Advanced Semiconductor Engineering, Inc. Reports Unaudited Consolidated Financial Results for the First Quarter of 2012

TAIPEI, Taiwan, April 27, 2012 /PRNewswire-Asia/ -- 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 revenue (Note 1) of NT$43,101 million for the first quarter of 2012 (1Q12), down by 6% year-over-year and down by 7% sequentially.  Net income for the quarter totaled NT$2,056 million, down from a net income of NT$3,974 million in 1Q11 and down from a net income of NT$2,639 million in 4Q11.  Diluted earnings per share for the quarter were NT$0.31 (or US$0.052 per ADS), compared to diluted earnings per share of NT$0.58 for 1Q11 and NT$0.40 for 4Q11.

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 of operations for any future period.

RESULTS OF OPERATIONS

1Q12 Results Highlights -- Consolidated

  • Net revenue contribution from IC packaging operations, testing operations, EMS operations, substrates sold to third parties and others was NT$23,531 million, NT$5,077 million, NT$13,889 million, NT$553 million and NT$51 million, respectively, and each represented approximately 55%, 12%, 32%, 1% and 0%, respectively, of total net revenues for the quarter.
  • Cost of revenue was NT$35,913 million, down by 4% year-over-year and down from NT$37,915 million in the same period last year.
    • Raw material cost totaled NT$20,101 million during the quarter, representing 47% of total net revenue, compared with NT$21,570 million and 47% of total net revenue in the previous quarter.
    • Labor cost totaled NT$5,571 million during the quarter, representing 13% of total net revenue, compared with NT$5,735 million and 12% of total net revenue in the previous quarter.
    • Depreciation, amortization and rental expenses totaled NT$5,307 million during the quarter, down by 0.4% year-over-year and down by 3% sequentially.
  • Gross margin decreased 1.6 percentage points to 16.7% in 1Q12 from 18.3% in 4Q11.
  • Total operating expenses during 1Q12 were NT$4,342 million, including NT$1,758 million in R&D and NT$2,584 million in SG&A, compared with total operating expenses of NT$4,974 million in 4Q11.  Total operating expenses as a percentage of net revenue for the current quarter were 10%, up from 9% in 1Q11 and down from 11% in 4Q12.
  • Operating income for the quarter totaled NT$2,846 million, down from NT$3,501 million in the previous quarter.  Operating margin was 6.6% in 1Q12 compared to 7.5% in 4Q11.
  • In terms of non-operating items:
    • Net interest expense was NT$391 million, down from NT$404 million a quarter ago.
    • Net foreign exchange gain of NT$506 million was primarily attributable to the depreciation of the U.S. dollar against N.T. dollar and depreciation of the U.S. dollar against Renminbi ("RMB").
    • Loss on equity-method investments of NT$9 million was primarily attributable to our investment on Hung Ching Development & Construction Co.
    • Loss on valuation of financial assets and liabilities was NT$426 million.
    • Other net non-operating income of NT$57 million were primarily related to miscellaneous income.  Total non-operating expenses for the quarter were NT$263 million, compared to total non-operating income of NT$709 million for 1Q11 and total non-operating expenses of NT$549 million for 4Q11.
  • Income before tax was NT$2,583 million for 1Q12, compared to NT$2,952 million in the previous quarter.  We recorded income tax expense of NT$465 million during the quarter, compared to NT$340 million in 4Q11.
  • In 1Q12, net income was NT$2,056 million, compared to net income of NT$3,974 million for 1Q11 and net income of NT$2,639 million for 4Q11.
  • Our total number of shares outstanding at the end of the quarter was 6,655,092,732, including treasury stock owned by our subsidiaries. Our 1Q12 diluted earnings per share of NT$0.31 (or US$0.052 per ADS) were based on 6,650,273,264 weighted average number of shares outstanding in 1Q12.

