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Asat Holdings Ltd · 6-K · For 10/31/00

Filed On 12/22/00 12:02pm ET · SEC File 0-30842 · Accession Number 1021408-0-4178

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

12/22/00  Asat Holdings Ltd                 6-K        10/31/00    1:20                                     Donnell..Financial/NY/FA

Report of a Foreign Private Issuer · Form 6-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Form 6-K (Report of Foreign Issuer)                   20     57K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Condensed Consolidated Balance Sheets as of April 30, 2000 and October 31, 2000 Condensed Consolidated Statements of Cash Flows for the three months and six months ended October 31, 1999 and 2000 Condensed Consolidated Statements of Operations and Comprehensive Income for the three months and six months ended October 31, 1999 and 2000 Extraordinary charge Financial Statements Gross profit Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results Notes to Condensed Consolidated Financial Statements Recapitalization costs Research and development Selling, general and administrative Signature
1	1st Page
3	Item 1. Financial Statements
4	Condensed Consolidated Balance Sheets as of April 30, 2000 and October 31, 2000
5	Condensed Consolidated Statements of Operations and Comprehensive Income for the three months and six months ended October 31, 1999 and 2000
7	Condensed Consolidated Statements of Cash Flows for the three months and six months ended October 31, 1999 and 2000
9	Notes to Condensed Consolidated Financial Statements
11	Item 2. Management's Discussion and Analysis of Financial Condition and Results
13	Gross profit
"	Selling, general and administrative
"	Research and development
14	Extraordinary charge
16	Recapitalization costs
19	Item 1 Legal Proceedings
20	Signature

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SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 20549  

FORM 6-K  
--------  

Report of Foreign Issuer  

Pursuant to Rule 13a-16 or 15d-16 of the  
Securities Exchange Act of 1934 

ASAT Holdings Limited 
--------------------- 
(Exact name of Registrant as specified in its Charter)  

14/th/ Floor  
138 Texaco Road 
Tsuen Wan, New Territories  
Hong Kong 
(Address of Principal Executive Offices)  

    Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.                           

Form 20-F    X     Form 40-F
--- 

   Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of  
1934.                                                                           

Yes ___        No X 
                 -

If  "Yes" is marked, indicate below the file number assigned to the registrant  
in connection with Rule 12g3-2(b):  82-________________.                        

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         This report contains (i) Condensed Consolidated Financial Statements,
(ii) a Management's Discussion and Analysis of Financial Condition and Results  
of Operations for the three months and six months ended October 31, 2000, and   
(iii) other information, and is being made pursuant to Section 4.8 of the       
Indenture, dated as of October 29, 1999, by and between ASAT (Finance) LLC, a   
Delaware limited liability company (the "Company"), ASAT Holdings Limited and   
its subsidiaries referred to therein as guarantors, and The Chase Manhattan     
Bank, as trustee.                                                               

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TABLE OF CONTENTS 

                                                        [Enlarge/Download Table]
                                                                                                              
Part I  Financial Information                                                                                 
-----------------------------                                                                                 

Item 1  Financial Statements                                                                                  

        Condensed Consolidated Balance Sheets as of April 30, 2000 and October 31, 2000...................  1 

        Condensed Consolidated Statements of Operations and Comprehensive Income                              
          for the three months and six months ended October 31, 1999 and 2000.............................  2 

        Condensed Consolidated Statements of Cash Flows for the three months and six months                   
          ended October 31, 1999 and 2000.................................................................  4 

        Notes to Condensed Consolidated Financial Statements..............................................  6 

Item 2  Management's Discussion and Analysis of Financial Condition and Results of Operations                 
          for the three months and six months ended October 31, 1999 and 2000.............................  8 

Part II  Other Information                                                                                    
--------------------------                                                                                    

Item 1  Legal Proceedings................................................................................. 16 

Signature................................................................................................. 17 

All financial information in this report on Form 6-K is in United States        
dollars, which are referred to as "Dollars" and "$".                            

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ASAT HOLDINGS LIMITED 

CONDENSED CONSOLIDATED BALANCE SHEETS 
AS OF APRIL 30, 2000 AND OCTOBER 31, 2000 
(In thousands)

                                                        [Enlarge/Download Table]

                                                                           April 30,   October 31,
                                                                              2000        2000    
                                                                              ----        ----    
                                                                                       (Unaudited)
                                                                                                  
ASSETS                                                                                            
Current assets:                                                                                   
 Cash and cash equivalents................................................  $ 10,892      $100,566
 Accounts receivable-trade (net of allowance for doubtful accounts                                
  of $290 and $303 at April 30, 2000 and October 31, 2000, respectively)..    40,566        42,066
 Inventories (Note 3).....................................................    23,302        27,878
 Prepaid expenses and other current assets................................    10,911        19,470
                                                                            --------      --------
 Total current assets.....................................................    85,671       189,980
Property, plant and equipment, net of accumulated depreciation............   166,461       216,397
Option to acquire ASAT, S.A., at cost.....................................    20,000        20,000
Deferred charges..........................................................    10,907         4,996
Noncompete covenants, net.................................................       442             -
                                                                            --------      --------
 Total assets.............................................................  $283,481      $431,373
                                                                            ========      ========

