ASAT Holdings Announces Financial Results for the Fourth Quarter and Fiscal Year...

ASAT Holdings Announces Financial Results for the Fourth Quarter and Fiscal
Year 2008
Revenue For July 2009 Quarter Expected To Rise Approximately 30 Percent
Sequentially

HONG KONG and MILPITAS, Calif., July 31 /PRNewswire-FirstCall/ -- ASAT
Holdings Limited (OTC Bulletin Board: ASTTY.OB), a global provider of
semiconductor package design, assembly and test services, today announced
financial results for the fourth quarter and fiscal 2008, ended April 30,
2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080325/AQTU023LOGO)
Net revenue for the fourth quarter of fiscal 2008 was $36.2 million
compared with $41.8 million in the previous quarter. Fourth quarter net loss
of $8.8 million, or a net loss of $0.20 per American Depositary Share (ADS),
compares with a net loss of $5.0 million, or a net loss of $0.12 per ADS in
the third quarter. Included in the fourth quarter net loss were reorganization
charges of approximately $19,000 related to completing the move of the
Company's manufacturing operations to China. Net loss in the third quarter
included charges of approximately $149,000 in similar expenses.
"Our fourth quarter revenue declined due to a combination of factors.
These included the economic uncertainty that impacted many of our customers
resulting in an inventory correction, and a seasonally slower period in our
industry," said Kei Hong Chua, chief financial officer of ASAT Holdings
Limited.
Additional Fourth Quarter Results
-- Net sales for assembly were $35.5 million
-- Net sales for test were $0.7 million
-- Capital expenditures were $2.0 million
-- Cash and cash equivalents at the end of the quarter were $6.0 million

Fiscal 2008 Financial Results
Net revenue for fiscal 2008 was $156.0 million, compared with net revenue
of $164.9 million in fiscal 2007. Fiscal 2008 net loss was $24.7 million, or
a net loss of $0.59 per ADS. This compares with a net loss of $35.0 million,
or a net loss of $0.83 per ADS, in the prior fiscal year. The net loss for
both fiscal years reflects the ADS ratio change from 5 ordinary shares per ADS
to 15 ordinary shares per ADS, effective December 26, 2006.
"Our improved fiscal 2008 results, including higher gross margin, reduced
operating expenses and lower net loss, reflect the positive impact our lower-
cost Dongguan facility is having on our financial performance as compared with
fiscal 2007," said Tung Lok Li, acting chief executive officer of ASAT
Holdings Limited. "With the move to Dongguan completed and the cost savings
in place, we are focused on driving revenue growth in fiscal 2009. In
addition, we have secured additional financing, which we will leverage to
drive this top-line improvement."
New Financing
The Company recently closed on two new financing facilities totaling
approximately US$14 million. These funds are in addition to the original
facility that is still in place through September 2008.
"We are pleased to have secured these new sources of financing. The funds
will be used to support our expected growth in fiscal 2009," said Kei Hong
Chua, chief financial officer of ASAT Holdings Limited. "The new financing
consists of one facility of RMB 60 million that includes an approximately US$5
million credit line and US$4 million that is backed by pledged assets. The
second facility is a US$5 million line that is also backed by pledged assets.
In addition, we continue to work towards the renewal of our existing US$20
million facility."
While the Company believes the renewal of existing facilities is likely,
there can be no assurance that it will be obtained, and if such financing is
not obtained for any reason there may be questions regarding the Company's
ability to continue as a going concern.
First Quarter Fiscal 2009 Outlook
"In recent months we have focused our sales efforts on increasing revenue
from our top customers, which we believe offer the quickest route to growing
revenue," said Mr. Li. "We are making very good progress on this strategy, and
currently believe that for the July quarter revenue growth will be up
approximately 30 percent sequentially."
Conference Call and Webcast on July 31, 2008 at 8:30 a.m. ET
ASAT Holdings is scheduled to hold a conference call to discuss the
financial results and other financial matters today at 8:30 a.m. ET/5:30 a.m.
PT. To access the call, dial (480) 248-5081. A replay of the call will be
available until
August 7, 2008. To access the replay, dial (303) 590-3030. The passcode is
3904866. 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.
ASAT Holdings Limited
ASAT Holdings Limited is a global provider of semiconductor package
design, assembly and test services. With 20 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 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 whether an
active trading market in the Company's ADSs will develop or be maintained on
the OTC Bulletin Board or any other trading market, obtaining future
financing, conditions in the overall semiconductor market and economy, 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, our ability to obtain
future financing, the risk that an active trading market in the Company's
American Depositary Shares will not develop or be maintained on the OTC
Bulletin Board or any other trading market, 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 15, 2007 and the section entitled "Risk
Factors" in our current reports on Form 6-K filed with the United States
Securities and Exchange Commission containing quarterly financial information.
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, 2008 January 31, 2008
Market Segment % of Net Revenues % of Net Revenues
(Unaudited)
Communications 50 48
Automotive/Industrial & Other 16 14
Consumer 14 16
PC/Computing 20 22