1Q12 Results Highlights -- IC ATM (Note 2)

  • Net revenue from IC ATM was NT$29,236 million for the first quarter of 2012, down 5% year-over-year and down 8% sequentially.  Net revenue contribution from IC packaging operations, testing operations, EMS operations, and substrates sold to third parties was NT$23,542 million, NT$5,077 million, NT$64 million and NT$553 million, respectively, and each represented approximately 81%, 17%, 0% and 2%, respectively, of total net revenues for the quarter.
  • Cost of revenues was NT$23,580 million, down by 1% year-over-year and down by 6% sequentially.
    • Raw material cost totaled NT$9,242 million during the quarter, representing 32% of total net revenue, compared with NT$10,215 million and 32% of total net revenue in the previous quarter.
    • Labor cost totaled NT$4,994 million during the quarter, representing 17% of total net revenue, compared with NT$5,131 million and 16% of total net revenue in the previous quarter.
    • Depreciation, amortization and rental expenses totaled NT$4,991 million during the quarter, down by 0.3% year-over-year and down by 4% sequentially.
  • Gross margin decreased 2.0 percentage points to 19.3% in 1Q12 from 21.3% in 4Q11.
  • Total operating expenses during 1Q12 were NT$3,232 million, including NT$1,322 million in R&D and NT$1,910 million in SG&A, compared with total operating expenses of NT$3,634 million in 4Q11.  Total operating expenses as a percentage of net revenue for the current quarter were 11%, up from 10% in 1Q11 and remained the same as 4Q11.
  • Operating income for the quarter totaled NT$2,424 million, down from NT$3,156 million in the previous quarter.  Operating margin was 8.3% in 1Q12 compared to 9.9% in 4Q11.

Note 2:

 ATM stands for Semiconductor Assembly, Testing and Material.

1Q12 Results Highlights -- EMS

  • Net revenue contribution from EMS operations was NT$13,825 million, down by 8% year-over-year and down by 4% sequentially.
  • Cost of revenues was NT$12,192 million, down by 9% year-over-year and down by 4% sequentially.
    • Raw material cost totaled NT$10,869 million during the quarter, representing 79% of total net revenue, compared with NT$11,368 million and 79% of total net revenue in the previous quarter.
    • Labor cost totaled NT$578 million during the quarter, representing 4% of total net revenue, compared with NT$603 million and 4% of total net revenue in the previous quarter.
    • Depreciation, amortization and rental expenses totaled NT$192 million during the quarter, down by 1% year-over-year and remained the same sequentially.
  • Gross margin decreased to 11.8% in 1Q12 from 12.3% in 4Q11.
  • Total operating expenses during 1Q12 were NT$1,074 million, including NT$442 million in R&D and NT$632 million in SG&A, compared with total operating expenses of NT$1,295 million in 4Q11.  Total operating expenses as a percentage of net revenue for the current quarter were 8%, up from 7% in 1Q11 and down from 9% in 4Q11.
  • Operating income for the quarter totaled NT$559 million, up from NT$485 million in the previous quarter.  Operating margin increased to 4.0% in 1Q12 from 3.4% in 4Q11.

LIQUIDITY AND CAPITAL RESOURCES

  • As of March 31, 2012, our cash and current financial assets totaled NT$30,906 million, compared to NT$25,268 million as of December 31, 2011.
  • Capital expenditures in 1Q12 totaled US$156 million, of which US$106 million was used for IC packaging, US$39 million for testing, US$9 million for EMS and US$2 million for interconnect materials.
  • As of March 31, 2012, we had total bank debt of NT$78,226 million, compared to NT$76,593 million as of December 31, 2011.  Total bank debt consisted of NT$29,390 million of revolving working capital loans, NT$3,795 million of the current portion of long-term debt, and NT$45,041 million of long-term debt.  Total unused credit lines amounted to NT$94,382 million.
  • Current ratio as of March 31, 2012 was 1.33, compared to 1.35 as of December 31, 2011.  Net debt to equity ratio was 0.44 as of March 31, 2012.
  • Total number of employees was 51,792 as of March 31, 2012, compared to 49,173 as of March 31, 2011 and 51,411 as of December 31, 2011.

BUSINESS REVIEW

IC Packaging Operations (Note 3)

  • Net revenues generated from our IC packaging operations were NT$23,542 million during the quarter, down by NT$1,299 million, or by 5% year-over-year, and down by NT$2,015 million, or by 8% sequentially.
  • Net revenues from advanced substrate and leadframe-based packaging accounted for 80% of total IC packaging net revenues during the quarter, down by one percentage point from the previous quarter.
  • Gross margin for our IC packaging operations during the quarter was 17.1%, down by 2.9 percentage points year-over-year and down by 1.5 percentage points from the previous quarter.
  • Capital expenditures for our IC packaging operations amounted to US$106 million during the quarter, of which US$59 million was used for wirebonding packaging capacity and US$47 million for wafer bumping and flip chip packaging equipment.
  • As of March 31, 2012, there were 13,911 wirebonders in operation.  408 wirebonders were added and 343 wirebonders were disposed of during the quarter.
  • Net revenues from flip chip packages and wafer bumping services accounted for 24% of total packaging net revenues, which remained the same as the previous quarter.