LIABILITIES AND SHAREHOLDERS' EQUITY                                                              
Current liabilities:                                                                              
 Short-term bank borrowings...............................................  $  9,000      $      -
 Current portion of other long-term debt..................................     5,000             -
 Accounts payable.........................................................    24,549        19,063
 Accrued liabilities......................................................     6,155        10,038
 Income taxes payable.....................................................    12,847        12,345
 Amount due to QPL Group..................................................     5,300         4,714
 Amount due to a related company..........................................       297           572
                                                                            --------      --------
 Total current liabilities................................................    63,148        46,732
Deferred income taxes.....................................................    21,992        28,344
12.5% Senior notes due 2006...............................................   149,217        97,277
Other long-term debt......................................................    35,000             -
Shareholders' equity:                                                                             
 Common stock.............................................................     5,760         6,760
 Additional paid-in capital...............................................    12,457       233,457
 (Accumulated deficit)/Retained earnings..................................    (4,093)       18,803
                                                                            --------      --------
 Total shareholders' equity...............................................    14,124       259,020
                                                                            --------      --------
 Total liabilities and shareholders' equity...............................  $283,481      $431,373
                                                                            ========      ========

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ASAT HOLDINGS LIMITED 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME  
FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 31, 1999 AND 2000 
(Unaudited) 
(In thousands, except share data) 

                                                        [Enlarge/Download Table]

                                                                        Three months ended           Six months ended       
                                                                        ------------------           ----------------       
                                                                    October 31,    October 31,   October 31,    October 31, 
                                                                       1999            2000          1999          2000     
                                                                       ----            ----          ----          ----     
                                                                                                                            
Net sales:                                                                                                                  
 -  Third parties.................................................. $    78,749    $   104,130   $   144,611    $   207,163 
 -  QPL Group......................................................           -              -           101              - 
                                                                    -----------    -----------   -----------    ----------- 

Total net sales....................................................      78,749        104,130       144,712        207,163 
                                                                    -----------    -----------   -----------    ----------- 

Cost of sales:                                                                                                              
 -  Purchases from QPL Group and other related party...............      17,170         16,286        29,168         32,504 
 -  Other costs....................................................      30,857         51,216        60,820        102,452 

                                                                    -----------    -----------   -----------    ----------- 
Total cost of sales................................................      48,027         67,502        89,988        134,956 
                                                                    -----------    -----------   -----------    ----------- 
Gross profit.......................................................      30,722         36,628        54,724         72,207 
                                                                    -----------    -----------   -----------    ----------- 

Operating expenses:                                                                                                         
 Selling, general and administrative...............................       7,550          8,812        14,116         17,219 
 Research and development..........................................       1,182          1,390         2,339          2,951 

                                                                    -----------    -----------   -----------    ----------- 
Total operating expenses...........................................       8,732         10,202        16,455         20,170 
                                                                    -----------    -----------   -----------    ----------- 

Income from operations.............................................      21,990         26,426        38,269         52,037 
Other (expense) income, net........................................        (141)         2,049           (76)         3,200 
Interest expense:                                                                                                           
 -  amortization of deferred charges...............................         (14)          (235)          (14)          (688)
 -  third parties..................................................      (1,927)        (3,956)       (3,464)       (10,315)
 -  QPL Group......................................................      (2,059)             -        (2,404)             - 
    Recapitalization costs.........................................      (6,493)             -        (6,493)             - 

                                                                    -----------    -----------   -----------    ----------- 
Income before income taxes and extraordinary charge................      11,356         24,284        25,818         44,234 
Provision for income taxes.........................................      (3,262)        (4,375)       (5,456)        (8,215)
                                                                    -----------    -----------   -----------    ----------- 

Income before extraordinary charge.................................       8,094         19,909        20,362         36,019 
Extraordinary charge on early extinguishment of debt                                                                        
 (net of income tax benefit of $885 for the three months                                                                    
  ended October 31, 2000 and $1,108 for the six months                                                                      
  ended October 31, 2000) (Note 4).................................           -        (10,561)            -        (13,126)
                                                                    -----------    -----------   -----------    ----------- 

Net income.........................................................       8,094          9,348        20,362         22,893 
Other comprehensive income:                                                                                                 
 Unrealized holding loss on marketable securities..................         (83)             -             -              - 
                                                                    -----------    -----------   -----------    ----------- 

Comprehensive income............................................... $     8,011    $     9,348   $    20,362    $    22,893 
                                                                    ===========    ===========   ===========    =========== 

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ASAT HOLDINGS LIMITED 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME  
FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 31, 1999 AND 2000 - Continued 
(Unaudited) 
(In thousands, except share data) 

                                                        [Enlarge/Download Table]

                                                Three months ended            Six months ended      
                                                ------------------            ----------------      
                                            October 31,     October 31,   October 31,    October 31,
                                               1999             2000         1999           2000    
                                               ----             ----         ----           ----    
                                                                                                    
