TAIPEI, Taiwan, Aug. 1 /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$26,287 million for the second
quarter of 2006 (2Q06), up 46% year-over-year and up 6%
sequentially(2). Net income for the quarter totaled NT$7,319
million, up from net loss of NT$9,094 million in 2Q05 and from net
income of NT$3,182 million in 1Q06. Earnings per share for the
quarter was NT$1.58 (or US$0.245, per ADS), compared to loss per
share of NT$2.08 for 2Q05 and earnings per share of NT$0.69 for
1Q06. (1) 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. (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. For the six
months ended June 30, 2006, the Company reported net revenues of
NT$51,124 million and net income of NT$10,501 million. Earnings per
share for the 1st half of 2006 was NT$2.27, or US$0.353 per ADS.
RESULTS OF OPERATIONS 2Q06 Results Highlights -- Net revenues
contribution from IC packaging operations, testing operations,
module assembly, and others were NT$18,701 million, NT$5,700
million, NT$1,254 million and NT$632 million, respectively, and
each represented approximately 71%, 22%, 5% and 2% respectively, of
total net revenues for the quarter. -- Cost of revenues was
NT$18,795 million, up 3% sequentially and up 18% year-over-year. --
As a percentage of total net revenues, cost of revenues was 72% in
2Q06, down from 73% in 1Q06 and from 89% in 2Q05. -- Raw material
cost totaled NT$8,137 million during the quarter, representing 31%
of total net revenues; compared with NT$7,727 million and 31% of
revenues in the previous quarter. -- Depreciation, amortization and
rental expenses totaled NT$3,743 million during the quarter,
relatively unchanged sequentially and down 3% year-over-year. --
Total operating expenses during 2Q06 were NT$2,052 million,
including NT$645 million in R&D and NT$1,407 million in
SG&A. Total operating expenses as a percentage of net revenues
for the current quarter were 8%, relatively unchanged from the
previous quarter and down from 12% in 2Q05. -- Operating profit for
the quarter totaled NT$5,440 million, up from NT$4,685 million in
the previous quarter. Operating margin improves from 19% in 1Q06 to
21% in 2Q06. -- In terms of non-operating items, -- Net interest
expense was NT$338 million, down from NT$359 million a quarter ago.
-- Net exchange loss of NT$17 million was mainly attributable to
the exchange loss in Korean Won- based loans and payables due to
stronger Korean Won against US dollars. -- Gain on long-term
investment was NT$83 million relating to investment income from
minority-owned affiliates, including NT$66 million of investment
income from Universal Scientific Industrial Co. ("USI"), NT$18
million of investment income from Hung Ching Construction, and NT$1
million of investment loss from Hung Ching Kwan Co. -- We have
reached final settlement with the insurers on June 27, 2006 with
regards to the fire damage incurred to ASE's Chung-Li plants. The
final settlement amount is NT$8,068 million. Deducting the fire
insurance receivable recorded in 2Q05, the company recognized
NT$3,427 million non-operating income from the insurance settlement
in 2Q06. In addition, NT$1,120 million worth of equipment and
buildings was repaired and recovered, and the same amount of fire
loss recorded previously was reversed and recorded as non-operating
income. Meanwhile, the company took a provision for customer
compensation, and took a charge on certain obsolete assets in the
quarter which totaled NT$1,124 million. Together with other
non-operating expenses, non-operating income booked in the quarter
was NT$3,152 million, compared to non-operating expenses of NT$602
million for 1Q06 and NT$9,958 million for 2Q05. -- Income before
tax was NT$8,592 million for 2Q06. We recorded an income tax
expense of NT$435 million during the quarter. Minority interest
adjustment was NT$838 million. -- In 2Q06, net income was NT$7,319
million, compared to net income of NT$3,182 million for 1Q06 and
net loss of NT$9,094 million for 2Q05. For the six months ended
June 30, 2006, the company reported net income of NT$10,501
million, compared with a net loss of NT$9,222 million in the same
period 2005. -- Our total number of shares outstanding at the end
of the quarter was 4,394,071,307. Our fully-diluted EPS for 2Q06
was NT$1.58, or US$0.245 per ADS, based on 4,673,420,846 weighted
average number of shares outstanding during the second quarter. EPS
for the first half of 2006 was NT$2.27, or US$0.353 per ADS.