Note 3:

IC packaging services include module assembly services.

Testing Operations

  • Net revenues generated from our testing operations were NT$5,077 million, down by NT$273 million, or by 5% year-over-year, and down by NT$526 million, or by 9% sequentially.
  • Final testing contributed 82% to total testing net revenues, down by 2 percentage points from the previous quarter.  Wafer sort contributed 16% to total testing net revenues, up by 2 percentage points from the previous quarter.  Engineering testing contributed 2% to total testing net revenues, which remained the same as the previous quarter.
  • Depreciation, amortization and rental expense associated with our testing operations amounted to NT$1,576 million, down from NT$1,761 million in 1Q11 and down from NT$1,644 million in 4Q11.
  • In 1Q12, gross margin for our testing operations was 29.5%, down by 1.4 percentage points year-over-year and down by 4.2 percentage points from the previous quarter.
  • Capital spending on our testing operations amounted to US$39 million during the quarter.
  • As of March 31, 2012, there were 2,628 testers in operation.  109 testers were added and 66 testers were disposed of during the quarter.

EMS Operations

  • Net revenues generated from our EMS operations were NT$13,825 million, down by NT$1,270 million, or by 8% year-over-year, and down by NT$622 million, or by 4% sequentially.
  • Communications products contributed 39% to total EMS net revenues, up by 2 percentage points from the previous quarter.  Computing products contributed 22% to total EMS net revenues, down by 2 percentage points from the previous quarter.  Consumer products contributed 14% to total EMS net revenues, down by one percentage point from the previous quarter.  Industrial products contributed 15% to total EMS net revenues, which remained the same as the previous quarter.   Car products contributed 10% to total EMS net revenues, up by one percentage point from the previous quarter.
  • In 1Q12, gross margin for our EMS operations was 11.8%, up by 0.9 percentage point year-over-year and down by 0.5 percentage point from the previous quarter.
  • Capital spending on our EMS operations amounted to US$9 million during the quarter.

Substrate Operations

  • PBGA substrate manufactured by ASE amounted to NT$1,652 million during the quarter, down by NT$518 million, or by 24% year-over-year, and down by NT$160 million, or by 9% from the previous quarterOf the total output of NT$1,652 million, NT$553 million was from sales to external customers.
  • Gross margin for substrate operations was 5.5% during the quarter, down by 12.7 percentage points year-over-year and down by 2.8 percentage points from the previous quarter.
  • In 1Q12, our internal substrate manufacturing operations supplied 26% (by value) of our total substrate requirements.

Customers
IC ATM consolidated Basis

  • Our five largest customers together accounted for approximately 35% of our total net revenues in 1Q12, compared to 29% in 1Q11 and 37% in 4Q11.  There was one customer which accounted for more than 10% of our total net revenues.
  • Our top 10 customers contributed 50% of our total net revenues during the quarter, compared to 46% in 1Q11 and 51% in 4Q11.
  • Our customers that are integrated device manufacturers, or IDMs, accounted for 34% of our total net revenues during the quarter, compared to 43% in 1Q11 and 33% in 4Q11.

EMS Basis

  • Our five largest customers together accounted for approximately 63% of our total net revenues in 1Q12, compared to 62% in 1Q11 and 58% in 4Q11.  There was one customer which accounted for more than 10% of our total net revenues.
  • Our top 10 customers contributed 82% of our total net revenues during the quarter, compared to 80% in 1Q11 and 81% in 4Q11.

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, China, 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 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 2011 Annual Report on Form 20-F filed on April 20, 2012.

Supplemental Financial Information

IC ATM Consolidated Operations

Amounts in NT$ Millions

1Q/12

4Q/11

1Q/11

Net Revenues

29,236

31,908

30,879

Revenues by End Application




Communications

51%

56%

49%

Computers

11%

12%

16%

Automotive and Consumer

37%

32%

35%

Others

1%

0%

0%

Revenues by Region




North America

58%

58%

51%

Europe

11%

12%

13%

Taiwan

19%

20%

20%

Japan

5%

5%

8%

Other Asia

7%

5%

8%

 

IC Packaging Operations

Amounts in NT$ Millions

1Q/12

4Q/11

1Q/11

Net Revenues

23,542

25,557

24,841

Revenues by Packaging Type




Advanced substrate & leadframe based

80%

81%

83%

Traditional leadframe based

10%

8%

9%

Module assembly

6%

6%

4%

Others

4%

5%

4%

Capacity




CapEx (US$ Millions)*

106

81

115

Number of Wirebonders

13,911

13,846

11,604

* Capital expenditure amounts exclude building construction costs.

