Advanced Semiconductor Engineering, Inc. Reports Unaudited Consolidated Financial Results for the Second Quarter of 2010

TAIPEI, Taiwan, July 30 — (PRNewswire) — 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(1) of NT$46,416 million for the second quarter of 2010 (2Q10), up 122% year-over-year and up 24% sequentially. Net income for the quarter totaled NT$4,613 million, up from a net income of NT$1,674 million in 2Q09 and NT$3,395 million in 1Q10. Diluted earnings per share for the quarter was NT$0.76 (or US$0.120 per ADS), compared to diluted earnings per share of NT$0.29 for 2Q09 and NT$0.57 for 1Q10.

To aid investors in understanding the significance of the Company's successful tender offer for 78.1% of the outstanding common shares of Universal Scientific Industrial Co., Ltd. ("USI") in the second quarter of 2010, this earnings release includes (i) the Company's pro forma and actual financial results both reflecting the consolidation of USI, and (ii) consolidated financial results for USI. USI's financial results are reflected in the Company's actual financial results for the first quarter beginning in February 2010 and for the second quarter of 2010. The pro forma financial results reflect the completion of the USI tender offer as if it had occurred on January 1, 2009. The presentation of the financial results for USI and the Company as described above are for purposes of this earnings release only.

    (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

    2Q10 Results Highlights -- Actual Basis

    -- Net revenue contribution from IC packaging operations (including module
       assembly), testing operations, EMS operations and substrates sold to
       third parties was NT$25,700 million, NT$5,288 million, NT$14,726
       million, and NT$702 million, respectively, and each represented
       approximately 55%, 11%, 32% and 2%, respectively, of total net revenues
       for the quarter.
    -- Cost of revenue was NT$36,500 million, up 123% year-over-year and up
       22% sequentially.
       -- Raw material cost totaled NT$22,108 million during the quarter,
          representing 48% of total net revenue, compared with NT$17,130
          million and 46% of total net revenue in the previous quarter.
       -- Labor cost totaled NT$5,164 million during the quarter, representing
          11% of total net revenue, compared with NT$4,476 million and 12% of
          total net revenue in the previous quarter.
       -- Depreciation, amortization and rental expenses totaled NT$4,470
          million during the quarter, up 7% year-over-year and sequentially.
    -- Total operating expenses during 2Q10 were NT$4,153 million, including
       NT$1,560 million in R&D and NT$2,593 million in SG&A, compared with
       operating expenses of NT$3,277 million in 1Q10.  Total operating
       expenses as a percentage of net revenue for the current quarter were 9%,
       slightly down from 10% in 2Q09 and the same as the previous quarter.
    -- Operating income for the quarter totaled NT$5,763 million, up from
       NT$4,279 million in the previous quarter.  Operating margin increased
       to 12% in 2Q10 from 11% in 1Q10.
    -- In terms of non-operating items:
       -- Net interest expense was NT$282 million, down from NT$292 million a
          quarter ago primarily due to lower loan balance during the quarter.
       -- Net foreign exchange loss of NT$80 million was primarily
          attributable to the appreciation of the U.S. dollar against the N.T.
          dollar.
       -- Gain on equity-method investments of NT$36 million was primarily
          attributable to our investment income of NT$43 million from Hung
          Ching Construction and investment loss of other investments.
       -- Other non-operating loss of NT$54 million was primarily related to
          miscellaneous loss.  Total non-operating expenses for the quarter
          was NT$380 million, compared to non-operating expenses of NT$337
          million for 2Q09 and non-operating expense of NT$206 million for
          1Q10.
    -- Income before tax was NT$5,383 million for 2Q10, compared to NT$4,073
       million in the previous quarter.  We recorded income tax expense of
       NT$611 million during the quarter, compared to NT$455 million in 1Q10.
    -- In 2Q10, net income was NT$4,613 million, compared to net income of
       NT$1,674 million for 2Q09 and net income of NT$3,395 million for 1Q10.
    -- Our total number of shares outstanding at the end of the quarter was
       6,049,280,572, including retroactive stock dividend and treasury stock
       owned by our subsidiaries.  Our 2Q10 diluted earnings per share of
       NT$0.76 (or US$0.120 per ADS) was based on 6,010,598,704 weighted
       average number of shares outstanding in 2Q10.

