TAIPEI, Taiwan, April 25 /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(1) of NT$21,093 million for the first
quarter of 2007 (1Q07), down 15% year-over- year and down 7%
sequentially. Net income for the quarter totaled NT$1,661 million,
down from NT$3,182 million in 1Q06 and down from NT$2,734 million
in 4Q06. Diluted earnings per share for the quarter was NT$0.36 (or
US$0.055 per ADS), compared to NT$0.69 for 1Q06 and NT$0.59 for
4Q06. (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.
RESULTS OF OPERATIONS 1Q07 Results Highlights -- Net revenues
contribution from IC packaging operations (including module
assembly), testing operations, and substrate sold to third parties
were NT$16,283 million, NT$4,324 million and NT$486 million,
respectively, and each represented approximately 77%, 21% and 2%
respectively, of total net revenues for the quarter. -- Cost of
revenues was NT$16,096 million, down 12% year-over-year and
relatively unchanged sequentially. -- As a percentage of total net
revenues, cost of revenues was 76% in 1Q07, up from 73% in 1Q06 and
up from 72% in 4Q06. -- Raw material cost totaled NT$5,738 million
during the quarter, representing 27% of total net revenues;
compared with NT$5,990 million and 27% of net revenues in the
previous quarter. -- Depreciation, amortization and rental expenses
totaled NT$3,976 million during the quarter, up 6% year-over-year
and up 5% sequentially. -- Total operating expenses during 1Q07
were NT$2,226 million, including NT$689 million in R&D and
NT$1,537 million in SG&A. Total operating expenses as a
percentage of net revenues for the current quarter were 11%, up
from 8% in 1Q06 and up from 10% in 4Q06. -- Operating profit for
the quarter totaled NT$2,771 million, down from NT$4,223 million in
the previous quarter. Operating margin decreased from 19% in 4Q06
to 13% in 1Q07. -- In terms of non-operating items, -- Net interest
expense was NT$354 million, up from NT$214 million a quarter ago,
primarily due to a decrease in cash balance as a result of our
acquisition of GAPT and investment in Power-ASE. -- Net exchange
gain of NT$19 million was mainly attributable to the exchange gain
in U.S. dollar-based assets due to the appreciation 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 of NT$76 million was primarily related to
investment income of NT$99 million from USI, and partially offset
by investment loss from Hung Ching Construction. -- Other
non-operating expenses of NT$242 million were primarily related to
loss from the sale of our investment in Taiwan Fixed Network Co.,
Ltd., inventory provision adjustment and other miscellaneous
expenses. Together with other non-operating expenses, total
non-operating expenses for the quarter were NT$501 million,
compared to NT$602 million for 1Q06 and NT$185 million for 4Q06. --
Income before tax was NT$2,270 million for 1Q07, compared with
NT$4,038 million in the previous quarter. We recorded an income tax
expense of NT$320 million during the quarter. Minority interest
adjustment was NT$289 million for 1Q07. -- In 1Q07, net income was
NT$1,661 million, compared to net income of NT$3,182 million for
1Q06 and NT$2,734 million for 4Q06. -- Our total number of shares
(excluding treasury stock) outstanding at the end of the quarter
was 4,445,582,581. Our diluted EPS for 1Q07 was NT$0.36, or
US$0.055 per ADS, based on 4,706,551,294 weighted average number of
shares outstanding during the first quarter. LIQUIDITY AND CAPITAL
RESOURCES -- As of March 31, 2007, our cash and other financial
assets totaled NT$26,712 million, up from NT$26,634 million on
December 31, 2006. -- Capital expenditures in 1Q07 totaled US$76
million, of which US$33 million was for IC packaging, US$43 million
was for testing, and US$0.1 million was for interconnect materials.
-- As of March 31, 2007, we had total bank debts of NT$41,620
million, up from NT$37,897 million as of December 31, 2006. The
increase in bank debts was primary attributed to our acquisition of
GAPT and the drawn down of bank debt by Power-ASE. Total bank debts
consisted of NT$5,477 million of revolving working capital loans,
NT$2,603 million of current portion of long-term debts, NT$1,375
million of current portion of bonds payable, NT$23,957 million of
long-term debts and NT$8,208 million of long-term bonds payable.
