* 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.
** In September 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 full year of 2005, the Company's revenues were NT$84,036 million, up 12% compared to 2004. Net loss was NT$4,718 million, compared to net income of NT$4,210 million in 2004. Loss per share was NT$1.08, or US$0.168 per ADS, compared to earning per share of NT$0.96 for 2004.
RESULTS OF OPERATIONS
4Q05 Results
-- Net revenues amounted to NT$26,404 million, up 21% sequentially and
27% year-over-year. The revenue contribution from IC packaging
operations, testing operations, module assembly, and others was
NT$18,730 million, NT$5,267 million, NT$2,054 million and NT$353
million, respectively, and each represented approximately 71%, 20%
and 8%, respectively, of total net revenues for the quarter.
-- Cost of revenues was NT$19,869 million, up 12% sequentially and 15%
year-over-year.
-- As a percentage of net revenues, cost of revenues was 75% in 4Q05,
down from 81% in 3Q05 and from 83% in 4Q04.
-- Depreciation, amortization and rental expenses totaled NT$3,877
million during the quarter, up 3% sequentially and down 5% year-
over-year. As a percentage of net revenues, depreciation,
amortization and rental expenses were 15% during the quarter, down
from 17% in 3Q05 and from 20% in 4Q04.
-- Gross profit for 4Q05 was NT$6,535 million, up 60% from NT$4,088
million in 3Q05 and up 88% from NT$3,473 million in 4Q04. Gross
margin was 25% for the quarter, which increased from 19% in the
previous quarter and from 17% in 4Q04.
-- Total operating expenses during 4Q05 were NT$2,298 million including
NT$769 million in R&D and NT$1,529 million in SG&A. Total operating
expenses as a percentage of net revenues for the current quarter was
at 9%, down from 10% in 3Q05 and 11% in 4Q04.
-- Operating income for 4Q05 was NT$4,237 million, compared to income
of NT$1,954 million and NT$1,157 million for 3Q05 and 4Q04,
respectively. Operating margin was 16% in 4Q05, which increased
from 9% in 3Q05 and from 6% in 4Q04.
-- We recorded net non-operating expenses of NT$966 million in 4Q05,
which increased by NT$704 million sequentially, and decreased by
NT$2,306 million year-over-year.
-- The net exchange loss of NT$105 million was mainly attributable
to the effect of US dollars depreciation on our net assets
position denominated in US dollars.
-- Gain on long-term investment was NT$48 million, consisting of
NT$75 million investment income from minority-owned affiliates and
NT$27 million of goodwill amortization expense related to such
minority-owned affiliates. The NT$75 million investment income
from minority-owned affiliates mainly included NT$88 million of
investment income from Universal Scientific Industrial Co.
("USI"), NT$13 million of investment loss from Hung Ching
Construction.
-- Other non-operating expenses were primarily related to equipment
provision associated with the discontinuation of leadframe
manufacturing operation, inventory provision adjustment and
other miscellaneous expenses.
-- Income before tax was NT$3,271 million for 4Q05. We recorded an
income tax expenses of NT$46 million during the quarter. Income from
discontinuing operations related to our camera module assembly
operation in Penang was NT$230 million. Minority interest adjustment
was NT$540 million.
-- In 4Q05, net income was NT$2,915 million, compared to net income of
NT$1,588 million for 3Q05 and net loss of NT$1,407 million for 4Q04.
-- Our total shares outstanding at the end of the quarter were
4,382,238,648. Our EPS for 4Q05 was NT$0.64, or US$0.095 per ADS,
based on 4,615,663,939 weighted average number of shares outstanding
during the fourth quarter.
2005 Full-year Results
-- Net revenues for the full year of 2005 amounted to NT$84,036 million,
up 12% from 2004. The revenue contribution from IC packaging
operations, testing operations, module assembly, and others were
NT$59,443 million, NT$17,122 million, NT$6,580 million and NT$891
million, respectively.
-- IC packaging, testing and module assembly represent approximately
71%, 20% and 8%, respectively, of total net revenues for the year.
-- Costs of revenues for the full year of 2005 were NT$69,538 million,
up 17% compared to 2004.
-- As a percentage of net revenues, cost of revenues was 83% in
2005, up from 79% in 2004.
-- Depreciation, amortization and rental expenses totaled
NT$15,647 million during the year, up 4% compared to 2004. As
a percentage of net revenues, Depreciation, amortization and
rental expenses were 19% during the year, down from 20% in
2004. The increase in depreciation, amortization and rental
expense was primarily due to our capacity expansion in our
Shanghai operation and the full-year effect of our acquisition
of ASE Japan.
