TAIPEI, Taiwan, Feb. 6 /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 (Notes 1) of NT$22,574 million for the
fourth quarter of 2006 (4Q06), down 15% year-over-year and down 16%
sequentially (Notes 2). Net income for the quarter totaled NT$2,734
million, down from NT$2,942 million in 4Q05 and down from NT$4,181
million in 3Q06. Diluted earnings per share for the quarter was
NT$0.59 (or US$0.090, per ADS), compared to NT$0.65 for 4Q05 and
NT$0.91 for 3Q06. For the full year of 2006, the Company reported
net revenues of NT$100,424 million and net income of NT$17,416
million. Diluted earnings per share for the full year of 2006 was
NT$3.77, or US$0.580 per ADS. RESULTS OF OPERATIONS 4Q06 Results
Highlights -- Net revenues contribution from IC packaging
operations (including module assembly), testing operations, and
others were NT$17,186 million, NT$4,797 million and NT$591 million,
respectively, and each represented approximately 76%, 21% and 3%
respectively, of total net revenues for the quarter. -- Cost of
revenues was NT$16,176 million, down 19% year-over-year and down
12% sequentially. * As a percentage of total net revenues, cost of
revenues was 72% in 4Q06, down from 75% in 4Q05 and up from 69% in
3Q06. * Raw material cost totaled NT$5,995 million during the
quarter, representing 27% of total net revenues; compared with
NT$7,557 million and 28% of revenues in the previous quarter. *
Depreciation, amortization and rental expenses totaled NT$3,787
million during the quarter, down 2% year-over-year and down 1%
sequentially. -- Total operating expenses during 4Q06 were NT$2,175
million, including NT$690 million in R&D and NT$1,485 million
in SG&A. Total operating expenses as a percentage of net
revenues for the current quarter were 10%, up from 9% in 4Q05 and
up from 8% in 3Q06. -- Operating profit for the quarter totaled
NT$4,223 million, down from NT$6,093 million in the previous
quarter. Operating margin decreased from 23% in 3Q06 to 19% in
4Q06. -- In terms of non-operating items, * Net interest expense
was NT$214 million, down from NT$303 million a quarter ago,
primarily due to decrease in total bank loan. * Net exchange gain
of NT$159 million was mainly attributable to the exchange gain in
U.S. dollar-based loans and payables due to the depreciation of the
US dollar against the New Taiwan dollar, and the exchange gain from
the appreciation of the Renminbi against the U.S. dollar. * Gain on
long-term investment was NT$136 million relating to investment
income from minority-owned affiliates, including NT$100 million of
investment income from Universal Scientific Industrial Co. ("USI"),
NT$47 million of investment income from InveStar Burgeon Venture
Capital, Inc., NT$9 million of investment loss from Hung Ching
Construction, and NT$2 million of investment loss from Hung Ching
Kwan Co. * Other non-operating expenses were primarily related to
inventory provision adjustment and other miscellaneous expenses.
Together with other non-operating expenses, total non-operating
expenses for the quarter was NT$185 million, compared to NT$954
million for 4Q05 and NT$554 million for 3Q06. -- Income before tax
was NT$4,038 million for 4Q06, compared with NT$5,539 million in
the previous quarter. We recorded an income tax expense of NT$766
million during the quarter. Minority interest adjustment was NT$538
million. -- In 4Q06, net income was NT$2,734 million, compared to
net income of NT$2,942 million for 4Q05 and NT$4,181 million for
3Q06. -- Our total number of shares outstanding at the end of the
quarter was 4,427,237,177, excluding treasury stock. Our diluted
EPS for 4Q06 was NT$0.59, or US$0.090 per ADS, based on
4,693,690,488 weighted average number of shares outstanding during
the fourth quarter. 2006 Full-year Results -- Net revenues for the
full year of 2006 amounted to NT$100,424 million, up 20% from 2005.