2Q10 Results Highlights -- Pro Forma Basis Assuming USI Consolidated at the Beginning of Each Applicable Period

    -- Net revenue contribution from IC packaging operations, testing
       operations, EMS operations and substrates sold to third parties was
       NT$25,700 million, NT$5,288 million, NT$14,726 million, and NT$702
       million, respectively, and each represented approximately 55%, 11%, 32%
       and 2%, respectively, of total net revenues for the quarter.
    -- Cost of revenues was NT$36,500 million, up 35% year-over-year and up 8%
       sequentially.
    -- Total operating expenses during 2Q10 were NT$4,153 million, including
       NT$1,560 million in R&D and NT$2,593 million in SG&A, compared with
       operating expenses of NT$3,616 million in 1Q10.  Total operating
       expenses as a percentage of net revenue for the current quarter were 9%,
       the same as 2Q09 and the previous quarter.
    -- Operating income for the quarter totaled NT$5,763 million, up from
       NT$4,450 million in the previous quarter.  Operating margin  was  12%  in
              2Q10,  slightly  up  1%  from  the  previous  quarter.
        --  Total  non-operating  expenses  for  the  quarter  were  NT$380  million,
              compared  to  non-operating  expenses  of  NT$386  million  for  2Q09  and
              non-operating  expenses  of  NT$236  million  for  1Q10.
        --  Income  before  tax  was  NT$5,383  million  for  2Q10,  compared  to  NT$4,214
              million  in  the  previous  quarter.    We  recorded  income  tax  expense  of
              NT$611  million  during  the  quarter,  compared  to  NT$470  million  in  1Q10.
        --  In  2Q10,  net  income  was  NT$4,613  million,  compared  to  a  net  income  of
              NT$1,883  million  for  2Q09  and  net  income  of  NT$3,488  million  for  1Q10.
        --  Our  total  number  of  shares  outstanding  at  the  end  of  the  quarter  was
              6,049,280,572,  including  retroactive  stock  dividend  and  treasury  stock
              owned  by  our  subsidiaries.    Our  2Q10  diluted  earnings  per  share  of
              NT$0.76  was  based  on  6,010,598,704  weighted  average  number  of  shares
              outstanding  in  2Q10.

        2Q10  Results  Highlights  --  IC  ATM(2)  Basis

        --  Net  revenue  contribution  from  IC  packaging  operations,  testing
              operations,  and  substrates  sold  to  third  parties  was  NT$25,707  million,
              NT$5,288  million  and  NT$702  million,  respectively,  and  each  represented
              approximately  81%,  17%  and  2%,  respectively,  of  total  net  revenues  for
              the  quarter.
        --  Cost  of  revenues  was  NT$23,394  million,  up  43%  year-over-year  and  up
              12%  sequentially.
              --  Raw  material  cost  totaled  NT$10,278  million  during  the  quarter,
                    representing  32%  of  total  net  revenue,  compared  with  NT$8,886
                    million  and  32%  of  total  net  revenue  in  the  previous  quarter.
              --  Labor  cost  totaled  NT$4,643  million  during  the  quarter,  representing
                    15%  of  total  net  revenue,  compared  with  NT$4,135  million  and  15%  of
                    total  net  revenue  in  the  previous  quarter.
              --  Depreciation,  amortization  and  rental  expenses  totaled  NT$4,093
                    million  during  the  quarter,  down  2%  year-over-year  and  up  2%
                    sequentially.
        --  Total  operating  expenses  during  2Q10  were  NT$2,936  million,  including
              NT$1,143  million  in  R&D  and  NT$1,793  million  in  SG&A,  compared  with
              operating  expenses  of  NT$2,629  million  in  1Q10.    Total  operating
              expenses  as  a  percentage  of  net  revenue  for  the  current  quarter  were  9%,
              down  from  10%  in  2Q09  and  the  previous  quarter.
        --  Operating  income  for  the  quarter  totaled  NT$5,367  million,  up  from
              NT$3,818  million  in  the  previous  quarter.    Operating  margin  increased
              to  17%  in  2Q10  from  14%  in  1Q10.
        --  In  terms  of  non-operating  items:
              --  Net  interest  expense  was  NT$275  million,  down  from  NT$293  million  a
                    quarter  ago  primarily  due  to  lower  loan  balance  during  the  quarter.
              --  Net  foreign  exchange  loss  of  NT$77  million  was  primarily
                    attributable  to  the  appreciation  of  the  U.S.  dollar  against  the  N.T.
                    dollar.
              --  Gain  on  equity-method  investments  of  NT$313  million  was  primarily
                    attributable  to  our  investment  income  in  USI.
              --  Other  non-operating  loss  of  NT$152  million  was  primarily  related  to
                    miscellaneous  loss.    Total  non-operating  expenses  for  the  quarter
                    was  NT$191  million,  compared  to  non-operating  expenses  of  NT$337
                    million  for  2Q09  and  non-operating  income  of  NT$113  million  for  1Q10.
        --  Income  before  tax  was  NT$5,176  million  for  2Q10,  compared  to  NT$3,931
              million  in  the  previous  quarter.    We  recorded  income  tax  expense  of
              NT$525  million  during  the  quarter,  compared  to  NT$395  million  in  1Q10.
        --  In  2Q10,  net  income  was  NT$4,613  million,  compared  to  a  net  income  of
              NT$1,674  million  for  2Q09  and  net  income  of  NT$3,395  million  for  1Q10.

