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ChipMOS REPORTS THIRD QUARTER 2016 RESULTS

(PRNewswire) —

HSINCHU, Taiwan, Nov. 10, 2016 /PRNewswire-FirstCall/ --

3Q16 Highlights (as compared to 2Q16):

ChipMOS TECHNOLOGIES INC. ("ChipMOS", "ChipMOS Taiwan" or the "Company") (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS), an industry leading provider of outsourced semiconductor assembly and test services ("OSAT"), today reported unaudited consolidated financial results for the third quarter ended September 30, 2016. All U.S. dollar figures in this release are based on the exchange rate of NT$31.27 against US$1.00 as of September 30, 2016. The merger (the "Merger") of ChipMOS Bermuda with and into its subsidiary ChipMOS Taiwan was completed on October 31, 2016.  Financial results included in this press release are for the third quarter of 2016 results of the former ChipMOS Taiwan, which may not be comparable to results in press releases of ChipMOS Bermuda in prior periods.  Results are based on 858.968 million shares outstanding on a fully diluted basis for ChipMOS Taiwan as compared to 27.583 million shares outstanding on a fully diluted basis for the former ChipMOS Bermuda at the end of 2Q16.

All the figures were prepared in accordance with Taiwan-International Financial Reporting Standards ("T-IFRS").

Net revenue for the third quarter of 2016 was NT$5,015.6 million or US$160.4 million, an increase of 6.1% from NT$4,727.1 million or US$151.2 million in the second quarter of 2016 and an increase of 3.9% from NT$4,827.1 million or US$154.4 million for the same period in 2015.

Net income attributable to equity holders of the Company for the third quarter of 2016 was NT$255.1 million or US$8.2 million, and NT$0.30 or US$0.01 per basic common share and NT$0.30 or US$0.01 per diluted common share, as compared to net income attributable to equity holders of the Company for the second quarter of 2016 of NT$314.9 million or US$10.1 million, and NT$0.37 or US$0.01 per basic common share and NT$0.36 or US$0.01 per diluted common share, and compared to net income attributable to equity holders of the Company in the third quarter of 2015 of NT$583.5 million or US$18.7 million, and NT$0.65 or US$0.02 per basic common share and NT$0.65 or US$0.02 per diluted common share.  Net income for the third quarter of 2016 was adversely impacted by US$5.5 million or US$0.01 per basic common share in foreign exchange losses.

The unaudited consolidated financial results of ChipMOS for the third quarter ended September 30, 2016 included the financial results of ChipMOS U.S.A., Inc. and ChipMOS TECHNOLOGIES (BVI) LTD. and its wholly-owned subsidiary ChipMOS TECHNOLOGIES (Shanghai) LTD. ("ChipMOS Shanghai").

S.J. Cheng, Chairman and Chief Executive Officer of ChipMOS, said, "We are pleased to be reporting today as the newly merged ChipMOS Taiwan and ChipMOS Bermuda.  We are now able to focus all of our efforts on the priority opportunities that we expect will drive our growth and ultimately create value for shareholders. Revenue for the third quarter came in at the high-end of our guidance, up 6.1% as compared to Q2.  We are benefitting from strong DDI demand in small panels.  This uptick started in late Q216 and is expected to continue through Q416 due to inventory tightness across the supply chain.  We expect this to be one of many favorable catalysts in our business.  We are also pleased with the timing of capacity adds in our bumping business, which increased to 78% utilization from 67% in the prior quarter even as we absorbed the new capacity coming online.   Our memory services also saw demand strength led by DRAM and flash, including Mask ROM, while revenue of our mixed signal business grew near 20% sequentially. Overall, we are confident in the prospects for our business, with utilization levels expected to trend higher through the first half of 2017 based on customer feedback, an expected inventory replenishment, and higher demand for our MEMS, finger print sensor, touch driver, AMOLED, and OLED testing and assembly services.  We also remain fully focused on moving forward with our expansion in China and look forward to updating you on our progress.  Finally, our Board of Directors approved a cash dividend payable on December 19 to shareholders of record of December 3 (NT$2.0 per share without and NT$1.5 per share with Unigroup Private Placement).  We will continue to evaluate the capital needs of our business and will also consider the reinstatement of our share repurchase, if and when the Board determines the timing appropriate in relation to our other capital needs, including the expansion in China and ongoing CapEx needs as we support existing and forecast customer demand levels. Based on the Taiwan Securities and Exchange Act, in relation to the declaration and distribution of a dividend, we cannot repurchase shares during the period from the notification to two days before the book closure date. As a result, the Company is not allowed to repurchase its own shares prior to November 27."

