Hsinchu, Taiwan -- July 26, 2007 -- 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 June 30, 2007. The second quarter revenue was NT$1,154 million, while net income and fully diluted earnings per share came to NT$369 million and NT$1.15 per share, respectively.
Thanks to a higher percentage from high-margin IP business, gross margin of the quarter raised to 53.8%, higher than previous quarter’s 53.0%. The operating income was NT$279 million, operating margin of 2Q07 was 24.2%. Net income was NT$369 million down 0.9% over the same period last year.
The unconsolidated sales revenue for the first half of 2007 were NT$2,301 million, gross margin and net margin were 53.4% and 41.4% respectively. EPS for the first half of 2007 was NT$2.95, higher than same period of 2006’s NT$2.30.
[1] Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with ROC GAAP, which differ in some material respects from generally accepted accounting principles in the United States. They are un-audited, un-consolidated, and represent comparisons among the three-month period ending June 30, 2007, the three-month period ending March 31, 2007, and the equivalent three-month period that ended June 30, 2006. For all 2Q07 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. dollars at the exchange rate of NT$32.9 to one U.S. dollar.
Summary of Operating Results
Operating Results
| (Amount: NT$ million) | 2Q07 | 1Q07 | QoQ% change | 2Q06 | YoY% change |
| Revenue | 1,154 | 1,148 | 0.6 | 1,474 | (21.7) |
| Gross Profit | 620 | 608 | 2.0 | 664 | (6.5) |
| Operation Expenses | (341) | (294) | 16.0 | (293) | 16.5 |
| Operating Income | 279 | 314 | (11.1) | 371 | (24.6) |
| Non-op. Income (Expenses) | 91 | 265 | (65.7) | 1 | 5101.4 |
| Net Income | 369 | 578 | (36.2) | 372 | (0.9) |
| EPS (NT$ per share) | 1.15 | 1.80 | | 1.20 | |
Detailed Financials Section
COGS & Expenses
| (Amount: NT$ million) | 2Q07 | 1Q07 | QoQ% change | 2Q06 | YoY% change |
| Revenue | 1,154 | 1,148 | 0.6 | 1,474 | (21.7) |
| COGS | (534) | (540) | (1.1) | (810) | (34.1) |
| Wafer | (270) | (256) | 5.5 | (434) | (37.8) |
| Other Mfg. Costs | (264) | (284) | 7.0 | (376) | (29.8) |
| Gross Profit | 620 | 608 | 2.0 | 664 | (6.5) |
| Gross Margin (%) | 53.8% | 53.0% | | 45.0% | |
| Total Operating Exp. | (341) | (294) | 16.0 | (293) | 16.5 |
| G&A | (46) | (39) | 17.9 | (40) | 16.7 |
| Sales and Marketing | (28) | (25) | 12.0 | (27) | 2.9 |
| R&D | (267) | (230) | 16.1 | (226) | 18.1 |
| Operating Income | 279 | 314 | (11.1) | 371 | (24.6) |
| Operating Margin (%) | 24.2% | 27.4% | | 25.1% | |
Non-operating Income (Expenses)
| (Amount: NT$ million) | 2Q07 | 1Q07 | 2Q06 |
| Net Non-operating Income | 91 | 265 | 1 |
| (Loss) | 8 | 7 | 4 |
| Net Interest Income (Expense) | 81 | 251 | (3) |
| et Investment Income (Loss) | 1 | (1) | (1) |
| Reverse on (Inventory Loss Provision) | - | - | - |
| Gain (Loss) on Disposal of Investment | 2 | - | (2) |
| Exchange Gain (Loss) | (1) | 8 | 3 |
| Others | | | |
Current Assets
| (Amount: NT$ million) | 2Q07 | 1Q07 | 2Q06 |
| Cash & Cash Equiv. | 2,423 | 2,026 | 2,117 |
| Notes & Accounts Receivable | 951 | 834 | 967 |
| Days Sales Outstanding | 71 | 77 | 58 |
| Inventory | 252 | 173 | 257 |
| Avg. Inventory Turnover | 44 | 40 | 34 |
| Total Current Assets | 3,877 | 3,344 | 3,614 |
Liabilities
| (Amount: NT$ million) | 2Q07 | 1Q07 | 2Q06 |
| Total Current Liabilities | 2,211 | 947 | 2,643 |
| Notes & Accounts Payable | 602 | 432 | 673 |
| Others | 1,609 | 515 | 1,970 |
| Long-term Liabilities | | | |
| Total Liabilities | 2,234 | 971 | 2,672 |
| Liabilities to Equity | 33.7% | 13.4% | 56.4% |
Analysis of Revenue
ASIC Revenue Breakdown by Region
| Region | 4Q06 | 1Q07 | 2Q07 |
| Taiwan | 53.6% | 56.8% | 54.1% |
| USA | 18.3% | 16.1% | 21.9% |
| Japan | 7.5% | 9.2% | 5.9% |
| Europe | 9.8% | 8.8% | 7.3% |
| Korea | 6.4% | 6.0% | 6.1% |
| China | 4.4% | 3.1% | 4.7% |
ASIC Revenue Breakdown by Geometry
| Geometry | 4Q06 | 1Q07 | 2Q07 |
| 0.13um | 5.7% | 2.5% | 4.7% |
| 0.162um | | | 3.7% |
| 0.18um | 50.8% | 54.7% | 50.3% |
| 0.22um | 9.9% | 5.3% | 4.9% |
| 0.25um | 11.6% | 14.5% | 11.5% |
| 0.35um | 12.6% | 15.5% | 15.2% |
| 0.45um | 1.7% | 1.4% | 1.9% |
| 0.5um | 7.1% | 5.3% | 6.9% |
| 0.6um | 0.6% | 0.8% | 0.9% |
Total Revenue Breakdown by Customer Type
| Type | 4Q06 | 1Q07 | 2Q07 |
| Fabless | 53.7% | 59.5% | 47.9% |
| System | 37.4% | 32.3% | 32.3% |
| Foundry | 8.9% | 8.2% | 19.8% |
Total Revenue Breakdown by Billing Method
| Billing | 4Q06 | 1Q07 | 2Q07 |
| ASIC | 65.2% | 55.9% | 60.7% |
| Design Service | 10.3% | 16.3% | 11.2% |
| IP | 24.5% | 27.8% | 28.1% |
ASIC Revenue Breakdown by Application
| Application | 4Q06 | 1Q07 | 2Q07 |
| Peripheral | 29.9% | 26.5% | 19.1% |
| Storage | 26.9% | 17.7% | 12.7% |
| Comm | 24.5% | 23.7% | 29.3% |
| Display | 6.4% | 5.9% | 4.1% |
| Consumer | 0.7% | 4.5% | 7.6% |
| Multimedia | 8.5% | 12.2% | 18.8% |
| Others | 3.1% | 9.5% | 8.4% |
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 more than 700 employees and 2006 revenue of NT$5,544 million (US$171 million), Faraday is one of the largest fabless ASIC companies in the Asia-Pacific region, and it also has a significant presence in other markets, world-wide. 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: http://www.faraday-tech.com