TAIPEI, Taiwan, Feb. 8 /Xinhua-PRNewswire-FirstCall/ -- 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$26,404 million for the fourth
quarter of 2005 (4Q05), up 27% year-over-year and 21%
sequentially**. Net income for the quarter totaled NT$2,915
million, up from net loss of NT$1,407 million in 4Q04 and from net
income of NT$1,588 million in 3Q05. Earnings per share for the
quarter was NT$0.64 (or US$0.095, per ADS), compared to loss per
share of NT$0.32 for 4Q04 and earnings per share of NT$0.35 for
3Q05. * 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 September 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. For the full year of 2005, the Company's revenues were
NT$84,036 million, up 12% compared to 2004. Net loss was NT$4,718
million, compared to net income of NT$4,210 million in 2004. Loss
per share was NT$1.08, or US$0.168 per ADS, compared to earning per
share of NT$0.96 for 2004. RESULTS OF OPERATIONS 4Q05 Results --
Net revenues amounted to NT$26,404 million, up 21% sequentially and
27% year-over-year. The revenue contribution from IC packaging
operations, testing operations, module assembly, and others was
NT$18,730 million, NT$5,267 million, NT$2,054 million and NT$353
million, respectively, and each represented approximately 71%, 20%
and 8%, respectively, of total net revenues for the quarter. --
Cost of revenues was NT$19,869 million, up 12% sequentially and 15%
year-over-year. -- As a percentage of net revenues, cost of
revenues was 75% in 4Q05, down from 81% in 3Q05 and from 83% in
4Q04. -- Depreciation, amortization and rental expenses totaled
NT$3,877 million during the quarter, up 3% sequentially and down 5%
year- over-year. As a percentage of net revenues, depreciation,
amortization and rental expenses were 15% during the quarter, down
from 17% in 3Q05 and from 20% in 4Q04. -- Gross profit for 4Q05 was
NT$6,535 million, up 60% from NT$4,088 million in 3Q05 and up 88%
from NT$3,473 million in 4Q04. Gross margin was 25% for the
quarter, which increased from 19% in the previous quarter and from
17% in 4Q04. -- Total operating expenses during 4Q05 were NT$2,298
million including NT$769 million in R&D and NT$1,529 million in
SG&A. Total operating expenses as a percentage of net revenues
for the current quarter was at 9%, down from 10% in 3Q05 and 11% in
4Q04. -- Operating income for 4Q05 was NT$4,237 million, compared
to income of NT$1,954 million and NT$1,157 million for 3Q05 and
4Q04, respectively. Operating margin was 16% in 4Q05, which
increased from 9% in 3Q05 and from 6% in 4Q04. -- We recorded net
non-operating expenses of NT$966 million in 4Q05, which increased
by NT$704 million sequentially, and decreased by NT$2,306 million
year-over-year. -- The net exchange loss of NT$105 million was
mainly attributable to the effect of US dollars depreciation on our
net assets position denominated in US dollars. -- Gain on long-term
investment was NT$48 million, consisting of NT$75 million
investment income from minority-owned affiliates and NT$27 million
of goodwill amortization expense related to such minority-owned
affiliates. The NT$75 million investment income from minority-owned
affiliates mainly included NT$88 million of investment income from
Universal Scientific Industrial Co. ("USI"), NT$13 million of
investment loss from Hung Ching Construction. -- Other
non-operating expenses were primarily related to equipment
provision associated with the discontinuation of leadframe
manufacturing operation, inventory provision adjustment and other
miscellaneous expenses. -- Income before tax was NT$3,271 million
for 4Q05. We recorded an income tax expenses of NT$46 million
during the quarter. Income from discontinuing operations related to
our camera module assembly operation in Penang was NT$230 million.
Minority interest adjustment was NT$540 million. -- In 4Q05, net
income was NT$2,915 million, compared to net income of NT$1,588
million for 3Q05 and net loss of NT$1,407 million for 4Q04. -- Our
total shares outstanding at the end of the quarter were
4,382,238,648. Our EPS for 4Q05 was NT$0.64, or US$0.095 per ADS,
based on 4,615,663,939 weighted average number of shares
outstanding during the fourth quarter. 2005 Full-year Results --
Net revenues for the full year of 2005 amounted to NT$84,036
million, up 12% from 2004. The revenue contribution from IC
packaging operations, testing operations, module assembly, and
others were NT$59,443 million, NT$17,122 million, NT$6,580 million
and NT$891 million, respectively. -- IC packaging, testing and
module assembly represent approximately 71%, 20% and 8%,
respectively, of total net revenues for the year. -- Costs of
revenues for the full year of 2005 were NT$69,538 million, up 17%
compared to 2004. -- As a percentage of net revenues, cost of
revenues was 83% in 2005, up from 79% in 2004. -- Depreciation,
amortization and rental expenses totaled NT$15,647 million during
the year, up 4% compared to 2004. As a percentage of net revenues,
Depreciation, amortization and rental expenses were 19% during the
year, down from 20% in 2004. The increase in depreciation,
amortization and rental expense was primarily due to our capacity
expansion in our Shanghai operation and the full-year effect of our
acquisition of ASE Japan. -- Gross profit for the year was
NT$14,498 million, down 7% compared to NT$15,597 million in 2004.
