WAYNE, Pa. and AUSTIN, Texas, Dec. 10 /Xinhua-PRNewswire-FirstCall/
-- Ascend Acquisition Corp. ("Ascend") (OTC:ASAQOTC:ASAQUOTC:ASAQW)
(BULLETIN BOARD: ASAQ, ASAQU, ASAQW) , a specified purpose
acquisition company, today announced the unaudited financial
results for the three and nine months ended September 30, 2007, for
its merger partner, e.PAK Resources (S) Pte. Ltd. ("ePAK"). Third
Quarter Highlights -- Net sales increased 31% year-over-year to
$12.4 million -- Gross profit rose 27% year-over-year to $4.1
million -- Adjusted EBITDA increased 21% year-over-year to $2.0
million -- Net income increased 41% year-over-year to $686,000 --
Tripled manufacturing space at Shenzhen facility to 600,000 square
feet -- Expanding cleanroom space by about 50% due to strong demand
for wafer and disk drive products Third Quarter 2007 Results In the
third quarter of 2007, ePAK generated net sales of $12.4 million,
up 31.2% from $9.4 million in the same quarter in 2006. This growth
was primarily the result of a substantial increase in sales of
wafer shippers, wafer transport media and data storage devices to
new customers and an increase in sales to existing customers. Sales
of IC handling products also increased during the quarter. "Our
third quarter results reflect strong demand for our wafer products
from both new and existing customers, which translated into
double-digit growth in revenues, adjusted EBITDA and profits," said
Steve Dezso, ePAK's CEO. "We expect our margins to improve as wafer
handling and other new consumable products represent a larger
portion of our product mix going forward." Don K. Rice, Chairman of
the Board and CEO of Ascend, commented, "ePAK is a high growth,
high margin business managed by semiconductor veterans who have
operated successfully in China over the last 15 years. We believe
ePAK will utilize the additional capital from the merger to
continue to deliver exceptional financial performance well into the
future." Gross profit increased 26.6% in the third quarter of 2007
to $4.1 million. Gross margin was 33.1% in the third quarter of
2007, down from 34.3% in the same quarter of 2006. During the
quarter, the increased contribution of higher margin wafer products
to the product sales mix had a positive impact on gross margin,
which was offset by higher materials costs for IC handling
products. Operating expenses were $3.0 million, up 19.4% from $2.5
million in the same quarter of 2006, primarily due to higher
selling and administrative expenses in support of increased sales
and increased costs at its manufacturing facilities in China.
Operating expenses accounted for 24.5% of sales in the third
quarter of 2007, down from 26.9% of sales in the year ago period.
Operating profit increased 52.5% to $1.1 million and adjusted
EBITDA increased 20.6% to $2.0 million in the third quarter of
2007. Net income was $686,000, up 41.4% from $485,000 in the same
quarter of 2006. After an accretion of convertible contingently
redeemable common shares, which will be eliminated following the
close of ePAK's merger with Ascend, net income attributable to
common shareholders was $245,000, up from $43,000 in the third
quarter of 2006. Nine-Month Results Net sales for first nine months
of 2007 increased 25.6% to $32.8 million, compared to $26.1 million
in the first nine months of 2006. Gross profit increased 18.9% to
$11.3 million, up from $9.5 million in the first nine months of
2006. Gross margin was 34.3%, compared to 36.2% in the first nine
months of 2006. Operating profit increased 29.4% to $2.9 million
and adjusted EBITDA increased 19.1% to $5.0 million in the first
nine months of 2007. Net income was $1.8 million, up 14.4% from
$1.6 million in the first nine months of 2006. After an accretion
of convertible contingently redeemable common shares, net income
attributable to common shareholders was $359,000, up from $61,000
in the first nine months of 2006. Financial Condition At September
30, 2007, ePAK had cash and cash equivalents of $1.9 million, total
