Advanced Semiconductor Engineering, Inc. Reports Consolidated Year
2004 Second-Quarter Financial Results TAIPEI, Taiwan, Aug. 3
/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 (Note 1) of NT$20,290 million for the
second quarter of 2004 (2Q04), up 59% year-over- year and up 18%
sequentially. Net income for the quarter totaled NT$2,020 million,
up 461% year-over-year and up 23% sequentially. EPS for the quarter
was NT$0.55, or US$0.082, per ADS, up 450% year-over-year and 25%
sequentially. ASE's Q2 revenue marks the highest quarterly revenue
level in the Company's history. Note 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. 'We are very pleased with our quarterly earnings,
and we are confident in reaching our goal of growing our revenue by
50% on a full year basis,' commented Mr. Jason Chang, Chairman of
ASE. 'We believe that our current quarter revenue has proven our
integrated business model, capital investment and business
expansion to be effective. We believe our business in the second
half of 2004 will keep growing as we continue to gain market share
in the high-end IC packaging and testing segment.' 'Continuing our
business expansion, we completed the acquisition of NEC's Yamagata
IC packaging and testing operations on June 1st and are expecting
to leverage this added platform to grow our revenues from Japan
significantly in the future periods. In Taiwan, we completed the
merger of ASE Chung Li and ASE Material with the parent company on
August 1st to further streamline our operations. Our new
manufacturing plant in Kaohsiung is also scheduled to be completed
in Q3, which will provide the needed space for further expansion in
Taiwan. In China, we have been successful in securing land lots in
the Shanghai area sufficient for long term expansion and are
initiating ramp up in Q4.' 'Despite the weak sentiment in the
market recently, we believe the fundamentals of our business model
remain solid and the gap between ASE and our competitors has been
and will continue to widen given our effective strategy
implementation. While celebrating ASE's 20th anniversary and the
solid progress we have made so far in 2004, we will continue to
execute our business plan with extreme caution and therefore
maintain our positive outlook for the quarters to come.' RESULTS OF
OPERATIONS 2Q04 Results -- Net revenues amounted to NT$20,290
million, up 18% sequentially and 59% year-over-year. The revenue
contribution from IC packaging operations, testing operations,
module assembly, and others were NT$12,756 million, NT$4,102
million, NT$3,376 million and NT$56 million, respectively. -- Gross
profit for 2Q04 was NT$4,469 million, up19% compared to NT$3,769
million in 1Q04. Gross margin of 22% for the quarter remained flat
from the previous quarter, while it increased significantly from
15% in 2Q03. -- Total operating expenses during 2Q04 were NT$2,110
million, which increased by NT$154 million or 8% from the previous
quarter. R&D and SG&A expenses as a percentage of net
revenues remained flat sequentially. On a year-over-year basis,
R&D and SG&A expenses as a percentage of net revenues
decreased by 1% and 2%, respectively due to expanded revenue base.
-- Operating profit for 2Q04 reached NT$2,359 million, which grew
by NT$546 million or 30% from the previous quarter, and grew by
NT$2,200 million or 1384% year-over-year. Operating margin was 12%
in 2Q04, which improved from 11% in Q104 and 1% in Q203. -- We
recorded net non-operating expenses of NT$301 million in 2Q04,
which increased by NT$56 million or 23% sequentially and increased
by NT$3 million or 1% year-over-year. The sequential increase is
mainly because of the lower net exchange gain of about NT$77
million in 2Q04 and the increase of financial handling charges by
NT$16 million, which were offset by the decrease of interest
expense of NT$35 million, increase of interest revenue of NT$7
million and decrease in loss on long-term investment of NT$6
million. 1. The decrease in interest expense is mainly due to lower
interest rates. 2. The lower net exchange gain was mainly
attributable to the appreciation of the US dollar against the NT
dollar that had a negative impact on our US dollar-based debts and
payables. 3. Loss on long-term investment was NT$29 million,
consisting of NT$26 investment gain from minority-owned affiliates
and NT$55 million of goodwill amortization related to such
minority-owned affiliates. The investment gain from minority-owned
shareholders included NT$57 million of investment income from
Universal Scientific Industrial Co. ("USI"), NT$18 million of
investment loss from Hung Ching Construction and NT$13 million of
investment loss from other invested companies. -- Income before tax
was NT$2,058 million for 2Q04. We recognized an income tax benefit
of NT$567 million during the quarter. Minority interest adjustment
for the quarter increased by NT$401 million to NT$605 million,
primarily due to the increased earnings contributed by ASE Test
Limited and ASE Material. -- In 2Q04, net income amounted to
NT$2,020 million, up by NT$383 million or 23% sequentially and up
by NT$1,660 million or 461% year-over-year. For the first six
months of 2004, the Company's net income totaled NT$3,657 million,
compared with NT$12 million in the first half of 2003. -- Our total
shares outstanding at the end of the quarter were 3,579,914,106.