Revenue Breakdown by Region

Three Months Ended
April 30, 2008 January 31, 2008
Region % of Net Revenues % of Net Revenues
(Unaudited)
United States 85 85
Europe 4 4
Asia 11 11

Revenue Breakdown by Customer Type

Three Months Ended
April 30, 2008 January 31, 2008
Customer Type % of Net Revenues % of Net Revenues
(Unaudited)
Fabless 80 84
IDM 20 16

Summary financial data follows

ASAT Holdings Limited
Condensed Consolidated Statements of Operations
(USD in thousands, except share data)
For the three months ended April 30, 2008,
January 31, 2008 and April 30, 2007, and
For the year ended April 30, 2008
and April 30, 2007

Three Months Ended Year Ended
April 30, January 31, April 30, April 30, April 30,
2008 2008 2007 2008 2007
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)*

Net Sales 36,228 41,764 35,985 155,961 164,853

Cost of sales
(Note A) 34,399 36,783 33,399 138,683 149,927

Gross profit 1,829 4,981 2,586 17,278 14,926

Operating expenses:
Selling,
general and
administrative 4,411 4,157 5,794 18,940 22,065
Research and
development 505 519 475 2,034 2,218
Reorganization
expenses (Note B) 19 149 682 392 2,473
Facilities and
relocation charges - - 89 - 3,047

Total operating
expenses 4,935 4,825 7,040 21,366 29,803

Income/(loss) from
operations (3,106) 156 (4,454) (4,088) (14,877)
Other (expenses)/
income, net (901) (111) (397) (722) 643
Interest expense: -
- amortization
of deferred
charges (739) (773) (858) (3,245) (3,705)
- third
parties (3,943) (4,092) (4,013) (16,281) (15,837)

Loss before
income taxes (8,689) (4,820) (9,722) (24,336) (33,776)
Income tax
expense
(Note C) (98) (130) (1,264) (339) (1,264)

Net loss (8,787) (4,950) (10,986) (24,675) (35,040)
Other comprehensive
loss:
Foreign currency
translation 18 9 22 61 39

Comprehensive
loss (8,769) (4,941) (10,964) (24,614) (35,001)
Net loss applicable
to ordinary
shareholders:
Net loss (8,787) (4,950) (10,986) (24,675) (35,040)
Preferred
shares:
Cumulative
preferred
share
dividends (507) (507) (497) (2,028) (1,990)
Accretion of
preferred
shares (433) (411) (339) (1,591) (1,232)

Net loss
applicable to
ordinary
shareholders: (9,727) (5,868) (11,822) (28,294) (38,262)

Basic and diluted
loss per ADS
(Note D):
Basic and
diluted:
Net loss (0.20) (0.12) (0.25) (0.59) (0.83)

Basic and diluted
weighted average
number of ADSs
outstanding
(Note D) 49,722,587 48,723,339 46,695,972 48,306,653 46,119,881

Basic and diluted
loss per
ordinary share:
Basic and
diluted:
Net loss (0.01) (0.01) (0.02) (0.04) (0.06)

Basic and diluted
weighted average
number of
ordinary shares
out-
standing 745,838,798 730,850,088 700,439,575 724,599,796 691,798,216

Note A: Includes $(67) thousand, $79 thousand and $1,356 thousand
inventory (reversal)/write-down in the three months ended April 30, 2008,
January 31, 2008 and April 30, 2007, respectively. Includes $861 thousand and
$1,611 thousand inventory write-down for the year ended April 30, 2008 and
April 30, 2007 respectively.
Note B: Includes charges of $19 thousand, $149 thousand and $682
thousand associated with headcount reductions in the three months ended April
30, 2008, January 31, 2008 and April 30, 2007, respectively. The charge for
this quarter is primarily related to the headcount reductions of the Company's
US employees; while the charges for other periods are primarily relate to the
headcount reductions of the Company's Hong Kong employees.
Note C: The amount for the fiscal period of 2008 mainly represents
provision for the US Income Tax, the PRC Enterprise Income Tax and the Hong
Kong Profits Tax. 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
Condensed Consolidated Balance Sheets
(USD in thousands)
As of April 30, 2008, January 31, 2008 and April 30, 2007

April 30, January 31, April 30,
2008 2008 2007
(Unaudited) (Unaudited) (Audited)*

ASSETS

Current assets:
Cash and cash equivalents 6,011 12,264 7,325
Current portion of restricted cash - 900 900
Accounts receivable, net 17,540 18,505 17,704
Inventories 15,112 15,599 13,270
Prepaid expenses and other current
assets 5,138 6,679 5,171

