ASTTY.pk ASAT Holdings Announces Financial Results for the Third Quarter of Fiscal Year 2008 Friday, March 28 2008 - 7:30
ASTTY $0.0 $0 (%0)
MILPITAS, Calif. and HONG KONG, March 28 /PRNewswire-FirstCall/ -- ASAT Holdings Limited (Pink Sheets: ASTTY), a global provider of semiconductor package design, assembly and test services, today announced financial results for the third quarter of fiscal 2008, ended January 31, 2008.
Net revenue for the third quarter of fiscal 2008 increased for the third consecutive quarter to $41.8 million. This compares with net revenue of $40.2 million in the previous quarter. Third quarter net loss improved to $5.0 million, or a net loss of $0.12 per American Depositary Share (ADS), compared with a net loss of $5.2 million, or a net loss of $0.13 per ADS in the second quarter. Included in the third quarter net loss were reorganization charges of $149,000. Net loss in the second quarter included a charge of approximately $92,000 in reorganization costs for follow-on expenses related to completing the move of the Company's manufacturing operations to China.
Additional Third Quarter Results -- Net sales for assembly were $40.7 million -- Net sales for test were $1.1 million -- Capital expenditures were $2.5 million -- Cash and cash equivalents at the end of the quarter were $12.3 million
"We have now achieved three consecutive quarters of revenue growth and we recorded positive income from operations for the first time since the April 2004 quarter. These results further demonstrate the success of the financial improvement plan implemented last year," said Tung Lok Li, acting chief executive officer of ASAT Holdings Limited. "In the third quarter, we improved on several important elements of this plan, including expanding sales to existing customers and generating initial revenue from new customers. We will continue to invest in our sales organization in order to capitalize on new business opportunities, which should lead to additional revenue this year."
Fourth Quarter Fiscal 2008 Outlook
"While we remain confident with our current strategy, our outlook for the April quarter, which is traditionally our weakest quarter, is cautious due to normal seasonal sales trends and uncertainty in the macro economy. These factors lead us to forecast revenue in the fourth quarter of fiscal 2008 will be down 10 percent to 15 percent sequentially," said Mr. Li.
Future Financing
As the Company's existing $20 million revolving credit facility will expire in September 2008, ASAT is in the process of obtaining external financing, including, but not limited to, the renewal of the existing $20 million revolving credit facility. These funds will be used primarily to facilitate the Company's required working capital needs. While ASAT believes receipt of financing is likely, there can be no assurance that it will be obtained, and if such financing is not obtained for any reason there may be questions regarding the Company's ability to continue as a going concern.
Conference Call and Webcast on March 28, 2008 at 8:30 a.m. ET
ASAT Holdings is scheduled to hold a conference call to discuss the financial results and other financial matters today at 8:30 a.m. ET/5:30 a.m. PT. To access the call, dial (480) 248-5085. A replay of the call will be available until April 4, 2008. To access the replay, dial (303) 590-3030. The passcode is 3859640. A live webcast of the call will also be available via the investor relations section of the Company's website at http://www.asat.com.
ASAT Holdings Limited
ASAT Holdings Limited is a global provider of semiconductor package design, assembly and test services. With 19 years of experience, the Company offers a definitive selection of semiconductor packages and world-class manufacturing lines. ASAT's advanced package portfolio includes standard and high thermal performance ball grid arrays, leadless plastic chip carriers, thin array plastic packages, system-in-package and flip chip. ASAT was the first company to develop moisture sensitive level one capability on standard leaded products. Today the Company has operations in the United States, Asia and Europe. For more information, visit http://www.asat.com.
Safe Harbor
This news release contains statements and information that involve risks, uncertainties and assumptions. These statements and information constitute "forward-looking statements" within the meaning of federal securities laws including 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. Such forward-looking statements, including statements regarding expected revenues, liquidity and financial position in our fiscal quarter, our manufacturing capacity and cost structure, our operational efficiencies, our relocation and reorganization costs, our customer retention, growth and expectations, our continuation as a going concern and our capital needs, involve known and unknown risks, uncertainties, assumptions and other factors that could cause the actual performance, financial condition or results of operations of ASAT Holdings Limited to differ materially from those expressed or implied in any forward-looking statement. Investors are cautioned that actual events and results could differ materially from those contained in these statements as a result of a variety of factors, including whether an active trading market in the Company's ADSs will develop or be maintained on the OTC Bulletin Board or any other trading market, obtaining future financing, conditions in the overall semiconductor market and economy, our progress in ramping the new China facility, acceptance and demand for the Company's products and services, continued operational efficiencies, customer retention, growth and expectations, operational and technological risks and revisions to the preliminary unaudited financial results which may occur during preparation of financial statements and disclosures and the preparation of the Company's quarterly report on Form 6-K and annual report on Form 20-F. The risks, uncertainties and other factors also include, among others, our ability to successfully implement our diversification strategy and our long- term growth strategy, our ability to continue to realize operational efficiencies and improvements to our cost structure, our ability to obtain future financing, the risk that an active trading market in the Company's American Depositary Shares will not develop or be maintained on the OTC Bulletin Board or any other trading market, and those risks, uncertainties, assumptions and other factors stated in the section entitled "Risk Factors" in our Annual Report on Form 20-F filed with the United States Securities and Exchange Commission on October 15, 2007 and the section entitled "Risk Factors" in our current reports on Form 6-K filed with the United States Securities and Exchange Commission containing quarterly financial information. The forward-looking statements in this release reflect the current beliefs and expectations of the Company as of this date, and the Company undertakes no obligation to update these projections and forward-looking statements to reflect actual results or events or circumstances that occur after the date of this news release.