assets of $38.0 million and short-term bank borrowings of $5.1
million. The Company generated $10.7 million in cash flow from
operating activities in the first nine months of 2007. Outlook "In
the coming months, we will continue to reinvest our growing cash
flows into our business in order to meet the rapidly rising demand
for our products and minimize the impact of our capacity
constraints," Mr. Dezso said. "We look forward to the closing of
the merger with Ascend, which will allow us to make the capital
investments we need to fully take advantage of the multiple growth
opportunities available to us." "We are confident that our
shareholders will agree that ePAK provides an attractive
opportunity to invest in the rapidly growing $40 billion
semiconductor materials market," Mr. Rice said. "Ascend's planned
merger with ePAK meets the 80% valuation test and is fair based on
industry comparables. This transaction is structured for aggressive
growth, in which all of the cash at closing and from the warrant
conversion will be available for ePAK's continued growth." In July
2007, Ascend entered into a definitive agreement to merge with
ePAK. Under the terms of the agreement, at the closing of the
transaction, Ascend will reincorporate as a Bermuda public company
and acquire 100% of the outstanding capital stock of ePAK. Upon
completion of the transaction, which is expected in the first
quarter of 2008, the resulting public company will be domiciled in
Bermuda and renamed ePAK International Ltd. It is expected that
ePAK International's common stock and warrants will trade on the
NASDAQ Global Market. Additional Information The parties have filed
with the SEC a registration statement and proxy statement under
Form S-4 in connection with the proposed acquisition of ePAK and
reincorporation of Ascend in Bermuda. STOCKHOLDERS OF ASCEND AND
OTHER INTERESTED PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, THE
FINAL PROSPECTUS AND DEFINITIVE PROXY STATEMENT IN CONNECTION WITH
THE TRANSACTIONS AND THE SOLICITATION OF PROXIES FOR THE SPECIAL
MEETING OF ASCEND'S STOCKHOLDERS BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. The final prospectus and definitive proxy
statement will be mailed to Ascend's stockholder as of a record
date to be established for voting on the acquisition and
redomestication. These documents also will be available without
charge online at the Securities and Exchange Commission's Internet
site (http://www.sec.gov/) and by mail through requests to Ascend
Acquisition Corp., 435 Devon Park Drive, Bldg. 400 Wayne, PA 19087,
Attention: T. Anderson. Stockholders and other interested persons
can also read Ascend's final prospectus, dated May 11, 2006, for a
description of the security holdings of Ascend's directors and
officers and of EarlyBirdCapital, Inc., the underwriters of
Ascend's initial public offering, and their respective interests in
the successful consummation of the proposed transactions. Use of
Non-GAAP Financial Information This press release contains adjusted
EBITDA, a financial measure that is not defined by US GAAP.
Adjusted EBITDA was derived by calculating earnings before
interest, taxes, depreciation and amortization and non-cash charges
including share based compensation, and provisions for bad debt and
inventory. The Company's management uses adjusted EBITDA as an
important financial measure to assess the ability of ePAK's assets
to generate cash sufficient to pay interest on its indebtedness,
meet capital expenditure and working capital requirements, and
otherwise meet its obligations as they become due. The Company's
management believes that the presentation of adjusted EBITDA
provides useful information regarding ePAK's results of operations
because it assists in analyzing and benchmarking the performance
and value of ePAK's business. The Company's calculation of adjusted
EBITDA may not be consistent with similarly titled measures of
other companies. The table below presents a reconciliation of
adjusted EBITDA to net income, its most directly comparable U.S.