Net income per ordinary share:                                                                      
  Basic:                                                                                            
  Income before extraordinary charge....... $       0.01  $       0.03   $       0.04  $       0.06 
  Extraordinary charge.....................            -         (0.02)             -         (0.02)
                                            ------------  ------------   ------------  ------------ 
Net income                                  $       0.01  $       0.01   $       0.04  $       0.04 
                                            ------------  ------------   ------------  ------------ 

Basic weighted average number of ordinary                                                           
  shares outstanding.......................  576,000,000   676,000,000    576,000,000   635,782,609 
                                            ------------  ------------   ------------  ------------ 
Net income per ADS :                                                                                
  Basic:                                                                                            
    Income before extraordinary charge..... $       0.07  $       0.15   $       0.18  $       0.28 
    Extraordinary charge...................            -         (0.08)             -         (0.10)
                                            ------------  ------------   ------------  ------------ 
  Net income                                $       0.07  $       0.07   $       0.18  $       0.18 
                                            ------------  ------------   ------------  ------------ 

Basic weighted average number of ADSs                                                               
    outstanding............................  115,200,000   135,200,000    115,200,000   127,156,522 
                                            ------------  ------------   ------------  ------------ 

The dilutive earnings per share and ADS are the same as the basic earnings per  
share and ADS for the three months ended October 31, 2000 and the six months    
ended October 31, 2000.                                                         

The extraordinary charge of $10.6 million and $13.1 million for the three months
and six months ended October 31, 2000, respectively, consisted of the redemption
premium and a non-cash charge of approximately $5 million of unamortized        
deferred charges and was net of income tax benefit of approximately $0.9 million
and $1.1 million for the three months and six months ended October 31, 2000,    
respectively.                                                                   

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ASAT HOLDINGS LIMITED 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 31, 1999 AND 2000 
(Unaudited) 
(In thousands)  

                                                        [Enlarge/Download Table]

                                                                     Three months ended          Six months ended       
                                                                     ------------------          ----------------       
                                                                  October 31,    October 31,  October 31,    October 31,
                                                                     1999           2000         1999           2000    
                                                                     ----           ----         ----           ----    
                                                                                                                        
Operating activities:                                                                                                   
  Net income.....................................................  $   8,094      $  9,348    $  20,362      $ 22,893   
  Adjustments to reconcile net income to net cash                                                                       
      provided by operating activities:                                                                                 
      Depreciation and amortization:                                                                                    
         Property, plant and equipment and noncompete covenants..      6,171         8,065       12,376        14,794   
         Deferred charges and debt discount......................         14           397           14         1,070   
      Deferred income taxes......................................        733         3,362          479         6,352   
      Loss (gain) on disposal of property, plant and equipment...        504             -          603          (360)  
      Loss on disposal of marketable securities..................        156             -          156             -   
      Deferred charges written off...............................          -         2,707            -         5,496   
      Cost incurred by QPL Group on behalf of ASAT...............        350             -          701             -   
      Others.....................................................       (359)            -          (44)            -   
Changes in operating assets and liabilities:                                                                            
  Accounts receivable-trade......................................      6,314         8,597        1,940        (1,500)  
  Inventories....................................................      1,230        (2,688)      (1,617)       (4,576)  
  Prepaid expenses and other current assets......................     (1,433)          (68)        (594)       (2,113)  
  Accounts payable...............................................      2,782        (4,876)       4,071        (8,374)  
  Accrued liabilities............................................      2,902        (5,746)       3,768         3,883   
  Amount due to a related company................................         75            53          373           275   
  Income taxes payable...........................................      3,313          (591)       4,978          (502)  
                                                                   ---------      --------    ---------      --------   
    Net cash provided by operating activities....................     30,846        18,560       47,566        37,338   
                                                                   ---------      --------    ---------      --------   
Investing activities:                                                                                                   
  Acquisition of property, plant and equipment...................     (9,310)      (34,867)     (15,625)      (68,114)  
  Proceeds from sale of property, plant and equipment............      1,860          (331)       5,023           628   
  Options to acquire ASAT S.A....................................    (20,000)            -      (20,000)            -   
  Sale proceeds of marketable securities.........................        119             -          119             -   
  Decrease in restricted cash....................................        695             -          665             -   
                                                                   ---------      --------    ---------      --------   
    Net cash used in investing activities........................    (26,636)      (35,198)     (29,818)      (67,486)  
                                                                   ---------      --------    ---------      --------   
Financing activities:                                                                                                   
  Proceeds from initial public offerings, net of expenses........          -             -            -       222,001   
  Issue of shares................................................        120             -          120             -   
  Issue of 12.5% senior notes due 2006...........................    151,502             -      151,502             -   
  35% redemption of 12.5% senior notes due 2006..................          -       (52,321)           -       (52,321)  
  Increase in other long-term debt...............................     40,000             -       40,000             -   
  Repayment of other long-term debt..............................    (38,288)            -      (39,348)      (40,000)  
  Net (decrease) in short-term bank borrowings...................    (42,771)            -      (44,873)       (9,000)  
  Net increase (decrease) in other amounts due to QPL Group......      8,196          (349)         477          (586)  
  Dividend paid to QPL...........................................   (101,374)            -     (101,374)            -   
  Deferred charges...............................................    (10,984)         (127)     (10,984)         (272)  
  Proceeds from accounts receivable financing....................     21,285             -       40,221             -   
  Repayment under accounts receivable financing..................    (29,315)            -      (47,709)            -   
                                                                   ---------      --------    ---------      --------   
    Net cash (used in) provided by financing activities..........     (1,629)      (52,797)     (11,968)      119,822   
                                                                   ---------      --------    ---------      --------   
Net increase (decrease) in cash and cash equivalents.............      2,581       (69,435)       5,780        89,674   
Cash and cash equivalents at beginning of the period.............      4,608       170,001        1,409        10,892   
                                                                   ---------      --------    ---------      --------   
Cash and cash equivalents at end of the period...................  $   7,189      $100,566    $   7,189      $100,566   
                                                                   =========      ========    =========      ========   

