MANILA, Philippines, Nov. 7 /PRNewswire-FirstCall/ -- PSi
Technologies Holdings, Inc., (NASDAQ:PSIT), 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, 2007: Third Quarter Financial Results The third
quarter revenue totaled $22.5 million, relatively unchanged
compared to $22.7 million in the previous quarter, and a decline of
6.4% compared to the same quarter in 2006. The company continues to
experience the softness in the power semiconductors market as a
result of inventory adjustments. In particular, the third quarter
volume of the package used in appliances has significantly dropped
compared to the previous quarter. The top five customers for the
third quarter of 2007(in alphabetical order) were Infineon
Technologies, NXP Semiconductors, ON Semiconductors, Power
Integrations, and ST Microelectronics. The products assembled and
tested for these customers are used in various end user
applications, such as, automotive systems, consumer electronics,
communications equipment, industrial applications, home appliances
and PC motherboards. As in the prior quarter, PSi continues to
focus on developing strategic partnerships with new customers,
particularly for its new package family of Power QFN. The cost of
sales improved from $18.8 million in the second quarter of 2007 to
$18.2 million in the third quarter, largely due to the cost
reduction programs covering raw materials usage and efficiency in
manpower management leading to productivity gains. Furthermore, the
company realized the benefit of its efforts to move its product
portfolio towards higher contribution packages. As a result, gross
profit increased by 42.1% from $0.8 million in the second quarter
to $1.2 million in the third quarter of 2007. Net other expenses
for the third quarter improved to $0.9 million from $1.3 million
during the previous quarter. This reduction in net other expenses
is attributable to lower foreign exchange losses resulting from the
slowdown on the rate of appreciation of the Philippine currency
against the U.S. dollar in the third quarter as compared to
previous quarter and lower interest and bank charges, partly offset
by additional legal fees resulting from the closure of China
operations. Overall, the improvement in gross profit by 42.1% and
reduction of net other expenses by 29% for the third quarter
resulted to an improvement in net loss by 20.9% and a 18.6%
increase in EBITDA, compared to the second quarter of 2007. Year To
Date Financial Results Sales revenue for the first nine months of
2007 was $69.9 million, representing an increase of 8.0% over sales
revenue of $64.7 million for the same period last year. 2006
results exclude sales revenue of $2.2 million generated by the
now-closed China operations. Through the first nine months of 2007,
the continued appreciation of the Philippine currency against the
U.S. dollar and the increase in copper prices in the first nine
months of 2007 as against the same period of 2006 has negatively
affected gross profit and EBITDA. Comparing the same periods of
2007 and 2006, the Philippine peso, on the average, has appreciated
by 9%. The copper prices have increased by an average of 30%, from
$5.3/kg to $6.89/kg, for the first nine months of 2006 and 2007,
respectively. The impact of these external factors was partly
reduced through management focus on, and execution of, cost
reduction initiatives and productivity improvement programs across
the two assembly and test sites. Moreover, the company was able to
obtain agreements with its major customers that enabled the company
to pass through increased copper prices to customers beginning in
the latter part of third quarter 2007. With the appreciation of the
Philippine peso and the increase in copper prices offset by the
cost initiatives, productivity programs and the copper price
pass-through, gross profit for the first nine months of 2007 was
$3.3 million, down from $4.1 million in the same period of 2006.
Similarly, EBITDA was down from $8.3 million to $6.4 million, for
the first nine months of 2006 and 2007, respectively. Balance Sheet
Highlights Third quarter 2007 ending cash balance improved by 80%,
from $3.3 million in December 2006 to $5.9 million in September
2007. The net increase in cash can be largely attributed to
improved collections and a prepayment from a customer, offset by
reduction in liabilities and acquisition of machineries. New
acquisitions in property, plant and equipment totaled $1.9 million
for the first nine months of 2007. These expenditures are mostly
related to the purchase of machineries and equipment to improve
capacity and support ramp up for new products. Total current
liabilities decreased by $5.5 million, from $37.8 million in
December 2006 to $32.3 million in September 2007, mainly due to
payment of trade and capital liabilities. The prepayment from a
customer, $1.3 million as of September 2007, effectively booked the
production line for current and future loadings Noncurrent
liabilities account includes the carrying amount of $5.9 million
Exchangeable Notes issued in July 2003 and June 2005, net of
discount representing the embedded conversion feature of the Note.