 

Testing Operations

Amounts in NT$ Millions

1Q/12

4Q/11

1Q/11

Net Revenues

5,077

5,603

5,350

Revenues by Testing Type




Final test

82%

84%

86%

Wafer sort

16%

14%

12%

Engineering test

2%

2%

2%

Capacity




CapEx (US$ Millions)*

39

48

32

Number of Testers

2,628

2,585

2,229

* Capital expenditure amounts exclude building construction costs.

 

EMS Operations

Amounts in NT$ Millions

1Q/12

4Q/11

1Q/11

Net Revenues

13,825

14,447

15,095

Revenues by End Application




Communications

39%

37%

41%

Computing

22%

24%

22%

Consumer

14%

15%

18%

Industrial

15%

15%

10%

Car

10%

9%

8%

Others

0%

0%

1%

Capacity




CapEx (US$ Millions)*

9

8

3

* 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

2012


Dec. 31

2011


Mar. 31

2011


Net revenues:







IC Packaging

23,531


25,543


24,812


Testing

5,077


5,603


5,339


Direct Material

553


668


688


EMS

13,889


14,527


15,095


Others

51


49


71


Total net revenues

43,101


46,390


46,005









Cost of revenues

(35,913)


(37,915)


(37,347)


Gross profit

7,188


8,475


8,658









Operating expenses:







Research and development

(1,758)


(1,954)


(1,631)


Selling, general and administrative

(2,584)


(3,020)


(2,640)


Total operating expenses

(4,342)


(4,974)


(4,271)


Operating income (loss)

2,846


3,501


4,387









Net non-operating (expenses) income:







Interest expense - net

(391)


(404)


(276)


Foreign exchange gain (loss)

506


348


(27)


Gain (loss) on equity-method investments

(9)


(25)


132


Gain (loss) on valuation of financial assets and

Liabilities

 

(426)


 

(72)


169


Others

57


(396)


711


Total non-operating (expenses) income

(263)


(549)


709


Income (loss) before tax

2,583


2,952


5,096









Income tax benefit (expense)

(465)


(340)


(963)


(Loss) income from continuing operations and

before minority interest

2,118


2,612


4,133


Minority interest

(62)


27


(159)









Net income (loss)

2,056


2,639


3,974









Per share data:







Earnings (losses) per share







- Basic

NT$0.32


NT$0.40     


NT$0.60     


- Diluted

NT$0.31


  NT$0.40


  NT$0.58









Earnings (losses) per equivalent ADS







- Basic

US$0.053


  US$0.067


  US$0.102


- Diluted

US$0.052


  US$0.066


  US$0.100









Number of weighted average shares used in

diluted EPS calculation (in thousands)

6,650,273


6,589,701


6,794,108









Exchange rate (NT$ per US$1)

29.74


30.24


29.29










 

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Income Statements Data -- IC ATM

(In NT$ millions, except per share data)

(Unaudited)


For the three months ended



Mar. 31

2012


Dec. 31

2011


Mar. 31

2011


Net revenues:







IC Packaging

23,542


25,557


24,841


Testing

5,077


5,603


5,350


Direct Material

553


668


688


EMS

64


80


-


Total net revenues

29,236


31,908


30,879









Cost of revenues

(23,580)


(25,118)


(23,784)


Gross profit

5,656


6,790


7,095









Operating expenses:







Research and development

(1,322)


(1,494)


(1,233)


Selling, general and administrative

(1,910)


(2,140)


(1,892)


Total operating expenses

(3,232)


(3,634)


(3,125)


Operating income (loss)

2,424


3,156


3,970









Net non-operating (expenses) income:







Interest expense - net

(354)


(346)


(268)


Foreign exchange gain (loss)

480


301


(11)


Gain (loss) on equity-method investments

307


369


315


Gain (loss) on valuation of financial assets and

liabilities

 

(423)


 

(84)


