Advanced Semiconductor Engineering, Inc. Reports Consolidated Year 2006 First-Quarter Financial Results27 April 2006
Advanced Semiconductor Engineering, Inc. (TAIEX: 2311; NYSE: ASX) (''We'', ''ASE'', or the ''Company''), the world's largest independent provider of IC packaging and testing services, today reported unaudited consolidated net revenues* of NT$24,837 million for the first quarter of 2006 (1Q06), up 39% year-over-year and down 6% sequentially**. Net income for the quarter totaled NT$3,182 million, up from net loss of NT$128 million in 1Q05 and from net income of NT$2,942 million in 4Q05. Earnings per share for the quarter was NT$0.69 (or US$0.106, per ADS), compared to loss per share of NT$0.03 for 1Q05 and earnings per share of NT$0.65 for 4Q05.
* All financial information presented in this press release is
unaudited, consolidated and prepared in accordance with generally
accepted accounting principles in the Republic of China, or ROC
GAAP. Such financial information is generated internally by us, and
has not been subjected to the same review and scrutiny, including
internal auditing procedures and review by independent auditors, to
which we subject our audited consolidated financial statements, and
may vary materially from the audited consolidated financial
information for the same period. Any evaluation of the financial
information presented in this press release should also take into
account our published audited consolidated financial statements and
the notes to those statements. In addition, the financial
information presented is not necessarily indicative of our
results for any future period.
**In October 2005, the Company disposed of its camera module assembly
operation in Malaysia. Accordingly, the historical consolidated
financial information presented in this press release has been
retroactively adjusted to net out the results of these discontinued
operations, which will be presented as a separate line item in our
consolidated statement of operations. The consolidated financial
information presented herein represents the results of continuing
operations only.
RESULTS OF OPERATIONS
1Q06 Results Highlights
-- The revenue contribution from IC packaging operations, testing
operations, module assembly, and others was NT$17,831 million,
NT$5,123 million, NT$1,475 million and NT$408 million, respectively,
and each represented approximately 72%, 21%, 6% and 1% respectively,
of total net revenues for the quarter.
-- Cost of revenues was NT$18,202 million, down 8% sequentially and up
14% year-over-year.
-- As a percentage of net revenues, cost of revenues was 73% in
1Q06, down from 75% in 4Q05 and from 90% in 1Q05.
-- Raw material cost totaled NT$7,727 million during the quarter,
representing 31% of revenues; compared with NT$8,611 million and
33% of revenues in the previous quarter.
-- Depreciation, amortization and rental expenses totaled NT$3,741
million during the quarter, down 4% sequentially and down 10%
year-over-year.
-- Total operating expenses during 1Q06 were NT$1,950 million,
including NT$634 million in R&D and NT$1,316 million in SG&A.
Total operating expenses as a percentage of net revenues for the
current quarter was 8%, down from 9% in 4Q05 and 11% in 1Q05.
-- We recorded net non-operating expenses of NT$602 million in 1Q06,
which decreased by NT$352 million sequentially, and increased by
NT$282 million year-over-year.
-- The net exchange gain of NT$43 million was mainly attributable to
the exchange gain in US dollar-based loans and payables and
exchange loss in Korean Won- based loans and payables due to the
respective currency exchange rate changes.
-- Gain on long-term investment was NT$61 million related to
investment income from minority-owned affiliates, including NT$61
million of investment income from Universal Scientific Industrial
Co. ("USI"), NT$8 million of investment loss from Hung Ching
Construction, and NT$8 million of investment income from Hung
Ching Kwan Co. Under the revised ROC SFAS No.25 issued in
December 2005, goodwill amortization expenses related to such
minority-owned affiliates will no longer be amortized over its
estimated useful life beginning January 1st, 2006.
-- Other non-operating expenses were primarily related to inventory
provision adjustment and other miscellaneous expenses.
-- Income before tax was NT$4,083 million for 1Q06. We recorded an
income tax expense of NT$18 million during the quarter. The
cumulative effect of change in accounting principle was a loss of
NT$457 million related to new ROC SFAS No. 34 adopted on January 1,
2006. Upon initial adoption of the aforementioned standards, we
properly categorized its financial assets and liabilities including
derivative instruments. The adjustments in original carrying amount
for financial instruments categorized as financial assets or
financial liabilities at fair value through profit or loss are
included in the cumulative effect of change in accounting principles.
