ASAT Holdings Limited Reports Q4 and FY01 Financial Results.Business Editors HONG KONG Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. and FREMONT Fremont (frē`mŏnt). 1 City (1990 pop. 173,339), Alameda co., W Calif., on San Francisco Bay; inc. 1956. Long an agricultural center, with champagne vineyards founded (1870) by Leland Stanford, it still ships fruits and vegetables. , Calif.--(BUSINESS WIRE)--June 14, 2001 ASAT ASAT abbr. antisatellite Adj. 1. ASAT - of or relating to a system to destroy satellites in orbit; "antisatellite weapons" antisatellite Holdings Limited (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ASTT ASTT Applied Science Technologists and Technicians (Canada) ASTT Advanced Simulation Technology Thrust (DARPA) ASTT Airborne Surveillance and Tracking Technology ASTT Angle Sum Triangle Theorem ), a leading outsource supplier of advanced integrated circuit integrated circuit (IC), electronic circuit built on a semiconductor substrate, usually one of single-crystal silicon. The circuit, often called a chip, is packaged in a hermetically sealed case or a nonhermetic plastic capsule, with leads extending from it for package designs, assembly and test services for the semiconductor industry, today announced financial results for the fourth quarter and fiscal year ended April 30, 2001. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fourth quarter were $48.7 million, compared with $84.4 million in the third quarter of 2001 and $83.7 million in the fourth quarter of 2000. Net loss for the quarter was $14.2 million, or a loss of $0.11 per American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Depository The place where a deposit is placed and kept, e.g., a bank, savings and loan institution, credit union, or trust company. A place where something is deposited or stored as for safekeeping or convenience, e.g., a safety deposit box. Shares (ADS). The loss included, net of tax, specific charges of $4.0 million, or $0.03 per ADS, which is composed of $2.2 million for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when associated with the firm's cost-reduction program and a $1.8 million write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of inventories. The April 2001 loss is compared with net earnings of $10.7 million, or $0.08 per ADS, in the third quarter of 2001 and $9.9 million, or $0.09 per ADS, for the quarter ended April 2000. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the quarter ended April 2001 was a loss of $2.2 million (excluding the specific charges before income tax effect) compared with $22.9 million for the quarter ended January January: see month. 2001 and $24.0 million for the quarter ended April 2000. Earnings per ADS for the April 2001 quarter were computed based on 134.6 million weighted average ADS outstanding and was net of 1.25 million shares repurchased by the company ended April 30th, 2001. Earnings per ADS for the April 2000 quarter, which was pre-IPO pre-IPO An offering of a company's shares prior to the firm's initial public offering. Investing in a pre-IPO tends to be very risky, in part because the planned IPO may never take place. , were computed based upon 115.2 million equivalent ADS outstanding. Net sales for fiscal year ended April 2001 were $340.2 million, a 9 percent increase over the prior year's sales of $312.1 million. Net income for the year ended April 2001 was $19.4 million, or $0.15 per ADS, compared with $34.7 million, or $0.30 per ADS, for the year ended April 2000. The year ended April 2001 included: (1) extraordinary charges of $13.1 million, or $0.10 per ADS, representing premiums paid for the early retirement of $54 million, or 35 percent, of the company's $155 million senior debt and (2) $4.0 million, or $0.03 per ADS, for the specific charges taken in the fourth quarter as described above. The year ended April 2000 included restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. charges totaling $16.1 million, or $0.14 per ADS. Net income before specific charges and extraordinary items pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to both years was $36.6 million, or $0.28 per ADS, in 2001, compared with $50.8 million, or $0.44 per ADS in 2000. Earnings per ADS for fiscal years ended 2001 and 2000 were computed based upon a weighted average of 131.0 million and 115.2 million ADS outstanding respectively. ASAT's initial public offering in July July: see month. 2000 (Q1 of fiscal 2001) raised the total number of ADS outstanding to 135.2 million. ASAT's net earnings decreased in fiscal 2001 from fiscal 2000 primarily due to increases in depreciation and certain operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. the company incurred throughout the year as it ramped up to produce higher volumes but experienced an industry slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. toward the end of the fiscal year. The primary increases in operating expenses in fiscal 2001 were depreciation; manufacturing labor and fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). ; and selling and R&D expenses. These fiscal 2001 cost increases were exclusive of the specific charges taken in the fourth quarter as described above. Depreciation expense increased nearly $8 million net of tax effect as a result of capital expenditures for wire bonders and testers purchased to increase operating capacity. Manufacturing labor and fixed costs had been added to serve higher volumes the company had experienced prior to the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. . The company had also increased selling and R&D expenses to serve growth that had been expected. ASAT's balance sheet remained strong at the end of the quarter with $80 million in cash. During the quarter, the company repurchased approximately 1.17 million of its shares in the open market at an average price of $4.20 per ADS for a total cost of approximately $4.9 million. This brought the total shares repurchased