S.K. Chen, Chief Financial Officer of ChipMOS, said, "Our Q316 gross margin was 19.0%, which came in at the high end of our guidance due to product mix and higher utilization levels. We generated US$84.3 million in cash from operations in the first three quarters of 2016, with US$45.9 million invested in CapEx, and US$0.6 million used in the repurchase of shares from the open market in 3Q16.  We made further progress with Tsinghua Unigroup on its proposed investment, which was already overwhelmingly approved by shareholders early this year. We still require regulatory approval in Taiwan but expect to reach a decision by the end of December as our private placement agreement will expire on December 11 and would require another shareholder vote to extend. Regardless of the outcome, we expect material growth in China in 2017 and should have the necessary funding in place. Beyond 2017, if the Tsinghua Unigroup investment is not approved by the Taiwan regulators we would likely pursue a joint venture structure in Shanghai to secure the more significant investment required to achieve our long-term growth targets."

Selected Operation Data







3Q16

2Q16

Revenue by segment



   Testing

25%

25%

   Assembly

34%

33%

   LCD Driver 

24%

27%

Bumping

17%

15%




Utilization by segment



   Testing

69%

67%

   Assembly

67%

59%

   LCD Driver

82%

77%

Bumping

78%

67%

   Overall

73%

67%




CapEx

US$45.9 million

US$26.9 million

   Testing

24%

20%

   Assembly

7%

16%

LCD Driver

36%

42%

   Bumping

33%

22%




Depreciation and amortization expenses

US$27.0 million

US$26.6million

 

Condensed consolidated statements of cash flows


Period ended

Sep. 30, 2016


Period ended

Sep. 30, 2015



US$ million


US$ million

Net cash generated from (used in) operating activities


84.3


130.3

Net cash generated from (used in) investing activities


(104.1)


(119.5)

Net cash generated from (used in) financing activities


29.7


(128.4)

Net increase (decrease) in cash and cash equivalents


9.9


(117.6)

Effect of exchange rate changes on cash


(2.1)


0.9

Cash and cash equivalents at beginning of period


323.8


425.7

Cash and cash equivalents at end of period


331.6


309.0

Fourth Quarter 2016 Outlook

The Company expects revenue for the fourth quarter of 2016 to be approximately flat to down in the low single digits, as compared to the third quarter of 2016, in-line with typical seasonality. The Company expects gross margin on a consolidated basis to be in the range of approximately 16% to 20% for the fourth quarter of 2016. The Company expects depreciation and amortization expenses for the fourth quarter of 2016 to be approximately US$24 million. Operating expenses are expected to be approximately 11% to 14% of revenues in the fourth quarter of 2016. The Company expects CapEx spending to be approximately US$35 million in the fourth quarter of 2016, as the Company continues to build-up LCD driver capacity at its Shanghai facility. The total number of the Company's outstanding common shares at the end of the fourth quarter of 2016 is expected to be approximately 856 million.

Investor Conference Call / Webcast Details

ChipMOS will review detailed third quarter 2016 results on Thursday, November 10, 2016 at 7:00 AM Eastern Time (8:00 PM Taiwan time, Thursday, November 10, 2016). The conference call-in number is +1-201-689-8562. A live webcast of the conference call will be available at ChipMOS' website at http://www.chipmos.com.  The playback is scheduled to be available in 2 hours after the conclusion of the conference call and will be accessible by dialing +1-412-317-6671, with confirmation ID number 13647852.

About ChipMOS TECHNOLOGIES INC.:

ChipMOS TECHNOLOGIES INC. ("ChipMOS") (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS), was established in August 1997 and is an industry leading provider of semiconductor assembly and test services. ChipMOS is a leader in Taiwan's IC packaging and testing industry as well and has one of the world's largest LCD driver capacity footprints for packaging and testing. With advanced facilities in Hsinchu Science Park, Hsinchu Industrial Park and Southern Taiwan Science Park in Taiwan and Qingpu Industrial Zone in Shanghai, ChipMOS and its subsidiaries provide assembly and test services to a broad range of customers, including leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries. For more details, please refer to ChipMOS' website http://www.chipmos.com.

