ASTT Asat Hldg Ltd American Dep (MM)

HONG KONG and MILPITAS, Calif., Jan. 14 /PRNewswire-FirstCall/ -- ASAT Holdings Limited (NASDAQ:ASTT), a global provider of semiconductor package design, assembly and test services, today announced financial results for the second quarter of fiscal 2008, ended October 31, 2007. (Logo: http://www.newscom.com/cgi-bin/prnh/20030414/ASATLOGO) Net revenue in the second quarter of fiscal 2008 increased 6.6 percent to $40.2 million, compared with net revenue of $37.7 million in the previous quarter. Second quarter net loss was $5.2 million, or a net loss of $0.13 per American Depositary Share (ADS). Second quarter net loss includes 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. Net loss in the first quarter of fiscal 2008 was $5.7 million, or a net loss of $0.14 per ADS, and included reorganization costs of approximately $132,000. Additional Second Quarter Results * Net sales for assembly were $38.5 million * Net sales for test were $1.7 million * Capital expenditures were $3.4 million * Cash and cash equivalents at the end of the quarter were $6.2 million "We recorded another quarter of revenue growth and better overall financial performance, further validating our financial improvement plan implemented in 2007 is succeeding," said Tung Lok Li, acting chief executive officer of ASAT Holdings Limited. "We continued to execute on our strategy to build our client base, which has resulted in new customers and additional qualifications along with more business from existing customers. Also, we continue to be encouraged with the level of design activity with new products that offer high growth for the next year." Third Quarter Fiscal 2008 Outlook "While we are firing on all cylinders and our long-term prospects look good, we have seen a recent general softening in the macro economy that leads us to be cautious in our short-term forecast. Based on current customer feedback, we forecast revenue for the January quarter will be in-line with the October quarter," said Mr. Li. Conference Call and Webcast on January 14, 2008 at 8:30 a.m. ET ASAT Holdings Limited 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) 248-5081. A replay of the call will be available until January 21, 2008. To access the replay, dial (303) 590- 3030. The passcode is 3826856. 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 obtaining additional financing, possible delisting of the Company's securities from Nasdaq, 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 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, 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 quarterly reports on Form 6-K filed with the United States Securities and Exchange Commission. 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 October 31, 2007 July 31, 2007 Market Segment % of Net Revenues % of Net Revenues (Unaudited) Communications 46 48 Automotive/Industrial & Other 9 15 Consumer 22 20 PC/Computing 23 17 Revenue Breakdown by Region Three Months Ended October 31, 2007 July 31, 2007 Region % of Net Revenues % of Net Revenues (Unaudited) United States 83 82 Europe 6 5 Asia 11 13 Revenue Breakdown by Customer Type Three Months Ended October 31, 2007 July 31, 2007 Customer Type % of Net Revenues % of Net Revenues (Unaudited) Fabless 85 83 IDM 15 17 Summary financial data follows ASAT Holdings Limited Condensed Consolidated Statements of Operations (USD in thousands, except share data) For the three months ended October 31, 2007, July 31, 2007 and October 31, 2006, and for the six months ended October 31, 2007 and October 31, 2006 Three Months Ended October 31, July 31, October 31, 2007 2007 2006 (Unaudited) (Unaudited) (Unaudited) Net Sales 40,234 37,735 40,989 Cost of sales (Note A) 34,799 32,702 37,103 -------- -------- -------- Gross profit 5,435 5,033 3,886 -------- -------- -------- Operating expenses: Selling, general and administrative 5,145 5,227 5,311 Research and development 498 512 632 Reorganization expenses (Note B) 92 132 607 Facilities and relocation charges - - 999 -------- -------- -------- Total operating expenses 5,735 5,871 7,549 -------- -------- -------- Loss from operations (300) (838) (3,663) Other income, net 68 222 245 Interest expense: - amortization of deferred charges (841) (892) (997) - third parties (4,146) (4,100) (3,913) -------- -------- -------- Loss before income taxes (5,219) (5,608) (8,328) Income tax expense (Note C) (6) (105) - -------- -------- -------- Net loss (5,225) (5,713) (8,328) Other comprehensive loss: Foreign currency translation 34 - 4 -------- -------- -------- Comprehensive loss (5,191) (5,713) (8,324) Net loss applicable to ordinary shareholders: Net loss (5,225) (5,713) (8,328) Preferred shares: Cumulative preferred share dividends (507) (507) (502) Accretion of preferred shares (385) (362) (299) -------- -------- -------- Net loss applicable to ordinary shareholders: (6,117) (6,582) (9,129) ======== ======== ======== Basic and diluted loss per ADS (Note D): Basic and diluted: Net loss (0.13) (0.14) (0.20) ======== ======== ======== Basic and diluted weighted average number of ADSs outstanding (Note D) 47,854,878 46,956,590 45,899,282 ======== ======== ======== Basic and diluted loss per ordinary share: Basic and diluted: Net loss (0.01) (0.01) (0.01) ======== ======== ======== Basic and diluted weighted average number of ordinary shares outstanding 717,823,169 704,348,844 688,489,240 ======== ======== ======== Six Months Ended October 31, October 31, 2007 2006 (Unaudited) (Unaudited) Net Sales 77,969 87,322 Cost of sales (Note A) 67,501 78,854 -------- -------- Gross profit 10,468 8,468 -------- -------- Operating expenses: Selling, general and administrative 10,372 10,687 Research and development 1,010 1,236 Reorganization expenses (Note B) 224 1,028 Facilities and relocation charges - 2,553 -------- -------- Total operating expenses 11,606 15,504 -------- -------- Loss from operations (1,138) (7,036) Other income, net 290 476 Interest expense: - amortization of deferred charges (1,733) (2,021) - third parties (8,246) (7,827) -------- -------- Loss before income taxes (10,827) (16,408) Income tax expense (Note C) (111) - -------- -------- Net loss (10,938) (16,408) Other comprehensive loss: Foreign currency translation 34 9 -------- -------- Comprehensive loss (10,904) (16,399) Net loss applicable to ordinary shareholders: Net loss (10,938) (16,408) Preferred shares: Cumulative preferred share dividends (1,014) (991) Accretion of preferred shares (747) (574) -------- -------- Net loss applicable to ordinary shareholders: (12,699) (17,973) ======== ======== Basic and diluted loss per ADS (Note D): Basic and diluted: Net loss (0.27) (0.39) ======== ======== Basic and diluted weighted average number of ADSs outstanding (Note D) 47,405,734 45,709,940 ======== ======== Basic and diluted loss per ordinary share: Basic and diluted: Net loss (0.02) (0.03) ======== ======== Basic and diluted weighted average number of ordinary shares outstanding 711,086,007 685,649,100 ======== ======== Note A: Includes $418, $228 and $38 inventory write-down in the three months ended October 31, 2007, July 31, 2007 and October 31, 2006, respectively. Includes $646 and $38 inventory write-down for the six months ended October 31, 2007 and 2006, respectively. Note B: Includes charges of $92, $132 and $607 associated with headcount reductions, primarily in the Company's Hong Kong operations, in the three months ended October 31, 2007, July 31, 2007 and October 31, 2006, respectively. Note C: The amount for the fiscal period of 2007 mainly represents provision for the Hong Kong profits tax concerning a tax dispute for the fiscal year 2000. 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 October 31, 2007, July 31, 2007 and October 31, 2006 October 31, July 31, October 31, 2007 2007 2006 (Unaudited) (Unaudited) (Unaudited) ASSETS Current assets: Cash and cash equivalents 6,237 9,765 8,742 Current portion of restricted cash 900 900 - Accounts receivable, net 19,037 17,590 23,663 Inventories 16,048 13,504 18,361 Prepaid expenses and other current assets 6,321 5,411 4,119 --------- --------- --------- Total current assets 48,543 47,170 54,885 Restricted cash - 900 3,320 Property, plant & equipment, net 70,729 75,857 85,735 Deferred charges, net 7,808 4,931 5,968 Other non-current assets 5,146 5,067 5,007 --------- --------- --------- Total assets 132,226 133,925 154,915 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Short-term bank facilities 3,964 1,331 