Our earnings per share for the second quarter of 2004 was NT$0.55,
or US$0.082 per ADS, based on 3,806,572,194 weighted average number
of shares outstanding during the second quarter. For the first half
of 2004, the Company's earnings per share were NT$0.99, compared
with NT$0.004 in the first half of 2003. LIQUITY AND CAPITAL
RESOURCES -- Capital expenditures in 2Q04 totaled US$237 million,
of which US$106 million was for IC packaging, US$18 million for
module assembly, US$65 million for testing and US$48 million for
interconnect materials. Capital expenditures in the first half of
2004 totaled US$373 million, of which US$166 million was for IC
packaging, US$28 million for module assembly, US$124 million for
testing and US$55 million for interconnect materials. -- EBITDA for
the quarter totaled NT$6,138 million, up 67% year-over-year and up
12% sequentially, primarily as a result of an increase in pre- tax
income. -- As of June 30, 2004, we had cash on hand plus short-term
investment of NT$13,185 million, which increased by NT$2,660
million when compared to the end of 1Q04. -- As of June 30, 2004,
we had total bank debt of NT$50,263 million, consisting of NT$9,259
million of revolving working capital loans, NT$7,389 million of
current portion of long-term debt, NT$23,918 million of long-term
debt and NT$9,697 million long-term bonds payable. Total unused
banking facilities amounted to NT$13,849 million. -- Total number
of employees reached 30,983 as of June 30, 2004. BUSINESS REVIEW IC
Packaging Services -- Revenues generated from our IC packaging
operations were NT$12,756 million during the quarter, up NT$966
million or 8% sequentially and up NT$3,705 million or 41%
year-over-year. On a sequential basis, the significant increase in
packaging revenue was primarily due to volume increase and improved
average selling price, as a result of product mix change. --
Revenues from flip chip packaging (including wafer bumping)
accounted for 10% of total IC packaging revenues, up 1% from the
previous quarter and year-over-year. -- Revenues from BGA and other
substrate-based packaging contributed 46% of total IC packaging
revenues during the quarter, slightly up from 45% in 1Q04 and 43%
in Q203. -- Advanced leadframe-based packaging, including QFP,
TQFP, LQFP, QFN and BCC, accounted for 29% of total IC packaging
revenues, down slightly from 31% in the previous quarter and 32% in
2Q03. -- Gross margin for our IC packaging operations was 22%, up
1% sequentially and up 8% year-over-year. -- Capital expenditure on
our IC packaging operations amounted to US$106 million during the
quarter, of which US$85 million was for wirebonding packaging
capacity, and US$21 million was for wafer bumping and flip chip
packaging equipment. -- As of June 30, 2004, there were 6,322
wirebonders in operation. A total of 789 wirebonders were added
during the second quarter of 2004. Testing Services -- Revenues
generated from our testing operations were NT$4,102 million, up
NT$683 million or 20% sequentially and up NT$1,350 million or 49%,
mainly due to volume increase. ASP has remained relatively stable
from the previous quarter. -- Final testing contributed 74% to
total testing revenues, down by 3% from the previous quarter. Wafer
sort contributed 22% to total testing revenues, up by 2% from the
previous quarter. Engineering testing contributed 4% to total
testing revenues, up by 1%. -- Gross margin for our testing
operations was 29%, which significantly improved by 4% sequentially
and 10% year-over-year. The main reason for the increase in gross
margin is the higher utilization rate for testers as customer
demand significantly increased and improved efficiency. -- Capital
spending on our testing operations amounted to US$65 million during
the quarter. -- As of June 30, 2004, we operated a total of 1,492
testers, including 250 testers added during the quarter. Module
Assembly Services -- Revenues generated from our module assembly
operations were NT$3,376 million, up NT$1,421 million or 73%
sequentially and up NT$2,440 million or 261% year-over-year mainly
due to ASP increase and volume increase. -- Camera module assembly
revenue accounted for 67% of the total module assembly revenues,
while RF and baseband module assembly accounted for 33%. In the
previous quarter, camera module assembly was roughly 55% of module
assembly revenues, while RF and baseband module assembly was about
45%. Interconnect Materials -- ASE Materials recorded revenues of
NT$2,077 million for the quarter, up by NT$264 million or 15%
sequentially and up by NT$944 million or 83% year-over-year. Gross
margin for ASE Material reached 24% during the quarter, which
improved significantly from 22% if 1Q04 and from 4% in 2Q03. In the
second quarter of 2004, ASE Material supplied 51% (by value) of our
total PBGA substrate requirements. Substantially all of ASE
Material's revenues were derived from inter-company sales and
therefore were not reflected in ASE's consolidated revenues.
