Advanced Semiconductor Engineering, Inc. Reports Unaudited Consolidated Financial Results for the Third Quarter of 2009
30 Oct 2009
PR Newswire Asia
TAIPEI, Taiwan, Oct. 30 /PRNewswire-Asia-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 net revenues (Note 1) of NT$25,205 million for the third quarter of 2009 (3Q09), down 2% year-over-year and up 21% sequentially. Net income for the quarter totaled NT$3,187 million, up from NT$2,212 million in 3Q08 and up from NT$1,674 million in 2Q09. Diluted earnings per share for the quarter was NT$0.61 (or US$0.093 per ADS), compared to diluted earnings per share of NT$0.41 for 3Q08 and NT$0.32 for 2Q09. For the first three quarters of 2009, diluted earnings per share was NT$0.63 (or US$0.095 per ADS).
Note 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 audit 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
3Q09 Results Highlights * Net revenue contribution from IC packaging operations (including module assembly), testing operations, and substrates sold to third parties was NT$20,005 million, NT$4,588 million and NT$612 million, respectively, and each represented approximately 79%, 18% and 3%, respectively, of total net revenues for the quarter. * Cost of revenues was NT$18,848 million, down 3% year-over-year and up 15% sequentially. - Raw material cost totaled NT$7,442 million during the quarter, representing 30% of total net revenue, compared with NT$6,168 million and 30% of net revenue in the previous quarter. - Labor cost totaled NT$3,590 million during the quarter, representing 14% of total net revenue, compared with NT$3,028 million and 15% of net revenue in the previous quarter. - Depreciation, amortization and rental expenses totaled NT$4,108 million during the quarter, down 1% year-over-year and down 1% sequentially. * Total operating expenses during 3Q09 were NT$2,390 million, including NT$956 million in R&D and NT$1,434 million in SG&A, compared with operating expenses of NT$2,028 million in 2Q09. Total operating expenses as a percentage of net revenue for the current quarter were 9%, down from 11% in 3Q08 and 10% in 2Q09. * Operating income for the quarter totaled NT$3,967 million, up from NT$2,496 million in the previous quarter. Operating margin increased to 16% in 3Q09 from 12% in 2Q09. * In terms of non-operating items: - Net interest expense was NT$303 million, down from NT$340 million a quarter ago primarily due to lower average interest rates during the quarter. - Net foreign exchange loss of NT$30 million was primarily attributable to the depreciation of the U.S. dollar against the N.T. dollar. - Gain on equity-method investments of NT$112 million was primarily attributable to our investment in USI. - Other non-operating income of NT$111 million was primarily related to scrap sales and other miscellaneous gains. Total non-operating expenses for the quarter were NT$110 million, compared to NT$561million for 3Q08 and NT$290 million for 2Q09. * Income before tax was NT$3,857 million for 3Q09, compared to NT$2,206 million in the previous quarter. We recorded income tax expense of NT$558 million during the quarter, compared to NT$559 million in 2Q09. * In 3Q09, net income was NT$3,187 million, compared to NT$2,212 million for 3Q08 and NT$1,674 million for 2Q09. * Our total number of shares outstanding at the end of the quarter was 5,480,262,954, including treasury stock owned by our subsidiaries. Our 3Q09 diluted earnings per share of NT$0.61 (or US$0.093 per ADS) was based on 5,186,949,206 weighted average number of shares outstanding in 3Q09.
LIQUIDITY AND CAPITAL RESOURCES * As of Sep 30, 2009, our cash and other financial assets totaled NT$32,520 million, compared to NT$28,676 million as of Jun 30, 2009. * Capital expenditures in 3Q09 totaled US$109 million, of which US$91 million was used for IC packaging, US$17 million was used for testing and US$1 million was used for interconnect materials. * As of Sep 30, 2009, we had total bank debt of NT$66,381 million, compared to NT$62,176 million as of June 30, 2009. Total bank debt consisted of NT$17,856 million of revolving working capital loans, NT$3,972 million of the current portion of long-term debt, and NT$44,553 million of long-term debt. Total unused credit lines amounted to NT$52,404 million. * Current ratio as of Sep 30, 2009 was 1.52, compared to 1.90 as of Jun 30, 2009. Net debt to equity ratio was 0.48 as of Sep 30, 2009. * Total number of employees was 27,940 as of Sep 30, 2009, compared to 30,511 as of Sep 30, 2008 and 26,406 as of Jun 30, 2009.
BUSINESS REVIEW
IC Packaging Services (Note 2) * Net revenues generated from our IC packaging operations were NT$20,005 million during the quarter, down NT$122 million, or 1% year-over-year, and up NT$3,414 million, or 21% sequentially. * Net revenues from advanced substrate and leadframe-based packaging accounted for 88% of total IC packaging net revenues during the quarter, down by 3 percentage points from the previous quarter. * Gross margin for our IC packaging operations during the quarter was 21%, flat from same period last year and up by 2 percentage points sequentially. * Capital expenditures for our IC packaging operations amounted to US$91 million during the quarter, of which US$71 million was used for wirebonding packaging capacity and US$20 million was used for wafer bumping and flip chip packaging equipment. * As of Sep 30, 2009, there were 8,880 wirebonders in operation. 391 wirebonders were added and 12 wirebonders were disposed of during the quarter. * Net revenues from flip chip packages and wafer bumping services accounted for 16% of total packaging net revenues, up by 2 percentage point from the previous quarter.