2,533 Accounts payable 31,209 29,228 29,977 Accrued liabilities and other payable 19,567 22,781 24,031 Amount due to QPL 3,174 2,418 2,191 Current portion of capital lease obligations 1,615 1,724 1,769 --------- --------- --------- Total current liabilities 59,529 57,482 60,501 Other payable, net of current portion 3,129 2,602 - Long-term bank facilities - 2,588 - Purchase money loan 9,378 8,796 7,256 9.25% senior notes due 2011 150,000 150,000 150,000 Capital lease obligations, net of current portion 105 406 1,639 --------- --------- --------- Total liabilities 222,141 221,874 219,396 --------- --------- --------- Series A Redeemable Convertible Preferred Shares 6,487 6,105 5,085 --------- --------- --------- Shareholders' deficit: Common stock 7,378 7,114 7,010 Less: Repurchase of shares at par (71) (71) (71) Additional paid-in capital 248,571 245,992 246,269 Accumulated deficits (352,130) (346,905) (322,560) Accumulated other comprehensive loss (150) (184) (214) --------- --------- --------- Total shareholders' deficit (96,402) (94,054) (69,566) --------- --------- --------- Total liabilities and shareholders' deficit 132,226 133,925 154,915 ========= ========= ========= ASAT Holdings Limited Condensed Consolidated Statements of Cash Flows (USD in thousands) For the three months ended October 31, 2007, July 31, 2007 and October 31, 2006, and for the six months ended October 31, 2007 and October 31, 2006 Three Months Ended Six Months Ended October July October October October 31, 31, 31, 31, 31, 2007 2007 2006 2007 2006 (Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited) Operating activities: Net loss (5,225) (5,713) (8,328) (10,938) (16,408) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization: Property, plant and equipment 5,618 5,674 5,912 11,292 11,827 Deferred charges and debt discount 841 892 997 1,733 2,021 (Gain) loss on disposal of property, plant and equipment (55) 2 1 (53) 4 Unrealized foreign exchange loss 45 82 - 127 - Amortization of stock-based compensation 89 282 223 371 541 Changes in operating assets and liabilities: Accounts receivable, net (1,447) 114 (916) (1,333) 5,944 Restricted cash 900 - - 900 - Inventories (2,536) (120) 3,618 (2,656) 4,875 Prepaid expenses and other current assets (910) (240) 3,354 (1,150) 3,965 Other non-current assets (79) (59) (542) (138) (737) Accounts payable 4,896 2,327 (3,826) 7,223 (2,933) Accrued liabilities and other payable (3,214) 336 (1,247) (2,878) 333 Amount due to QPL 756 (114) (1,532) 642 (3,635) Other payable, net of current portion 527 516 - 1,043 - ------- ------- -------- -------- -------- Net cash provided by (used in) operating activities 206 3,979 (2,286) 4,185 5,797 ------- ------- -------- -------- -------- Investing activities: Proceeds from disposal of property, plant and equipment 71 - - 71 - Acquisition of property, plant and equipment (3,430) (1,089) (4,144) (4,519) (10,820) ------- ------- -------- -------- -------- Net cash used in investing activities (3,359) (1,089) (4,144) (4,448) (10,820) ------- ------- -------- -------- -------- Financing activities: Proceeds from warrant and preferred shares exercised 1 - - 1 - Proceeds from draw down of new loan - - 2,533 - 2,533 Repayment of capital lease obligations (410) (450) (755) (860) (1,182) Proceeds from right offering - - - - 490 ------- ------- -------- -------- -------- Net cash (used in) provided by financing activities (409) (450) 1,778 (859) 1,841 ------- ------- -------- -------- -------- Net (decrease) increase in cash and cash equivalents (3,562) 2,440 (4,652) (1,122) (3,182) Cash and cash equivalents at beginning of period 9,765 7,325 13,390 7,325 11,915 Effects of foreign exchange rates change 34 - 4 34 9 ------- ------- -------- -------- -------- Cash and cash equivalents at end of period 6,237 9,765 8,742 6,237 8,742 ======= ======= ======== ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest expense 7,103 86 7,030 7,189 7,150 Income taxes 134 172 - 306 - http://www.newscom.com/cgi-bin/prnh/20030414/ASATLOGO http://photoarchive.ap.org/ DATASOURCE: ASAT Holdings Limited CONTACT: Jim Fanucchi of Summit IR Group Inc., +1-408-404-5400, , for ASAT Holdings Limited Web site: http://www.asat.com/

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