through April 30, 2001 to 1.25 million shares at a cost of $5.3 million. In January 2001, the company had adopted a share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program providing for the purchase of up to $20 million of its ADS through January 31, 2002. "The April 2001 quarter was very challenging for ASAT, as it was for the entire industry. Our results reflect the industry's excess-inventory situation, as well as the weak end-market demand that is being experienced overall but particularly in the communications sector," said Jerry Jer·ry n. pl. Jer·ries Chiefly British Slang A German, especially a German soldier. [Alteration of German. Lee, ASAT's chief executive officer. "In response to industry conditions, we have implemented a three part strategy: "First, we have taken steps to reduce our cost structure. We expect the reorganization and expense control programs we have implemented across the company to lower our break-even point break-even point - In the process of implementing a new computer language, the point at which the language is sufficiently effective that one can implement the language in itself. and position the company for a more profitable future once we see volumes increase. We have made progress in lowering our expenses this quarter and we expect to reduce costs further as our program becomes fully implemented. Once all cost reductions are in place, we should be able to break even on an EBITDA basis at utilization levels just under 30% for our assembly business and on a net earnings basis at utilization just under 40%. During the April 2001 quarter our utilization rates dropped to 30%," he said. "Second, we are working to strengthen our position with existing customers. Our new Kestral product line group is being very well received and is being qualified among our customers. We expect our recently announced Moisture Sensitive Level One product series to generate significant interest as we are the only company to offer this technology. We believe these technology initiatives as well as our record of on-time delivery and customer service will enable us to maintain a strong position in the communications sector, which we believe is one of the most significant long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth drivers in the semiconductor industry. Our customer relationships remain strong, as evidenced by the number of customer awards we received recently for our work in 2000," said Mr. Lee. "Third, we are actively working to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our customer base. Our superior packaging technology and excellent reputation in customer support are attracting potential new customers from the consumer and industrial sectors. We remain confident that we will be able to diversify our revenues through new customers and through design wins and existing technologies," he said. "Despite the limited visibility in the near term, we remain confident about the long-term growth potential of the communications sector, and about continuing outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. opportunities in the semiconductor industry in general," said Mr. Lee. "Everyone at ASAT recognizes the challenges the industry has provided, and we are all working to improve our operating performance while continuing to position ourselves well for the upturn that will come. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , our reduced capital expenditure budget is set at $40 million for fiscal year 2002. This includes $20 million for construction on our new operation in China, which we expect to be ready for production by mid-year calendar 2002," said Mr. Lee. Fourth Quarter 2001 Earnings Conference Call ASAT Holdings Ltd.'s fourth quarter 2001 earnings conference call will be held on Thursday Thursday: see week. , June June: see month. 14 at 5:00 p.m. ET/ 2:00 p.m. PT. To participate in the call, please dial (913) 981-5507. A replay of the call will be available for one week at (719) 457-0820, passcode 716428. A webcast of the conference call will be available on www.asat.com. About ASAT Holdings Limited ASAT Holdings Limited is a leader in advanced integrated circuit package designs and has provided outsourced assembly and test services for the semiconductor industry for over 10 years. The Company assembles a broad selection of advanced leaded and ball grid array “BGA” redirects here. For other uses, see BGA (disambiguation). A ball grid array (BGA) is a type of surface-mount packaging used for integrated circuits. packages utilizing advanced technology characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by higher electrical and thermal performance. The Company also has multi-chip module A Multi-Chip Module or MCM is a specialized electronic package where multiple integrated circuits (ICs), semiconductor dies or other modules are packaged in such a way as to facilitate their use as a single IC. and flip-chip assembly lines, and offers testing for complex broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). mixed-signal and system-on-a-chip System-on-a-chip or system on chip (SoC or SOC) refers to integrating all components of a computer or other electronic system into a single integrated circuit (chip). devices used in communications. The Company has facilities and offices in Asia, Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , and across the U.S.,
with its major manufacturing sites strategically located in Hong Kong.This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. intended to qualify under the "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements regarding the anticipated demand for ASAT's products and services for Fiscal Years 2000 and 2001. These projections and statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those projected as a result of certain factors. A discussion of these factors is included in the Company's periodic reports filed with the Securities and Exchange Commission.
