ASTT Asat Hldg Ltd American Dep (MM)

HONG KONG and MILPITAS, Calif., Aug. 1 /PRNewswire-FirstCall/ -- ASAT Holdings Limited (NASDAQ:ASTT), a global provider of semiconductor package design, assembly and test services, today announced financial results for the fourth quarter and fiscal 2007, ended April 30, 2007. (Logo: http://www.newscom.com/cgi-bin/prnh/20030414/ASATLOGO) Net sales in the fourth quarter were $36.0 million, compared with net sales of $41.5 million in the previous quarter. Net loss was $11.0 million, or a net loss of $0.25 per American Depositary Share (ADS). Fourth quarter net loss includes charges of approximately $682,000 in reorganization costs for follow-on expenses related to completing the move of the Company's manufacturing operations to China, a $1.4 million non-cash inventory write-off and a $1.3 million income tax provision. Fourth quarter net loss compares with a net loss of $7.6 million in the third quarter, or a loss of $0.18 per ADS. Third quarter net loss included charges of approximately $405,000 for relocation and facilities expenses and $763,000 in reorganization charges related to the relocation to China. Additional Fourth Quarter Results * Net sales for assembly were $34.5 million * Net sales for test were $1.5 million * Capital expenditures were $3.5 million * Cash and cash equivalents at the end of the quarter were $7.3 million Fiscal 2007 Financial Results Net sales for fiscal 2007 were $164.9 million, compared with net sales of $182.1 million in fiscal 2006. Net loss for fiscal 2007 was $35.0 million, or a net loss of $0.83 per ADS. This compares with a net loss of $42.4 million, or a net loss of $0.97 per ADS, in fiscal 2006. The fiscal net loss for both years reflects the ADS ratio change from 5 ordinary shares per ADS to 15 ordinary shares per ADS, effective December 26, 2006. "Fiscal 2007 marked the successful completion of the move of our manufacturing operations to China," said Tung Lok Li, acting chief executive officer of ASAT Holdings Limited. "While our revenue declined year-over-year, the lower cost structure and better operating environment contributed to an improvement in our gross margin and a reduction in our net loss. "With the majority of our cost reduction strategy now implemented, in fiscal 2008 we will focus on driving top line growth through a combination of increasing business with our current customers and capitalizing on our core strengths to add new customers. I am confident we have the strategy and management team in place to grow revenue next fiscal year. Also, when combining revenue growth with the new lower cost structure, we expect to see an overall improvement in our financial results in fiscal 2008," said Mr. Li. First Quarter Fiscal 2008 Outlook "We are seeing positive signs in the overall market environment and believe the seasonal trends and inventory issues that impacted our customers for the last two quarters are now behind us," said Mr. Li. "As a result, based on preliminary figures, we expect our net sales for the quarter ended July 31, 2007 increased to approximately $37.7 million. Also, while we are just beginning our October quarter, we expect our positive momentum to continue and believe revenue will increase 3 percent to 8 percent above the July quarter results." ASAT Commences Consent Solicitation In a separate release issued today, ASAT announced it is soliciting consent from the holders of its 9.25% Senior Notes due 2011. ASAT is seeking consents for amendment or waiver of certain defaults and events of default that may have occurred or may occur. The proposed amendments, if adopted, will among other things: (i) eliminate restrictions on the value of the assets that may be held by ASAT Semiconductor (Dongguan) Limited ("ASDL"), ASAT Holdings' Chinese subsidiary; (ii) expand the ability of ASAT Holdings and its subsidiaries to secure financing from additional sources; and (iii) extend the deadline for ASAT Holdings to fulfill its reporting obligations under the indenture for the Senior Notes. The consent solicitation will expire at 5:00 p.m., New York City time, on August 20, 2007, unless extended by New ASAT (Finance) Limited. Only holders of record as of 5:00 p.m., New York City time, on July 25, 2007 are eligible to deliver consents to the proposed amendments in the consent solicitation. Financing ASAT continues to seek additional financing to facilitate its required working capital needs. While the Company is reviewing various financing options and believes receipt of financing is likely, there can be no assurance that it will be obtained. If such financing is not obtained for any reason, there may be questions regarding the Company's ability to continue as a going concern. Interest Payment The Company announced today it will delay making the semi-annual interest payment on its 9.25% Senior Notes. ASAT has 30 days from the August 1, 2007 due date to meet its interest payment obligation. "We