        (2)  ATM  stands  for  Semiconductor  Assembly,  Testing  and  Material.

        2Q10  Results  Highlights  of  USI

        --  Net  revenue  contribution  from  EMS  operations  was  NT$14,726  million,  up
              23%  year-over-year  and  up  2%  sequentially.
        --  Cost  of  revenues  was  NT$12,963  million,  up  22%  year-over-year  and  up  1%
              sequentially.
              --  Raw  material  cost  totaled  NT$11,838  million  during  the  quarter,
                    representing  80%  of  total  net  revenue,  compared  with  NT$11,777
                    million  and  81%  of  total  net  revenue  in  the  previous  quarter.
              --  Labor  cost  totaled  NT$520  million  during  the  quarter,  representing
                    4%  of  total  net  revenue,  compared  with  NT$487  million  and  3%  of
                    total  net  revenue  in  the  previous  quarter.
              --  Depreciation,  amortization  and  rental  expenses  totaled  NT$231
                    million  during  the  quarter,  down  30%  year-over-year  and  down  9%
                    sequentially.
        --  Total  operating  expenses  during  2Q10  were  NT$1,218  million,  including
              NT$417  million  in  R&D  and  NT$801  million  in  SG&A,  compared  with
              operating  expenses  of  NT$988  million  in  1Q10.    Total  operating  expenses
              as  a  percentage  of  net  revenue  for  the  current  quarter  were  8%,  the
              same  as  2Q09  and  up  from  7%  in  1Q10.
        --  Operating  income  for  the  quarter  totaled  NT$545  million,  down  from
              NT$626  million  in  the  previous  quarter.    Operating  margin  was  4%  in
              2Q10,  the  same  as  the  previous  quarter.
        --  Total  non-operating  income  for  the  quarter  was  NT$91  million,  compared
              to  non-operating  income  of  NT$22  million  for  2Q09  and  non-operating
              expenses  of  NT$20  million  for  1Q10.
        --  Income  before  tax  was  NT$636  million  for  2Q10,  compared  to  NT$606
              million  in  the  previous  quarter.    We  recorded  income  tax  expense  of
              NT$85  million  during  the  quarter,  compared  to  NT$74  million  in  1Q10.
        --  In  2Q10,  net  income  was  NT$549  million,  compared  to  a  net  income  of
              NT$349  million  for  2Q09  and  net  income  of  NT$530  million  for  1Q10.