Gross margin was 17% for the year, down from 21% in 2004. -- Total
operating expenses during 2005 were NT$8,693 million including
NT$2,788 million in R&D and NT$5,905 million in SG&A. Total
operating expenses as a percentage of net revenues was 10% in 2005,
down from 12% in 2004. -- Operating income for the year was
NT$5,805 million, compared to income of NT$6,957 for the previous
year. Operating margin was 7% in 2005, which decreased from 9% in
2004. -- We recorded net non-operating expenses of NT$11,506
million in 2005, which increased by NT$7,485 million from the
previous year. -- The Company recorded fire loss of NT $8.8
billion. Such loss amount assumed total loss on all fire-impacted
assets with net book value of NT$13.0 billion, labor & rental
cost totaling NT$228 million that were idled from May to December
2005, and other miscellaneous NT$172 million, netted by insurance
receivable of NT$4.6 billion. The insurance receivables of NT$4.6
billion were based on certain assets with their damage amount
currently assessed by the Company and adjusted for the insurance
deductibles. NT$2.3 billion of total NT$ 4.6 billion insurance
receivable was received in October 2005. -- The increase in net
interest expense is mainly due to higher outstanding loan balances
and interest rate. -- The net exchange gain of NT$175 million was
mainly attributable to the effect of US dollars appreciation on our
net assets position denominated in US dollars. -- Gain on long-term
investment was NT$80 million, consisting of NT$187 million
investment income from minority-owned affiliates, NT$107 million of
goodwill amortization related to such minority- owned affiliates.
The NT$187 million investment income from minority-owned
subsidiaries included NT$151 million of investment income from
Universal Scientific Industrial Co. ("USI"), NT$29 million of
investment loss from Hung Ching Construction, NT$61 million of
investment income from Inprocomm, Inc. ("IPCM"), and NT$4 million
of investment income from other invested companies. -- Loss before
tax was NT$5,701 million for 2005. We recognized an income tax
benefit of NT$119 million during the year. Income from
discontinuing operations related to our camera module assembly
operation in Penang was NT$354 million. Minority interest
adjustment was NT$510 million. -- In 2005, net loss amounted to
NT$4,718 million, compared to net income of NT$4,210 for 2004. --
Our total shares outstanding at the end of the year were
4,382,238,648. Our loss per share for 2005 was NT$1.08, or US$0.168
per ADS, based on 4,370,513,685 weighted average number of shares
outstanding. LIQUIDITY AND CAPITAL RESOURCES -- Capital
expenditures in 4Q05 totaled US$113 million, of which US$31 million
was for IC packaging, US$13 million was for module assembly, US$21
million was for testing, and US$48 million was for interconnect
materials. Capital expenditures for the full year 2005 totaled
US$262 million, including US$108 million for IC packaging, US$17
million for module assembly, US$71 million for testing and US$66
million for interconnect materials. -- EBITDA for the quarter
totaled NT$7,753 million, up 51% year-over-year and 32%
sequentially. Full-year EBITDA totaled NT$20,303 million, down 12%
from the prior year. -- As of the end of 4Q05, we had cash on hand
plus short-term investments of NT$17,698 million, which increased
by NT$4,196 million from the end of 3Q05. -- As of the end of 4Q05,
we had total bank debts of NT$53,385 million, decreased from
NT$57,619 million as of end of 3Q05. Total bank debts were
consisting of NT$5,085 million of revolving working capital loans,
NT$5,438 million of current portion of long-term debts, NT$33,500
million of long-term debts and NT$9,362 million of long-term bonds
payable. Total unused banking facilities were NT$21,480 million. --
Current ratio improved from 1.45 as of end of 3Q05 to 1.54 as of
year end 2005, and net debt to equity ratio also improved from 0.86
to 0.65. -- Total number of employees was 29,039 as of December 31,
2005. Business Review IC Packaging Services -- Revenues generated
from our IC packaging operations were NT$18,730 million during the
quarter, up NT$3,465 million or 23% sequentially and NT$4,035