Minority interest adjustment was NT$426 million.
-- In 1Q06, net income was NT$3,182 million, compared to net income of
NT$2,942 million for 4Q05 and net loss of NT$128 million for 1Q05.
-- Our total shares outstanding at the end of the quarter were
4,389,359,048. Our fully-diluted EPS for 1Q06 was NT$0.69, or
US$0.106 per ADS, based on 4,651,513,032 weighted average number of
shares outstanding during the first quarter.
LIQUIDITY AND CAPITAL RESOURCES
-- Capital expenditures in 1Q06 totaled US$67 million, of which US$25
million was for IC packaging, US$3 million was for module assembly,
US$14 million was for testing, and US$25 million was for interconnect
materials.
-- As of the end of 1Q06, we had total bank debts of NT$50,199 million,
decreased from NT$53,385 million as of end of 2005. Total bank debts
consisted of NT$5,327 million of revolving working capital loans,
NT$4,586 million of current portion of long-term debts, NT$30,944
million of long-term debts and NT$9,342 million of long-term bonds
payable. Total unused banking facilities were NT$23,141 million.
-- Current ratio improved from 1.54 as of end of 4Q05 to 1.63 as of end
of 1Q06, and net debt to equity ratio was 0.56
-- Total number of employees was 28,310 as of March 31, 2006.
Business Review
IC Packaging Services
-- Revenues generated from our IC packaging operations were NT$17,831
million during the quarter, down NT$899 million or 5% sequentially
and up NT$5,076 million or 40% year-over-year. On a sequential
basis, the decrease in packaging revenue was primarily due to fewer
working days during the quarter, unfavorable product mix changes and
volume decrease. Average selling price remained stable.
-- Revenues from advanced substrate and leadframe-based packaging
accounted for 89% of total IC packaging revenues during the quarter,
down by one percentage point from the previous quarter.
-- Gross margin for our IC packaging operations was 24%, up by three
percentage points sequentially and up by fourteen percentage points
year-over-year as a result of increased utilization and favorable
product mix changes.
-- Capital expenditure for our IC packaging operations amounted to US$25
million during the quarter, of which US$16 million was for
wirebonding packaging capacity, and US$9 million was for wafer
bumping and flip chip packaging equipment.
-- As of March 31, 2006, there were 6,326 wirebonders in operation, of
which 52 wirebonders were added and 92 wirebonders were disposed of
during the quarter.
-- Revenues from flip chip packages and wafer bumping services accounted
for 16% of total packaging revenue, down from 19% in 4Q05.
Testing Services
-- Revenues generated from our testing operations were NT$5,123 million,
down NT$144 million or 3% sequentially and up NT$1,430 million or 39%
year-over-year.
-- Final testing contributed 77% to total testing revenues, down by three
percentage points from the previous quarter. Wafer sort contributed
19% to total testing revenues, up by two percentage points from the
previous quarter. Engineering testing contributed 4% to total testing
revenues, up by one percentage point from the previous quarter.
-- Depreciation, amortization and rental expense associated with testing
operation amounted to NT$1,616 million, down from NT$1,700 million in
4Q05 and NT$1,946 million in 1Q05.
-- In 1Q06, gross margin for our testing operations was 39%, down by one
percentage point sequentially and up by twenty nine percentage points
year-over-year. The sequential decline in gross margin was primarily
due to fewer working days and increased incentives and overtime
charges in the first quarter of 2006. Testing ASP also remained
stable during the quarter.
-- Capital spending on our testing operations amounted to US$14 million
during the quarter.
-- As of March 31, 2006, there were 1,305 testers in operation, of which
36 testers were added and 35 testers were disposed of during the
quarter.
Module Assembly Services
-- Revenues generated from our module assembly operations were NT$1,475
million, down NT$579 million or 28% sequentially, and up NT$296
million or 25% year-over-year mainly due to volume decrease.
