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Advanced Semiconductor Engineering, Inc. Reports Unaudited Consolidated Financial Results for the Second Quarter of 2017

(PRNewswire) — Advanced Semiconductor Engineering, Inc. (TAIEX: 2311, NYSE: ASX) ("We", "ASE", or the "Company"), among the world's leading companies in semiconductor packaging and testing, today reported unaudited net revenues1 of NT$66,026 million for the second quarter of 2017 (2Q17), up by 5% year-over-year and down by 1% sequentially.  Net income attributable to shareholders of the parent for the quarter totaled NT$7,847 million, up from a net income attributable to shareholders of the parent of NT$4,302 million in 2Q16 and up from a net income attributable to shareholders of the parent of NT$2,559 million in 1Q17.  Basic earnings per share for the quarter were NT$0.97 (or US$0.160 per ADS), compared to basic earnings per share of NT$0.56 for 2Q16 and NT$0.33 for 1Q17. Diluted earnings per share for the quarter were NT$0.89 (or US$0.148 per ADS), compared to diluted earnings per share of NT$0.47 for 2Q16 and NT$0.29 for 1Q17.

1 All financial information presented in this press release is unaudited, consolidated and prepared in accordance with Taiwan-IFRS (International Financial Reporting Standards as endorsed for use in the R.O.C.). Such financial information is generated internally by us and has not been subjected to the same review and scrutiny, including internal auditing procedures and audit by our 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 of operations for any future period.

RESULTS OF OPERATIONS

2Q17 Results Highlights - Consolidated

2Q17 Results Highlights - IC ATM2

2 ATM stands for Semiconductor Assembly, Testing and Material.

2Q17 Results Highlights - EMS

LIQUIDITY AND CAPITAL RESOURCES

BUSINESS REVIEW

Packaging Operations3

3 IC packaging services include module assembly services.

Testing Operations

EMS Operations

Substrate Operations

Customers

IC ATM CONSOLIDATED BASIS

EMS BASIS

OUTLOOK

Based on our current business outlook and exchange rate assumptions, management projects overall performance for the third quarter of 2017 to be as follows:

About ASE, Inc.

ASE is among the world's leading companies in semiconductor packaging and testing sector, including front-end engineering testing, wafer probing and final testing services. With advanced technological capabilities and a global presence spanning Taiwan, China, Korea, Japan, Singapore, Malaysia and the United States, ASE, Inc. has established a reputation for reliable, high quality products and services.  For more information, please 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 United States Securities Act of 1933, as amended, and Section 21E of the United States 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 or electronic industry; changes in our regulatory environment, including our ability to comply with new or stricter environmental regulations and to resolve environmental liabilities; demand for the outsourced semiconductor packaging, testing and electronic manufacturing services we offer and for such outsourced services generally; the highly competitive semiconductor or manufacturing industry we are involved in; our ability to introduce new technologies in order to remain competitive; international business activities; our business strategy; our future expansion plans and capital expenditures; the uncertainties as to whether we can complete the share exchange contemplated by a joint share exchange agreement between Siliconware Precision Industries Co., Ltd. and us; the strained relationship between the Republic of China and the People's Republic of China; general economic and political conditions; the recent global economic crisis; possible disruptions in commercial activities caused by natural or human-induced disasters; 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 2016 Annual Report on Form 20-F filed on April 21, 2017.

Supplemental Financial Information

IC ATM Consolidated Operations

Amounts in NT$ Millions

2Q/17

1Q/17

2Q/16

Net Revenues

39,048

38,385

38,504

Revenues by Application




Communication

48%

50%

52%

Computer

11%

11%

12%

Automotive, Consumer & Others

41%

39%

36%


Packaging Operations

Amounts in NT$ Millions

2Q/17

1Q/17

2Q/16

Net Revenues

31,718

31,061

31,180

Revenues by Packaging Type




Bumping, Flip Chip, WLP &
SiP

31%

31%

31%

IC Wirebonding

58%

58%

61%

Discrete and Others

11%

11%

8%

Capacity




CapEx (US$ Millions)*

161

120

136

Number of Wirebonders

16,118

15,963

15,920


Testing Operations

Amounts in NT$ Millions

2Q/17

1Q/17

2Q/16

Net Revenues

6,350

6,365

6,502

Revenues by Testing Type




Final test

83%

81%

77%

Wafer sort

14%

15%

20%

Engineering test

3%

4%

3%

Capacity




CapEx (US$ Millions)*

47

31

107

Number of Testers

3,796

3,782

3,629


EMS Operations

Amounts in NT$ Millions

2Q/17

1Q/17

2Q/16

Net Revenues

28,248

29,363

24,886

Revenues by End Application




Communication

48%

49%

46%

Computer

17%

15%

20%

Consumer

20%

22%

18%

Industrial

8%

7%

8%

Automotive

6%

6%

7%

Others

1%

1%

1%

Capacity




CapEx (US$ Millions)*

4

3

4


* Capital expenditure excludes building construction costs.