believe it is prudent to utilize the 30 day grace period while we attempt to complete the consent solicitation process and closure of potential new financing, which we are trying to complete prior to the end of the grace period," said Kei Hong Chua, chief financial officer of ASAT Holdings Limited. "While we have the funds available now to make the payment, doing so would leave us in a challenging position to support our ongoing business requirements in the near term. We are working with several banks and financing firms to obtain financing and are optimistic that we will reach a successful outcome with both the consent solicitation and financing package." Conference Call and Webcast on Friday, August 3, 2007 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 on Friday, August 3, 2007 at 8:30 am ET/5:30 am PT. To access the call, dial (973) 935-8766. 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/. A replay of the call will be available until August 10, 2007. To access the replay, dial (973) 341-3080. The passcode is 9051711. ASAT Holdings Limited ASAT Holdings Limited is a global provider of semiconductor package design, assembly and test services. With 18 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 and completing the consent solicitation on terms acceptable to us, 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, the need for additional funding and the risk that the shareholder financing or the additional financing and consent solicitation as described may not be obtained, 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 10, 2006 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 April 30, 2007 Jan. 31, 2007 Market Segment % of Net Revenues % of Net Revenues (Unaudited) Communications 57 62 Automotive/Industrial & Other 20 22 Consumer 14 9 PC/Computing 9 7 Revenue Breakdown by Region Three Months Ended April 30, 2007 Jan. 31, 2007 Region % of Net Revenues % of Net Revenues (Unaudited) United States 82 84 Europe 4 5 Asia 14 11 Revenue Breakdown by Customer Type Three Months Ended April 30, 2007 Jan. 31, 2007 Customer Type % of Net Revenues % of Net Revenues (Unaudited) Fabless 80 81 IDM 20 19 Summary financial data follows ASAT Holdings Limited Consolidated Statements of Operations (USD in thousands, except share data) For the three months ended April 30, 2007, January 31, 2007 and April 30, 2006 and year ended April 30, 2007 and 2006 Three Months Ended Year Ended April 30, January 31, April 30, April 30, April 30, 2007 2007 2006 2007 2006 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)* Net Sales 35,985 41,546 49,325 164,853 182,115 Cost of sales (Note A) 33,399 37,674 45,578 149,927 168,859 Gross profit 2,586 3,872 3,747 14,926 13,256 Operating expenses: Selling, general and admini- strative 5,794 5,584 8,578 22,065 29,448 Research and development 475 507 848 2,218 4,059 Reorganization expenses (Note B) 682 763 2,715 2,473 4,690 Impairment of property, plant and equipment -- -- 3,890 -- 3,890 Facilities and relocation charges 89 405 1,054 3,047 1,054 Total operating expenses 7,040 7,259 17,085 29,803 43,141 Loss from operations (4,454) (3,387) (13,338) (14,877) (29,885) Other (expense) / income, net (397) 564 436 643 3,438 Interest expense: - amortization of deferred charges (858) (826) (914) (3,705) (1,947) - third parties (4,013) (3,997) (3,949) (15,837) (14,686) Loss before income taxes (9,722) (7,646) (17,765) (33,776) (43,080) Income tax expense (Note C) (1,264) -- 640 (1,264) 649 Net loss (10,986) (7,646) (17,125) (35,040) (42,431) Other comprehensive loss: Foreign currency translation 22 8 17 39 11 Comprehensive loss (10,964) (7,638) (17,108) (35,001) (42,420) Net loss applicable to common shareholders: Net loss (10,986) (7,646) (17,125) (35,040) (42,431) Preferred shares: Cumulative preferred share dividends (497) (502) (489) (1,990) (976) Accretion of preferred shares (339) (319) (258) (1,232) (500) Net loss applicable to common shareholders: (11,822) (8,467) (17,872) (38,262) (43,907) Net loss per ADS (Note D): Basic and diluted: Net loss per ADS (0.25) (0.18) (0.39) (0.83) (0.97) Basic and diluted weighted average number of ADS out- standing (Note D) 46,695,972 46,382,458 45,405,199 46,119,881 45,290,521 Net loss per ordinary share: Basic and diluted: Net loss per ordinary share (0.02) (0.01) (0.03) (0.06) (0.06) Basic and diluted weighted average number of ordinary shares out- standing 700,439,575 695,736,872 681,077,990 691,798,216 679,357,820 Note A: Includes $1,356, $217 and $1,295 inventory write-down in the three months ended April 30, 2007, January 31, 2007 and April 30, 2006, respectively. Includes $1,611 and $1,802 inventory write-down for the year ended April 30, 2007 and 2006, respectively. Note B: Includes charges of $682, $763 and $2,715 associated with headcount reductions, primarily in the Company's Hong Kong operations, in the three months ended April 30, 2007, January 31, 2007 and April 30, 2006, respectively. Note