The revenue contribution from IC packaging operations (including
module assembly), testing operations, and others were NT$76,820
million, NT$21,430 million, and NT$2,174 million, respectively, and
each represented approximately 77%, 21% and 2% respectively, of
total net revenues for the year. -- Costs of revenues for the full
year of 2006 were NT$71,644 million, up 3% compared to 2005. * As a
percentage of net revenues, cost of revenues was 71% in 2006, down
from 83% in 2005. * Depreciation, amortization and rental expenses
totaled NT$15,096 million during the year, down 4% compared to
2005. As a percentage of net revenues, depreciation, amortization
and rental expenses were 15% during the year, down from 19% in
2005. The decrease in depreciation, amortization and rental expense
was primarily due to the improved machinery utilization, lower
capital expenditure and retirement of machinery. -- Gross profit
for the year was NT$28,780 million, up 98% compared to NT$14,518
million in 2005. Gross margin was 29% for the year, up from 17% in
2005. -- Total operating expenses during 2006 were NT$8,334
million, including NT$2,632 million in R&D and NT$5,702 million
in SG&A. Total operating expenses as a percentage of net
revenues was 8% in 2006, down from 10% in 2005. -- Operating income
for the year was NT$20,446 million, compared to income of NT$5,819
for the previous year. Operating margin was 20% in 2006, which
increased from 7% in 2005. -- In terms of non-operating items, *
Net interest expense was NT$1,214 million, down from NT$1,398
million in 2005 primarily due to a decrease in total bank loans. *
Gain on long-term investment was NT$499 million, primarily
attributed to the income from USI and InveStar Burgeon Venture
Capital, Inc., partially offset by the investment loss from Hung
Ching Construction. * We reached final settlement with our insurers
on June 27, 2006 with regards to the fire damage incurred to ASE's
Chung-Li plants. The final settlement amount was NT$8,068 million.
Fire loss recovery recognized in the year was NT$4,574 million.
Netting out other non- operating expenses, non-operating income for
the year was NT$1,806 million, compared to non-operating expenses
of NT$11,493 million for 2005, which includes fire loss of NT$8,838
million recognized in the year. -- Inome before tax was NT$22,252
million for 2006. We recognized an income tax expense of NT$2,085
million during the year. Minority interest adjustment was NT$2,408
million. -- In 2006, net income amounted to NT$17,416 million,
compared with a net loss of NT$4,691 in the same period 2005. --
Our total shares outstanding at the end of the year were
4,427,237,177, excluding treasury stock. Our diluted EPS for 2006
was NT$3.77, or US$0.580 per ADS, based on 4,664,594,732 weighted
average number of shares outstanding. LIQUIdiTY AND CAPITAL
RESOURCES -- As of December 31, 2006, our cash and other financial
assets totaled NT$26,639 million, down from NT$30,476 million as of
September 30, 2006. -- Capital expenditures in 4Q06 totaled US$73
million, of which US$33 million was for IC packaging, US$33 million
was for testing, and US$7 million was for interconnect materials.
-- For the full year 2006, the company spent US$363 million of
capital expenditures, including US$161 million for IC packaging,
US$133 million for testing, and US$69 million for IC substrate. --
As of December 31, 2006, we had total bank debts of NT$37,897
million, down from NT$47,348 million as of September 30, 2006 and
down from NT$53,385 as of December 31, 2005. Total bank debts
consisted of NT$2,868 million of revolving working capital loans,
NT$1,833 million of current portion of long-term debts, NT$3,798
million of current portion of bonds payable, NT$23,639 million of
long-term debts and NT$5,759 million of long-term bonds payable.
Total unused banking facilities were NT$41,560 million. -- Current
ratio as of December 31, 2006 was 1.74, compared to 1.66 as of
September 30, 2006 and net debt to equity ratio was 0.15 as of
December 31, 2006. -- Total number of employees was 26,986 as of
December 31, 2006. Business Review IC Packaging Services (Notes 3)
-- Net revenues generated from our IC packaging operations were
NT$17,186 million during the quarter, down by NT$3,598 million or
17% year-over- year and down by NT$3,188 million or 16%
sequentially. On a sequential basis, the decrease in packaging
revenue was primarily due to volume decrease. -- Revenues from
advanced substrate and leadframe-based packaging accounted for 82%
of total IC packaging revenues during the quarter, down by two
percentage points from the previous quarter. -- Gross margin for
our IC packaging operations was 25%, up by six percentage points
year-over-year and decreased slightly by 0.8 percentage point
sequentially. -- Capital expenditure for our IC packaging
operations amounted to US$33 million during the quarter, of which
US$31 million was for wirebonding packaging capacity, and US$2
million was for wafer bumping and flip chip packaging equipment. --
As of December 31, 2006, there were 6,526 wirebonders in operation,
of which 35 wirebonders were added and 53 wirebonders were disposed
of during the quarter. -- Revenues from flip chip packages and
wafer bumping services accounted for 12% of total packaging
revenue, down by two percentage points from the previous quarter.
