PSi Technologies Reports Third Quarter 2003 Results SOUTH SAN
FRANCISCO, Calif. and MANILA, Philippines, Nov. 3 /PRNewswire/ --
PSi Technologies Holdings, Inc., , a leading independent provider
of assembly and test services for the power semiconductor market,
today announced financial results for the third quarter ended
September 30, 2003: Highlights for the quarter -- Revenue of $17.5
million, a decrease of (21)% on a quarter-over- quarter basis. --
Gross margin of 3.8%, an increase of 32 basis points on a
quarter-over-quarter basis. -- EBITDA margin of 13.3%, an increase
of 300 basis points versus 10.2% in last quarter. -- Asset
Impairment Charge of $12.1 million. -- EPS of $(0.85) per share,
inclusive of a $(0.74) per share asset impairment charge. Third
Quarter Financial Results Revenues for the third quarter of 2003
totaled $17.5 million, a (21)% sequential decline compared to $22.2
million in the previous quarter, and a (10)% decrease compared to
$19.4 million in revenues for the third quarter of 2002. Revenues
from the top 5 customers of the Company were $14.3 million, a (21)%
decline compared to $18.2 million in the previous quarter, and a
(9)% decline compared to $15.7 million in the third quarter of
2002. "In the quarter, the Company decided to adjust its package
and technology portfolio away from the low dropout (LDO) voltage
regulator market, which has experienced significant and continuing
price erosion. Most of the decline in revenue was attributable to
this decision," said Arthur J. Young, Jr. Chairman and CEO.
"Likewise, the buildup in consumer electronics inventory led to
softness in loadings from certain customers exposed to those
markets." Power semiconductor packages comprised 94.3% of total
third quarter revenue, or $16.5 million, a (21)% sequential decline
in sales versus $20.9 million in the previous quarter, and a (8)%
decline compared to $17.9 million in revenues for the third quarter
of 2002. Overall unit volumes decreased (22)% sequentially and were
lower by 1% year-over-year. According to Young, "The 1% sequential
increase in average selling prices (ASPs) was attributable in part
to targeted investments made during the first and second quarters,
that allowed the Company to build-up capability and competence in
selected higher margin packages." The Company's largest customers
for the third quarter (in alphabetical order) were Fairchild
Semiconductor, Infineon Technologies, ON Semiconductor, and
Philips. Products packaged for those customers are used in a
variety of end user applications, with particular focus on
automotive systems, consumer electronics, communications equipment,
industrial applications, home appliances and PC motherboards. Gross
profit margin increased to 3.8%, from 3.5% in the previous quarter.
It was 4.9% in the same period last year. Gross profit was $665,510
in the third quarter, compared to $773,180 in the previous quarter,
and $951,558 for the third quarter of 2002. Operating loss for the
third quarter improved to $(1.5) million, compared to $(1.6)
million in the previous quarter, driven by the (10)% reduction in
operating expenses. Operating loss margin was (8.5)%. EBITDA margin
was 13.3% for the quarter, compared to 10.2% in the second quarter,
and 11.2% in the same period last year. "The higher EBITDA margin
was a result of our decision to exit the low dropout voltage
regulator market and the continued reduction in the Company's cost
base. Realigning the organization and increasing productivity,
adjusting our operations schedule with our production plan to
reduce utilities costs and other associated expenses, and improving
manufacturing efficiency were key initiatives undertaken to lower
cost, and lowered our cost of sales by 4 percentage points or more
than $700,000," said Young. Third quarter net loss was $(14.0)
million or $(0.85) per diluted share, inclusive of a $12.1 million
asset impairment charge, compared to $(1.9) million, or $(0.11) per
diluted share in the previous quarter, and $(1.4) million or
$(0.09) per diluted share in the third quarter of 2002. "The third
quarter was a critical period for the Company as we restructured
our package portfolio, directly resulting in an asset impairment
charge that realigned the Company's asset base with business
expectations," said Young. Balance Sheet Highlights Cash and cash
equivalents totaled $2.1 million on September 30, 2003, versus $1.0
million in the previous quarter. Current Ratio excluding Accounts
Payable CAPEX improved to 0.98 in the third quarter, from 0.83 in
the second quarter, due to the issuance of the $4 million 5-year
senior subordinated exchangeable note to the Company's majority
shareholder Merrill Lynch Global Emerging Markets Partners
(MLGEMP), and reclassification of $5.1 million in bank credit
