Faraday Reported 2008 First Quarter Results

First Quarter 2008 Highlights[1]:
  • Year-over-year revenue increased 0.3% to NT$1,152 million (US$36.5 million)
  • Gross margin, 47.7%
  • Net income of NT$214 million (US$6.8 million)
  • Earnings per share of NT$0.63 for the quarter

Hsinchu, Taiwan -- April 24, 2008 -- Faraday Technology Corporation (TSE: 3035), a leading fabless ASIC design solution and silicon IP provider, today announced its unconsolidated operating results for the quarter ended March 31, 2008. The first quarter revenue was NT$1,152 million, while net income and basic earnings per share came to NT$214 million and NT$0.63 per share, respectively.

Due to the change of product mix from ASIC business and NTD appreciation, gross margin of the quarter was 47.7%, decreased 4.5% compared to the previous quarter. The operating margin of 1Q08 was 10.2% after implementing a new ROC accounting rule of expensing employee profit sharing.

The ASIC revenue showed a significant migration to the advanced technology in the quarter. The revenue from 0.13um technology presented 15.8% of the overall ASIC revenue, increased 37% compared to the previous quarter; and more than five times revenue growth over the same period last year.

Summary of Operating Results

Operating Results

(Amount: NT$ million)
1Q08
4Q07
QoQ%
change
1Q07
YoY%
change
Revenue 1,152 1,390 (17.1) 1,148 0.3
Gross Profit
549
722
(23.9)
608
(9.8)
Operation Expenses
(432)
(393)
10.0
(294)
46.9
Operating Income
117
329
(64.4)
314
(62.9)
Non-op. Income (Expenses)
97
49
101.2
265
(63.4)
Net Income
214
383
(44.0)
578
(63.0)
EPS (NT$ per share)
0.63
1.14

1.71

Detailed Financials Section

COGS & Expenses

(Amount: NT$ million)
1Q08
4Q07
QoQ%
change
1Q07
YoY%
change
Revenue 1,152 1,390 (17.1) 1,148 0.3
COGS
(603)
(668)
(9.7)
(540)
11.7
Wafer
(296)
(351)
(15.7)
(256)
15.6
Other Mfg. Costs
(307)
(317)
(3.2)
(284)
8.1
Gross Profit
549
722
(23.9)
608
(9.8)
Gross Margin (%)
47.7%
52.0%
53.0%
Total Operating Exp.
(432)
(393)
10.0
(294)
46.9
G&A
(60)
(58)
3.4
(39)
53.8
Sales and Marketing
(63)
(42)
50.0
(25)
152.0
R&D
(309)
(293)
5.5
(230)
34.3
Operating Income
117
329
(64.4)
314
(62.9)
Operating Margin (%)
10.2%
23.7%

27.4%



Non-operating Income (Expenses)

(Amount: NT$ million)
1Q08
4Q07
1Q07
Net Non-operating Income (Loss)
97
49
265
Net Interest Income (Expense)
4
5
7
Net Investment Income (Loss)
112
58
251
Reverse on (Inventory Loss Provision)
(15)
(8)
(1)
Gain (Loss) on Disposal of Investment
-
-
-
Exchange Gain (Loss)
(2)
0
0
Others
(2)
(6)
8

Current Assets

(Amount: NT$ million)
1Q08
4Q07
1Q07
Cash & Cash Equiv. 1,712 1,660 2,026
Notes & Accounts Receivable 867 1,035 834
Days Sales Outstanding 75 75 77
Inventory 349 399 173
Avg. Inventory Turnover 66 53 40
Total Current Assets 3,299 3,494 3,344

Liabilities

(Amount: NT$ million)
1Q08
4Q07
1Q07
Total Current Liabilities 1,450 1,387 947
Notes & Accounts Payable 652 759 432
Others 798 628 515
Long-term Liabilities 20 21 24
Total Liabilities 1,470 1,408 971
Liabilities to Equity 22.5% 21.8% 13.4%

 

Analysis of Revenue

ASIC Revenue Breakdown by Region

Region
3Q07
4Q07
1Q08
Taiwan
48.2%
37.0%
44.7%
USA
23.1%
15.5%
15.9%
Japan
5.4%
8.3%
8.6%
Europe
15.0%
31.2%
16.8%
Korea
2.7%
2.9%
1.9%
China
5.6%
5.1%
12.1%

ASIC Revenue Breakdown by Geometry

Geometry
3Q07
4Q07
1Q08
90nm
0.4%


0.13µm
8.6%
9.5%
15.8%
0.162µm
13.6%
5.6%
11.7%
0.18µm
52.4%
57.9%
43.9%
0.22µm
1.6%
2.6%
2.2%
0.25µm
7.9%
10.4%
8.4%
0.35µm
9.7%
8.6%
11.3%
0.45µm
1.5%
1.1%
1.8%
0.5µm
3.8%
4.0%
4.6%
0.6µm
0.5%
0.3%
0.3%


Total Revenue Breakdown by Customer Type

Type
3Q07
4Q07
1Q08
Fabless
43.5%
64.0%
47.0%
System
41.2%
26.6%
40.7%
Foundry
15.3%
9.4%
12.3%


Total Revenue Breakdown by Billing Method

Billing
3Q07
4Q07
1Q08
ASIC
68.3%
71.5%
70.7%
Design Service
11.8%
7.6%
8.2%
IP
19.9%
20.9%
21.1%

ASIC Revenue Breakdown by Application

Application
3Q07
4Q07
1Q08
Peripheral /Storage
39.1%
25.1%
27.6%
Comm.
29.7%
51.3%
40.9%
Display
4.0%
3.3%
2.4%
Consumer
5.7%
2.7%
7.9%
Multimedia
17.8%
13.1%
19.8%
Others
3.7%
4.5%
1.4%

 About Faraday

Faraday Technology Corporation is a leading silicon IP and fabless ASIC vendor. The company's broad IP portfolio includes 32-bit RISC CPUs, DSPs, PHY/Controllers for USB 2.0, Ethernet, and Serial ATA. With 2007 revenue of US$ 156 million, Faraday is one of the largest fabless ASIC companies in the Asia-Pacific region, and it also has a significant presence in other world-wide market. Headquartered in Taiwan, Faraday has service and support offices around the world, including the U.S., Japan, Europe, and China. For more information, please visit: www.faraday-tech.com.

[1] Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with ROC GAAP, which differ in some material respects from generally accepted accounting principles in the United States. They are un-audited, un-consolidated, and represent comparisons among the three-month period ending March31, 2008, the three-month period ending December 31, 2007, and the equivalent three-month period that ended March 31, 2007. For all 1Q08 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. dollars at the exchange rate of NT$31.529 to one U.S. dollar.

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