million or 27% year-over-year. On a sequential basis, the increase
in packaging revenue was primarily due to volume increase with
slight increase in average selling price. -- Revenues from advanced
substrate and leadframe-based packaging accounted for 90% of total
IC packaging revenues during the quarter, up by three percentage
points from the previous quarter. -- Gross margin for our IC
packaging operations was 21%, up by five percentage points
sequentially and up by six 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$31 million during the quarter, of which US$25 million was for
wirebonding packaging capacity, and US$6 million was for wafer
bumping and flip chip packaging equipment. -- As of December 31,
2005, there were 6,366 wirebonders in operation, of which 229
wirebonders were added and 99 wirebonders were disposed of during
the quarter. -- Revenues from flip chip packages and wafer bumping
services accounted for 19% of total packaging revenue, up from 14%
in 3Q05. Testing Services -- Revenues generated from our testing
operations were NT$5,267 million, up NT$857 million or 19%
sequentially and NT$910 million or 21% year-over-year. -- Final
testing contributed 80% to total testing revenues, down by one
percentage point from the previous quarter. Wafer sort contributed
17% to total testing revenues, up by one percentage point from the
previous quarter. Engineering testing contributed 3% to total
testing revenues, consistent with the previous quarter. -- In 4Q05,
gross margin for our testing operations was 40%, up by ten
percentage points sequentially and by seventeen percentage points
year-over-year. The increase in gross margin was mainly due to
higher utilization, lower depreciation expenses and rental
expenses, slight increase in average selling price and favorable
revenue mix changes. -- Capital spending on our testing operations
amounted to US$21 million during the quarter. -- As of December 31,
2005, there were 1,304 testers in operation, of which 30 testers
were added and 56 testers were disposed of during the quarter.
Module Assembly Services -- Revenues generated from our module
assembly operations were NT$2,054 million, up NT$159 million or 8%
sequentially, and up NT$557 million or 32% year-over-year mainly
due to volume increase and favorable product mix change. -- In
September 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. -- Camera module assembly revenue accounted for
37% of the total module assembly revenues, while RF and baseband
module assembly accounted for 63%. -- In 4Q05, gross margin for our
module assembly operations was 18%, up by one percentage points
sequentially and year-over-year. Interconnect Materials -- The
materials output manufactured by ASE was about NT$2,201 million for
the quarter, up by NT$835 million or 61% from NT$1,366 million in
previous quarter, and increased by NT$58 million or 3% from
NT$2,143 million in a year-ago quarter. -- Gross margin for
material was 25% during the quarter, which increased from 6% in
3Q05 and from 8% in 4Q04. The gross margin improved sequentially
mainly due to increase in sales volume during the current quarter
and yield improvement -- In 4Q05, the Company's internal material
operation supplied 33% (by value) of our total PBGA substrate
requirements. -- As of end of December 31, 2005, the Company had
recovered its PBGA capacity lost in the fire accident, with monthly
capacity reaching 36 million units. Customers -- Our five largest
customers together accounted for approximately 30% of our net
revenues in 4Q05, consistent with the previous quarter and
decreased from 36% in 4Q04. 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% 4Q04. -- Our customers that are
integrated device manufacturers, or IDMs, accounted for 41% of our
revenues in 4Q05, compared to 42% in 3Q05 and 45% in 4Q04. 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 4Q/05 3Q/05 4Q/04
Net Revenues 26,404 21,822 20,760 Revenues by End Application
Communication 35% 36% 38% Computer 27% 30% 32% Automotive and
Consumers 35% 31% 27% Others 3% 3% 3% Revenues by Region North
America 51% 49% 53% Europe 12% 14% 9% Taiwan 21% 20% 22% Japan 10%
11% 10% Other Asia 6% 6% 6% IC Packaging Services Amounts in NT$
Millions 4Q/05 3Q/05 4Q/04 Net Revenues 18,730 15,265 14,695