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ASAT HOLDINGS LIMITED 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 31, 1999 AND 2000--continued  

(Unaudited) 
(In thousands)  

                                                        [Enlarge/Download Table]

                                                          Three months ended        Six months ended      
                                                          ------------------        ----------------      
                                                       October 31,  October 31,  October 31,   October 31,
                                                          1999         2000          1999         2000    
                                                          ----         ----          ----         ----    
                                                                                                          
Supplemental disclosure of cash flow information:                                                         

  Cash paid during the period for:                                                                        
    Interest..........................................   $ 4,656      $1,118        $ 5,940       $ 9,791 
    35% redemption of 12.5% senior notes due 2006,             -      61,031              -        61,031 
    including $6,781 charged related primarily to                                                         
    premium for early redemption and associated fees                                                      
    Income taxes......................................         -         538              -         1,790 

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ASAT HOLDINGS LIMITED 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  
(Unaudited) 
(In thousands)  

1.   PRESENTATION OF INTERIM FINANCIAL STATEMENTS                               

   The condensed consolidated financial statements have been prepared by the
  Company in accordance with generally accepted accounting principles. The
April 30, 2000 balance sheet date was derived from audited financial  
statements but does not include all disclosures required by generally 
    accepted accounting principles. The interim financial statements and notes
 thereto should be read in conjunction with the financial statements and
notes included in the annual report of ASAT Holdings Limited (the     
"Company") on Form 20-F for the fiscal year ended April 30, 2000. The 
     interim financial statements for fiscal 2000 and 2001 were not audited, but
   in the opinion of management reflect all adjustments necessary for a fair
presentation of the results for the interim periods presented.        

2.   FOREIGN CURRENCY TRANSLATION                                               

   Effective May 1, 2000, the Company changed its functional currency to the
US dollar. The change was necessitated by significant changes in the  
    economic environment in which the Company operates. The Company's business
    has changed in that a more significant portion of its revenues and sources
of its financing are in US dollars. In addition, subsequent to the    
    Company's recapitalization in October 1999, the Company has diminished the
interdependencies with its affiliates. The impact of the change on the
Company's financial position and operations is not material.          

3.   INVENTORIES                                                                

The components of inventories were as follows:                        

                                                         April     October
                                                         30, 2000   31, 2000
                                                         --------   --------
                                                                   (Unaudited)

  Raw materials...................................     $  20,726   $25,783
  Work-in-progress................................         2,576     2,095
                                                       ---------   -------
                                                       $  23,302   $27,878
                                                       =========   =======

4.   INITIAL PUBLIC OFFERING                                                    

    On July 14, 2000, the Company issued 20,000,000 American depository shares
   ("ADS") representing 100,000,000 ordinary shares at $12.00 per ADS in the
initial public offering of the Company's ADSs on the Nasdaq National  
    Market. Offering proceeds, net of expenses, amounted to approximately $222
million.                                                              

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ASAT HOLDINGS LIMITED 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  
(Unaudited) 
(In thousands)  

   During the quarter ended July 31, 2000, the Company used a portion of the
proceeds to repay early its $40 million senior secured loan and its   
   revolving credit facility outstanding loan of $17 million. As a result of
    this early repayment, the Company recorded an extraordinary charge of $2.6
million. The charge represented a non-cash item and consisted of the  
unamortized deferred charges and is net of income tax benefit of $0.2 
million.                                                              

    On August 23, 2000, the Company used an additional portion of the proceeds
    to redeem 35% or $53 million of the outstanding aggregate principal amount
of the 12.5% senior notes due November 2006. The redemption price was 
  112.5% of the principal, as provided in the senior notes. As a result of
this early redemption, the Company recorded an extraordinary charge of
approximately $10.6 million. The charge consists primarily of the     
redemption premium plus a non-cash charge of approximately $5 million 
     related to the unamortized deferred charges plus fees and net of income tax
benefit of approximately $0.9 million.                                