Note 2: IC packaging services include module assembly services.
Testing Services * Net revenues generated from our testing operations were NT$4,588 million, down NT$607 million, or 12% year-over-year, and up NT$711 million, or 18%, sequentially. * Net revenue from final testing, wafer sorting, and engineering testing accounted for 82%, 15%, and 3%, respectively, of total net revenues, all of which remained unchanged from the previous quarter. * Depreciation, amortization and rental expense associated with our testing operations amounted to NT$1,436 million, down from NT$1,593 million in 3Q08 and down from NT$1,480 million in 2Q09. * In 3Q09, gross margin for our testing operations was 35%, down by 1 percentage point year-over-year and up by 7 percentage points sequentially. * Capital spending on our testing operations amounted to US$17million during the quarter. * As of Sep 30, 2009, there were 1,569 testers in operation. 70 testers were added and 11 testers were disposed of during the quarter.
Substrate Operations * PBGA substrate manufactured by ASE amounted to NT$2,249 million during the quarter, down NT$32 million, or 1% year-over-year, and up NT$410 million, or 22% from the previous quarter. Of the total output of NT$2,249million, NT$612 million was from sales to external customers. * Gross margin for substrate operations was 22% during the quarter, up by 2 percentage points year-over-year and up by 5 percentage points sequentially. * In 3Q09, our internal substrate manufacturing operations supplied 52% (by value) of our total substrate requirements.
Customers * Our five largest customers together accounted for approximately 27% of our total net revenues in 3Q09, compared to 27% in 3Q08 and 32% in 2Q09. 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, compared to 46% in 3Q08 and 45% in 2Q09. * Our customers that are integrated device manufacturers, or IDMs, accounted for 35% of our total net revenues during the quarter, compared to 41% in 3Q08 and 30% in 2Q09.
About ASE, Inc. ASE, Inc. is the world's largest independent provider of IC packaging services and 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., MediaTek Inc., NEC Electronics Corporation, NVIDIA Corporation, NXP Semiconductors, Qualcomm Incorporated, RF Micro Devices Inc. and STMicroelectronics N.V. 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 presentation contains "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, including statements regarding our future results of operations and business prospects. 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 presentation. 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 presentation. 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, including the recent global financial crisis; 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 2008 Annual Report on Form 20-F filed on June 24, 2009.
Supplemental Financial Information
Consolidated Operations
Amounts in NT$ Millions 3Q/09 2Q/09 3Q/08 Net Revenues 25,205 20,881 25,815 Revenues by End Application Communication 44% 49% 44% Computer 17% 16% 23% Automotive and Consumer 37% 34% 33% Others 2% 1% 0% Revenues by Region North America 52% 55% 55% Europe 13% 11% 15% Taiwan 20% 22% 18% Japan 10% 8% 9% Other Asia 5% 4% 3%
IC Packaging Services
Amounts in NT$ Millions 3Q/09 2Q/09 3Q/08 Net Revenues 20,005 16,591 20,127 Revenues by Packaging Type Advanced substrate & leadframe based 88% 91% 89% Traditional leadframe based 6% 5% 4% Module assembly 3% 2% 4% Others 3% 2% 3% Capacity CapEx (US$ Millions) * 91 31 50 Number of Wirebonders 8,880 8,501 8,436
Testing Services
Amounts in NT$ Millions 3Q/09 2Q/09 3Q/08 Net Revenues 4,588 3,877 5,195 Revenues by Testing Type Final test 82% 82% 80% Wafer sort 15% 15% 18% Engineering test 3% 3% 2% Capacity CapEx (US$ Millions) * 17 13 45 Number of Testers 1,569 1,510 1,638
* 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 nine ended months ended Sep. 30 Jun. 30 Sep. 30 Sep. 30 Sep. 30 2009 2009 2008 2009 2008 Net revenues: IC Packaging 20,005 16,591 20,127 46,804 59,387 Testing 4,588 3,877 5,195 11,233 15,191 Others 612 413 493 1,446 1,541 Total net revenues 25,205 20,881 25,815 59,483 76,119
Number of weighted average shares used in diluted EPS calculation (in thousands) 5,186,949 5,164,078 5,403,832 5,202,233 5,489,339
Exchange rate (NT$ per US$1) 32.81 33.16 30.95 33.26 31.02
Advanced Semiconductor Engineering, Inc. Summary of Consolidated Balance Sheet Data (In NT$ millions) (Unaudited)
As of Sep. 30, As of Jun. 30, 2009 2009
Current assets: Cash and cash equivalents 26,059 20,285 Financial assets - current 6,461 8,391 Notes and accounts receivable 16,847 14,583 Inventories 5,723 5,215 Others 4,397 3,511 Total current assets 59,487 51,985
Financial assets - non current 4,797 4,587 Properties - net 77,566 78,546 Intangible assets 12,900 12,091 Others 3,932 3,956 Total assets 158,682 151,165
Current liabilities: Short-term debts - revolving credit 17,856 7,888 Current portion of long-term debts 3,972 1,932 Notes and accounts payable 8,209 6,842 Others 9,047 10,771 Total current liabilities 39,084 27,433
Long-term debts 44,553 52,356 Other liabilities 3,807 3,618 Total liabilities 87,444 83,407
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