TAIPEI, Taiwan, Oct. 30 /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 net
revenues (Note 1) of NT$27,733 million for the third quarter of
2007 (3Q07), up 4% year-over-year and up 19% sequentially. Net
income for the quarter totaled NT$4,225 million, up from NT$4,181
million in 3Q06 and up from NT$2,575 million in 2Q07. Diluted
earnings per share for the quarter was NT$0.79 (or US$0.120 per
ADS), compared to NT$0.78 for 3Q06 and NT$0.48 for 2Q07. (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 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.) For the nine months ended
September 30, 2007, the Company reported net revenues of NT$72,188
million and net income of NT$8,461 million. Earnings per share for
the 1st nine months of 2007 was NT$1.58, or US$0.241 per ADS.
RESULTS OF OPERATIONS 3Q07 Results Highlights -- Net revenues
contribution from IC packaging operations (including module
assembly), testing operations, and substrate sold to third parties
were NT$21,644 million, NT$5,282 million and NT$807 million,
respectively, and each represented approximately 78%, 19% and 3%
respectively, of total net revenues for the quarter. -- Cost of
revenues was NT$19,303 million, up 4% year-over-year and up 14%
sequentially. -- As a percentage of total net revenues, cost of
revenues was 70% in 3Q07, up from 69% in 3Q06 and down from 73% in
2Q07. -- Raw material cost totaled NT$7,830 million during the
quarter, representing 28% of total net revenues, compared with
NT$6,356 million and 27% of net revenues in the previous quarter.
The rise in raw material cost as percentage of sales was primarily
due to higher revenue contribution from flip chip packages. --
Depreciation, amortization and rental expenses totaled NT$4,100
million during the quarter, up 7% year-over-year and down 1%
sequentially. -- Total operating expenses during 3Q07 were NT$2,321
million, including NT$748 million in R&D and NT$1,573 million
in SG&A. Compared with operating expense of NT$2,515 million in
2Q07, the sequential decrease was primarily attributable to the
bonus to employee and compensation to directors of subsidiary in
2Q07. Total operating expenses as a percentage of net revenues for
the current quarter were 8%, relatively unchanged compared to 3Q06
and down from 11% in 2Q07. -- Operating profit for the quarter
totaled NT$6,109 million, up from NT$3,889 million in the previous
quarter. Operating margin increased from 17% in 2Q07 to 22% in
3Q07. -- In terms of non-operating items, -- Net interest expense
was NT$273 million, down from NT$306 million a quarter ago
primarily due to a decrease in total bank loans. -- Net exchange
gain of NT$39 million was mainly attributable to the exchange gain
from the appreciation of the Renminbi against the U.S. dollar, and
partially offset by exchange loss from the depreciation of the US
dollar against the Malaysian ringgit and Korean won. -- Gain on
long-term investment of NT$111 million was primarily related to
investment income of NT$82 million from USI, investment income of
NT$30 million from Hung Ching Construction, and partially offset by
investment loss from Hung Ching Kwan Co. -- Other non-operating
expenses of NT$157 million were primarily related to loss from
inventory provision adjustment and other miscellaneous expenses.
Together with other non-operating expenses, total non-operating
expenses for the quarter were NT$280 million, compared to NT$554
million for 3Q06 and NT$292 million for 2Q07. -- Income before tax
was NT$5,829 million for 3Q07, compared with NT$3,597 million in
the previous quarter. We recorded an income tax expense of NT$1,008
million during the quarter, compared with an income tax expense of
NT$866 million in 2Q07. Minority interest adjustment was NT$596
million for 3Q07. -- In 3Q07, net income was NT$4,225 million,
compared to net income of NT$4,181 million for 3Q06 and NT$2,575
million for 2Q07. For the nine months ended September 30, 2007, the
company reported net income of NT$8,461 million, compared with net
income of NT$14,682 million in the same period in 2006. -- Our
total number of shares (excluding treasury stock) outstanding at
the end of the quarter was 5,237,081,632. Our diluted EPS for 3Q07
was NT$0.79, or US$0.120 per ADS, based on 5,402,950,991 shares,
being the weighted average number of shares outstanding during the
third quarter. EPS for the nine months ended September 30, 2007 was
NT$1.58, or US$0.241 per ADS. LIQUIDITY AND CAPITAL RESOURCES -- As
of September 30, 2007, our cash and other financial assets totaled
NT$24,631 million, compared to NT$26,683 million on June 30, 2007.
