ASAT Holdings Limited reports Q2 fiscal 2006 financial results

ASAT Holdings Limited has announced financial results for its second quarter of fiscal 2006, ended October 31, 2005.

Net revenue in the second quarter of fiscal 2006 was $42.6 million, compared with net revenue of $41.9 million in the first quarter of fiscal 2006. Net loss in the second quarter of fiscal 2006 was $9.7 million, or a loss of $0.07 per American Depository Share (ADS). There were no significant charges in the first quarter of fiscal 2006. 

"We achieved approximately 45 percent revenue growth in our China facility in the second quarter," said Robert J. Gange, president and CEO of ASAT Holdings Limited.  "Revenue from China increased to 38 percent of total revenue in the second quarter, compared with 26 percent of total revenue in the first quarter.  In addition, because of the low-cost structure in China, gross margin improved more than 700 basis points over the first quarter.

"In the second quarter, we completed the expansion phase of our China facility and commenced pre-production activities.  We will continue to bring more production capacity online in China and expect the percentage of total revenue from China will accelerate over the remainder of our fiscal year," said Mr. Gange.  "During this transition period, we will have significant redundancy in our manufacturing expenses as we continue to operate both our Hong Kong and China facilities.  We expect this redundancy will continue to decline during the first half of calendar 2006 as we move manufacturing out of Hong Kong, which should translate in better margin results."

On November 11, 2005, the Company's board of directors elected Glen G. Possley as an independent member to the ASAT Holdings Limited board. Dr. Possley replaced Don Beadle who resigned from the board in July. On December 5, 2005, ASAT announced the appointment of Alan Dworak as senior vice president of worldwide sales. 

For the third quarter of fiscal 2006, ending January 31, 2006, the Company expects revenue to increase approximately 5 percent to 10 percent over the second quarter.