        LIQUIdiTY  AND  CAPITAL  RESOURCES  of  Actual  Basis

        --  As  of  June  30,  2010,  our  cash  and  current  financial  assets  totaled
              NT$28,061  million,  compared  to  NT$40,417  million  as  of  March  31,  2010.
        --  Capital  expenditures  in  2Q10  totaled  US$366million,  of  which  US$227
              million  was  used  for  IC  packaging,  US$127  million  was  used  for  testing,
              US$7  million  was  used  for  EMS  and  US$5  million  was  used  for
              interconnect  materials.
        --  As  of  June  30,  2010,  we  had  total  bank  debt  of  NT$68,446  million,
              compared  to  NT$78,317  million  as  of  March  31,  2010.    Total  bank  debt
              consisted  of  NT$15,494  million  of  revolving  working  capital  loans,
              NT$2,136  million  of  the  current  portion  of  long-term  debt,  and
              NT$50,816  million  of  long-term  debt.    Total  unused  credit  lines
              amounted  to  NT$86,585  million.
        --  Current  ratio  as  of  June  30,  2010  was  1.42,  compared  to  1.61  as  of
              March  31,  2010.    Net  debt  to  equity  ratio  was  0.44  as  of  June  30,  2010.
        --  Total  number  of  employees  was  44,374  as  of  June  30,  2010,  compared  to
              26,406  as  of  June  30,  2009  and  42,953  as  of  March  31,  2010.

        Business  Review

        IC  Packaging  Services(3)

        --  Net  revenues  generated  from  our  IC  packaging  operations  were  NT$25,707
              million  during  the  quarter,  up  NT$9,116  million,  or  55%  year-over-year,
              and  up  NT$3,619  million,  or  16%  sequentially.
        --  Net  revenues  from  advanced  substrate  and  leadframe-based  packaging
              accounted  for  85%  of  total  IC  packaging  net  revenues  during  the  quarter,
              down  2  percentage  points  from  the  previous  quarter.
        --  Gross  margin  for  our  IC  packaging  operations  during  the  quarter  was  22%,
              up  by  3  percentage  points  from  the  same  quarter  last  year  and  previous
              quarter.
        --  Capital  expenditures  for  our  IC  packaging  operations  amounted  to  US$227
              million  during  the  quarter,  of  which  US$186  million  was  used  for
              wirebonding  packaging  capacity  and  US$41  million  was  used  for  wafer
              bumping  and  flip  chip  packaging  equipment.
        --  As  of  June  30,  2010,  there  were  10,705  wirebonders  in  operation.    916
              wirebonders  were  added  and  28  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  1  percentage
              point  from  the  previous  quarter.

        (3)  IC  packaging  services  include  module  assembly  services.

        Testing  Services

        --  Net  revenues  generated  from  our  testing  operations  were  NT$5,288
              million,  up  NT$1,411  million,  or  36%  year-over-year,  and  up  NT$626
              million,  or  13%,  sequentially.
        --  Final  testing  contributed  83%  to  total  testing  net  revenues,  which
              remained  the  same  as  the  previous  quarter.    Wafer  sort  contributed  15%
              to  total  testing  net  revenues,  up  1  percentage  point  from  the  previous
              quarter.    Engineering  testing  contributed  2%  to  total  testing  net
              revenues,  down  1  percentage  point  from  the  previous  quarter.
        --  Depreciation,  amortization  and  rental  expense  associated  with  our
              testing  operations  amounted  to  NT$1,403  million,  down  from  NT$1,480
              million  in  2Q09  and  up  from  NT$1,372  million  in  1Q10.
        --  In  2Q10,  gross  margin  for  our  testing  operations  was  39%,  up  by  11
              percentage  points  year-over-year  and  up  4  percentage  points  from  the
              previous  quarter.
        --  Capital  spending  on  our  testing  operations  amounted  to  US$127  million
              during  the  quarter.
        --  As  of  June  30,  2010,  there  were  1,846  testers  in  operation.    242
              testers  were  added  and  30  testers  were  disposed  of  during  the  quarter.