180


Others

(11)


(459)


588


Total non-operating (expenses) income

(1)


(219)


804


Income (loss) before tax

2,423


2,937


4,774









Income tax benefit (expense)

(356)


(329)


(645)


(Loss) income from continuing operations and

before minority interest

2,067


2,608


4,129


Minority interest

(11)


31


(155)









Net income (loss)

2,056


2,639


3,974









Per share data:







Earnings (losses) per share







- Basic

NT$0.32


NT$0.40


NT$0.60     


- Diluted

NT$0.31


NT$0.40


  NT$0.58









Number of weighted average shares used in

diluted EPS calculation (in thousands)

6,650,273


6,589,701


6,794,108









 

Universal Scientific Industrial Co., Ltd.

Summary of Consolidated Income Statements Data -- EMS

(In NT$ millions, except per share data)

(Unaudited)


For the three months ended



Mar. 31

2012


Dec. 31

2011


Mar. 31

2011


Net revenues:







Total net revenues

13,825


14,447


15,095









Cost of revenues

(12,192)


(12,667)


(13,447)


Gross profit

1,633


1,780


1,648









Operating expenses:







Research and development

(442)


(467)


(398)


Selling, general and administrative

(632)


(828)


(703)


Total operating expenses

(1,074)


(1,295)


(1,101)


Operating income (loss)

559


485


547









Net non-operating (expenses) income:







Total non-operating (expenses) income

84


115


93


Income (loss) before tax

643


600


640









Income tax benefit (expense)

(105)


(7)


(295)


(Loss) income from continuing operations and

before minority interest

538


593


345


Minority interest

(52)


(6)


(3)









Net income (loss)

486


587


342









 Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Balance Sheet Data – Actual Basis

(In NT$ millions)

(Unaudited)

 




As of Mar. 31, 2012




As of Dec. 31, 2011


Current assets:









Cash and cash equivalents



30,307




24,422


Financial assets - current



599




846


Notes and accounts receivable



29,237




30,476


Inventories



28,957




30,070


Others



4,873




4,318


Total current assets



93,973




90,132











Financial assets – non current



2,342




2,221


Properties - net



111,429




111,779


Intangible assets



15,550




15,772


Others



3,716




3,974


Total assets



227,010




223,878











Current liabilities:









Short-term debts - revolving credit



29,390




22,965


Current portion of long-term debts



3,795




3,461


Notes and accounts payable



19,531




21,192


Others



18,099




19,143


Total current liabilities



70,815




66,761











Long-term debts



45,041




50,167


Other liabilities



4,548




4,667


Total liabilities



120,404




121,595











Minority interest



2,606




1,113











Shareholders' equity



104,000




101,170


Total liabilities & shareholders' equity



227,010




223,878




















Current Ratio



1.33




1.35


Net Debt to Equity



0.44




0.50











 

Universal Scientific Industrial Co., Ltd.

Summary of Consolidated Balance Sheet Data

(In NT$ millions)

(Unaudited)













As of Mar. 31, 2012




As of Dec. 31, 2011


Current assets:









Cash and cash equivalents



14,088




10,125


Financial assets - current



45




50


Notes and accounts receivable



10,604




11,958


Inventories



5,934




6,626


Others



3,731




3,658


Total current assets



34,402




32,417











Financial assets - non current



427




441


Properties – net



4,759




4,845


Intangible assets



190




202


Others



650




697


Total assets



40,428




38,602











Current liabilities:









Short-term debts - revolving credit



4,403




4,409


Current portion of long-term debts



570




559


Notes and accounts payable



9,707




11,090


Others



2,666




2,637


Total current liabilities



17,346




18,695











Long-term debts



2,152




2,753


Other liabilities



505




512


Total liabilities



20,003




21,960











Minority interest



1,606




101











Shareholders' equity



18,819




16,541


Total liabilities & shareholders' equity



40,428




38,602











Contact:

ASE, Inc.

Joseph Tung, CFO / Vice President

Room 1901, No. 333, Section 1

Allen Kan, Director

Keelung Road, Taipei, Taiwan, 110

ir@aseglobal.com



Tel: +886-2-6636-5678

Clare Lin, Senior Director (US Contact)

Fax: +886-2-2757-6121

clare.lin@aseus.com

http://www.aseglobal.com

Tel: +1-408-636-9524

SOURCE Advanced Semiconductor Engineering, Inc.



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