facilities to long-term liabilities. Accounts payable CAPEX went
down from $6.9 million in June 30, 2003 to $4.4 million at the end
of September. The Company anticipates a further reduction in
Accounts Payable CAPEX, to $3 million by the end of the year. Total
CAPEX in 2003 is expected to be at $9 million. "In accordance with
the terms of the subordinated exchangeable note issued to MLGEMP in
the third quarter, the Exchange Price at which the Note is
exchangeable into shares of common stock has been lowered to $1.29
per share, from an Exchange Price of $1.47 at issuance," according
to Thelma G. Oribello, Chief Financial Officer. The Company's third
quarter EBITDA of $2.3 million was lower than the third quarter
Exchangeable Note EBITDA target of $3.89 million. In the event the
Company reports a fourth quarter EBITDA figure of less than $3.92
million, the Exchange Price will be lowered to $1.15. Tangible book
value was $4.20 per share on September 30, 2003, with outstanding
shares of 13,289,525 shares, or $3.40 per share on 16,390,300
shares assuming the exchange of the subordinated exchangeable note
at an Exchange Price of $1.29 per share. Business Outlook
Commenting on the Company's business outlook and going forward
strategies, Young said, "Forecasts from our customers through early
2004 show increasing loadings, underpinned by strengthening demand
and ongoing inventory replenishment in our automotive, PC and
wireless business. We are hopeful that this will result in a 5 to
10% sequential increase in fourth quarter revenues." Conference
Call and Webcast Company management will hold a conference call on
its third quarter 2003 operating results on Monday, November 3,
2003, at 5:00 p.m. Eastern/2:00 p.m. Pacific. Interested parties
should call 888-243-0818 (for domestic callers) or 703-925-2402
(for international callers) at least 5 minutes before start time,
and ask the operator for the PSi conference call. A live webcast
will also be available through the Investor Relations section of
the Company's website at http://www.psitechnologies.com/ under
'Quarterly Webcasts,' or at http://www.fulldisclosure.com/. A
replay of the conference call will be available at 888-266-2086
(for domestic callers) and 703-925-2435 (for international callers)
through November 10, 2003; the access code is 302928. The webcast
replay will be available for 90 days. About PSi Technologies PSi
Technologies is a focused independent semiconductor assembly and
test service provider to the power semiconductor market. The
Company provides comprehensive package design, assembly and test
services for power semiconductors used in telecommunications and
networking systems, computers and computer peripherals, consumer
electronics, electronic office equipment, automotive systems and
industrial products. Their customers include most of the major
power semiconductor manufacturers in the world such as Fairchild
Semiconductor, Infineon Technologies, ON Semiconductor, Philips
Semiconductor, and ST Microelectronics. For more information, visit
the Company's web site at http://www.psitechnologies.com/ or call:
At PSi Technologies Holdings, Inc.: At FRB | Weber Shandwick Edison
G. Yap, CFA Jocelyn Hunter (general info) (63 917) 894 1335 (415)
248 3433 Safe Harbor Statement This press release contains
forward-looking statements that involve risks and uncertainties.
Actual results and outcomes may differ materially. Factors that
might cause a difference include, but are not limited to, those
relating to the pace of development and market acceptance of PSi's
products and the power semiconductor market generally,
commercialization and technological delays or difficulties, the
impact of competitive products and technologies, competitive
pricing pressures, manufacturing risks, the possibility of our
products infringing patents and other intellectual property of
third parties, product defects, costs of product development,
manufacturing and government regulation, risks inherent in emerging
markets, including but not limited to, currency volatility and
depreciation, restricted access to financing and political and
social unrest. PSi undertakes no responsibility to update these
forward-looking statements to reflect events or circumstances after
the date hereof. More detailed information about potential factors
that could affect PSi's financial results is included in the
documents PSi files from time to time with the Securities and
Exchange Commission. PSi Technologies Holdings, Inc. Unaudited
Income Statement (in US Dollars) (in US Dollars) For 3 months ended
For 9 Months ended 30-Sep-03 30-Jun-03 30-Sep-03 30-Sep-02 Sales
$17,501,217.84 $22,186,139.51 $59,833,954.86 $54,370,232.40 Cost of
Sales $16,835,707.46 $21,412,959.92 $58,372,103.32 $52,767,783.72
Gross Profit 665,510.38 773,179.59 1,461,851.54 1,602,448.68