        EMS  Services

        --  Net  revenues  generated  from  our  EMS  operations  were  NT$14,726  million,
              up  NT$2,748  million,  or  23%  year-over-year,  and  up  NT$220  million,  or
              2%,  sequentially.
        --  Electronics  Packaging  &  EMS  products  contributed  22%  to  total  EMS  net
              revenues,  down  by  6  percentage  points  from  the  previous  quarter.
              Computers  &  Peripherals  products  contributed  16%  to  total  EMS  net
              revenues,  down  by  9  percentage  points  from  the  previous  quarter.
              Communications  products  contributed  32%  to  total  EMS  net  revenues,  up
              by  11  percentage  points  from  the  previous  quarter.    Network  Storage  &
              Servers  products  contributed  10%  to  total  EMS  net  revenues,  up  by  1
              percentage  point  from  the  previous  quarter.    Industrial  &  Automotive
              products  contributed  20%  to  total  EMS  net  revenues,  up  by  3  percentage
              points  from  the  previous  quarter.
        --  In  2Q10,  gross  margin  for  our  EMS  operations  was  12%,  up  1  percentage
              point  from  2Q09  and  the  previous  quarter.
        --  Capital  spending  on  our  EMS  operations  amounted  to  US$7  million  during
              the  quarter.

        Substrate  Operations

        --  PBGA  substrate  manufactured  by  ASE  amounted  to  NT$2,560  million  during
              the  quarter,  up  NT$721  million,  or  39%  year-over-year,  and  up  NT$230
              million,  or  10%  from  the  previous  quarter.    Of  the  total  output  of
              NT$2,560  million,  NT$702  million  was  from  sales  to  external  customers.
        --  Gross  margin  for  substrate  operations  was  27%  during  the  quarter,  up  by
              10  percentage  points  year-over-year  and  up  by  3  percentage  points
              sequentially.
        --  In  2Q10,  our  internal  substrate  manufacturing  operations  supplied  45%
              (by  value)  of  our  total  substrate  requirements.

        Customers

        IC  ATM  consolidated  Basis

        --  Our  five  largest  customers  together  accounted  for  approximately  29%  of
              our  total  net  revenues  in  2Q10,  compared  to  32%  in  2Q09  and  30%  in  1Q10.
              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  46%  in  2Q09  and  44%  in  1Q10.
        --  Our  customers  that  are  integrated  device  manufacturers,  or  IDMs,
              accounted  for  35%  of  our  total  net  revenues  during  the  quarter,
              compared  to  30%  in  2Q09  and  37%  in  1Q10.

        USI  consolidated  Basis

        --  Our  five  largest  customers  together  accounted  for  approximately  62%  of
              our  total  net  revenues  in  2Q10,  compared  to  66%  in  2Q09  and  63%  in  1Q10.
              There  are  four  customers    accounted  for  more  than  10%  of  our  total  net
              revenues.
        --  Our  top  10  customers  contributed  78%  of  our  total  net  revenues  during
              the  quarter,  compared  to  83%  in  2Q09  and  79%  in  1Q10.
 

1 | 2 | 3 | 4  Next Page »



Review Article Be the first to review this article
CST Webinar Series

EMA:

Featured Video
Editorial
Peggy AycinenaWhat Would Joe Do?
by Peggy Aycinena
Retail Therapy: Jump starting Black Friday
Peggy AycinenaIP Showcase
by Peggy Aycinena
REUSE 2016: Addressing the Four Freedoms
More Editorial  
Jobs
Development Engineer-WEB SKILLS +++ for EDA Careers at North Valley, CA
ACCOUNT MANAGER MUNICH GERMANY EU for EDA Careers at MUNICH, Germany
Manager, Field Applications Engineering for Real Intent at Sunnyvale, CA
FAE FIELD APPLICATIONS SAN DIEGO for EDA Careers at San Diego, CA
Principal Circuit Design Engineer for Rambus at Sunnyvale, CA
AE-APPS SUPPORT/TMM for EDA Careers at San Jose-SOCAL-AZ, CA
Upcoming Events
Zuken Innovation World 2017, April 24 - 26, 2017, Hilton Head Marriott Resort & Spa in Hilton Head Island, SC at Hilton Head Marriott Resort & Spa Hilton Head Island NC - Apr 24 - 26, 2017
CST Webinar Series



Internet Business Systems © 2016 Internet Business Systems, Inc.
595 Millich Dr., Suite 216, Campbell, CA 95008
+1 (408)-337-6870 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy Policy