-- Gross profit for the year was NT$14,498 million, down 7% compared to
NT$15,597 million in 2004. Gross margin was 17% for the year, down
from 21% in 2004.
-- Total operating expenses during 2005 were NT$8,693 million
including NT$2,788 million in R&D and NT$5,905 million in SG&A.
Total operating expenses as a percentage of net revenues was 10% in
2005, down from 12% in 2004.
-- Operating income for the year was NT$5,805 million, compared to
income of NT$6,957 for the previous year. Operating margin was 7%
in 2005, which decreased from 9% in 2004.
-- We recorded net non-operating expenses of NT$11,506 million in
2005, which increased by NT$7,485 million from the previous year.
-- The Company recorded fire loss of NT $8.8 billion. Such loss
amount assumed total loss on all fire-impacted assets with net
book value of NT$13.0 billion, labor & rental cost totaling NT$228
million that were idled from May to December 2005, and other
miscellaneous NT$172 million, netted by insurance receivable of
NT$4.6 billion. The insurance receivables of NT$4.6 billion were
based on certain assets with their damage amount currently
assessed by the Company and adjusted for the insurance
deductibles. NT$2.3 billion of total NT$ 4.6 billion insurance
receivable was received in October 2005.
-- The increase in net interest expense is mainly due to higher
outstanding loan balances and interest rate.
-- The net exchange gain of NT$175 million was mainly attributable
to the effect of US dollars appreciation on our net assets
position denominated in US dollars.
-- Gain on long-term investment was NT$80 million, consisting of
NT$187 million investment income from minority-owned affiliates,
NT$107 million of goodwill amortization related to such minority-
owned affiliates. The NT$187 million investment income from
minority-owned subsidiaries included NT$151 million of investment
income from Universal Scientific Industrial Co. ("USI"), NT$29
million of investment loss from Hung Ching Construction, NT$61
million of investment income from Inprocomm, Inc. ("IPCM"), and
NT$4 million of investment income from other invested companies.
-- Loss before tax was NT$5,701 million for 2005. We recognized an
income tax benefit of NT$119 million during the year. Income from
discontinuing operations related to our camera module assembly
operation in Penang was NT$354 million. Minority interest adjustment
was NT$510 million.
-- In 2005, net loss amounted to NT$4,718 million, compared to net
income of NT$4,210 for 2004.
-- Our total shares outstanding at the end of the year were
4,382,238,648. Our loss per share for 2005 was NT$1.08, or
US$0.168 per ADS, based on 4,370,513,685 weighted average number
of shares outstanding.
LIQUIDITY AND CAPITAL RESOURCES
-- Capital expenditures in 4Q05 totaled US$113 million, of which US$31
million was for IC packaging, US$13 million was for module assembly,
US$21 million was for testing, and US$48 million was for interconnect
materials. Capital expenditures for the full year 2005 totaled
US$262 million, including US$108 million for IC packaging, US$17
million for module assembly, US$71 million for testing and US$66
million for interconnect materials.
-- EBITDA for the quarter totaled NT$7,753 million, up 51%
year-over-year and 32% sequentially. Full-year EBITDA totaled
NT$20,303 million, down 12% from the prior year.
-- As of the end of 4Q05, we had cash on hand plus short-term
investments of NT$17,698 million, which increased by NT$4,196
million from the end of 3Q05.
-- As of the end of 4Q05, we had total bank debts of NT$53,385 million,
decreased from NT$57,619 million as of end of 3Q05. Total bank
debts were consisting of NT$5,085 million of revolving working
capital loans, NT$5,438 million of current portion of long-term
debts, NT$33,500 million of long-term debts and NT$9,362 million of
long-term bonds payable. Total unused banking facilities were
NT$21,480 million.
-- Current ratio improved from 1.45 as of end of 3Q05 to 1.54 as of
year end 2005, and net debt to equity ratio also improved from
0.86 to 0.65.
-- Total number of employees was 29,039 as of December 31, 2005.
Business Review
IC Packaging Services
-- Revenues generated from our IC packaging operations were NT$18,730
million during the quarter, up NT$3,465 million or 23% sequentially
and NT$4,035 million or 27% year-over-year. On a sequential basis,
the increase in packaging revenue was primarily due to volume
increase with slight increase in average selling price.
-- Revenues from advanced substrate and leadframe-based packaging
accounted for 90% of total IC packaging revenues during the quarter,
up by three percentage points from the previous quarter.
-- Gross margin for our IC packaging operations was 21%, up by five
percentage points sequentially and up by six percentage points
year-over-year as a result of increased utilization and favorable
product mix changes.