Business Outlook Arthur J. Young, Jr., Chairman and CEO said,
"During the third quarter we had to contend with rapidly-changing
business demand that affected the semiconductor value chain. A
couple of PSi customers had dramatic net reductions in volume,
which affected our own loading requirements. To avert further
negative financial impact, we were able to move our assembly and
test lines to higher-contribution margin packages and execute on
our cost and productivity initiatives. We anticipate that our
particular market will strengthen and will be back to single digit
growth in the fourth quarter of 2007. We see the Philippine peso
further appreciating in the fourth quarter of 2007, the effect of
which we will continue to address." Gordon J. Stevenson, EVP and
COO remarked, "During 2007 we have made significant strides forward
with respect to embedding continuous improvement activities in both
of our manufacturing sites and have sustained our cost reduction
drive considered essential towards combating the appreciating peso
and increased copper prices. Our 'Quality First' strategy continues
to yield breakthrough performance with numerous key customers
viewing PSi as a preferred supplier and either now starting to
shift their demand to PSi or increasing the current load to our
Philippine manufacturing facilities. While opportunities remain,
these factors combined are assisting greatly the overall PSi
financial performance and are enabling us to lay a much more
competitive foundation in preparation for an improved stronger
semiconductor market." 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 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 Financial Relations Board Larry
Cajucom Lasse Glassen (63 2) 838 4489 (213) 486 6546 : 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 and the possibility that the initiatives described
herein may not produce the intended results. 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) For the Three Months Ended For the Nine Months Ended
30-Sep-07 30-Jun-07 30-Sep-06 30-Sep-07 30-Sep-06 Unaudited
Unaudited Unaudited Unaudited Unaudited REVENUES $22,502,430
22,675,639 $24,052,713 $69,856,734 $64,666,457 COST OF SALES
18,205,792 18,818,243 18,556,448 57,093,931 50,474,809 DEPRECIATION
3,129,672 3,036,396 3,634,203 9,462,144 10,136,943 GROSS PROFIT
(LOSS) 1,166,966 821,000 1,862,062 3,300,659 4,054,706 OPERATING
EXPENSES Research and development 308,405 274,256 306,288 834,460
822,173 Stock compensation cost 44,943 29,227 28,715 103,396
128,695 Administrative expenses 1,787,967 1,660,905 1,672,073
5,096,877 4,752,905 Marketing expenses 223,628 225,038 187,035
678,141 521,516 Total Operating Expenses 2,364,943 2,189,426
2,194,111 6,712,874 6,225,288 LOSS FROM OPERATIONS (1,197,977)
(1,368,426) (332,049) (3,412,215) (2,170,582) Interest and bank
charges-net (262,954) (336,662) (217,845) (852,280) (717,821)
Foreign exchange gains (losses)-net (123,317) (472,747) (228,673)
(729,097) (344,552) Lease income 41,370 41,370 28,920 124,110 -
Exchangeable Note interest and financing charges (638,130)
(612,979) (595,280) (1,868,038) (1,718,306) Loss on discontinued
operation and special charges (23,904) - - (23,904) (1,078,491)
Miscellaneous 57,355 35,267 (2,303) 105,606 2,553 Net Other Expense
(949,580) (1,345,751) (1,015,181) (3,243,603) (3,856,616) NET LOSS
$(2,147,557)$(2,714,177) $(1,347,230) $(6,655,818)$(6,027,198)
EBITDA $2,105,304 $1,775,815 $3,259,133 $6,439,769 $8,327,655 No.