Revenue Breakdown by Market Segment
Three Months Ended January 31, 2008 October 31, 2007 Market Segment % of Net Revenues % of Net Revenues (Unaudited)
Revenue Breakdown by Region Three Months Ended January 31, 2008 October 31, 2007 Region % of Net Revenues % of Net Revenues (Unaudited) United States 85 83 Europe 4 6 Asia 11 11
Revenue Breakdown by Customer Type
Three Months Ended January 31, 2008 October 31, 2007 Customer Type % of Net Revenues % of Net Revenues (Unaudited) Fabless 84 85 IDM 16 15
Summary financial data follows
ASAT Holdings Limited Condensed Consolidated Statements of Operations (USD in thousands, except share data) For the three months ended January 31, 2008, October 31, 2007, and January 31, 2007, and For the nine months ended January 31, 2008 and January 31, 2007
Three Months Ended Nine Months Ended January 31, October 31, January 31, January 31, January 31, 2008 2007 2007 2008 2007 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net Sales 41,764 40,234 41,546 119,733 128,868
Cost of sales (Note A) 36,783 34,799 37,674 104,284 116,528 Gross profit 4,981 5,435 3,872 15,449 12,340
Operating expenses: Selling, general and administrative 4,157 5,145 5,584 14,529 16,271 Research and development 519 498 507 1,529 1,743 Reorganization expenses (Note B) 149 92 763 373 1,791 Facilities and relocation charges - - 405 - 2,958
Total operating expenses 4,825 5,735 7,259 16,431 22,763
Income/(loss) from operations 156 (300) (3,387) (982) (10,423) Other (expenses) /income, net (111) 68 564 179 1,040 Interest expense: - - amortization of deferred charges (773) (841) (826) (2,506) (2,847) - third parties (4,092) (4,146) (3,997) (12,338) (11,824)
Loss before income taxes (4,820) (5,219) (7,646) (15,647) (24,054) Income tax expense (Note C) (130) (6) - (241) -
Net loss (4,950) (5,225) (7,646) (15,888) (24,054) Other comprehensive loss: Foreign currency translation 9 34 8 43 17
Comprehensive loss (4,941) (5,191) (7,638) (15,845) (24,037) Net loss applicable to ordinary shareholders: Net loss (4,950) (5,225) (7,646) (15,888) (24,054) Preferred shares: Cumulative preferred share dividends (507) (507) (502) (1,521) (1,493) Accretion of preferred shares (411) (385) (319) (1,158) (893)
Net loss applicable to ordinary shareholders: (5,868) (6,117) (8,467) (18,567) (26,440)
Basic and diluted loss per ADS (Note D): Basic and diluted: Net loss (0.12) (0.13) (0.18) (0.39) (0.58)
Basic and diluted weighted average number of ADSs outstanding (Note D) 48,723,339 47,854,878 46,382,458 47,844,936 45,934,113
Basic and diluted loss per ordinary share: Basic and diluted: Net loss (0.01) (0.01) (0.01) (0.03) (0.04)
Basic and diluted weighted average number of ordinary shares out- standing 730,850,088 717,823,169 695,736,872 717,674,034 689,011,691
Note A: Includes $79, $418 and $217 inventory write-down in the three months ended January 31, 2008, October 31, 2007, and January 31, 2007, respectively. Includes $928 and $255 inventory write-down for the nine months ended January 31, 2008 and 2007, respectively.
Note B: Includes charges of $149, $92 and $763 associated with headcount reductions, primarily related to the Company's Hong Kong and US employees for this quarter. For the result of the remaining periods, the headcount reductions mainly related to the Company's Hong Kong employees.
Note C: The amount for the fiscal period of 2008 mainly represents provision for the US Income Tax, the PRC Enterprise Income Tax and Hong Kong Profits Tax.
Note D: On December 8, 2006, the Company announced an intention to change the ADS ratio from 5 ordinary shares per 1 ADS to 15 ordinary shares per 1 ADS, representing the equivalent of a 1- for-3 reverse split. The new ADS ratio had taken effect at the close of business on December 22, 2006 and the new ADS ratio had in place at beginning of the next business day on December 26, 2006. The basic and diluted loss per ADS has been prepared on the number of ADS after the reverse share split.