LIQUIDITY AND CAPITAL RESOURCES -- As of end of June 2006, our cash
and other financial assets totaled NT$22,360 million, up from
NT$17,156 million as of March end 2006. -- Capital expenditures in
2Q06 totaled US$132 million, of which US$49 million was for IC
packaging, US$4 million was for module assembly, US$58 million was
for testing, and US$21 million was for interconnect materials. --
For the first half of 2006, the company spent US$199 million of
capital expenditures, including US$74 million for IC packaging,
US$7 million for module assembly, US$72 million for testing, and
US$46 million for IC substrate. -- As of the end of 2Q06, we had
total bank debts of NT$50,038 million, decreased from NT$50,199
million as of end of 1Q06. Total bank debts consisted of NT$5,482
million of revolving working capital loans, NT$3,512 million of
current portion of long-term debts, NT$31,640 million of long-term
debts and NT$9,404 million of long-term bonds payable. Total unused
banking facilities were NT$38,445 million. -- Current ratio
improved from 1.63 as of end of 1Q06 to 1.71 as of end of 2Q06, and
net debt to equity ratio was 0.41 as of end of June 2006. -- Total
number of employees was 28,087 as of June 30, 2006. BUSINESS REVIEW
IC Packaging Services -- Revenues generated from our IC packaging
operations were NT$18,701 million during the quarter, up NT$870
million or 5% sequentially and up NT$6,008 million or 47%
year-over-year. On a sequential basis, the increase in packaging
revenue was primarily due to favorable product mix changes and
volume increase. -- Revenues from advanced substrate and
leadframe-based packaging accounted for 89% of total IC packaging
revenues during the quarter, relatively unchanged from the previous
quarter. -- Gross margin for our IC packaging operations was 26%,
up by two percentage points sequentially and up by fifteen
percentage points year-over-year as a result of increased volume.
-- Capital expenditure for our IC packaging operations amounted to
US$49 million during the quarter, of which US$37 million was for
wirebonding packaging capacity, and US$12 million was for wafer
bumping and flip chip packaging equipment. -- As of June 30, 2006,
there were 6,517 wirebonders in operation, of which 229 wirebonders
were added and 38 wirebonders were disposed of during the quarter.
-- Revenues from flip chip packages and wafer bumping services
accounted for 15% of total packaging revenue, down from 16% in
1Q06. Testing Services -- Revenues generated from our testing
operations were NT$5,700 million, up NT$577 million or 11%
sequentially and up NT$1,948 million or 52% year-over-year. --
Final testing contributed 76% to total testing revenues, down by
one percentage points from the previous quarter. Wafer sort
contributed 19% to total testing revenues, relatively unchanged
from the previous quarter. Engineering testing contributed 5% 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$1,587 million,
down from NT$1,616 million in 1Q06 and NT$1,761 million in 2Q05. --
In 2Q06, gross margin for our testing operations was 43%, up by
four percentage point sequentially and up by twenty seven
percentage points year-over-year. The sequential increase in gross
margin was primarily due to higher utilization, lower depreciation,
amortization and rental expenses in the second quarter of 2006.
Testing ASP remained relatively unchanged compared to 1Q06. --
Capital spending on our testing operations amounted to US$58
million during the quarter. -- As of June 30, 2006, there were
1,314 testers in operation, of which 56 testers were added and 47
testers were disposed of during the quarter. Module Assembly
Services -- Revenues generated from our module assembly operations
were NT$1,254 million, down NT$221 million or 15% sequentially, and
down NT$198 million or 14% year-over-year mainly due to volume
decrease. -- In 2Q06, gross margin for our module assembly
operations was 17%, down by one percentage point sequentially and
up by five percentage points year-over-year. Substrate Operations
-- PBGA substrate manufactured by ASE amounted NT$2,008 million for
the quarter, up by NT$176 million or 10% from the previous quarter,
and increased by NT$1,064 million or 113% from a year-ago quarter.
Of the total output of NT$2,008 million, NT$632 million was from
sales to external customers. -- Gross margin for substrate
operation was 24% during the quarter, down by two percentage point
compared with previous quarter, and up by thirty six percentage
points compared with a year-ago quarter. -- In 2Q06, the Company's
internal substrate manufacturing operations supplied 34% (by value)
of our total substrate requirements. -- As of end of June 30, 2006,
the Company's PBGA capacity was at 40 million units per month.