Total unused credit lines were NT$49,681 million. -- Current ratio
as of March 31, 2007 was 1.72, compared to 1.74 as of December 31,
2006 and net debt to equity ratio was 0.19 as of March 31, 2007. --
Total number of employees was 28,069 as of March 31, 2007. Business
Review IC Packaging Services(2) -- Net revenues generated from our
IC packaging operations were NT$16,283 million during the quarter,
down by NT$3,023 million or 16% year-over- year and down by NT$903
million or 5% sequentially. On a sequential basis, the decrease in
packaging net revenue was primarily due to volume decrease. -- Net
revenues from advanced substrate and leadframe-based packaging
accounted for 83% of total IC packaging net revenues during the
quarter, up by one percentage point from the previous quarter. --
Gross margin for our IC packaging operations was 21%, relatively
unchanged year-over-year and down by 4 percentage points
sequentially. -- Capital expenditure for our IC packaging
operations amounted to US$33 million during the quarter, of which
US$32 million was for wirebonding packaging capacity, and US$1
million was for wafer bumping and flip chip packaging equipment. --
As of March 31, 2007, there were 7,050 wirebonders in operations.
541 wirebonders were added, of which 539 were from our acquisition
of GAPT. 17 wirebonders were disposed of during the quarter. -- Net
revenues from flip chip packages and wafer bumping services
accounted for 9% of total packaging net revenues, down by three
percentage points from the previous quarter. (2) IC packaging
services include module assembly services. Testing Services -- Net
revenues generated from our testing operations were NT$4,324
million, down by NT$799 million or 16% year-over-year and down by
NT$473 million or 10% sequentially. Testing ASP remained relatively
unchanged compared to 4Q06. The decrease in testing net revenues
was primarily due to volume decrease. -- Final testing contributed
78% to total testing net revenues, up by one percentage point from
the previous quarter. Wafer sort contributed 17% to total testing
net revenues, down by one percentage point from the previous
quarter. Engineering testing contributed 5% to total testing net
revenues, relatively unchanged from the previous quarter. --
Depreciation, amortization and rental expense associated with
testing operation amounted to NT$1,573 million, down from NT$1,616
million in 1Q06 and up from NT$1,556 million in 4Q06. -- In 1Q07,
gross margin for our testing operations was 29%, down by ten
percentage points year-over-year and down by seven 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$43 million during the quarter. --
As of March 31, 2007, there were 1,365 testers in operations. 98
testers were added and 38 testers were disposed of during the
quarter. The added 98 testers consist of 55 testers from our
acquisition of GAPT, 28 testers from consignment, and 15 testers
from purchase and lease. Substrate Operations -- PBGA substrate
manufactured by ASE amounted NT$1,716 million for the quarter, down
by NT$116 million or 6% from a year-ago quarter, and down by NT$153
million or 8% from the previous quarter. Of the total output of
NT$1,716 million, NT$486 million was from sales to external
customers. -- Gross margin for substrate operations was 18% during
the quarter, down by eight percentage points compared with a
year-ago quarter, and down by six percentage points compared with
previous quarter. -- In 1Q07, the Company's internal substrate
manufacturing operations supplied 43% (by value) of our total
substrate requirements. -- As of March 31, 2007, the Company's PBGA
capacity was at 48 million units per month. Power-ASE -- Net
revenues from our joint venture with Powerchip totaled NT$530
million. Gross profit and operating profit was NT$204 million and
NT$180 million, respectively. -- Capital investment made to this
joint venture totaled US$44 million in the first quarter of 2007.