5.   COMMITMENTS                                                                

   As of April 30, 2000 and October 31, 2000, the Company had contracted for
     capital expenditure on property, plant and equipment of $55,561 and $43,940
respectively.                                                         

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Item 2  Management's Discussion and Analysis of Financial Condition and Results 
       -----------------------------------------------------------------------
        of Operations for the three months and six months ended October 31, 1999
        ------------------------------------------------------------------------
and 2000                                                        
--------                                                        

You should read the following discussion and analysis together with our         
condensed consolidated financial statements and related notes included elsewhere
in this document, which contain additional information helpful in evaluating our
operating results and financial condition.                                      

Overview                                                                        

We are one of the world's largest independent providers of semiconductor        
assembly and testing services. We offer a broad selection of semiconductor      
packages, including standard and advanced leaded and ball grid array, or BGA,   
packages.  We also are a leading provider of semiconductor testing services,    
particularly for mixed-signal semiconductors.                                   

We target the communications sector of the semiconductor industry, including    
data networking, broadband applications, and mobile communications.  We have    
over 123 customers and many of our top customers are among the world's largest  
and fastest growing semiconductor companies.                                    

We provide assembly and testing services from our Hong Kong facilities.  We also
provide package design, thermal and electrical simulation services and testing  
support services from our facilities in Fremont, California and Hong Kong.  Our 
sales offices and representatives are strategically located in the United       
States, Europe, Hong Kong, South Korea and Singapore.                           

Industry Demand. Our business is substantially affected by market conditions in 
the semiconductor industry. Semiconductor growth continues to be driven by      
strong end-use demand for networking applications, telecommunications services, 
computers and consumer products. The semiconductor business is highly cyclical. 
The industry experienced sustained growth during the first half of the 1990s as 
global demand for semiconductors expanded at an accelerated pace, but           
subsequently experienced downturns characterized by reduced product demand,     
production over-capacity, increased competition and lower pricing.              

We have pursued a strategy of reducing our exposure to the semiconductor        
industry's cycles by (1) developing a customer base that produces semiconductor 
products for end-use applications that have experienced sustained growth in     
recent years, and (2) decreasing our exposure to the personal computer and      
memory markets, which have experienced particularly sharp price declines and    
demand volatility in recent years.                                              

Due to a variety of factors, our quarterly operating results will vary.  These  
factors could include: general economic conditions in the semiconductor         
industry, the short-term nature of our customers' commitments, capacity         
utilization, erosion of the selling prices of packages, changes in our product  
mix, and timing of our receipt of semiconductor chips from our customers.       
Interim results of operations do not necessarily indicate the results that may  
be expected for the full year.  You should read the following information in    
conjunction with our consolidated financial statements and the related notes    
included in this document.                                                      

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Results of Operations                                                           

The following table contains certain items as a percentage of net sales for the 
periods listed:                                                                 

                                                        [Enlarge/Download Table]

                                         Three Months Ended                        Six Months Ended           
                                         ------------------                        ----------------           
                                   October 31,         October 31,          October 31,          October 31,  
                                      1999                2000                 1999                 2000      
                                ---------------     ----------------     ----------------     ----------------
                                                   ($ in millions, except margin amounts)                     
                                                                                                              
Net Sales...................... 78.7     100.0%     104.1     100.0%     144.7     100.0%     207.2     100.0%
Cost of Sales.................. 48.0      61.0%      67.5      64.8%      90.0      62.2%     135.0      65.2%
Gross Profit................... 30.7      39.0%      36.6      35.2%      54.7      37.8%      72.2      34.8%
Selling, general and                                                                                          
administrative.................  7.5       9.5%       8.8       8.5%      14.1       9.7%      17.2       8.3%

Research and development.......  1.2       1.5%       1.4       1.3%       2.3       1.6%       3.0       1.4%
Total operating expenses.......  8.7      11.0%      10.2       9.8%      16.4      11.3%      20.2       9.7%
Income from operations......... 22.0      28.0%      26.4      25.4%      38.3      26.5%      52.0      25.1%

The following table sets forth our unaudited gross profit, gross margin, EBITDA 
and EBITDA margin for the periods listed:                                       

                                                        [Enlarge/Download Table]

                                         Three Months Ended                        Six Months Ended           
                                         ------------------                        ----------------           
                                   October 31,         October 31,          October 31,          October 31,  
                                      1999                2000                 1999                 2000      
                                ---------------     ----------------     ----------------     ----------------
                                                   ($ in millions, except margin amounts)                     
                                                                                                              
Gross Profit...................           30.7                 36.6                 54.7                 72.2 
Gross Margin...................           39.0%                35.2%                37.8%                34.8%
EBITDA/(1)/....................           28.2                 34.5                 50.6                 66.8 
EBITDA Margin/(1)/.............           35.8%                33.1%                35.0%                32.2%

_______________                                                                 
(1)  "EBITDA" is income from operations plus depreciation and amortization, non-
   recurring charges and extraordinary charge and is presented because it is
  generally accepted as providing useful information regarding a company's
  ability to service and/or incur debt. EBITDA should not be considered in
isolation or as a substitute for operating income, cash flows from    
    operating activities and other income or cash flow statement data prepared
     in accordance with generally accepted accounting principles or as a measure
     of our profitability or liquidity. EBITDA, as defined in this footnote, may
 not be comparable to similarly titled measures used by other companies.