Customers -- Our five largest customers together accounted for
approximately 27% of our net revenues in 2Q06, decreased from 29%
in 1Q06 and from 32% in 2Q05. No customer accounted for more than
10% of our total revenues. -- Our top 10 customers contributed 44%
of our net revenues during the quarter, decreased from 46% in 1Q06
and 2Q05. -- Our customers that are integrated device
manufacturers, or IDMs, accounted for 41% of our revenues in 2Q06,
compared to 42% in 1Q06 and 43% in 2Q05. 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;
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 2Q/06
1Q/06 2Q/05 Net Revenues 26,287 24,837 17,988 Revenues by End
Application Communication 36% 34% 36% Computer 25% 28% 31%
Automotive and Consumers 38% 37% 29% Others 1% 1% 4% Revenues by
Region North America 53% 53% 55% Europe 13% 11% 12% Taiwan 18% 22%
17% Japan 9% 9% 10% Other Asia 7% 5% 6% IC Packaging Services
Amounts in NT$ Millions 2Q/06 1Q/06 2Q/05 Net Revenues 18,701
17,831 12,693 Revenues by Packaging Type Advanced substrate &
leadframe based 89% 89% 87% Traditional leadframe based 5% 6% 8%
Others 6% 5% 5% Capacity CapEx (US$ Millions) * 49 25 24 Number of
Wirebonders 6,517 6,326 6,136 Wafer Bumping 8" (pcs/month) 78,000
70,000 45,000 Wafer Bumping 12" (pcs/month) 15,000 15,000 10,000
Testing Services Amounts in NT$ Millions 2Q/06 1Q/06 2Q/05 Net
Revenues 5,700 5,123 3,752 Revenues by Testing Type Final test 76%
77% 80% Wafer sort 19% 19% 16% Engineering test 5% 4% 4% Capacity
CapEx (US$ Millions) * 58 14 13 Number of Testers 1,314 1,305 1,350
* 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 For the period months ended ended Jun. 30
Mar. 31 Jun. 30 Jun. 30 Jun. 30 2006 2006 2005 2006 2005 Net
revenues: IC Packaging 18,701 17,831 12,693 36,532 25,448 Testing
5,700 5,123 3,752 10,823 7,445 Module Assembly 1,254 1,475 1,452
2,729 2,631 Others 632 408 91 1,040 287 Total net revenues 26,287
24,837 17,988 51,124 35,811 Cost of revenues 18,795 18,202 15,933
36,997 31,935 Gross Profit 7,492 6,635 2,055 14,127 3,876 Operating
expenses: Research and development 645 634 672 1,279 1,341 Selling,
general and administrative 1,407 1,316 1,558 2,723 2,921 Total
operating expenses 2,052 1,950 2,230 4,002 4,262 Operating income
(loss) 5,440 4,685 (175) 10,125 (386) Net non-operating (income)
expenses: Interest expenses - net 338 359 360 697 654 Foreign
exchange loss (gain) 17 (43) 1 (26) (13) Loss (gain) on long-term
investment (83) (61) 2 (144) (20) Loss (gain) on disposal of assets
26 (22) 62 3 59 Others (3,450) 369 9,533 (3,079) 9,598 Total
non-operating expenses (3,152) 602 9,958 (2,549) 10,278 Income
(loss) before tax 8,592 4,083 (10,133) 12,674 (10,664) Income tax
expense (benefit) 435 18 21 453 (125) Income (loss) from continuing
operations 8,157 4,065 (10,154) 12,221 (10,539) Loss (Income) from
discontinuing operations -- -- (59) -- (82) Cumulative effect of
change in accounting principle -- 457 -- 457 -- Income (loss)
before minority interest 8,157 3,608 (10,095) 11,764 (10,457)
Minority interest 838 426 (1,001) 1,263 (1,235) Net income (loss)
7,319 3,182 (9,094) 10,501 (9,222) Per share data: Earnings (loss)
per common share - Basic NT$1.67 NT$0.72 NT$(2.08) NT$2.39
NT$(2.11) - Diluted NT$1.58 NT$0.69 NT$(2.08) NT$2.27 NT$(2.11)
Earnings (loss) per pro Forma equivalent ADS - Basic US$0.259
US$0.112 US$(0.332) US$0.372 US$(0.335) - Diluted US$0.245 US$0.107
US$(0.332) US$0.353 US$(0.335) Number of weighted average shares
used in diluted EPS calculation (in thousands) 4,673,421 4,651,513
4,364,563 4,661,703 4,636,762 Forex (NT$ per US$1) 32.12 32.26
31.36 32.19 31.54 Advanced Semiconductor Engineering, Inc.
Consolidated Summary Balance Sheet Data (In NT$ millions)
(Unaudited) As of Jun. 30, As of Mar. 31, 2006 2006 Current assets:
Cash and cash equivalents 17,038 10,261 Financial assets - current
5,322 6,895 Notes and accounts receivable 13,477 15,030 Inventories
6,513 7,561 Others 9,518 6,137 Total current assets 51,868 45,884
Financial assets - non current 5,238 5,138 Properties - net 73,275
67,897 Other assets 10,909 10,655 Total assets 141,290 129,574
Current liabilities: Short-term debts - revolving credit 5,482
5,327 Short-term debts - current portion of long-term debts 3,512
4,586 Notes and accounts payable 9,388 9,035 Others 12,008 9,286
Total current liabilities 30,390 28,234 Long-term debts 31,640
30,944 Long-term bonds payable 9,404 9,342 Other liabilities 2,498
2,240 Total liabilities 73,932 70,760 Minority interest 9,280 8,372
Shareholders' equity 58,078 50,442 Total liabilities &
shareholders' equity 141,290 129,574 Current Ratio 1.71 1.63 Net
Debt to Equity 0.41 0.56 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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