GAAP financial measure, on a historical basis, for the periods
presented. About e.PAK Resources (S) Pte. Ltd. ePAK is a
full-service designer, manufacturer and supplier of precision
engineered products and solutions for the automated transport and
handling of semiconductor and electronic devices. ePAK's product
areas include front-end wafer handling, back-end IC transport, and
end-system sub-assembly handling. The Company's products are sold
globally to top tier global customers including semiconductor
companies, system OEMs, and IC assembly and test operations. The
Company's low cost, large-scale manufacturing operations in
Shenzhen, the People's Republic of China ("PRC") are centrally
located to the semiconductor industry. ePAK's executive offices are
located in Austin, Texas and the Company maintains nine sales and
applications engineering offices worldwide. About Ascend
Acquisition Corporation Ascend Acquisition Corp. was formed on
December 5, 2005 for the purpose of effecting a merger, capital
stock exchange, asset acquisition or other similar business
combination with an operating business. Ascend's registration
statement for its initial public offering was declared effective on
May 11, 2006 and the offering closed on May 22, 2006, generating
net proceeds of approximately $38.5 million from the sale of 6.9
million units, including the full exercise of the underwriters'
over-allotment option and the sale of 166,667 units to the Ascend's
Chairman and CEO, Don K. Rice. Each unit was comprised of one share
of Ascend common stock and two warrants, each with an exercise
price of $5.00. As of September 30, 2007, Ascend held approximately
$40.3 million in a trust account maintained by an independent
trustee, which will be released to Ascend upon the consummation of
the business combination. FORWARD-LOOKING STATEMENTS This press
release may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 about
Ascend, ePAK and their combined business after completion of the
proposed business combination. These forward-looking statements are
based on current expectations and projections about future events.
These forward-looking statements are subject to known and unknown
risks, uncertainties and assumptions about us that may cause actual
results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity,
performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may," "will,"
"should," "could," "would," "expect," "plan," "anticipate,"
"believe," "estimate," "continue," or the negative of such terms or
other similar expressions. Factors that might cause or contribute
to such a discrepancy include, but are not limited to, Ascend's
ability to effect a business combination, ePAK's ability to grow
future revenues and earnings, changes in demand for ePAK's
products, market acceptance of the ePAK's products, changes in the
laws of the People's Republic of China that affect ePAK's
operations, and other factors that may be detailed from time to
time in Ascend's filings with the United States Securities and
Exchange Commission and other regulatory authorities. e.PAK
RESOURCES AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (United States dollars in thousands) Three
Months Nine Months ended ended September 30, September 30, 2007
2006 2007 2006 (Unaudited)(Unaudited) (Unaudited)(Unaudited) Net
sales $12,355 $9,420 $32,818 $26,131 Cost of sales (8,260) (6,185)
(21,564) (16,667) Gross profit 4,095 3,235 11,254 9,464 Selling,
general and administrative expenses (2,953) (2,488) (8,210) (7,102)
Research and development (70) (44) (165) (137) Operating profit
1,072 703 2,879 2,225 Interest income 5 5 15 14 Other income 3 3 8
15 Interest expense (112) (102) (351) (236) Other expense (118)
(47) (324) (194) Income before income taxes 850 562 2,227 1,824
Income tax expense (164) (77) (389) (218) Net income 686 485 1,838
1,606 Accretion of convertible contingently redeemable common
shares (441) (442) (1,479) (1,545) Net income attributable to
common shareholders $245 $43 $359 $61 e.PAK RESOURCES AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (United States
dollars in thousands) September 30, December 31, 2007 2006
(Unaudited) ASSETS Current assets: Cash and cash equivalents $1,501