 

 

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Statement of Comprehensive Income Data

(In NT$ millions, except per share data)

(Unaudited)


For the three months ended


For the six months ended


Jun. 30

2017


Mar. 31

2017


Jun. 30

2016


Jun. 30

2017


Jun. 30

2016

Net revenues:










Packaging

30,494


29,806


30,178


60,300


58,214

Testing

6,350


6,365


6,503


12,715


12,498

Direct Material

928


892


759


1,820


1,651

EMS

28,210


29,355


24,845


57,565


49,594

Others

44


133


316


177


3,015

Total net revenues

66,026


66,551


62,601


132,577


124,972











Cost of revenues4

(53,910)


(54,576)


(50,347)


(108,486)


(101,270)

Gross profit

12,116


11,975


12,254


24,091


23,702











Operating expenses:










Research and development

(2,952)


(2,763)


(2,745)


(5,715)


(5,353)

Selling, general and administrative4

(3,945)


(3,987)


(3,620)


(7,932)


(7,255)

Total operating expenses

(6,897)


(6,750)


(6,365)


(13,647)


(12,608)

Operating income

5,219


5,225


5,889


10,444


11,094











Net non-operating (expenses) income:










Interest expense - net

(365)


(435)


(532)


(800)


(1,059)

Foreign exchange gain (loss)

(201)


2,891


(238)


2,690


643

Gain (loss) on valuation of financial assets
  and liabilities

 

800


 

(3,964)


 

858


 

(3,164)


 

498

Gain (loss) on equity-method investments4,5

253


(171)


541


82


645

Others

5,684


299


(438)


5,983


(367)

Total non-operating income (expenses)

6,171


(1,380)


191


4,791


360

Income before tax

11,390


3,845


6,080


15,235


11,454











Income tax expense

(3,207)


(886)


(1,523)


(4,093)


(2,841)

Income from continuing operations and
 
before non-controlling interest

8,183


2,959


4,557


11,142


8,613

Non-controlling interest

(336)


(400)


(255)


(736)


(429)











Net income attributable to shareholders of the parent

7,847


2,559


4,302


10,406


8,184











Per share data:










Earnings (losses) per share










– Basic

NT$0.97


NT$0.33


NT$0.56


NT$1.32


NT$1.07

– Diluted

NT$0.89


NT$0.29


NT$0.47


  NT$1.22


NT$0.87











Earnings (losses) per equivalent ADS










– Basic

US$0.160


US$0.053


US$0.087


  US$0.214


US$0.163

– Diluted

US$0.148


US$0.047


US$0.072


  US$0.199


US$0.132











Number of weighted average shares used in
 
diluted EPS calculation (in thousands)

8,604,623


7,931,315


8,238,396


8,121,989


8,272,966











Exchange rate (NT$ per US$1)

30.18


31.20


32.40


30.69


32.74

 

4 As of June 30, 2017, we have completed the identification of the difference between the cost of the investment and our share of the net fair value of subsidiary and associates' identifiable assets and liabilities.  Accordingly, we retrospectively adjusted the provisional amounts recognized at the acquisition dates in May , July and November 2016, respectively.
5 As of September 30, 2016, we have completed the identification of the difference between the cost of the investment and our share of the net fair value of SPIL's identifiable assets and liabilities.  Accordingly, we retrospectively adjusted the provisional amounts recognized at the acquisition dates in September 2015, March and April 2016, respectively.

 

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Statement of Comprehensive Income Data - IC ATM

(In NT$ millions, except per share data)

(Unaudited)


For the three months ended


For the six months ended


Jun. 30

2017


Mar. 31

2017


Jun. 30

2016


Jun. 30

2017


Jun. 30

2016

Net revenues:










Packaging

31,718


31,061


31,180


62,779


59,777

Testing

6,350


6,365


6,502


12,715


12,497

Direct Material

960


935


801


1,895


1,732

Others

20


24


21


44


41

Total net revenues

39,048


38,385


38,504


77,433


74,047











Cost of revenues

(30,021)


(29,552)


(28,945)


(59,573)


(56,656)

Gross profit

9,027


8,833


9,559


17,860


17,391











Operating expenses:










Research and development

(2,113)


(2,000)


(2,021)


(4,113)


(3,943)

Selling, general and administrative

(2,812)


(2,850)


(2,623)


(5,662)


(5,311)

Total operating expenses

(4,925)


(4,850)


(4,644)


(9,775)


(9,254)

Operating income

4,102


3,983


4,915


8,085


8,137











Net non-operating (expenses) income:










Interest expense - net

(443)


(498)


(576)


(941)


(1,180)

Foreign exchange gain (loss)

(162)


2,868


(306)


2,706


528

Gain (loss) on valuation of financial assets
  and liabilities

522


(4,072)


828


(3,550)


567

Gain (loss) on equity-method investments4,5

5,410


601


1,144


6,011


2,293

Others

33


325


(397)


358


(273)

Total non-operating income (expenses)

5,360


(776)


693


4,584


1,935

Income before tax

9,462


3,207


5,608


12,669


10,072











Income tax expense

(1,541)


(570)


(1,266)


(2,111)


(1,795)

Income from continuing operations and
 
before non-controlling interest

7,921


2,637


4,342


10,558


8,277

Non-controlling interest

(74)


(78)


(40)


(152)


(93)











Net income attributable to
 
shareholders of the parent

 

7,847


 

2,559


 

4,302


 

10,406


 

8,184












 

 

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Statement of Comprehensive Income Data - EMS

(In NT$ millions, except per share data)

(Unaudited)


For the three months ended


For the six months ended


Jun. 30

2017


Mar. 31

2017


Jun. 30

2016


Jun. 30

2017


Jun. 30

2016

Net revenues:










Total net revenues

28,248


29,363


24,886


57,611


49,674











Cost of revenues

(25,127)


(26,249)


(22,326)


(51,376)


(45,107)

Gross profit

3,121


3,114


2,560


6,235


4,567











Operating expenses:










Research and development

(859)


(780)


(742)


(1,639)


(1,452)

Selling, general and administrative

(1,126)


(1,101)


(996)


(2,227)


(1,916)

Total operating expenses

(1,985)


(1,881)


(1,738)


(3,866)


(3,368)

Operating income

1,136


1,233


822


2,369


1,199











Net non-operating (expenses) income:










Total non-operating income

366


217


190


583


268

Income before tax

1,502


1,450


1,012


2,952


1,467











Income tax expense

(284)


(303)


(205)


(587)


(286)

Income from continuing operations and
 
before non-controlling interest

1,218


1,147


807


2,365


1,181

Non-controlling interest

(289)


(313)


(204)


(602)


(312)











Net income attributable to
 
shareholders of the parent

 

929


 

834


 

603


 

1,763


 

869

 

 

Advanced Semiconductor Engineering, Inc.

Summary of Consolidated Balance Sheet Data

(In NT$ millions)

(Unaudited)



As of Jun. 30, 2017


As of Mar. 31, 2017






Current assets:





Cash and cash equivalents


43,891


42,474

Financial assets – current


4,138


3,720

Notes and accounts receivable


46,156


43,728

Inventories


42,818


42,616

Others


10,001


3,835

Total current assets


147,004


136,373






Financial assets - non current & Investments -
   equity method


 

50,878


 

52,183

Property plant and equipment


140,378


140,072

Intangible assets


11,885


11,907

Prepaid lease payments


2,065


2,081

Others


4,413


4,901

Total assets


356,623


347,517






Current liabilities:





Short-term borrowings


14,209


13,400

Current portion of bonds payable


15,236


15,179

Current portion of long-term borrowings & capital
  lease obligations


7,454


7,218

Notes and accounts payable


32,471


30,621

Others


43,765


32,173

Total current liabilities


113,135


98,591






Bonds payable


25,845


28,476

Long-term borrowings & capital lease obligations


28,823


33,639

Other liabilities


9,757


10,053

Total liabilities


177,560


170,759






Shareholders of the parent


166,838


164,840






Non-controlling interest


12,225


11,918






Total liabilities & shareholders' equity


356,623


347,517











Current Ratio


1.30


1.38

Net Debt to Equity


0.24


0.29











 

IR Contact:

Iris Wu, Manager

irissh_wu@aseglobal.com

Tel: +886.2.6636.5678

http://www.aseglobal.com

Grace Teng, Manager

grace_teng@aseglobal.com

Tel: +886.2.6636.5678

 


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SOURCE Advanced Semiconductor Engineering, Inc.

Contact:
Advanced Semiconductor Engineering, Inc.
Web: http://www.aseglobal.com