Forward-Looking Statements

This press release contains certain forward-looking statements. These forward-looking statements may be identified by words such as 'believes,' 'expects,' 'anticipates,' 'projects,' 'intends,' 'should,' 'seeks,' 'estimates,' 'future' or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Actual results may differ materially in the future from those reflected in forward-looking statements contained in this document, due to various factors. These risks and uncertainties include those discussed under "Cautionary Statement Concerning Forward Looking Statements" and "Risk Factors" in the prospectus included in the registration statement on Form F-4 that ChipMOS Taiwan filed with the U.S. SEC.

About Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures

To supplement the consolidated financial results presented in accordance with the T-IFRS, ChipMOS uses non-GAAP free cash flow, non-GAAP earnings before interest, taxes, depreciation and amortization ("EBITDA") and non-GAAP net debt to equity ratio in this press release. The non-GAAP free cash flow represents operating profit plus depreciation, amortization and interest income and less capital expenditures, non-controlling interests, interest expenses, income tax expense and dividend. The non-GAAP EBITDA represents operating profit plus depreciation and amortization. The non-GAAP net debt to equity ratio represents the ratio of net debt, the sum of debt less cash and cash equivalent, divided by equity attributable to equity holders of the Company. These non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently.

The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the T-IFRS.

ChipMOS considers the use of non-GAAP free cash flow, non-GAAP EBITDA and non-GAAP net debt to equity ratio provides useful information to management to manage the Company's business and make financial and operational decisions and also to the investors to understand and evaluate the Company's business and operating performance. For more information on these non-GAAP financial measures, please refer to the table captioned "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" in this press release.

- FINANCIAL TABLES FOLLOW BELOW -

ChipMOS TECHNOLOGIES INC.

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended Sep. 30, Jun. 30, 2016, and Sep. 30, 2015

Figures in Million of U.S. dollars (USD) (1)

Except for Per Share Amounts and Shares Outstanding








 

3 months ended


Sep. 30, 2016


Jun. 30, 2016


Sep. 30, 2015


USD


USD


USD

Revenue

160.4


151.2


154.4

Cost of revenue

(129.9)


(125.7)


(126.8)

Gross profit 

30.5


25.5


27.6







Research and development expenses

(6.9)


(7.0)


(6.0)

Sales and marketing expenses

(0.6)


(0.7)


(0.6)

Administrative and general expenses

(7.4)


(5.0)


(5.2)

Operating expenses

(14.9)


(12.7)


(11.8)







Operating profit

15.6


12.8


15.8







Non-operating income (expenses), net

(4.9)


0.7


6.8







Profit (loss) before tax 

10.7


13.5


22.6







Income tax benefit (expense)

(2.5)


(3.4)


(3.9)







Profit (loss) for the period

8.2


10.1


18.7







Attributable to equity holders of the Company

8.2


10.1


18.7







Profit (loss) for the period






Other comprehensive income (loss)






Exchange differences on translation of foreign operations

(2.8)


(2.2)


2.3

Total other comprehensive income (loss)

(2.8)


(2.2)


2.3







Total comprehensive income (loss)

5.4


7.9


21.0







Attributable to equity holders of the Company

5.4


7.9


21.0







Earnings (loss) per share attributable to the Company - basic

0.01


0.01


0.02

Weighted average shares outstanding (in thousands) - basic

851,980


861,608


893,931

Net income (loss) attributable to the Company - diluted

8.2


10.1


18.7

Earnings (loss) per share attributable to the Company -diluted

0.01


0.01


0.02

Weighted average shares outstanding (in thousands) - diluted

858,968


867,686


898,712







Note:






(1) All U.S. dollar figures in this release are based on the exchange rate of NT$31.27 against US$1.00 as of Sep. 30, 2016. The convenience translation should not be construed as representations that the NT dollar amounts have been, or could be in the future be, converted into US dollars at this or any other exchange rate.

 

ChipMOS TECHNOLOGIES INC.