-- Capital expenditure for our IC packaging operations amounted to US$31
million during the quarter, of which US$25 million was for wirebonding
packaging capacity, and US$6 million was for wafer bumping and flip
chip packaging equipment.
-- As of December 31, 2005, there were 6,366 wirebonders in operation,
of which 229 wirebonders were added and 99 wirebonders were
disposed of during the quarter.
-- Revenues from flip chip packages and wafer bumping services accounted
for 19% of total packaging revenue, up from 14% in 3Q05.
Testing Services
-- Revenues generated from our testing operations were NT$5,267 million,
up NT$857 million or 19% sequentially and NT$910 million or 21%
year-over-year.
-- Final testing contributed 80% to total testing revenues, down by one
percentage point from the previous quarter. Wafer sort contributed
17% to total testing revenues, up by one percentage point from the
previous quarter. Engineering testing contributed 3% to total
testing revenues, consistent with the previous quarter.
-- In 4Q05, gross margin for our testing operations was 40%, up by ten
percentage points sequentially and by seventeen percentage points
year-over-year. The increase in gross margin was mainly due to higher
utilization, lower depreciation expenses and rental expenses, slight
increase in average selling price and favorable revenue mix changes.
-- Capital spending on our testing operations amounted to US$21 million
during the quarter.
-- As of December 31, 2005, there were 1,304 testers in operation, of
which 30 testers were added and 56 testers were disposed of during
the quarter.
Module Assembly Services
-- Revenues generated from our module assembly operations were NT$2,054
million, up NT$159 million or 8% sequentially, and up NT$557 million
or 32% year-over-year mainly due to volume increase and favorable
product mix change.
-- In September 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.
-- Camera module assembly revenue accounted for 37% of the total
module assembly revenues, while RF and baseband module assembly
accounted for 63%.
-- In 4Q05, gross margin for our module assembly operations was 18%, up
by one percentage points sequentially and year-over-year.
Interconnect Materials
-- The materials output manufactured by ASE was about NT$2,201 million
for the quarter, up by NT$835 million or 61% from NT$1,366 million
in previous quarter, and increased by NT$58 million or 3% from
NT$2,143 million in a year-ago quarter.
-- Gross margin for material was 25% during the quarter, which increased
from 6% in 3Q05 and from 8% in 4Q04. The gross margin improved
sequentially mainly due to increase in sales volume during the
current quarter and yield improvement
-- In 4Q05, the Company's internal material operation supplied 33%
(by value) of our total PBGA substrate requirements.
-- As of end of December 31, 2005, the Company had recovered its PBGA
capacity lost in the fire accident, with monthly capacity reaching
36 million units.
Customers
-- Our five largest customers together accounted for approximately 30%
of our net revenues in 4Q05, consistent with the previous quarter
and decreased from 36% in 4Q04. No customer accounted for more than
10% of our total revenues.
-- Our top 10 customers contributed 46% of our net revenues during the
quarter, consistent with the previous quarter and decreased from 52%
4Q04.
-- Our customers that are integrated device manufacturers, or IDMs,
accounted for 41% of our revenues in 4Q05, compared to 42% in 3Q05
and 45% in 4Q04.
About ASE, Inc.
ASE, Inc. is the world's largest independent provider of IC packaging services and, together with its subsidiary ASE Test Limited , 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, 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 2004 Annual Report on Form 20-F filed on June 23, 2005.
