Macronix International Co., Ltd. (Nasdaq: MXIC; TSEC: 2337) today announced the unaudited financial results for the second quarter ended June 30, 2007 . All numbers were prepared in compliance with the R.O.C. GAAP on an unconsolidated basis.
Summary of the Second Quarter 2007:
-- Total net revenues increased 12% over second quarter 2006 to NT$5,864
million (US$177.70 million).
-- Gross profit was NT$1,901 million (US$ 57.61million), a 39% increase
from NT$1,372 million in second quarter 2006.
-- Gross margin was 32.4%, compared to 26.2% in second quarter 2006.
-- Operating income doubled from NT$241 (US$7.30 million) in second
quarter 2006 to NT$505 million (US$15.30 million).
-- Net income reached NT$802 million (US$24.30 million), more than doubled
the NT$232 (US$7.03 million) in the second quarter of 2006.
-- Earnings per American Depositary Share ('ADS') were NT$0.27
(US$0.008), representing a 238% increase from NT$0.08 in the second
quarter 2006.
Second-Quarter 2007 Financial Highlights:
Positive Operating Income and a Record High Q2 Gross Margin since 2002
Revenues
The Company announced second quarter net sales revenues of NT$5,864 million (US$177.70 million), an increase of 12% year-over-year, and 14% increase sequentially. The sequential revenue increase is a result of strong demand for all product lines. The solid profit derives from successful technology migration and continuous cost reduction.
Gross Profit and Gross Margins
Gross profit set a five-year record high for second quarter. Gross margin reached 32.4%, a significant improvement from 26.2% in the second quarter 2006, but remained flat as compared to 32.5% in the first quarter of 2007. Gross profit was NT$1,901 million (US$57.61 million), an increase of 39% year-over- year, and 13% sequentially.
Operating Expenses and Operating Income
Operating expenses for the second quarter were NT$1,396 million (US$42.3 million), an increase of 23% year-over-year and 9% sequentially. Operating income for the second quarter was NT$505 million (US$15.3 million), compared to NT$241 million (US$7.30 million) in the second quarter of 2006 and NT$397 million (US$12.03 million) in the first quarter 2007.
Non-operating Income and Expenses
Net non-operating income was NT$336 million (US$10.18 million) for the quarter, consisting of net interest income of NT$58 million (US$1.76 million), recognized investment gain of NT$104 million (US$3.15 million), loss on disposal of fixed assets of NT$11 million (US$0.33 million), net inventory gain provision of NT$221 million (US$6.70 million), net foreign exchange loss of NT$104 million (US$3.15 million), and net other income of NT$68 million (US$2.06 million).
Net Income and EPS
Net income before tax was NT$841 million (US$24.48 million), compared to NT$583 million (US$17.67 million) in the first quarter of 2007, but improved significantly from NT$242 million (US$7.33 million) in the second quarter of 2006. The estimated tax provision was NT$39 million (US$1.18 million) and the net income after tax was NT$802 million (US$24.30 million). EPS was NT$0.27 (US$0.008), compared to NT$0.19 in the first quarter of 2007 and NT$0.08 (US$0.002) in the second quarter of 2006. The book value is NT$10.99 per share.
Balance Sheet
Macronix's revenue and margin growth has improved the Company's cash and debt position. The debt-to-asset ratio is now 0.21, which is a solid improvement from the level of 0.35 in the second quarter of 2006. As of June 30, 2007 , the Company had NT$10,284 million (US$311.64 million) in cash and cash equivalents. With the inclusion of restricted deposits, the cash position would have been NT$11,541 million (US$350 million). Net inventory decreased by NT$185 million (US$5.61 million) to NT$ 3,769 million (US$114.21 million), compared to NT$3,954 million (US$119.82 million) for the first quarter of 2007 and NT$4,008 million (US$121.45 million) in the second quarter of 2006.
The total liability increased to NT$8,292 million (US$251.27 million), an increase of NT$283 million (US$8.58 million), compared to NT$8,009 million (US$242.70 million) at the end of March 31, 2007 , and NT$15,446 million (US$468.06 million) at the end of June 30, 2006 . Owner's equity was NT$32,064 million (US$971.64 million). Depreciation and amortization expenses were NT$916 million (US$27.76 million), a decrease of NT$65 million (US$1.97 million), compared to NT$981 million (US$29.73 million) in the first quarter of 2007. Cash flow from operations was NT$1,521 million (US$46.09 million), while capital expenditure was NT$1,300 million (US$39.39 million). Capital expenditure was mainly for the equipment purchase of advanced process technology for Macronix's 8'' fab.