of Shares Outstanding 13,289,525 13,289,525 13,289,525 13,289,525
13,289,525 EPS- based on Outstanding Shares (0.16) (0.20) (0.10)
(0.50) (0.45) PSi Technologies Holdings, Inc. Unaudited
Consolidated Balance Sheet (In US Dollars) 30-Sep-07 31-Dec-06
Unaudited Audited ASSETS Current Assets Cash $5,942,598 $3,270,042
Restricted Cash - 102,969 Accounts receivable-net 10,848,821
14,643,596 Inventories-net 4,490,719 5,901,366 Other current
assets-net 1,073,853 482,629 Total Current Assets 22,355,991
24,400,602 Noncurrent Assets Property, plant and equipment-net
28,169,527 36,099,471 Other noncurrent assets-net 1,309,618
1,277,391 Total Noncurrent Assets 29,479,145 37,376,862 $51,835,136
$61,777,464 LIABILITIES AND STOCKHOLDERS' EQUITY Current
Liabilities Accounts payable and accrued expenses $20,327,327
$24,604,664 Accounts payable CAPEX 354,802 2,509,204 Loans Payable
10,250,000 10,524,743 Advance from customer 1,346,244 - Trust
receipts payable 60,240 39,998 Income tax payable - 114,773 Total
Current Liabilities 32,338,613 37,793,382 Noncurrent Liabilities
Exchangeable Note 5,904,433 4,541,506 Accrued retirement benefit
cost 3,794,777 3,092,841 Total Noncurrent Liabilities 9,699,210
7,634,347 Stockholders' Equity Capital stock-Philippine peso 1-2/3
par value Authorized-37,058,100 shares Issued and
outstanding-13,289,525 shares 590,818 590,818 Additional paid-in
capital 79,647,982 79,544,586 Other comprehensive loss (2,055,236)
(2,055,236) Deficit (68,386,251) (61,730,433) Total Stockholders'
Equity 9,797,313 16,349,735 $51,835,136 $61,777,464 PSi
Technologies Holdings, Inc. Unaudited Consolidated Statement of
Cash Flows (In US Dollars) For the Nine Months Ended September 30,
2007 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(6,655,818)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation 9,784,412 Interest on exchangeable notes
converted to principal 649,604 Stock compensation costs 103,396
Amortization of debt issuance costs and discount 727,914 Accretion
of interest receivable from sale of land, building and improvements
(30,281) Accretion of interest receivable from Manila Electric
Company (26,668) Provision for pension expense 586,960 Provision
for inventory losses 4,395 Provision for doubtful accounts 10,599
Changes in operating assets and liabilities: Decrease (increase)
in: Trade and other receivables 3,747,069 Inventories 1,387,569
Other current assets (591,225) Decrease in trade and other payables
(6,786,337) Net cash provided by (used in) operating activities
2,911,589 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of
property and equipment (1,540,684) Decrease (increase) in other
noncurrent assets (46,817) Net cash used in investing activities
(1,587,501) CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from
(payments of) trust receipts payable 20,242 Net proceeds from
(payments of) loans payable (274,743) Advance from customer
1,500,000 Decrease in restricted cash 102,969 Net cash provided by
financing activities 1,348,468 NET INCREASE (DECREASE) IN CASH
2,672,556 CASH, BEGINNING OF PERIOD 3,270,042 CASH, END OF PERIOD
$5,942,598 SUPPLEMENTAL INFORMATION ON NONCASH INVESTING AND
FINANCING ACTIVITIES Property and equipment acquired on account
under accounts payable $354,802 DATASOURCE: PSi Technologies
Holdings, Inc. CONTACT: Larry Cajucom of PSi Technologies Holdings,
Inc., [63 2] 838 4489, ; or Lasse Glassen of Financial Relations
Board, +1-213-486-6546, , for PSi Technologies Holdings, Inc. Web
site: http://www.psitechnologies.com/
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