ASAT Holdings Limited Condensed Consolidated Balance Sheets (USD in thousands) As of January 31, 2008, October 31, 2007 and January 31, 2007
January 31, October 31, January 31, 2008 2007 2007 (Unaudited) (Unaudited) (Unaudited) ASSETS
Current assets: Cash and cash equivalents 12,264 6,237 11,072 Current portion of restricted cash 900 900 1,520 Accounts receivable, net 18,505 19,037 19,866 Inventories 15,599 16,048 15,271 Prepaid expenses and other current assets 6,679 6,321 4,824
Total current assets 53,947 48,543 52,553
Restricted cash - - 1,800 Property, plant & equipment, net 65,774 70,729 80,708 Deferred charges, net 6,980 7,808 5,622 Other non-current assets 5,761 5,146 5,057
Total assets 132,462 132,226 145,740
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities: Short-term bank facilities 9,269 3,964 2,533 Accounts payable 29,005 31,209 24,279 Accrued liabilities and other payable 23,690 19,567 27,138 Amount due to QPL 4,312 3,174 2,754 Current portion of capital lease obligations 1,596 1,615 1,807
Total current liabilities 67,872 59,529 58,511
Other payable, net of current portion - 3,129 - Purchase money loan 9,323 9,378 7,736 9.25% senior notes due 2011 150,000 150,000 150,000 Capital lease obligations, net of current portion 48 105 1,216
Total liabilities 227,243 222,141 217,463
Series A Redeemable Convertible Preferred Shares 6,870 6,487 5,404
Shareholders' deficit: Common stock 7,382 7,378 7,031 Less: Repurchase of shares at par (71) (71) (71) Additional paid-in capital 248,259 248,571 246,325 Accumulated deficits (357,080) (352,130) (330,206) Accumulated other comprehensive loss (141) (150) (206)
Total shareholders' deficit (101,651) (96,402) (77,127)
Total liabilities and shareholders' deficit 132,462 132,226 145,740
ASAT Holdings Limited Condensed Consolidated Statements of Cash Flows (USD in thousands) For the three months ended January 31, 2008, October 31, 2007, and January 31, 2007, and For the nine months ended January 31, 2008 and January 31, 2007
Three Months Nine Months Ended Ended January October January January January 31, 31, 31, 31, 31, 2008 2007 2007 2008 2007 (Unau- (Unau- (Unau- (Unau- (Unau- dited) dited) dited) dited) dited) Operating activities: Net loss (4,950) (5,225) (7,646) (15,888) (24,054) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization: Property, plant and equipment 5,428 5,618 5,793 16,720 17,620 Deferred charges and debt discount 773 841 826 2,506 2,847 Gain on disposal of property, plant and equipment - (55) (4) (53) - Unrealized foreign exchange loss 205 45 - 332 - Amortization of stock-based compensation 75 89 178 446 719
Changes in operating assets and liabilities: Accounts receivable, net 532 (1,447) 3,797 (801) 9,741 Restricted cash - 900 - 900 - Inventories 442 (2,536) 3,090 (2,214) 7,965 Prepaid expenses and other current assets (358) (910) (705) (1,508) 3,260 Other non-current assets (615) (79) (50) (753) (787) Accounts payable (147) 4,896 (3,100) 7,076 (6,033) Accrued liabilities and other payable 994 (2,687) 3,107 (841) 3,440 Amount due to QPL 1,138 756 563 1,780 (3,072)
Net cash provided by operating activities 3,517 206 5,849 7,702 11,646
Investing activities: Proceeds from disposal of property, plant and equipment - 71 35 71 35 Acquisition of property, plant and equipment (2,518) (3,430) (3,395) (7,037) (14,215)
Net cash used in investing activities (2,518) (3,359) (3,360) (6,966) (14,180)
Financing activities: Proceeds from warrant and preferred shares exercised - 1 - 1 - Repayment of short-term bank facilities (2,156) - - (2,156) - Proceeds from draw down of new bank facilities 7,256 - - 7,256 2,533 Repayment of capital lease obligations (76) (410) (385) (936) (1,567) Proceeds from stock options exercised - - 218 - 218 Proceeds from right offering - - - - 490
Net cash provided by (used in) financing activities 5,024 (409) (167) 4,165 1,674
Net increase (decrease) in cash and cash equivalents 6,023 (3,562) 2,322 4,901 (860) Cash and cash equivalents at beginning of period 6,237 9,765 8,742 7,325 11,915 Effects of foreign exchange rates change 4 34 8 38 17
Cash and cash equivalents at end of period 12,264 6,237 11,072 12,264 11,072
Supplemental disclosure of cash flow information: Cash paid during the period for: Interest expense 185 7,103 47 7,374 7,197 Income taxes 282 134 - 588 -
Market Data 
Markets 
AI
