ 415.3 $ 135.3 $ 990.2 $ 363.0
========= ========= ========= ==========
EARNINGS PER SHARE (BASIC)* $ 0.47 $ 0.16 $ 1.12 $ 0.42
========= ========= ========= ==========
$ 0.45 $ 0.15 $ 1.08 $ 0.41
EARNINGS PER SHARE(DILUTED)* ========= ========= ========= ==========
NUMBER OF WEIGHTED AVERAGE
SHARES USED IN CALCULATING
DILUTED EARNINGS PER SHARE 934.0 896.2 934.0 891.7
* All per share figures have been adjusted to reflect the 2-for-1 stock
split effected in June 1999 and the 3-for-1 stock split effected in
May 2000.
STMicroelectronics N.V.
CONSOLIDATED BALANCE SHEETS
(In millions of US dollars)
Sept. 30, December 31,
2000 1999
---------------- ----------------
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 187.8 $ 1,823.1
Marketable securities 826.0 --
Trade accounts and notes receivable 1,346.1 913.3
Inventories 753.2 619.4
Other receivables and assets 528.3 435.8
--------------- ----------------
Total current assets 3,641.4 3,791.6
Intangible assets, net 268.1 179.9
Property, plant and equipment, net 5,192.8 3,873.0
Investments and other non-current assets 94.1 85.8
---------------- ----------------
5,555.0 4,138.7
---------------- ----------------
Total assets $ 9,196.4 $ 7,930.3
================ ================
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Bank overdrafts $ 97.3 $ 26.5
Current portion of long-term debt 95.5 96.7
Trade accounts and notes payable 1,240.6 998.9
Other payables and accrued liabilities 471.6 381.8
Accrued and deferred income tax 315.5 189.3
---------------- ---------------
Total current liabilities 2,220.5 1,693.2
Long-term debt 1,129.5 1,348.5
Reserves for pension and
termination indemnities 105.4 108.3
Other non-current liabilities 197.8 191.7
---------------- ----------------
1,432.7 1,648.5
Total liabilities 3,653.2 3,341.7
Minority interests 26.2 24.7
Capital stock 1,132.8 1,112.7
Capital surplus 1,662.4 1,395.3
Accumulated result 3,515.4 2,551.8
Accumulated other comprehensive income (793.6) (495.9)
---------------- ----------------
Shareholders' equity 5,517.0 4,563.9
---------------- ----------------
Total liabilities and shareholders' equity $ 9,196.4 $ 7,930.3
STMicroelectronics NV
SELECTED CONSOLIDATED FINANCIAL DATA
(In millions of US dollars)
Consolidated Balance Sheet Data Sept. 30, December 31,
(End of Period) 2000 1999
---------------- ----------------
Cash, cash equivalents and marketable securities $ 1,013.8 $ 1,823.1
Working capital 599.9 398.5
Total assets 9,196.4 7,930.3
Short-term debt (including current
portion of long-term debt) 192.8 123.2
Long-term debt (excluding current portion) 1,129.5 1,348.5
Shareholders' equity 5,517.0 4,563.9
Consolidated Operating Data Sept. 30, Oct. 2,
(Nine Months Ended) 2000 1999
---------------- ----------------
Payment for purchases of tangible assets $ 2,303.9 $ 811.4
Net cash from operating activities 1,537.8 1,076.2
Net operating cash flow (951.3) 148.1
Depreciation and amortization 790.7 590.1
###
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: October 19, 2000 STMicroelectronics N.V.
By: /s/ Pasquale Pistorio
----------------------------------
Name: Pasquale Pistorio
Title: President and Chief
Executive Officer