Customers -- Our five largest customers together accounted for
approximately 27% of our total net revenues in 1Q07, down from 29%
in 1Q06 and unchanged from 27% in 4Q06. No single customer
accounted for more than 10% of our total net revenues. -- Our top
10 customers contributed 42% of our total net revenues during the
quarter, down from 46% in 1Q06 and down from 43% in 4Q06. -- Our
customers that are integrated device manufacturers, or IDMs,
accounted for 41% of our total net revenues in 1Q07, compared to
42% in 1Q06 and 47% in 4Q06. 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 1Q/07 4Q/06 1Q/06 Net Revenues 21,093
22,574 24,837 Revenues by End Application Communication 45% 39% 34%
Computer 21% 24% 28% Automotive and Consumers 32% 37% 37% Others 2%
0% 1% Revenues by Region North America 51% 54% 53% Europe 12% 13%
11% Taiwan 19% 18% 22% Japan 10% 10% 9% Other Asia 8% 5% 5% IC
Packaging Services Amounts in NT$ Millions 1Q/07 4Q/06 1Q/06 Net
Revenues 16,283 17,186 19,306 Revenues by Packaging Type Advanced
substrate & leadframe based 83% 82% 82% Traditional leadframe
based 5% 5% 5% Module assembly 8% 8% 8% Others 4% 5% 5% Capacity
CapEx (US$ Millions) * 33 33 25 Number of Wirebonders 7,050 6,526
6,326 Wafer Bumping 8' (pcs/month) 87,000 80,000 70,000 Wafer
Bumping 12' (pcs/month) 16,000 15,000 15,000 Testing Services
Amounts in NT$ Millions 1Q/07 4Q/06 1Q/06 Net Revenues 4,324 4,797
5,123 Revenues by Testing Type Final test 78% 77% 77% Wafer sort
17% 18% 19% Engineering test 5% 5% 4% Capacity CapEx (US$ Millions)
* 43 33 14 Number of Testers 1,365 1,305 1,305 * 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 ended Mar. 31 Dec. 31 Mar. 31 2007
2006 2006 Net revenues: IC Packaging 16,283 17,186 19,306 Testing
4,324 4,797 5,123 Others 486 591 408 Total net revenues 21,093
22,574 24,837 Cost of revenues 16,096 16,176 18,202 Gross profit
4,997 6,398 6,635 Operating expenses: Research and development 689
690 634 Selling, general and administrative 1,537 1,485 1,316 Total
operating expenses 2,226 2,175 1,950 Operating income (loss) 2,771
4,223 4,685 Net non-operating (income) expenses: Interest expenses
- net 354 214 359 Foreign exchange loss (gain) (19) (159) (43) Loss
(gain) on long-term investment (76) (136) (61) Others 242 266 347
Total non-operating (income) expenses 501 185 602 Income (loss)
before tax 2,270 4,038 4,083 Income tax expense (benefit) 320 766
132 Income (loss) from continuing operations 1,950 3,272 3,951
Cumulative effect of change in accounting principle -- -- 343
Income (loss) before minority interest 1,950 3,272 3,608 Minority
interest 289 538 426 Net income (loss) 1,661 2,734 3,182 Per share
data: Earnings (loss) per share - Basic NT$0.37 NT$0.62 NT$0.72 -
Diluted NT$0.36 NT$0.59 NT$0.69 Earnings (loss) per pro forma
equivalent ADS - Basic US$0.057 US$0.094 US$0.112 - Diluted
US$0.055 US$0.090 US$0.106 Number of weighted average shares used
in diluted EPS calculation (in thousands) 4,706,551 4,693,690
4,651,513 Exchange rate (NT$ per US$1) 32.78 32.84 32.26 Advanced
Semiconductor Engineering, Inc. Summary of Consolidated Balance
Sheet Data (In NT$ millions) (Unaudited) As of Mar. 31, As of Dec.
31, 2007 2006 Current assets: Cash and cash equivalents 14,008
15,730 Financial assets - current 12,704 10,904 Notes and accounts
receivable 12,401 11,455 Inventories 5,501 5,674 Others 4,086 5,000
Total current assets 48,700 48,763 Financial assets - non current
5,659 5,735 Properties - net 78,970 73,544 Other assets 10,239
8,999 Total assets 143,568 137,041 Current liabilities: Short-term
debts - revolving credit 5,477 2,868 Short-term debts - current
portion of long-term debts 2,603 1,833 Short-term debts - current
portion of bonds payable 1,375 3,798 Notes and accounts payable
7,553 7,305 Others 11,322 12,206 Total current liabilities 28,330
28,010 Long-term debts 23,957 23,639 Long-term bonds payable 8,208
5,759 Other liabilities 3,007 2,506 Total liabilities 63,502 59,914
Minority interest 11,470 11,107 Shareholders' equity 68,596 66,020
Total liabilities & shareholders' equity 143,568 137,041
Current Ratio 1.72 1.74 Net Debt to Equity 0.19 0.15 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:
http://www.aseglobal.com/ Joseph Tung, CFO / Vice President, or
Freddie Liu, Vice President Email: Clare Lin, Director (US Contact)
Tel: +1-408-986-6524 Emial: DATASOURCE: ASE, Inc. CONTACT: Joseph
Tung, CFO / Vice President, or Freddie Liu, Vice President,
+886-2-8780-5489, or fax, +886-2-2757-6121, or , or Clare Lin,
Director (US Contact), +1-408-986-6524, or , all of ASE Web Site:
http://www.aseglobal.com/
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