Testing Services -- Net revenues generated from our testing
operations were NT$4,797 million, down by NT$470 million or 9%
year-over-year and down by NT$1,013 million or 17% sequentially.
Testing ASP remained relatively unchanged compared to 3Q06. The
decrease in testing revenue was primarily due to volume decrease.
-- Final testing contributed 77% to total testing revenues, up by
one percentage point from the previous quarter. Wafer sort
contributed 18% to total testing revenues, down by one percentage
point from the previous quarter. Engineering testing contributed 5%
to total testing revenues, relatively unchanged from the previous
quarter. -- Depreciation, amortization and rental expense
associated with testing operation amounted to NT$1,556 million,
down from NT$1,700 million in 4Q05 and down from NT$1,597 million
in 3Q06. -- In 4Q06, gross margin for our testing operations was
36%, down by four percentage points year-over-year and down by
eight percentage points sequentially. The sequential decrease in
gross margin was primary due to the decrease of sales. -- Capital
spending on our testing operations amounted to US$33 million during
the quarter. -- As of December 31, 2006, there were 1,305 testers
in operation, of which 20 testers were added and 11 testers were
disposed of during the quarter. Substrate Operations -- PBGA
substrate manufactured by ASE amounted NT$1,869 million for the
quarter, down by NT$124 million or 6% from a year-ago quarter, and
down by NT$304 million or 14% from the previous quarter. Of the
total output of NT$1,869 million, NT$591 million was from sales to
external customers. -- Gross margin for substrate operation was 24%
during the quarter, down by three percentage points compared with a
year-ago quarter, and up by one percentage point compared with
previous quarter. -- In 4Q06, the Company's internal substrate
manufacturing operations supplied 45% (by value) of our total
substrate requirements. -- As of December 31, 2006, the Company's
PBGA capacity was at 48 million units per month. Customers -- Our
five largest customers together accounted for approximately 27% of
our net revenues in 4Q06, down from 30% in 4Q05 and down from 28%
in 3Q06. No single customer accounted for more than 10% of our
total net revenues. -- Our top 10 customers contributed 43% of our
net revenues during the quarter, down from 46% in 4Q05 and down
from 44% in 3Q06. -- Our customers that are integrated device
manufacturers, or IDMs, accounted for 47% of our revenues in 4Q06,
compared to 41% in 4Q05 and 44% in 3Q06. Notes: 1. All financial
information presented in this press release is unaudited,
consolidated and prepared in accordance with accounting principles
generally accepted 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 our 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. 2. 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. 3. IC
packaging services include module assembly services. 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 includes 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;
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 2005 Annual
Report on Form 20-F filed on June 19, 2006. Supplemental Financial
Information Consolidated Operations Amounts in NT$ Millions 4Q/06
3Q/06 4Q/05 Net Revenues 22,574 26,726 26,404 Revenues by End
Application Communication 39% 38% 36% Computer 24% 21% 27%
Automotive and Consumers 37% 40% 35% Others 0% 1% 2% Revenues by
Region North America 54% 53% 51% Europe 13% 14% 12% Taiwan 18% 17%
21% Japan 10% 11% 10% Other Asia 5% 5% 6% IC Packaging Services
Amounts in NT$ Millions 4Q/06 3Q/06 4Q/05 Net Revenues 17,186
20,374 20,784 Revenues by Packaging Type Advanced substrate &
leadframe based 82% 84% 81% Traditional leadframe based 5% 5% 6%
Module assembly 8% 6% 10% Others 5% 5% 4% Capacity CapEx (US$
Millions) * 33 47 43 Number of Wirebonders 6,526 6,544 6,366 Wafer
Bumping 8" (pcs/month) 80,000 80,000 70,000 Wafer Bumping 12"
(pcs/month) 15,000 15,000 15,000 Testing Services Amounts in NT$