-- In 1Q06, gross margin for our module assembly operations was 18%,
remained unchanged sequentially and was up by six percentage points
year-over-year.
Substrate Operations
-- PBGA substrate manufactured by ASE amounted NT$1,832 million for the
quarter, down by NT$161 million or 8% from the previous quarter, and
increased by NT$389 million or 27% from a year-ago quarter.
-- Gross margin for substrate operation was 26% during the quarter, down
by one percentage point compared with previous quarter, and up by
twenty five percentage points compared with a year-ago quarter.
-- In 1Q06, the Company's internal substrate manufacturing operations
supplied 37% (by value) of our total PBGA substrate requirements.
-- As of end of March 31, 2006, the Company's PBGA capacity was at 36
million units per month.
Customers
-- Our five largest customers together accounted for approximately 29% of
our net revenues in 1Q06, decreased from 30% in 4Q05 and from 37% in
1Q05. No customer accounted for more than 10% of our total revenues.
-- Our top 10 customers contributed 46% of our net revenues during the
quarter, consistent with the previous quarter and decreased from 52%
in 1Q05.
-- Our customers that are integrated device manufacturers, or IDMs,
accounted for 42% of our revenues in 1Q06, compared to 41% in 4Q05 and
47% in 1Q05.
About ASE, Inc.
ASE, Inc. is the world's largest independent provider of IC packaging services and, together with its subsidiary ASE Test Limited (Nasdaq: ASTSF), the world's largest independent provider of IC testing services, including front-end engineering testing, wafer probing and final testing services. ASE, Inc.'s international customer base of more than 200 customers include such leading names as ATI Technologies Inc., CSR plc, Freescale Semiconductor, Inc., IBM Corporation, NVIDIA Corporation, Koninklijke Philips Electronics N.V., Qualcomm Incorporated, RF Micro Devices Inc., STMicroelectronics N.V. and VIA Technologies, Inc. With advanced technological capabilities and a global presence spanning Taiwan, Korea, Japan, Singapore, Malaysia and the United States, ASE, Inc. has established a reputation for reliable, high quality products and services. For more information, visit our website at http://www.aseglobal.com .
Safe Harbor Notice
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release. The words ''anticipate'', ''believe'', ''estimate'', ''expect'', ''intend'', ''plan'' and similar expressions, as they relate to us, are intended to identify these forward-looking statements in this press release. Our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including risks associated with cyclicality and market conditions in the semiconductor industry; demand for the outsourced semiconductor packaging and testing services we offer and for such outsourced services generally; the highly competitive semiconductor industry; our ability to introduce new packaging, interconnect materials and testing technologies in order to remain competitive; our ability to successfully integrate pending and future mergers and acquisitions; international business activities; our business strategy; general economic and political conditions; possible disruptions in commercial activities caused by natural or human-induced disasters, including terrorist activity and armed conflict; our future expansion plans and capital expenditures; the strained relationship between the Republic of China and the People's Republic of China; fluctuations in foreign currency exchange rates; and other factors. For a discussion of these risks and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our 2004 Annual Report on Form 20-F filed on June 23, 2005.
Supplemental Financial Information
Consolidated Operations
Amounts in NT$ Millions 1Q/06 4Q/05 1Q/05
Net Revenues 24,837 26,404 17,823
Revenues by End Application
Communication 34% 35% 38%
Computer 28% 27% 32%
Automotive and Consumers 37% 36% 27%
Others 1% 2% 3%
Revenues by Region
North America 53% 51% 54%
Europe 11% 12% 11%
Taiwan 22% 21% 21%
Japan 9% 10% 11%
Other Asia 5% 6% 3%
IC Packaging Services
Amounts in NT$ Millions 1Q/06 4Q/05 1Q/05
Net Revenues 17,831 18,730 12,755
Revenues by Packaging Type
Advanced substrate &
leadframe based 89% 90% 88%
Traditional leadframe based 6% 6% 8%
Others 5% 4% 4%
Capacity
CapEx (US$ Millions) * 25 31 22
Number of Wirebonders 6,326 6,366 6,672
Wafer Bumping 8''
(pcs/month) 70,000 70,000 45,000
Wafer Bumping 12''
(pcs/month) 15,000 15,000 10,000
Testing Services
Amounts in NT$ Millions 1Q/06 4Q/05 1Q/05
Net Revenues 5,123 5,267 3,693
Revenues by Testing Type
Final test 77% 80% 78%
Wafer sort 19% 17% 17%
Engineering test 4% 3% 5%
Capacity
CapEx (US$ Millions) * 14 21 12
Number of Testers 1,305 1,304 1,493
* Capital expenditure amounts exclude building construction costs.