Total current assets 43,801 53,947 44,370

Restricted cash - - 900
Property, plant & equipment, net 62,252 65,774 79,582
Deferred charges, net 6,367 6,980 5,277
Other non-current assets 6,223 5,761 5,008

Total assets 118,643 132,462 135,137

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
Short-term bank facilities 9,392 9,269 3,837
Accounts payable 27,908 29,005 25,926
Accrued liabilities and other payable 21,315 23,690 22,445
Amount due to QPL 3,461 4,312 2,532
Current portion of capital lease
obligations 26 1,596 1,822

Total current liabilities 62,102 67,872 56,562

Other payable, net of current portion - - 2,086
Purchase money loan 9,449 9,323 8,249
9.25% senior notes due 2011 150,000 150,000 150,000
Capital lease obligations, net of
current portion 44 48 758

Total liabilities 221,595 227,243 217,655

Series A Redeemable Convertible
Preferred Shares 7,303 6,870 5,743

Shareholders' deficit:
Common stock 7,664 7,382 7,114
Less: Repurchase of shares at par (71) (71) (71)
Additional paid-in capital 248,142 248,259 246,072
Accumulated deficits (365,867) (357,080) (341,192)
Accumulated other comprehensive loss (123) (141) (184)

Total shareholders' deficit (110,255) (101,651) (88,261)

Total liabilities and shareholders'
deficit 118,643 132,462 135,137

ASAT Holdings Limited
Condensed Consolidated Statements of Cash Flows
(USD in thousands)
For the three months ended April 30, 2008,
January 31, 2008 and April 30, 2007, and
For the year ended April 30, 2008
and April 30, 2007

Three Months Ended Year Ended
April January April April April
30, 31, 30, 30, 30,
2008 2008 2007 2008 2007
(Unau- (Unau- (Unau- (Unau-
dited) dited) dited) dited) (Audited)*

Operating
activities:
Net loss (8,787) (4,950) (10,986) (24,675) (35,040)
Adjustments
to reconcile
net loss to
net cash
provided by
operating
activities:
Depreciation and
amortization:
Property, plant and
equipment 5,284 5,428 5,708 22,004 23,328
Deferred charges
and debt discount 739 773 858 3,245 3,705
Loss on disposal of
property, plant and
equipment 53 - 173 - 173
Unrealized foreign
exchange loss 567 205 - 899 -
Amortization of stock-
based compensation 598 75 169 1,044 888

Changes in operating assets and
liabilities:
Accounts receivable, net 965 532 2,162 164 11,903
Restricted cash 900 - 1,520 1,800 1,520
Inventories 486 442 1,974 (1,728) 9,939
Prepaid expenses and other
current assets (29) (358) (347) (1,537) 2,913
Other non-current assets (462) (615) 49 (1,215) (738)
Accounts payable (2,013) (147) 305 5,063 (5,728)
Accrued liabilities
and other payable (2,375) 994 (2,606) (3,216) 834
Amount due to QPL (851) 1,138 (222) 929 (3,294)

Net cash (used in)
provided by operating
activities (4,925) 3,517 (1,243) 2,777 10,403

Investing activities:
Proceeds from disposal of
property, plant and
equipment 700 - 146 771 181
Acquisition of property,
plant and equipment (2,036) (2,518) (3,533) (9,073) (17,748)

Net cash used in
investing
activities (1,336) (2,518) (3,387) (8,302) (17,567)

Financing activities:
Proceeds from warrant and
preferred shares
exercised - - - 1 -
Repayment of short-term
bank loan (3,390) (2,156) (5,546) -
Proceeds from draw
down of new loan 3,390 7,256 1,304 10,646 3,837
Repayment of capital lease
obligations (4) (76) (443) (940) (2,010)
Proceeds from stock options
exercised - - - - 218
Proceeds from right
offering - - - - 490

Net cash (used in)
provided by financing
activities (4) 5,024 861 4,161 2,535

Net (decrease) increase
in cash and cash
equivalents (6,265) 6,023 (3,769) (1,364) (4,629)
Cash and cash equivalents
at beginning of period 12,264 6,237 11,072 7,325 11,915
Effects of foreign exchange
rates change 12 4 22 50 39

Cash and cash equivalents at
end of period 6,011 12,264 7,325 6,011 7,325

Supplemental disclosure of cash
flow information:
Cash paid during the period
for:
Interest expense 7,129 185 7,014 14,503 14,211
Income taxes 289 282 102 877 102

* Extracted from the audited financial statements

SOURCE ASAT Holdings Limited

Jim Fanucchi of Summit IR Group Inc., +1-408-404-5400, ir@asat.com, for ASAT
Holdings Limited