Customers -- Our five largest customers together accounted for
approximately 36% of our net revenues in 2Q04, compared to 35% in
1Q04 and in 2Q03. Only one customer accounted for more than 10% of
our total revenues. -- Our top 10 customers contributed 50% of our
revenues during the quarter, compared to 51% in 1Q04 and 53% in
2Q03. -- Our customers that are integrated device manufacturers, or
IDMs, accounted for 51% of our revenues in 2Q04, compared to 47% in
1Q04 and 52% in 2Q03. Quarterly Highlights -- ASE held ASE US
Customer Appreciation Day in Santa Clara, CA, and Tech Forum Boston
and Customer Appreciation Day in Boston. Over 500 customers
attended the event in Santa Clara, and over 85 attended the event
in Boston. -- ASE closed the acquisition of NEC IC packaging and
testing operations in Yamagata, Japan. -- ASE was ranked amongst
Business Week's INFO TECH 100 List. 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. The Company's international customer base of more
than 200 customers include such leading names as ATI Technologies
Inc., Cirrus Logic International Ltd., IBM Corporation, Motorola,
Inc., NVIDIA Corporation, Koninklijke Philips Electronics N.V.,
Qualcomm Incorporated, 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, including terrorist activity and armed
conflict; 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
2003 Annual Report on Form 20-F filed on June 30, 2004.
Supplemental Financial Information Consolidated Operations Amounts
in NT$ Millions 2Q/04 1Q/04 2Q/03 Net Revenues 20,290 17,221 12,773
Revenues by End Application Communication 43 % 39 % 36 % Computer
31 % 34 % 34 % Automotive and Consumers 23 % 25 % 29 % Others 3 % 2
% 1 % Revenues by Region North America 56 % 54 % 64 % Europe 7 % 8
% 8 % Taiwan 28 % 31 % 24 % Japan 4 % 3 % 2 % Other Asia 5 % 4 % 2
% IC Packaging Services Amounts in NT$ Millions 2Q/04 1Q/04 2Q/03
Net Revenues 12,756 11,790 9,051 Revenues by End Application
Communication 30 % 29 % 30 % Computer 42 % 43 % 41 % Automotive and
Consumers 26 % 26 % 29 % Others 2 % 2 % 0 % Revenues by Packaging
Type Flip Chip & Bumping 10 % 9 % 9 % Traditional substrate
based 46 % 45 % 43 % Advanced leadframe based 29 % 31 % 32 %
Traditional leadframe based 10 % 9 % 11 % Others 5 % 6 % 5 %
Capacity CapEx (US$ Millions) * 106 60 41 Number of Wirebonders
6,322 5,553 4,688 Testing Services Amounts in NT$ Millions 2Q/04
1Q/04 2Q/03 Net Revenues 4,102 3,419 2,752 Revenues by End
Application Communication 39 % 39 % 35 % Computer 20 % 21 % 24 %
Automotive and Consumers 33 % 34 % 38 % Others 8 % 6 % 3 % Revenues
by Testing Type Final test 74 % 77 % 82 % Wafer sort 22 % 20 % 13 %
Engineering test 4 % 3 % 5 % Capacity CapEx (US$ Millions) * 65 59
43 Number of Testers 1,492 1,288 1,107 * Capital expenditure
amounts exclude building construction cost. Advanced Semiconductor
Engineering, Inc. Consolidated Summary Income Statements Data (In
NT$ millions, except per share data) (Unaudited) For the six For
the three Months ended months ended Jun. 30 Mar. 31 Jun. 30 Jun. 30
Jun. 30 2004 2004 2003 2004 2003 Net revenues: IC Packaging 12,756