Revenues by End Application Communication 27% 27% 30% Computer 32%
36% 39% Automotive and Consumers 38% 34% 28% Others 3% 3% 3%
Revenues by Packaging Type Advanced substrate & leadframe based
90% 87% 88% Traditional leadframe based 6% 8% 8% Others 4% 5% 4%
Capacity CapEx (US$ Millions) * 31 32 83 Number of Wirebonders
6,366 6,236 6,684 Testing Services Amounts in NT$ Millions 4Q/05
3Q/05 4Q/04 Net Revenues 5,267 4,410 4,357 Revenues by End
Application Communication 38% 39% 43% Computer 20% 22% 20%
Automotive and Consumers 36% 34% 30% Others 6% 5% 7% Revenues by
Testing Type Final test 80% 81% 76% Wafer sort 17% 16% 21%
Engineering test 3% 3% 3% Capacity CapEx (US$ Millions) * 21 26 28
Number of Testers 1,304 1,330 1,515 * Capital expenditure amounts
exclude building construction cost. Advanced Semiconductor
Engineering, Inc. Consolidated Summary Income Statements Data (In
NT$ millions, except per share data) (Unaudited) For the three
months ended For the period ended Dec. 31 Sep. 30 Dec. 31 Dec. 31
Dec. 31 2005 2005 2004 2005 2004 Net revenues: IC Packaging 18,730
15,265 14,695 59,443 53,545 Testing 5,267 4,410 4,357 17,122 16,474
Module Assembly 2,054 1,895 1,497 6,580 4,717 Others 353 252 211
891 502 Total net revenues 26,404 21,822 20,760 84,036 75,238 Cost
of revenues 19,869 17,734 17,287 69,538 59,641 Gross Profit 6,535
4,088 3,473 14,498 15,597 Operating expenses: Research and
development 769 678 728 2,788 2,581 Selling, general and
administrative 1,529 1,456 1,588 5,905 6,059 Total operating
expenses 2,298 2,134 2,316 8,693 8,640 Operating income (loss)
4,237 1,954 1,157 5,805 6,957 Net non-operating (income) expenses:
Interest expenses - net 390 354 223 1,398 894 Foreign exchange loss
(gain) 105 (267) 270 (175) 148 Loss (gain) on long-term investment
(48) (12) 327 (80) 395 Loss on disposal of assets 32 (8) 17 83 135
Goodwill impairment -- -- 2,462 -- 2,462 Others 487 195 (27) 10,280
(13) Total non-operating expenses 966 262 3,272 11,506 4,021 Income
(loss) before tax 3,271 1,692 (2,115) (5,701) 2,936 Income tax
expense (benefit) 46 (40) (211) (119) (1,397) Income (loss) from
continuing operations 3,225 1,732 (1,904) (5,582) 4,333 Loss
(Income) from discontinuing operations (230) (41) (75) (354) (568)
Income (loss) before minority interest 3,455 1,773 (1,829) (5,228)
4,901 Minority interest 540 185 (422) (510) 691 Net income (loss)
2,915 1,588 (1,407) (4,718) 4,210 Per share data: Earnings (loss)
per common share - Basic NT$0.67 NT$0.36 NT$(0.32) NT$(1.08)
NT$0.99 - Diluted NT$0.64 NT$0.35 NT$(0.32) NT$(1.08) NT$0.96
Earnings (loss) per pro forma equivalent ADS - Basic US$0.100
US$0.057 US$(0.049) US$(0.16) US$0.148 - Diluted US$0.095 US$0.054
US$(0.049) US$(0.168) US$0.144 Number of weighted average shares
used in diluted EPS calculation (in thousands) 4,615,664 4,580,884
4,349,001 4,370,514 4,545,868 Forex (NT$ per US$1) 33.40 32.00
33.08 32.08 33.44 Advanced Semiconductor Engineering, Inc.
Consolidated Summary Balance Sheet Data (In NT$ millions)
(Unaudited) As of Dec. 31, As of Sep. 30, 2005 2005 Current assets:
Cash and cash equivalents 13,345 9,988 Short-term investments 4,353
3,514 Notes and accounts receivable 15,588 16,200 Inventories 7,757
8,094 Others 6,866 7,912 Total current assets 47,909 45,708
Long-term investments 4,825 4,802 Properties - net 67,904 67,830
Other assets 11,877 12,037 Total assets 131,515 130,377 Current
liabilities: Short-term debts - revolving credit 5,085 6,400
Short-term debts - current portion of long-term 5,438 6,523 Notes
and accounts payable 11,160 9,946 Others 9,397 8,760 Total current
liabilities 31,080 31,629 Long-term debts 33,500 35,338 Long-term
bonds payable 9,362 9,358 Other liabilities 2,621 2,471 Total
liabilities 76,563 78,796 Minority interest 7,902 7,369
Shareholders' equity 47,050 44,212 Total liabilities &
shareholders' equity 131,515 130,377 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:
http://www.aseglobal.com/ DATASOURCE: Advanced Semiconductor
Engineering, Inc. CONTACT: Joseph Tung, or Freddie Liu, both of
Advanced Semiconductor Engineering, Inc., +886-2-8780-5489, or fax,
+886-2-2757-6121, or Web site: http://www.aseglobal.com/
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