-- Capital expenditures in 3Q07 totaled US$140 million, of which
US$83 million was for IC packaging, US$55 million was for testing,
and US$2 million was for interconnect materials. -- For the nine
months ended September 30, 2007, the Company spent US$284 million
for capital expenditures, including US$165 million for IC
packaging, US$118 million for testing, and US$1 million for
interconnect material. -- As of September 30, 2007, we had total
bank debts of NT$38,145 million, compared to NT$38,696 million as
of June 30, 2007. Total bank debts consisted of NT$7,279 million of
revolving working capital loans, NT$2,382 million of current
portion of long-term debts, NT$20,817 million of long-term debts
and NT$7,667 million of long-term bonds payable. Total unused
credit lines were NT$50,912 million. -- Current ratio as of
September 30, 2007 was 1.69, compared to 1.54 as of June 30, 2007
and net debt to equity ratio was 0.16 as of September 30, 2007. --
Total number of employees was 28,553 as of September 30, 2007.
BUSINESS REVIEW IC Packaging Services (Note 2) -- Net revenues
generated from our IC packaging operations were NT$21,644 million
during the quarter, up by NT$1,270 million or 6% year-over-year and
up by NT$3,615 million or 20% sequentially. On a sequential basis,
the increase in packaging net revenue was primarily due to volume
increase. -- Net revenues from advanced substrate and
leadframe-based packaging accounted for 85% of total IC packaging
net revenues during the quarter, relatively unchanged compared with
the previous quarter. -- Gross margin for our IC packaging
operations was 26%, up by 1 percentage point year-over-year and up
by 2 percentage points sequentially. -- Capital expenditure for our
IC packaging operations amounted to US$83 million during the
quarter, of which US$81 million was for wirebonding packaging
capacity, and US$2 million was for wafer bumping and flip chip
packaging equipment. -- As of September 30, 2007, there were 7,649
wirebonders in operation. 645 wirebonders were added, of which 20
wirebonders were from the formation of ASEN (our joint venture with
NXP). 36 wirebonders were disposed of during the quarter. -- Net
revenues from flip chip packages and wafer bumping services
accounted for 11% of total packaging net revenues, up by one
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$5,282
million, down by NT$528 million or 9% year-over-year and up by
NT$558 million or 12% sequentially. The increase in testing net
revenues was primarily due to an increase in testing volume and
average selling prices (ASP). -- Final testing contributed 76% to
total testing net revenues, relatively unchanged compared with the
previous quarter. Wafer sort contributed 21% to total testing net
revenues, up by one percentage point from the previous quarter.
Engineering testing contributed 3% to total testing net revenues,
down by one percentage point from the previous quarter. --
Depreciation, amortization and rental expense associated with our
testing operations amounted to NT$1,517 million, down from NT$1,597
million in 3Q06 and down from NT$1,574 million in 2Q07. -- In 3Q07,
gross margin for our testing operations was 41%, down by three
percentage points year-over-year and up by six percentage points
sequentially. The sequential increase in gross margin was primary
due to the increase of sales and utilization. -- Capital spending
on our testing operations amounted to US$55 million during the
quarter. -- As of September 30, 2007, there were 1,502 testers in
operations, of which 138 testers were added and 21 testers were
disposed of during the quarter. The added 138 testers consist of 16
testers from our joint venture with NXP, 86 testers from
consignment, and 36 testers from purchase and lease Substrate
Operations -- PBGA substrate manufactured by ASE amounted NT$2,612
million for the quarter, up by NT$439 million or 20% from a
year-ago quarter, and up by NT$565 million or 28% from the previous
quarter. Of the total output of NT$2,612 million, NT$807 million
was from sales to external customers. -- Gross margin for substrate
operations was 24% during the quarter, up by one percentage point
compared with the year-ago quarter, and up by three percentage
points compared with the previous quarter. -- In 3Q07, the
Company's internal substrate manufacturing operations supplied 52%
(by value) of our total substrate requirements. -- As of September
30, 2007, the Company's PBGA capacity was at 48 million units per
month. Customers -- Our five largest customers together accounted
for approximately 26% of our total net revenues in 3Q07, compared
to 28% in 3Q06 and 27% in 2Q07. No single customer accounted for
more than 10% of our total net revenues. -- Our top 10 customers
contributed 43% of our total net revenues during the quarter,
compared to 44% in 3Q06 and 2Q07. -- Our customers that are
integrated device manufacturers, or IDMs, accounted for 38% of our
total net revenues in 3Q07, compared to 44% in 3Q06 and 39% in