Business Highlights
ROM and Flash Contributed 45% and 42% Respectively of Net Sales
Sales in the second quarter from ROM revenue accounted for 45% of net sales, an increase of 45% year-over-year, and 11% sequentially, with strong demand in game cartridge sales being the primary driver of our year-over-year sales.
Flash products accounted for 42% of net sales, an increase of 10% year- over-year and a sequential decrease of 18%. The unit shipments of Flash increased 50% year-over-year and 26% sequentially. Despite pricing pressure, Macronix was still able to deliver a 10% increase in revenue over the second quarter of 2006.
Sales in SMS products accounted for 13% of net sales, an increase of 2% year-over-year, and a sequential increase of 26%.
Capacity Utilization Rate Maintained at 94%; Products of the Advanced Process Technology Remained in the Same Range
The products made by 0.15 um, 0.13 um and 0.10 um of the advanced process technology collectively accounted for 72% of net sales revenue for the second quarter of 2007. Capacity utilization rate decreased to 94% from 102% year- over-year, but increased from 92% in the previous quarter due to the expansion of production capacity in Fab2 during the second quarter of 2007.
Quarterly Income Statements
Unit: NT$ million (except EPS)
QoQ YoY
2007/Q2 2007/Q1 2006/Q2 Change Change
Net Sales Revenue 5,864 5,155 5,236 14% 12%
Gross Profit 1,901 1,676 1,372 13% 39%
Gross Margin% 32.4% 32.5% 26.2% -- --
Operating Expenses (1,396) (1,279) (1,131) 9% 23%
Operating Income (Loss) 505 397 241 27% 109%
Net Non-Operating Income
(Loss) 336 186 1 -- --
Income Before Tax 841 583 242 44% 247%
Income Taxes (39) (33) (10) -- --
Net Income 802 550 232 46% 245%
EPS* (NT$) 0.27 0.19 0.08 -- --
* As of 06/30/2007, the company had 2,975 million weighted average
outstanding shares.
* For details, please refer to the audited financial reports of Q2'07.
Balance Sheet / Cash Position
Unit: NT$ million
6/30/2007 3/31/2007
Cash 10,284 10,143
Inventory(Net) 3,769 3,954
Total Assets 40,356 39,964
Current Portion of Long Term Debt 647 1,221
Total Liabilities 8,292 8,009
Equity 32,064 31,955
Debt Ratio 0.21 0.20
Book Value 10.99 10.96
Quarterly Highlight 2007/Q2 2007/Q1
Depreciation & Amortization 916 981
Capital Expenditures (1,300) (1,635)
Cash Flow from Operating 1,521 533
Safe Harbor Statement under the provisions of the United States Private Securities Litigation Reform Act of 1995
The news release contains forward-looking statements, as defined in the Safe Harbor Provisions of the United States Private Securities Litigation Reform act of 1995. These forward-looking statements, including the statements generally can be identified by phrases such as Macronix or the Company 'believes', 'expects', 'anticipates', 'foresees', 'forecasts', ''estimates'' or other words or phrases of similar import. Similarly, such statements describe the Company's business outlook, financial highlights and the projections of capacity expansions. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. A description of certain risks and uncertainties, which could cause actual results to differ materially from those indicated in the forward- looking statements can be found in the section captioned 'Risk Factors' in the Company's 2005 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on July 2, 2007 . The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Macronix International Co., Ltd.
Founded in 1989, Macronix International Co., Ltd. (TSE: 2337; Nasdaq: MXIC) is a leading provider of innovative Non-Volatile Memory (NVM) solutions. Macronix is the largest worldwide manufacturer of ROM products, and also provide wide range of NOR Flash products across various densities for system embedded, consumer, communication and enterprise applications.
For more information, please visit the Company's web site at www.macronix.com .
Contacts:
Michelle Chang
Macronix International Co., Ltd.
Public Relations
Tel: +886-3-578-6688 ext. 71233
Email: michellechang@mxic.com.tw
Douglas Sun
Macronix International Co., Ltd.
Finance Center
Tel: +886-3-578-6688 ext. 76632
Email: douglassun@mxic.com.tw
Investor Relations (NY):
Delia Cannan, Director
Taylor Rafferty
205 Lexington Avenue
8th Floor
New York, NY 10016
Tel: +1-212-889-4350
Email: macronix@taylor-rafferty.com
www.taylor-rafferty.com
Investor Relations (HK):
Ruby Yim, Managing Director
Taylor Rafferty
3213 Cosco Tower
183 Queen's Road Central
Hong Kong
Tel: +852-3196-3712
Email: macronix@taylor-rafferty.com
www.taylor-rafferty.com
SOURCE Macronix International Co., Ltd.