11,790 9,051 24,546 17,593 Testing 4,102 3,419 2,752 7,521 5,287
Module Assembly 3,376 1,955 936 5,331 1,415 Others 56 57 34 113 62
Total net revenues 20,290 17,221 12,773 37,511 24,357 Cost of
revenues 15,821 13,452 10,803 29,273 20,876 Gross Profit 4,469
3,769 1,970 8,238 3,481 Operating expenses: Research and
development 595 584 550 1,179 1,093 Selling, general and
administrative 1,515 1,372 1,261 2,887 2,430 Total operating
expenses 2,110 1,956 1,811 4,066 3,523 Operating income (loss)
2,359 1,813 159 4,172 (42) Net non-operating (income) expenses:
Interest expenses (income) - net 197 225 358 422 747 Foreign
exchange loss (gain) - net (5) (82) 25 (87) 40 Loss (income) on
long-term investment 29 35 63 64 159 Loss (gain) on disposal of
assets 44 40 (96) 84 (43) Others 36 27 (52) 63 (95) Total
non-operating expenses 301 245 298 546 808 Income (loss) before tax
2,058 1,568 (139) 3,626 (850) Income tax expense (benefit) (567)
(273) (504) (840) (512) Net income (loss) before minority interest
2,625 1,841 365 4,466 (338) Minority interest 605 204 5 809 (350)
Net income (loss) 2,020 1,637 360 3,657 12 Per share data: Earnings
per common share - Basic NT$0.56 NT$0.46 NT$0.10 NT$1.02 NT$0.004 -
Diluted NT$0.55 NT$0.44 NT$0.10 NT$0.99 NT$0.004 Earnings per pro
forma equivalent ADS - Basic US$0.085 US$0.068 US$0.015 US$0.153
US$0.001 - Diluted US$0.082 US$0.066 US$0.015 US$0.148 US$0.001
Number of weighted average shares used in diluted EPS calculation
(in thousands) 3,806,572 3,836,569 3,456,420 3,824,065 3,428,239
Forex (NT$ per US$1) 33.30 33.49 34.70 33.40 34.67 Advanced
Semiconductor Engineering, Inc. Consolidated Summary Balance Sheet
Data (In NT$ millions) (Unaudited) As of Jun. 30, As of Mar. 31,
2004 2004 Current assets: Cash and cash equivalents 10,045 7,223
Short-term investments 3,140 3,302 Notes and accounts receivable
16,656 14,120 Inventories 8,393 6,237 Others 3,116 2,453 Total
41,350 33,335 Long-term investments 6,211 6,269 Properties - net
75,377 69,205 Other assets 9,897 9,307 Total assets 132,835 118,116
Current liabilities: Short-term debts - revolving credit 9,259
8,853 Short-term debts - current portion of long-term debts 7,389
5,565 Short-term debts - current portion of long-term bonds payable
0 0 Notes and accounts payable 7,916 5,691 Others 13,460 11,172
Total 38,024 31,281 Long-term debts 23,918 19,792 Long-term bonds
payable 9,697 9,484 Other liabilities 1,634 815 Total liabilities
73,273 61,372 Minority interest 10,887 10,274 Shareholders' equity
48,675 46,470 Total liabilities & shareholders' equity 132,835
118,116 For more information, please contact: Joseph Tung, CFO /
Vice President, or Freddie Liu, Financial Controller Tel:
+886-2-8780-5489 Fax: +886-2-2757-6121 Email: Web:
http://www.aseglobal.com/ Clare Lin, US Contact Tel:
+1-408-986-6524 Email: DATASOURCE: Advanced Semiconductor
Engineering, Inc. CONTACT: Joseph Tung/Freddie Liu,
+886-2-8780-5489, or fax, +886-2-2757- 6121, or , or Clare Lin,
+1-408-986-6524, or , all of ASE Web Site:
http://www.aseglobal.com/
Copyright