C: The amount for the period ended April 30, 2007 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. * Extracted from the audited financial statements ASAT Holdings Limited Consolidated Balance Sheet (USD in thousands) As of April 30, 2007, January 31, 2007 and April 30, 2006 April 30, January 31, April 30, 2007 2007 2006 (Unaudited) (Unaudited) (Audited)* ASSETS Current assets: Cash and cash equivalents 7,325 11,072 11,915 Current portion of restricted cash 800 1,520 -- Accounts receivable, net 17,704 19,866 29,607 Inventories 13,270 15,271 23,319 Prepaid expenses and other current assets 5,171 4,824 8,084 Total current assets 44,270 52,553 72,925 Restricted cash 1,000 1,800 3,320 Property, plant & equipment, net 79,582 80,708 93,831 Deferred charges, net 5,277 5,622 7,115 Other non-current assets 5,008 5,057 4,270 Total assets 135,137 145,740 181,461 LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Short-term bank facilities 3,837 2,533 -- Accounts payable 25,926 24,279 38,249 Accrued liabilities and other payable 24,531 27,138 23,698 Amount due to QPL 2,532 2,754 5,826 Current portion of capital lease obligations 1,822 1,807 2,051 Total current liabilities 58,648 58,511 69,824 Accounts payable, net of current portion -- -- 1,830 Purchase money loan 8,249 7,736 6,382 9.25% senior notes due 2011 150,000 150,000 150,000 Capital lease obligations, net of current portion 758 1,216 2,539 Total liabilities 217,655 217,463 230,575 Series A Redeemable Convertible Preferred Shares 5,743 5,404 4,143 Shareholders' deficit: Common stock 7,114 7,031 6,899 Less: Repurchase of shares at par (71) (71) (71) Additional paid-in capital 246,072 246,325 246,353 Deferred stock-based compensation -- -- (63) Accumulated deficits (341,192) (330,206) (306,152) Accumulated other comprehensive loss (184) (206) (223) Total shareholders' deficit (88,261) (77,127) (53,257) Total liabilities and shareholders' deficit 135,137 145,740 181,461 * Extracted from the audited financial statements ASAT Holdings Limited Consolidated Statements of Cash Flows (USD in thousands) For the three months ended April 30, 2007, January 31, 2007 and April 30, 2006 and for the year ended April 30 2007 and 2006 Three Months Ended Year Ended April 30, Janauary 31, April 30, April 30, April 30, 2007 2007 2006 2007 2006 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)* Operating activities: Net loss (10,986) (7,646) (17,125) (35,040) (42,431) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization: Property, plant and equipment 5,708 5,793 6,543 23,328 26,886 Deferred charges and others 858 826 914 3,705 1,947 Loss (Gain) on disposal of property, plant and equipment 173 (4) (13) 173 (14) Non-cash impairment of property, plant and equipment -- -- 3,890 -- 3,890 Amortization (Reversal) of stock-based compensation 169 178 (23) 888 (186) Changes in operating assets and liabilities: Accounts receivable, net 2,162 3,797 (6,738) 11,903 (11,927) Restricted cash 1,520 -- (3,320) 1,520 (3,320) Inventories 1,974 3,090 (842) 9,939 (5,301) Prepaid expenses and other current assets (347) (705) 349 2,913 (929) Other non-current assets 49 (50) (2,056) (738) (1,324) Accounts payable 305 (3,100) 3,747 (5,728) 16,815 Accrued liabilities and other payable (2,606) 3,107 11,111 834 5,914 Amount due to QPL (222) 563 534 (3,294) 2,920 Net cash (used in) provided by operating activities (1,243) 5,849 (3,029) 10,403 (7,060) Investing activities: Proceeds from disposal of property, plant and equipment 146 35 114 181 116 Acquisition of property, plant and equipment (3,533) (3,395) (3,823) (17,748) (23,520) Net cash used in investing activities (3,387) (3,360) (3,709) (17,567) (23,404) Financing activities: Proceeds from issuance of Series A Redeemable Convertible Preferred Shares -- -- -- -- 7,500 Proceeds from Purchasing Money Loan -- -- -- -- 9,150 Proceeds (Repayment) of short-term bank loan 1,304 -- -- 3,837 (4,227) Payment of other deferred charges -- -- (10) -- (1,677) Repayment of capital lease obligations (443) (385) (400) (2,010) (1,204) Proceeds from stock options exercised -- 218 48 218 109 Proceeds from right offering -- -- -- 490 -- Net cash provided by (used in) financing activities 861 (167) (362) 2,535 9,651 Net (decrease) increase in cash and cash equivalents (3,769) 2,322 (7,100) (4,629) (20,813) Cash and cash equivalents at beginning of period 11,072 8,742 18,998 11,915 32,717 Effects of foreign exchange rates change 22 8 17 39 11 Cash and cash equivalents at end of period 7,325 11,072 11,915 7,325 11,915 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest expense 7,014 47 93 14,211 14,239 Income taxes 102 -- -- 102 (639) Non-cash financing activity: Waiver of payment to QPL in exchange of Series A Redeemable Convertible Preferred Shares -- -- -- -- 7,500 -- -- -- * Extracted from the audited financial statements 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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