ASAT HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the year ended April 30, 2001 and 2000
(USD in thousands, April 30 April 30
except share data) 2001 2000
----------------------------------------------------------------------
Net Sales 340,236 312,131
Total cost of sales (Note 1) 244,484 199,636
------------ ------------
Gross profit 95,752 112,495
Operating expenses:
Selling, general
and administrative 37,631 26,453
Research and development 5,954 4,676
Charges of obsolete
equipment (Note 3) -- 12,340
Reorganization
expenses (Note 2) 2,603 --
------------ ------------
Total operating expenses 46,188 43,469
Income from operations 49,564 69,026
Other income, net 6,451 1,048
Interest expense:
-amortization of
deferred charges (1,112) (922)
-third parties (17,007) (15,668)
-QPL Group -- (2,404)
Recapitalization costs (Note 3) -- (6,813)
------------ ------------
Income before income taxes and
extraordinary charge 37,896 44,267
Provision for income taxes (5,350) (9,558)
------------ ------------
Income before
extraordinary charge 32,546 34,709
Extraordinary charge on early
extinguishment of debt
(net of income tax
benefit of $1,108) (13,126) --
------------ ------------
Net income 19,420 34,709
============ ============
EBITDA (Note 4) 87,495 105,516
============ ============
Net income per ADS:
Basic:
Income before
extraordinary charge $ 0.25 $ 0.30
Extraordinary charge (0.10) --
------------ ------------
$ 0.15 $ 0.30
Basic weighted average number
of ADS outstanding 130,992,475 115,200,000
Net income per ordinary share:
Basic:
Income before extraordinary charge $ 0.05 $ 0.06
Extraordinary charge (0.02) --
------------ ------------
$ 0.03 $ 0.06
Basic weighted average number of
ordinary shares outstanding 654,962,375 576,000,000
Notes:
1. Includes $2,214 specific charge for inventory writeoff ( $1,860
net of tax effect)
2. Includes $2,603 severance.
Therefore total specific charges (inventory writeoff plus
severance) is $4,817 ($4,046 net of tax effect).
3. Total charges in F'00 equal to $ 19,153 and $ 16,089 net of income
tax expense.
4. Defined as Operating Income plus depreciation and amortization
plus specific charges ($ 4,817 in Fiscal 2001 and $ 12,340 in
Fiscal 2000).
ASAT HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter ended April 30, 2001 and 2000
(USD in thousands, April 30 January 31 April 30
except share data) 2001 2001 2000
(Unaudited) (Unaudited) (Unaudited)
----------------------------------------------------------------------
Net Sales 48,687 84,386 83,731
Total cost of
sales(Note 1) 50,115 59,413 56,473
------------ ------------ ------------
Gross (loss) profit (1,428) 24,973 27,258
Operating expenses:
Selling, general and
administrative 11,130 9,282 7,534
Research and
development 1,510 1,493 1,169
Reorganization
expenses (Note 2) 2,603 -- --
------------ ------------ ------------
Total operating
expenses 15,243 10,775 8,703
(Loss) income from
operations (16,671) 14,198 18,555
Other income, net 1,494 1,757 802
Interest expense:
-amortization of
deferred charges (210) (214) (461)
-third parties (3,262) (3,430) (6,028)
Recapitalization costs -- -- (186)
------------ ------------ ------------
(Loss) income before
income taxes (18,649) 12,311 12,682
Provision for
income taxes 4,463 (1,598) (2,770)
------------ ------------ ------------
Net (loss) income (14,186) 10,713 9,912
============ ============ ============
EBITDA (Note 3) (2,191) 22,851 23,978
============ ============ ============
Net (loss) income
per ADS:
Basic: ($ 0.11) $ 0.08 $ 0.09
Basic weighted
average number
of ADS outstanding 134,576,240 135,197,478 115,200,000
Net (loss) income per
ordinary share:
Basic: ($ 0.02) $ 0.02 $ 0.02
Basic weighted
average number of
ordinary shares
outstanding 672,881,202 675,987,391 576,000,000
Notes:
1. Includes $2,214 specific charge for inventory writeoff ( $1,860
net of tax effect).
2. Includes $2,603 severance.
Therefore, total specific charges (inventory writeoff plus
severance) is $4,817 ($4,046 net of tax effect).
3. Defined as Operating Income plus Depreciation and Amortization
plus specific charges per Notes 1 and 2.
ASAT HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEET (Unaudited)
As at April 30, 2001 and 2000
(USD'000) 2001 2000
April 30 April
----------------------------------------------------------------------
ASSETS
Current Assets
Cash and cash equivalents 79,880 10,892
Accounts receivable -trade 16,474 40,566
Inventories 29,361 23,302
Prepaid expenses and
other current assets 7,094 10,911
-------- --------
Total current assets 132,809 85,671
Property, plant and equipment, net 265,622 166,461
Option to acquire ASAT S.A., at cost -- 20,000
Deferred charges, net 5,072 10,907
Noncompete covenants, net -- 442
-------- --------
Total assets 403,503 283,481
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term bank borrowings -- 9,000
Current portion of other long-term debt 551 5,000
Accounts payable 16,779 24,549
Accrued charges 9,796 6,155
Income taxes payable -- 12,847
Amount due to QPL Group 1,205 5,300
Amount due to a related company 362 297
-------- --------
Total current liabilities 28,693 63,148
Deferred income taxes 26,685 21,992
12.5% Senior notes due 2006 97,559 149,217
Other long-term debt -- 35,000
Shareholders' equity:
Common stock 6,760 5,760
Treasury stock (63) --
Additional paid-in capital 228,542 12,457
Retained earnings
(accumulated deficit) 15,327 (4,093)
-------- --------
Total shareholders' equity 250,566 14,124
-------- --------
Total liabilities and
shareholders' equity 403,503 283,481
======== ========
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