2Q07. 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., MediaTek Inc., NEC Corporation, NVIDIA
Corporation, NXP Semiconductors, 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 and Section 21E of the
Exchange Act, 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 annual report. We were not involved in the preparation of
these projections. 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; international business activities; our business
strategy; our future expansion plans and capital expenditures; the
strained relationship between the ROC and the PRC; general economic
and political conditions; possible disruptions in commercial
activities caused by natural or human-induced disasters;
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 2006 Annual Report on Form 20-F
filed on June 25, 2007. -- Tables to follow -- Supplemental
Financial Information Consolidated Operations Amounts in NT$
Millions 3Q/07 2Q/07 3Q/06 Net Revenues 27,733 23,362 26,726
Revenues by End Application Communication 44% 46% 38% Computer 22%
22% 21% Automotive and Consumers 33% 32% 40% Others 1% 0% 1%
Revenues by Region North America 49% 48% 53% Europe 13% 12% 14%
Taiwan 22% 23% 17% Japan 8% 9% 11% Other Asia 8% 8% 5% IC Packaging
Services Amounts in NT$ Millions 3Q/07 2Q/07 3Q/06 Net Revenues
21,644 18,029 20,374 Revenues by Packaging Type Advanced substrate
& leadframe based 85% 85% 84% Traditional leadframe based 4% 5%
5% Module assembly 6% 6% 6% Others 5% 4% 5% Capacity CapEx (US$
Millions) * 83 49 47 Number of Wirebonders 7,649 7,040 6,544
Testing Services Amounts in NT$ Millions 3Q/07 2Q/07 3Q/06 Net
Revenues 5,282 4,724 5,810 Revenues by Testing Type Final test 76%
76% 76% Wafer sort 21% 20% 19% Engineering test 3% 4% 5% Capacity
CapEx (US$ Millions) * 55 20 29 Number of Testers 1,502 1,385 1,296
* 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 For the period ended Sep. 30
Jun. 30 Sep. 30 Sep. 30 Sep. 30 2007 2007 2006 2007 2006 Net
revenues: IC Packaging 21,644 18,029 20,374 55,956 59,635 Testing
5,282 4,724 5,810 14,331 16,633 Others 807 609 542 1,901 1,582
Total net revenues 27,733 23,362 26,726 72,188 77,850 Cost of
revenues 19,303 16,958 18,479 52,358 55,467 Gross profit 8,430
6,404 8,247 19,830 22,383 Operating expenses: Research and
development 748 720 663 2,157 1,942 Selling, general and
administrative 1,573 1,795 1,491 4,905 4,217 Total operating
Expenses 2,321 2,515 2,154 7,062 6,159 Operating income (loss)
6,109 3,889 6,093 12,768 16,224 Net non-operating (income)
expenses: Interest expenses - - net 273 306 303 932 1,000 Foreign
exchange loss (gain) (39) (147) 89 (205) 66 Loss (gain) on
long-term investment (111) (65) (219) (252) (363) Others 157 198
381 597 (2,692) Total non-operating (income) expenses 280 292 554
1,072 (1,989) Income (loss) before tax 5,829 3,597 5,539 11,696
18,213 Income tax expense (benefit) 1,008 866 751 2,193 1,318
Income (loss) from continuing operations 4,821 2,731 4,788 9,503
16,895 Cumulative effect of change in accounting principle -- -- --
-- 343 Income (loss) before minority interest 4,821 2,731 4,788
9,503 16,552 Minority interest 596 156 607 1,042 1,870 Net income
(loss) 4,225 2,575 4,181 8,461 14,682 Per share data: Earnings
(loss) per share - Basic NT$0.81 NT$0.50 NT$0.82 NT$1.63 NT$2.88 -
Diluted NT$0.79 NT$0.48 NT$0.78 NT$1.58 NT$2.74 Earnings (loss) per
pro forma equivalent ADS - Basic US$0.123 US$0.075 US$0.125
US$0.248 US$0.445 - Diluted US$0.120 US$0.073 US$0.119 US$0.241
US$0.424 Number of weighted average shares used in diluted EPS
calculation (in thousands) 5,402,951 5,433,905 5,418,637 5,421,150
5,404,775 Exchange rate (NT$ per US$1) 32.86 33.11 32.70 32.94
32.36 Advanced Semiconductor Engineering, Inc. Summary of
Consolidated Balance Sheet Data (In NT$ millions) (Unaudited) As of
Sep. 30, As of Jun. 30, 2007 2007 Current assets: Cash and cash
equivalents 16,990 13,294 Financial assets - current 7,641 13,389
Notes and accounts receivable 18,074 13,813 Inventories 5,740 5,586
Others 3,788 3,835 Total current assets 52,233 49,917 Financial
assets - non current 4,813 4,802 Properties - net 80,056 77,564
Other assets 9,762 9,870 Total assets 146,864 142,153 Current
liabilities: Short-term debts - revolving credit 7,279 4,966
Short-term debts - current portion of long-term debts 2,382 2,425
Short-term debts - current portion of bonds payable 0 0 Notes and
accounts payable 9,709 7,616 Others 11,624 17,273 Total current
liabilities 30,994 32,280 Long-term debts 20,817 22,034 Long-term
bonds payable 7,667 9,271 Other liabilities 3,097 3,029 Total
liabilities 62,575 66,614 Minority interest 13,260 11,760
Shareholders' equity 71,029 63,779 Total liabilities &
shareholders' equity 146,864 142,153 Current Ratio 1.69 1.55 Net
Debt to Equity 0.16 0.16 Contact: ASE, Inc. Tel: +886-2-8780-5489
Fax: +886-2-2757-6121 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, CFO
or 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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