EBITDA increased in dollar terms in the three-month period ended October 31,    
2000, compared with October 31, 1999. This improvement is the result of the     
increase in sales and reduced selling and general administration expenses as a  
percentage of sales.                                                            

Market indicators for the second half of our fiscal 2001 lead management to     
anticipate that the second half of our fiscal 2001 may experience a decline in  
sales growth. A decline in sales in 2001 would lead to a decrease in sales      
growth.                                                                         

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Three Months Ended October, 1999 Compared to Three Months Ended Oct 31, 2000    

Net Sales                                                                       

The following table contains a breakdown of net sales by product category for   
the periods listed (U.S. dollars in millions and as a percentage of net sales): 

                                                        [Enlarge/Download Table]

                                         Three Months Ended                        Six Months Ended           
                                         ------------------                        ----------------           
                                   October 31,         October 31,          October 31,          October 31,  
                                      1999                2000                 1999                 2000      
                                ---------------     ----------------     ----------------     ----------------
                                                        ($ in millions, % of net sales)                       
                                                                                                              
Leaded:                                                                                                       
        Standard............... 26.3      33.4%      21.7      20.8%      49.5      34.2%      47.1      22.7%
        Advanced............... 21.3      27.1%      27.2      26.1%      37.5      25.9%      51.4      24.8%
BGA:                                                                                                          
        Standard...............  6.1       7.8%       0.8       0.8%      11.1       7.7%       5.7       2.8%
        Advanced............... 19.3      24.5%      48.7      46.8%      33.0      22.8%      90.7      43.8%
Testing........................  5.7       7.2%       5.7       5.5%      13.6       9.4%      12.3       5.9%
          Total................ 78.7     100.0%     104.1     100.0%     144.7     100.0%     207.2     100.0%

Net sales increased 32.3% to $104.1 million in the three months ended October   
31, 2000 from $78.7 million for the three months ended October 31, 1999. This   
increase was mainly due to strong volume growth in assembly sales of advanced   
BGA and leaded packages. Revenue from advanced packages accounted for 51.6% of  
sales in the three months ended October 31, 1999 and grew to 72.9% of sales in  
the three months ended October 31, 2000. The sales growth reflected a           
continuation of growth of our core business in advance packaging to the         
communication sectors.                                                          

Gross Profit                                                                    

Gross profit increased 19.2% to $36.6 million in the three months ended October 
31, 2000 from $30.7 million in the three months ended October 31, 1999. Gross   
margin was 35.2% in the three months ended October 31, 2000 compared to 39.0% in
the three months ended October 31, 1999. Gross margin decreased primarily due to
(1) a non-recurring consignment contract for the assembly business in the       
October 1999 quarter and (2) a decrease in testing revenue as a percentage of   
net sales. In the October 2000 quarter, the higher volume of production enabled 
ASAT to increase manufacturing efficiency and reduce unit fixed manufacturing   
costs.                                                                          

Selling, General and Administrative                                             

Selling, general and administrative expenses increased 17.3% to $8.8 million in 
the three months ended October 31, 2000 from $7.5 million in the three months   
ended October 31, 1999. As a percentage of net sales, operating and sales,      
general and administrative expenses decreased from 9.5% to 8.5%. The increase is
attributed primarily to an increase in headcount. These increases were partly   
offset by the elimination of the management fee paid to QPL in the three months 
ended October 31, 1999.                                                         

Research and Development                                                        

Research and development increased 16.7% to $1.4 million for the three months   
ended October 31, 2000 from $1.2 million for the three months ended October 31, 
1999. These costs decreased, however, as a percentage of net sales from 1.5% to 
1.3%. A significant portion of these expenditures, including additional staff   
costs and outside consulting services, was focused on developing additional     
advanced semiconductor packaging technologies which have introduced to the      
market in recent quarters.                                                      

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Interest Expense                                                                

Interest expense increased from $4.0 million during the three months ended      
October 31, 1999 to $4.2 million during the same period in 2000, a $0.2 million 
increase. Interest in the period ended October 31, 2000 was related to our      
senior unsecured notes of which 35% were early redeemed in August 2000. Interest
in the quarter ended October 1999 was attributed to term debt and a revolving   
credit line, both of which were extinguished subsequent to IPO.                 

Recapitalization Cost                                                           

Recapitalization costs represent primarily professional fees in conjunction with
disposition of 50% of ASAT shares previously held by QPL to various private     
equity funds including Chase Capital Partners, Olympus Capital Holdings Asia,   
and Orchid Asia Holdings.                                                       

Other Income and Expense                                                        

Other income and expense, combined, increased from $0.1 million net expenses in 
the three months ended October 31, 1999 to $2.0 million net income in the three 
months ended October 31, 2000. This increase was due to increased interest      
income arising from investment of cash generated from operations net of         
investment spending and debt repayment, plus unspent IPO proceeds to date.      

Income Taxes                                                                    

Income tax expense increased by $1.1 million to $4.4 million in the three months
ended October 31, 2000 from $3.3 million in the three months ended October 31,  
1999 mainly due to an increase in pre-tax income. The effective tax rate was    
18.0% in the three months ended October 31, 2000 and 18.3% (excluding the non-  
deductible recapitalization costs) in the three months ended October 31, 1999.  