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended Sep. 30, Jun. 30, 2016, and Sep. 30, 2015

Figures in Million of NT dollars (NTD)

Except for Per Share Amounts and Shares Outstanding



3 months ended


Sep. 30, 2016


Jun. 30, 2016


Sep. 30, 2015



NTD


NTD


NTD


Revenue

5,015.6


4,727.1


4,827.1


Cost of revenue

(4,061.2)


(3,930.2)


(3,963.1)


Gross profit

954.4


796.9


864.0









Research and development expenses

(217.2)


(217.5)


(187.5)


Sales and marketing expenses

(19.9)


(21.0)


(20.0)


Administrative and general expenses

(229.8)


(157.0)


(162.6)


Operating expenses

(466.9)


(395.5)


(370.1)









Operating profit

487.5


401.4


493.9









Non-operating income (expenses), net

(154.1)


21.8


212.7









Profit (loss) before tax

333.4


423.2


706.6









Income tax benefit (expense)

(78.3)


(108.3)


(123.1)









Profit (loss) for the period

255.1


314.9


583.5









Attributable to equity holders of the Company

255.1


314.9


583.5









Profit (loss) for the period







Other comprehensive income (loss)







Exchange differences on translation of  foreign operations

(87.3)


(67.1)


73.5


Total other comprehensive income (loss)

(87.3)


(67.1)


73.5









Total comprehensive income (loss)

167.8


247.8


657.0









Attributable to equity holders of the Company

167.8


247.8


657.0









Earnings (loss) per share attributable to the Company - basic

0.30


0.37


0.65


Weighted average shares outstanding (in thousands) - basic

851,980


861,608


893,931


Net income (loss) attributable to the Company -diluted

255.1


314.9


583.5


Earnings (loss) per share attributable to the Company -diluted

0.30


0.36


0.65


Weighted average shares outstanding (in thousands) - diluted

858,968


867,686


898,712


 


ChipMOS TECHNOLOGIES INC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As of Sep. 30, Jun. 30, 2016, and Sep. 30, 2015

Figures in Million of U.S. dollars (USD) (1)





Sep. 30, 2016


Jun. 30, 2016


Sep. 30, 2015

ASSETS

USD


USD


USD

Current assets






Inventories

71.3


69.0


56.0

Accounts and notes receivable

131.9


121.5


124.7

Short-term deposits

2.1


2.1


2.3

Other current assets

15.2


12.5


9.6

Cash and cash equivalents

331.6


355.0


309.0

Total current assets

552.1


560.1


501.6







Non-current assets






Financial assets measured by cost method

0.3


0.3


0.6

Investment measured by equity method

11.6


11.4


10.7

Property, plant & equipment

480.7


463.4


449.0

Other non-current assets

11.2


11.7


11.3

Total non-current assets

503.8


486.8


471.6

Total assets

1,055.9


1,046.9


973.2







EQUITY AND LIABILITIES






LIABILITIES






Current liabilities






Accounts payable and payables to contractors and equipment suppliers

52.2


41.2


38.1

Other current liabilities

116.5


122.5


59.2

Bank loans - current portion

0.0


-


49.5

Short-term bank loans

42.1


46.0


42.8

Total current liabilities

210.8


209.7


189.6







Non-current liabilities






Bank loans - non-current portion

264.5


263.6


159.4

Other non-current liabilities

27.2


27.8


28.4

Total non-current liabilities

291.7


291.4


187.8

Total liabilities

502.5


501.1


377.4







EQUITY






Issued capital

286.8


286.9


293.0

Capital surplus

121.3


120.8


120.8

Retained earnings

188.7


180.5


215.8

Other component of equity

(43.4)


(42.4)


(33.8)

Equity attributable to equity holders of the Company

553.4


545.8


595.8

Total equity

553.4


545.8


595.8

Total equity and liabilities

1,055.9


1,046.9


973.2







Note:

(1) All U.S. dollar figures in this release are based on the exchange rate of NT$31.27 against US$1.00 as of Sep. 30, 2016. The convenience translation should not be construed as representations that the NT dollar amounts have been, or could be in the future be, converted into US dollars at this or any other exchange rate.

 

ChipMOS TECHNOLOGIES INC.