Operating Expense Research and Development $334,521.58 $438,813.13
$1,206,024.91 $1,089,571.39 Stock compensation cost $59,988.21
$59,988.21 $179,964.63 $179,964.63 Administrative Expenses
$1,583,821.37 $1,677,242.21 $4,917,486.80 $4,462,536.68 Marketing
Expenses $173,926.97 $212,002.53 $598,578.94 $851,824.80 Subtotal
2,152,258.13 2,388,046.08 6,902,055.27 6,583,897.50 Operating
Profit/ (Loss) (1,486,747.75) (1,614,866.49) (5,440,203.73)
(4,981,448.82) Other Income/ (Charges) $(439,520.75) $(266,012.26)
$(909,632.47) $(414,075.19) Impairment Charge $(12,063,826.26) $--
$(12,063,826.26) $-- Income before Tax (13,990,094.76)
(1,880,878.75) (18,413,662.46) (4,870,762.86) Minority Interest
$(8,482.87) $(428.59) $(9,026.98) $(4,105.16) Net Income
(13,998,577.63) (1,881,307.34) (18,422,689.44) (4,874,868.02) Net
Income before Impairment (1,934,751.37) (1,881,307.34)
(6,358,863.18) (5,399,629.17) EBITDA $2,335,778.78 $2,261,659.88
$6,150,838.59 $4,846,487.30 No. of Shares Outstanding 16,390,300
16,390,300 16,390,300 16,390,300 EPS (0.85) (0.11) (1.12) (0.30)
PSi Technologies Holdings, Inc. Unaudited Consolidated Balance
Sheet (In US Dollars) ASSETS 30-Sep-03 31-Dec-02 Cash & Cash
Equivalents $2,088,559 $1,905,847 Accounts Receivable 10,156,786
13,974,443 Inventories 5,726,707 8,471,056 Prepaid Expenses &
Tax Credits 2,555,439 2,232,985 Total Current Assets 20,527,491
26,584,331 Property Plant & Equipment 131,664,808 138,236,943
Accumulated Depreciation 61,046,038 53,479,962 Property Plant &
Equipment - Net 70,618,770 84,756,981 Investment & Advances
141,983 240,964 Other Assets 1,477,298 1,463,479 TOTAL ASSETS
$92,765,542 $113,045,755 LIABILITIES & STOCKHOLDER'S EQUITY
Accounts Payable and Other Expenses $14,671,933 $15,600,831
Accounts Payable CAPEX 4,491,197 10,806,346 Bank Loans 2,600,000
6,500,000 Trust Receipts 3,738,137 3,668,734 Current Portion of
Long-term Debt 2,572,397 2,572,397 Current Portion of Obligation
under Capital Lease 60,535 135,701 Total Current Liabilities
28,134,200 39,284,008 Long-term liability (net of current)
9,100,000 -- Obligation Under Capital Leases (net of current)
119,229 115,935 TOTAL LIABILITIES 37,353,428 39,399,943 Minority
Interest 177,680 168,653 Equity Common Stock 590,818 590,818
Additional Paid-in-Capital 68,264,736 68,084,772 Subtotal Equity
68,855,554 68,675,590 Retained Earnings / (Deficit) Year to Date
Profit & Loss (18,422,689) (6,918,083) Previous Years' Retained
Earnings 4,801,568 11,719,652 Other Comprehensive Income Subtotal
Retained Earnings (13,621,121) 4,801,569 TOTAL EQUITY 55,234,433
73,477,158 TOTAL LIABILITIES & S'HOLDERS' EQUITY $92,765,542
$113,045,755 PSi Technologies Holdings, Inc. Unaudited Consolidated
Statement of Cash Flows (In US Dollars) For the 9 Months ended
30-Sep-03 CASH FLOWS FROM OPERATING ACTIVITIES Net Income
$(18,382,980) Adjustments to reconcile net income to net cash
provided by operating activities: Minority interest 9,027 Equity in
net loss (gain) of an investee 2002 -- Stock compensation cost
179,965 Depreciation and amortization 11,832,006 Loss on Asset
Impairment 12,063,826 Provision for (benefit from) deferred income
tax -- Equity in net loss (gain) of an investee -- Change in assets
and liabilities: Decrease (increase) in: -- Accounts receivables
3,817,657 Inventories 1,341,229 Other Current Assets and tax credit
receivable (322,454) Increase (decrease) in: -- Accounts payable
and other expenses (567,589) Net cash provided by operating
activities 9,970,687 CASH FLOWS FROM INVESTING ACTIVITIES Additions
to property and equipment (14,669,649) Decrease (increase) in
investments and advances 98,981 Decrease (increase) in other assets
(414,838) Net cash used in investing activities (14,985,506) CASH
FLOWS FROM FINANCING ACTIVITIES Net availment/(payments) of
short-term loans (3,900,000) Trust receipts and acceptances payable
69,403 Net availment/(payments) of stock issuance cost -- Net
availment/(payments) of long term loan 9,100,000 Net
availment/(payments) of obligation under capital leases (71,872)
Net cash provided by (used in) financing activities 5,197,531 NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 182,713 CASH AND
CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 1,905,847 CASH AND CASH
EQUIVALENTS AT END OF PERIOD $2,088,559 SUPPLEMENTAL INFORMATION ON
NONCASH FINANCING & INVESTING ACTIVITIES Property and equipment
acquired (paid) on account under accounts payable (6,315,148)
DATASOURCE: PSi Technologies Holdings, Inc. CONTACT: Edison G. Yap,
CFA of PSi Technologies Holdings, Inc., +63-917-894-1335, ; or
Jocelyn Hunter, general info of FRB | Weber Shandwick, +1-415-248
3433, , for PSi Technologies Holdings, Inc. Web site:
http://www.psitechnologies.com/
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