Advanced Semiconductor Engineering, Inc.
Consolidated Summary Income Statements Data
(In NT$ millions, except per share data)
(Unaudited)
For the three months ended
Mar. 31 Dec. 31 Mar. 31
2006 2005 2005
Net revenues:
IC Packaging 17,831 18,730 12,755
Testing 5,123 5,267 3,693
Module Assembly 1,475 2,054 1,179
Others 408 353 196
Total net revenues 24,837 26,404 17,823
Cost of revenues 18,202 19,849 16,002
Gross Profit 6,635 6,555 1,821
Operating expenses:
Research and development 634 766 669
Selling, general and administrative 1,316 1,537 1,363
Total operating expenses 1,950 2,303 2,032
Operating income (loss) 4,685 4,252 (211)
Net non-operating (income) expenses:
Interest expenses - net 359 390 294
Foreign exchange loss (gain) (43) 105 (13)
Loss (gain) on long-term investment (61) (48) (22)
Loss (gain) on disposal of assets (22) 32 (3)
Others 369 475 64
Total non-operating expenses 602 954 320
Income (loss) before tax 4,083 3,298 (531)
Income tax expense (benefit) 18 46 (146)
Income (loss) from continuing
operations 4,065 3,252 (385)
Loss (Income) from discontinuing
operations -- (230) (23)
Cumulative effect of change in
accounting principle 457 -- --
Income (loss) before minority interest 3,608 3,482 (362)
Minority interest 426 540 (234)
Net income (loss) 3,182 2,942 (128)
Per share data:
Earnings (loss) per common share
- Basic NT$0.72 NT$0.67 NT$(0.03)
- Diluted NT$0.69 NT$0.65 NT$(0.03)
Earnings (loss) per pro forma
equivalent ADS
- Basic US$0.112 US$0.101 US$(0.005)
- Diluted US$0.106 US$0.095 US$(0.005)
Number of weighted average shares
used in diluted EPS
calculation (in thousands) 4,651,513 4,615,664 4,362,952
Forex (NT$ per US$1) 32.26 33.40 31.54
Advanced Semiconductor Engineering, Inc.
Consolidated Summary Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Mar. 31, As of Dec. 31,
2006 2005
Current assets:
Cash and cash equivalents 10,261 13,264
Financial assets - current 6,895 4,353
Notes and accounts receivable 15,030 15,586
Inventories 7,561 7,757
Others 6,137 6,713
Total current assets 45,884 47,673
Financial assets - non current 5,138 4,898
Properties - net 67,897 68,041
Other assets 10,655 10,643
Total assets 129,574 131,255
Current liabilities:
Short-term debts - revolving credit 5,327 5,085
Short-term debts - current portion of
long-term debts 4,586 5,438
Notes and accounts payable 9,016 10,985
Others 9,305 9,443
Total current liabilities 28,234 30,951
Long-term debts 30,944 33,500
Long-term bonds payable 9,342 9,362
Other liabilities 2,240 2,462
Total liabilities 70,760 76,275
Minority interest 8,372 7,902
Shareholders' equity 50,442 47,078
Total liabilities & shareholders' equity 129,574 131,255
Current Ratio 1.63 1.54
Net Debt to Equity 0.56 0.65
Contact:
ASE, Inc.
Room 1901, No. 333, Section 1
Keelung Road, Taipei, Taiwan, 110
Joseph Tung, CFO / Vice President
Freddie Liu, Financial Controller
Tel: +886-2-8780-5489
Fax: +886-2-2757-6121
Email: ir@aseglobal.com
http://www.aseglobal.com
Source: prnewswire
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