Extraordinary Charge                                                            

During the quarter ended October 31, 2000, we used a portion of the proceeds    
from our initial public offering of ADSs to repay early our 35% of senior       
unsecured notes. As a result of the early repayment of these notes, we recorded 
an extraordinary loss of $10.6 million representing a non-cash charge consisting
of the unamortized deferred costs related to obtaining the refinancing, which is
net of an income tax benefit of $0.9 million.                                   

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Six Months Ended October, 1999 Compared to Six Months Ended October 31, 2000    

Net Sales                                                                       

The following table contains a breakdown of net sales by product category for   
the periods listed (U.S. dollars in millions and as a percentage of net sales): 

                                                        [Enlarge/Download Table]

                                                            Six Months Ended                  
                                                            ----------------                  
                                               October 31,                    October 31,     
                                                  1999                           2000         
                                               -----------                    -----------     
                                                    ($ in millions; % of net sales)           
                                                                                              
Assembly Leaded:                                                                              
     Standard............................  49.5            34.2%           47.1          22.7%
     Advanced............................  37.5            25.9%           51.4          24.8%
Assembly BGA:                                                                                 
     Standard............................  11.1             7.7%            5.7           2.8%
     Advanced............................  33.0            22.8%           90.7          43.8%
Testing..................................  13.6             9.4%           12.3           5.9%
     Total............................... 144.7           100.0%          207.2         100.0%

Net sales increased 43.2% to $207.2 million in the six months ended October 31, 
2000 from $144.7 million in the six months ended October 31, 1999. This increase
was mainly due to strong volume growth in assembly sales of BGA and advanced    
leaded packages. Revenue from advanced packages accounted for 68.6% of sales in 
the six months ended October 31, 2000, compared with 48.7% of sales in the six  
months ended October 31, 1999. The sales growth reflected a continuation of     
growth of our core business in advance packaging to the communication sectors.  

Gross Profit                                                                    

Gross profit increased 32.0% to $72.2 million in the six months ended October   
31, 2000, compared with $54.7 million in the six months ended October 31, 1999. 
Gross margin was 34.8% in the six months ended October 31, 2000, compared to    
37.8% in the six months ended October 31, 1999. Gross margin decreased primarily
due to (1) a non-recurring consignment revenue contract experienced in 1999, and
(2) a decrease in testing revenue as a percentage of net sales. Higher sales    
volumes in the six months ended October 2000 enabled us to increase our         
manufacturing efficiency and reduce fixed manufacturing costs per unit of       
product.                                                                        

Selling, General and Administrative                                             

Selling, general and administrative expenses increased 22.0% to $17.2 million in
the six months ended October 31, 2000 from $14.1 million in the six months ended
October 31, 1999. The increase resulted primarily from additions to sales and   
marketing personnel to help grow the business. Administration costs increases   
were offset to some extent by the elimination of the management fee paid        
historically to QPL in the six months ended October 31, 1999.                   

As a percentage of net sales, selling, general and administrative expenses      
decreased from 9.7% to 8.3%.                                                    

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Research and Development                                                        

Research and development increased 30.4% to $3.0 million in the six months ended
October 31, 2000 from $2.3 million in the six months ended October 31, 1999.    
These costs decreased, however, as a percentage of net sales from 1.6% to 1.4%. 
A significant portion of these expenditures was for staffing and consulting     
services which developed new packages introduced to the market in recent        
quarters.                                                                       

Interest Expense                                                                

Interest expense increased from $5.9 million during the six months ended October
31, 1999 to $11.0 million during the same period in 2000, a $5.1 million        
increase. Interest in the period ended October 31, 2000 was related to our      
secured term loan facility, our senior unsecured notes and our revolving banking
facility all of which were obtained as part of our recapitalization in October, 
1999.                                                                           

Recapitalization Costs                                                          

Recapitalization costs represent primarily professional fees in conjunction with
disposition of 50% of ASAT shares previously held by QPL to various private     
equity funds including Chase Capital Partners, Olympus Capital Holdings Asia,   
and Orchid Asia Holdings.                                                       

Other Income and Expense                                                        

Other income and expense, combined, increased from $0.1 million net expenses in 
the six months ended October 31, 1999 to $3.2 million net income in the six     
months ended October 31, 2000. This increase was due to increased interest      
income arising primarily from investment of net cash flow generated from the    
business plus unspent proceeds arising from IPO.                                

Income Taxes                                                                    

Income tax expense increased by $2.7 million to $8.2 million in the six months  
ended October 31, 2000 from $5.5 million in the six months ended October 31,    
1999 mainly due to an increase in pre-tax income. The effective tax rate was    
18.6% in the six months ended October 31, 2000, and was 16.9% (excluding the    
non-deductible recapitalization costs) in the six months ended October 31, 1999.