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As of Sep. 30, Jun. 30, 2016, and Sep. 30, 2015

Figures in Million of NT dollars (NTD)




Sep. 30, 2016


Jun. 30, 2016


Sep. 30, 2015

ASSETS

NTD


NTD


NTD

Current assets






Inventories

2,229.7


2,159.0


1,750.9

Accounts and notes receivable

4,124.8


3,799.7


3,898.1

Short-term deposits

66.6


66.0


71.7

Other current assets

476.1


390.4


300.7

Cash and cash equivalents

10,369.0


11,101.0


9,662.3

Total current assets

17,266.2


17,516.1


15,683.7







Non-current assets






Financial assets measured by cost method

10.0


10.0


18.5

Investment measured by equity method

362.2


355.1


336.0

Property, plant & equipment

15,030.0


14,490.9


14,038.8

Other non-current assets

349.5


364.7


355.1

Total non-current assets

15,751.7


15,220.7


14,748.4

Total assets

33,017.9


32,736.8


30,432.1







EQUITY AND LIABILITIES






LIABILITIES






Current liabilities






Accounts payable and payables to contractors and
equipment suppliers

1,632.5


1,289.4


1,190.4

Other current liabilities

3,644.5


3,830.3


1,851.6

Bank loans - current portion

1.0


-


1,548.1

Short-term bank loans

1,315.0


1,437.3


1,339.9

Total current liabilities

6,593.0


6,557.0


5,930.0







Non-current liabilities






Bank loans - non-current portion

8,270.5


8,242.2


4,983.1

Other non-current liabilities

850.0


870.8


888.0

Total non-current liabilities

9,120.5


9,113.0


5,871.1

 Total liabilities

15,713.5


15,670.0


11,801.1







EQUITY






Issued capital

8,968.0


8,972.2


9,163.0

Capital surplus

3,793.7


3,776.7


3,776.1

Retained earnings

5,899.1


5,644.1


6,747.9

Other component of equity

(1,356.4)


(1,326.2)


(1,056.0)

Equity attributable to equity holders of the Company

17,304.4


17,066.8


18,631.0

Total equity

17,304.4


17,066.8


18,631.0

Total equity and liabilities

33,017.9


32,736.8


30,432.1







 

RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES



The table below sets forth a reconciliation of our operating profit to non-GAAP free cash flow for the periods indicated:




Three months ended


Sep. 30, 2016


Jun. 30, 2016


Sep. 30, 2015


USD


USD


USD

Operating profit

15.6


12.8


15.8

Add: Depreciation

27.0


26.6


24.3

         Amortization

0.0


0.0


0.0

         Interest income

0.2


0.3


0.4

Less: Capital expenditures

(45.9)


(26.9)


(30.6)

         Non-controlling interest

-


-


-

         Interest expense

(1.3)


(1.1)


(1.0)

         Income tax expense

(2.5)


(3.4)


(3.9)

         Dividend

-


-


(63.9)

Non-GAAP free cash flow

(6.9)


8.3


(58.9)









The table below sets forth a reconciliation of our operating profit to non-GAAP EBITDA for the periods indicated:




Three months ended


Sep. 30, 2016


Jun. 30, 2016


Sep. 30, 2015


USD


USD


USD

Operating profit

15.6


12.8


15.8

Add: Depreciation

27.0


26.6


24.3

         Amortization

0.0


0.0


0.0

Non-GAAP EBITDA

42.6


39.4


40.1













The table below sets forth a calculation of our non-GAAP net debt to equity ratio for the periods indicated:








Sep. 30, 2016


Jun. 30, 2016


Sep. 30, 2015


USD


USD


USD

Short-term bank loans

42.1


46.0


42.8

Long-term bank loans

(including current portion)

 

264.5


 

263.6


 

208.9

Less: Cash and cash equivalents

(331.6)


(355.0)


(309.0)

Net debt

(25.0)


(45.4)


(57.3)

Equity attributable to equity holders of the Company

553.4


545.8


595.8

Net debt to equity ratio

-4.5%


-8.3%


-9.6%

 

Contacts:


In Taiwan

In the U.S.

Dr. S.K. Chen

David Pasquale

ChipMOS TECHNOLOGIES INC.

Global IR Partners

+886-6-507-7712

+1-914-337-8801

Email Contact

Email Contact

 

To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/chipmos-reports-third-quarter-2016-results-300360498.html

SOURCE ChipMOS TECHNOLOGIES INC.

Contact:
ChipMOS TECHNOLOGIES INC.
Web: http://www.chipmos.com