Millions 4Q/06 3Q/06 4Q/05 Net Revenues 4,797 5,810 4,410 Revenues
by Testing Type Final test 77% 76% 80% Wafer sort 18% 19% 17%
Engineering test 5% 5% 3% Capacity CapEx (US$ Millions) * 33 29 21
Number of Testers 1,305 1,296 1,304 * Capital expenditure amounts
exclude building construction costs. Advanced Semiconductor
Engineering, Inc. Summary of Consolidated Income Statements Data
(In NT$ millions, except per share data) (Unaudited) For the three
months For the year ended ended Dec. 31 Sep. 30 Dec. 31 Dec. 31
Dec. 31 2006 2006 2005 2006 2005 Net revenues: IC Packaging 17,186
20,374 20,784 76,820 66,023 Testing 4,797 5,810 5,267 21,430 17,122
Others 591 542 353 2,174 891 Total net revenues 22,574 26,726
26,404 100,424 84,036 Cost of revenues 16,176 18,479 19,849 71,644
69,518 Gross profit 6,398 8,247 6,555 28,780 14,518 Operating
expenses: Research and development 690 663 766 2,632 2,785 Selling,
general and administrative 1,485 1,491 1,537 5,702 5,914 Total
operating expenses 2,175 2,154 2,303 8,334 8,699 Operating income
(loss) 4,223 6,093 4,252 20,446 5,819 Net non-operating (income)
expenses: Interest expenses -- net 214 303 390 1,214 1,398 Foreign
exchange loss (gain) (159) 89 105 (93) (175) Loss (gain) on
long-term investment (136) (219) (48) (499) (80) Loss (gain) on
disposal of assets 35 33 32 99 137 Others 231 348 475 (2,527)
10,213 Total non-operating (income) expenses 185 554 954 (1,806)
11,493 Income (loss) before tax 4,038 5,539 3,298 22,252 (5,674)
Income tax expense (benefit) 766 751 46 2,085 (119) Income (loss)
from continuing operations 3,272 4,788 3,252 20,167 (5,555) Loss
(Income) from discontinued operations -- -- (230) -- (354)
Cumulative effect of change in accounting principle -- -- -- 343 --
Income (loss) before minority interest 3,272 4,788 3,482 19,824
(5,201) Minority interest 538 607 540 2,408 (510) Net income (loss)
2,734 4,181 2,942 17,416 (4,691) Per share data: Earnings (loss)
per share - Basic NT$0.62 NT$0.95 NT$0.67 NT$3.95 NT$(1.07) -
Diluted NT$0.59 NT$0.91 NT$0.65 NT$3.77 NT$(1.07) Earnings (loss)
per pro forma equivalent ADS - Basic US$0.094 US$0.145 US$0.101
US$0.609 US$(0.167) - Diluted US$0.090 US$0.139 US$0.095 US$0.580
US$(0.167) Number of weighted average shares used in diluted EPS
calculation (in thousands) 4,693,690 4,673,918 4,615,664 4,664,595
4,370,514 Exchange rate (NT$ per US$1) 32.84 32.70 33.40 32.48
32.08 Advanced Semiconductor Engineering, Inc. Summary of
Consolidated Balance Sheet Data (In NT$ millions) (Unaudited) As of
Dec. 31, As of Sep. 30, 2006 2006 Current assets: Cash and cash
equivalents 15,735 22,980 Financial assets - current 10,904 7,496
Notes and accounts receivable 11,446 14,134 Inventories 5,674 5,893
Others 4,993 3,689 Total current assets 48,752 54,192 Financial
assets - non current 5,735 5,612 Properties - net 73,506 73,123
Other assets 9,027 11,594 Total assets 137,020 144,521 Current
liabilities: Short-term debts - revolving credit 2,868 7,526
Short-term debts - current portion of long-term debts 1,833 3,974
Short-term debts - current portion of bonds payable 3,798 -- Notes
and accounts payable 7,296 8,978 Others 12,194 12,118 Total current
liabilities 27,989 32,596 Long-term debts 23,639 26,260 Long-term
bonds payable 5,759 9,588 Other liabilities 2,506 2,481 Total
liabilities 59,893 70,925 Minority interest 11,107 10,545
Shareholders' equity 66,020 63,051 Total liabilities &
shareholders' equity 137,020 144,521 Current Ratio 1.74 1.66 Net
Debt to Equity 0.15 0.23 Contact: ASE, Inc. Room 1901, No. 333,
Section 1 Keelung Road, Taipei, Taiwan, 110 Tel: + 886-2-8780-5489
Fax: + 886-2-2757-6121 Web site: http://www.aseglobal.com/ Joseph
Tung, CFO / Vice President Freddie Liu, Vice President Email: Clare
Lin, Director (US Contact) Tel: +1-408-986-6524 Email: DATASOURCE:
Advanced Semiconductor Engineering, Inc. CONTACT: Joseph Tung or
Freddie Liu, , or Clare Lin, , +1-408-986-6524, all for ASE Web
site: http://www.aseglobal.com/
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