$2,624 Restricted cash and cash equivalents 395 381 Accounts
receivable, net 9,090 6,535 Inventories 9,559 8,994 Deferred tax
assets 7 8 Other current assets 765 462 Total current assets 21,317
19,004 Long-term deposits 13 13 Property, plant and equipment, net
16,686 14,506 Total assets $38,016 $33,523 LIABILITIES AND
SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $11,213
$9,432 Accrued liabilities 1,897 1,571 Current maturities of
long-term debt 709 501 Short-term borrowings 5,139 4,964 Short-term
loan from Parent Company 4,807 4,903 Income taxes payable 1,144 930
Total current liabilities 24,909 22,301 Non-current liabilities:
Long-term debt, less current maturities 901 1,061 Deferred tax
liabilities 338 147 Redeemable common shares: Convertible
contingently redeemable common shares 25,685 24,205 Shareholders'
deficit: Common shares 400 400 Common share warrants -- 19
Accumulated deficit (14,251) (14,698) Non-distributable reserves
121 121 Accumulated other comprehensive loss (87) (33) Total
shareholders' deficit (13,817) (14,191) Total liabilities and
shareholders' deficit $38,016 $33,523 e.PAK RESOURCES AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (United States
dollars in thousands) 9 Months ended September 30, 2007 2006 Cash
flows from operating activities Unaudited Unaudited Net income
$1,838 $1,606 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation of property, plant
and equipment 2,049 1,728 Share-based compensation 69 225 Write-off
of inventory 253 188 Provision for bad debt -- 6 Deferred tax
expenses 192 108 Unrealized exchange differences 102 35 Increase
(decrease) in cash from changes in: Accounts receivable (2,555)
(318) Inventories (819) (2,047) Due from Parent Company -- 125
Other current assets (303) (477) Accounts payable 9,319 7,101
Accrued liabilities 331 (93) Income tax payables 214 86 Net cash
flows provided by operating activities 10,690 8,273 Cash flows from
investing activities Purchase of property, plant and equipment
(3,435) (3,607) Net cash flows used in investing activities (3,435)
(3,607) Cash flows from financing activities Increase in restricted
cash and cash equivalents (14) (12) Proceeds from short-term
borrowings 15,280 13,987 Repayment of short-term borrowings
(23,540) (18,741) Proceeds from long-term debt 490 600 Repayment of
long-term debt (442) (248) Repayment of loans from Parent Company
(96) (139) Net cash flows used in financing activities (8,322)
(4,553) Net (decrease) increase in cash and cash equivalents
(1,067) 113 Cash and cash equivalents at beginning of period 2,624
1,979 Effects of exchange rates on cash and cash equivalents (56)
(21) Cash and cash equivalents at end of period $1,501 $2,071
Supplemental cash flow disclosures : Cash paid for interest 351 236
Cash Paid for income taxes 4 22 Non-cash purchase of property,
plant and equipment through accounts payable 794 553 Non-cash
settlement of accounts payable through issuance of notes payable
8,435 6,303 e.PAK RESOURCES (S) PTE. LTD. AND SUBSIDIARIES
Reconciliation of Net Income to Adjusted EBITDA (Amounts expressed
in United States dollars, in thousands; US GAAP) Three Months Ended
Nine Months Ended September 30, September 30, 2007 2006 2007 2006
Net income $686 $485 $1,838 $1,606 Income taxes 164 77 389 218
Interest 107 97 336 222 Depreciation and amortization 713 765 2,049
1,728 Non-cash items 289 200 424 454 Adjusted EBITDA $1,959 $1,624
$5,036 $4,228 For more information, please contact: Ascend
Acquisition Corporation Don K. Rice, Chairman and CEO Phone:
+1-610-519-1336 Email: Website: http://www.ascendgrowth.com/ ePAK
International Inc. Steve Dezso, CEO Phone: +1-512-231-8083 Email:
Website: http://www.epak.com/ Investor Relations: Crocker Coulson,
President CCG Investor Relations Phone: +1-646-213-1915 Email:
Website: http://www.ccgir.com/ DATASOURCE: Ascend Acquisition
Corporation CONTACT: Ascend Acquisition Corporation - Don K. Rice,
Chairman and CEO, +1-610-519-1336, or ; or ePAK International Inc.
- Steve Dezso, CEO, +1-512-231-8083, or ; or Investor Relations -
Crocker Coulson, President of CCG Investor Relations,
+1-646-213-1915, or Web Site: http://www.ascendgrowth.com/
http://www.epak.com/ http://www.ccgir.com/
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