Supplemental Financial Information
Consolidated Operations
Amounts in NT$ Millions 4Q/05 3Q/05 4Q/04
Net Revenues 26,404 21,822 20,760
Revenues by End Application
Communication 35% 36% 38%
Computer 27% 30% 32%
Automotive and Consumers 35% 31% 27%
Others 3% 3% 3%
Revenues by Region
North America 51% 49% 53%
Europe 12% 14% 9%
Taiwan 21% 20% 22%
Japan 10% 11% 10%
Other Asia 6% 6% 6%
IC Packaging Services
Amounts in NT$ Millions 4Q/05 3Q/05 4Q/04
Net Revenues 18,730 15,265 14,695
Revenues by End Application
Communication 27% 27% 30%
Computer 32% 36% 39%
Automotive and Consumers 38% 34% 28%
Others 3% 3% 3%
Revenues by Packaging Type
Advanced substrate &
leadframe based 90% 87% 88%
Traditional leadframe based 6% 8% 8%
Others 4% 5% 4%
Capacity
CapEx (US$ Millions) * 31 32 83
Number of Wirebonders 6,366 6,236 6,684
Testing Services
Amounts in NT$ Millions 4Q/05 3Q/05 4Q/04
Net Revenues 5,267 4,410 4,357
Revenues by End Application
Communication 38% 39% 43%
Computer 20% 22% 20%
Automotive and Consumers 36% 34% 30%
Others 6% 5% 7%
Revenues by Testing Type
Final test 80% 81% 76%
Wafer sort 17% 16% 21%
Engineering test 3% 3% 3%
Capacity
CapEx (US$ Millions) * 21 26 28
Number of Testers 1,304 1,330 1,515
* 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 three months ended For the period ended
Dec. 31 Sep. 30 Dec. 31 Dec. 31 Dec. 31
2005 2005 2004 2005 2004
Net revenues:
IC Packaging 18,730 15,265 14,695 59,443 53,545
Testing 5,267 4,410 4,357 17,122 16,474
Module Assembly 2,054 1,895 1,497 6,580 4,717
Others 353 252 211 891 502
Total net revenues 26,404 21,822 20,760 84,036 75,238
Cost of revenues 19,869 17,734 17,287 69,538 59,641
Gross Profit 6,535 4,088 3,473 14,498 15,597
Operating expenses:
Research and development 769 678 728 2,788 2,581
Selling, general and
administrative 1,529 1,456 1,588 5,905 6,059
Total operating expenses 2,298 2,134 2,316 8,693 8,640
Operating income (loss) 4,237 1,954 1,157 5,805 6,957
Net non-operating (income)
expenses:
Interest expenses - net 390 354 223 1,398 894
Foreign exchange loss
(gain) 105 (267) 270 (175) 148
Loss (gain) on long-term
investment (48) (12) 327 (80) 395
Loss on disposal of assets 32 (8) 17 83 135
Goodwill impairment -- -- 2,462 -- 2,462
Others 487 195 (27) 10,280 (13)
Total non-operating
expenses 966 262 3,272 11,506 4,021
Income (loss) before tax 3,271 1,692 (2,115) (5,701) 2,936
Income tax expense (benefit) 46 (40) (211) (119) (1,397)
Income (loss) from
continuing operations 3,225 1,732 (1,904) (5,582) 4,333
Loss (Income) from
discontinuing operations (230) (41) (75) (354) (568)
Income (loss) before
minority interest 3,455 1,773 (1,829) (5,228) 4,901
Minority interest 540 185 (422) (510) 691
Net income (loss) 2,915 1,588 (1,407) (4,718) 4,210
Per share data:
Earnings (loss) per
common share
- Basic NT$0.67 NT$0.36 NT$(0.32) NT$(1.08) NT$0.99
- Diluted NT$0.64 NT$0.35 NT$(0.32) NT$(1.08) NT$0.96
Earnings (loss) per
pro forma equivalent
ADS
- Basic US$0.100 US$0.057 US$(0.049) US$(0.16) US$0.148
- Diluted US$0.095 US$0.054 US$(0.049) US$(0.168) US$0.144
Number of weighted average
shares used in
diluted EPS
calculation
(in thousands) 4,615,664 4,580,884 4,349,001 4,370,514 4,545,868
Forex (NT$ per US$1) 33.40 32.00 33.08 32.08 33.44
Advanced Semiconductor Engineering, Inc.
Consolidated Summary Balance Sheet Data
(In NT$ millions)
(Unaudited)
As of Dec. 31, As of Sep. 30,
2005 2005
Current assets:
Cash and cash equivalents 13,345 9,988
Short-term investments 4,353 3,514
Notes and accounts receivable 15,588 16,200
Inventories 7,757 8,094
Others 6,866 7,912
Total current assets 47,909 45,708
Long-term investments 4,825 4,802
Properties - net 67,904 67,830
Other assets 11,877 12,037
Total assets 131,515 130,377
Current liabilities:
Short-term debts - revolving credit 5,085 6,400
Short-term debts - current portion of
long-term 5,438 6,523
Notes and accounts payable 11,160 9,946
Others 9,397 8,760
Total current liabilities 31,080 31,629
Long-term debts 33,500 35,338
Long-term bonds payable 9,362 9,358
Other liabilities 2,621 2,471
Total liabilities 76,563 78,796
Minority interest 7,902 7,369
Shareholders' equity 47,050 44,212
Total liabilities & shareholders' equity 131,515 130,377
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:
Email Contact
http://www.aseglobal.com
CONTACT: Joseph Tung, or Freddie Liu, both of Advanced Semiconductor
Engineering, Inc., +886-2-8780-5489, or fax, +886-2-2757-6121, or
Email Contact
Web site: http://www.aseglobal.com/