Extraordinary Charge                                                            

During the six months ended October 31, 2000, we used a portion of the proceeds 
from our initial public offering of ADSs to repay early our $40.0 million senior
secured loan, the outstanding balance on our revolving credit facility of $17   
million and 35% of senior unsecured notes. As a result of the early repayment of
these obligations, we recorded an extraordinary charge of $13.1 million         
representing a non-cash charge consisting of the unamortized deferred costs     
related to obtaining the refinancing and is net of an income tax benefit of $1.1
million.                                                                        

Liquidity and Capital Resources                                                 

In fiscal years 1998, 1999 and 2000 and for the three months ended October,     
2000, our capital expenditures totaled approximately $44.0 million, $27.5       
million, $56.0 million and $34.9 million, respectively. These expenditures were 
incurred primarily for equipment and facilities acquired for production of      
assembly products and for test equipment. The fiscal year ended April 2000      
included $10 million for the purchase of a facility from Motorola Corporation to
house test and administration functions.                                        

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ASAT has historically financed capital expenditures through net operating cash  
flow, debt from outside financial institutions, including capital leases, and   
advances from QPL. Net cash generated by operating activities was $47.2 million,
$62.3 million, $81.7 million and $18.6 million in fiscal years 1998, 1999 and   
2000 and the three months ended October 31, 2000, respectively. Our net         
operating cash flow was also used to support QPL during the financial           
difficulties it incurred during the fiscal years 1998 and 1999 and the period in
fiscal 2000 until our recapitalization. Since our recapitalization, we have     
discontinued our financial support of QPL.                                      

In October 1999 (i.e. fiscal year 2000) we refinanced outstanding debt with     
$155.0 million in senior notes at 12.5% due November 1, 2006. Additionally, we  
obtained a five year $40.0 million secured term loan facility plus a $25.0      
million revolving credit facility.                                              

With $222 million net proceeds generated from our IPO in July 2000, we          
liquidated in August the $40 million term facility and $17 million borrowed     
against our revolving credit line. By end of the quarter ended October 2000, we 
reduced 35% or $54 million of the senior notes. At quarter end October 2000, the
principal balance of the senior notes was $97 million, compared with over $100  
million in cash on the balance sheet.                                           

Capital expenditures in the quarter ended October 2000 were financed by         
operating cash flows and a portion of IPO proceeds.                             

We expect future capital requirements to consist primarily of purchases of      
production machinery and equipment to expand capacity, serving growth of the    
company. We expect capital expenditures through fiscal year end April 2002 to be
financed through cash flow generated from operations plus remaining unspent IPO 
proceeds. We anticipate using up to $50 million of cash in fiscal 2001 and      
fiscal 2002 to construct and equip with assembly equipment an additional        
manufacturing operation in mainland China. The purpose is to expand capacity to 
accommodate high volume production, adding capacity for growth.                 

Market Sensitivity                                                              

We have market risk primarily in connection with the pricing of our packaging   
products and services and the purchase of raw materials. Both pricing and cost  
of raw materials are significantly influenced by semiconductor market           
conditions. Historically, during cyclical industry downturns, we have been able 
to offset pricing declines for our products through a combination of improved   
product mix and success in obtaining price reductions in raw material costs.    

We generally have not been significantly affected by foreign exchange           
fluctuations because (1) substantially all of our revenues are in U.S. dollars  
and (2) the largest share of our non-U.S. dollar costs historically has been    
denominated in Hong Kong dollars which have been pegged to the U.S. dollar at a 
relatively constant exchange rate since 1983.                                   

Inflation                                                                       

We do not believe that inflation has had a material effect on our business,     
financial condition or results of operations. If our costs were to become       
subject to significant inflationary pressures, we may not able to fully offset  
such higher costs through price increases. Our inability or failure to do so    
could adversely affect our business, financial conditions and results of        
operations.                                                                     

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Forward Looking Statements Disclaimer                                           

This document contains forward-looking statements and information that involve  
risks, uncertainties and assumptions. Forward-looking statements are all        
statements that concern plans, objectives, goals, strategies, future events or  
performance and underlying assumptions and other statements that are other than 
statements of historical fact, including those that are identified by the use of
words such as "anticipates," "believes," "estimates," "expects," "intends,"     
"plans," "predicts," "anticipates," "projects" and similar expressions. Risks   
and uncertainties that could affect us include technology changes, overall      
semiconductor industry conditions, timing of customers' orders and our capacity 
at the time to meet such orders, adverse developments affecting major customers,
fluctuations in market prices for our products, variations in product mix,      
timing of expenditures in anticipation of future sales, increased inflation and 
interest rates on our debt and effects of our substantial level of debt,        
including the cash required to service our debt and the possible difficulties in
obtaining additional financing. Should one or more of such risks and            
uncertainties materialize, or should any underlying assumption prove incorrect, 
actual outcomes may vary materially from those indicated in the applicable      
forward looking statements. Any forward-looking statement or information        
contained in this document speaks only as of the date the statement was made. We
are not required to update any such statement or information to either reflect  
events or circumstances that occur after the date the statement or information  
is made or to account for unanticipated events.                                 

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Part II 

Item 1  Legal Proceedings                                                       
-----------------                                               

We are not a party to any material litigation.                                  

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Signature 

  Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the        
undersigned, thereunto duly authorized.                                         

           ASAT Holdings Limited

             By:/s/ Stan Baumgartner
                   -----------------------
                   Name:  Stan Baumgartner
                          Title: Chief Financial Officer

Date: December 22, 2000                                                         

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 6-K Filing	Date	First	Last	Other Filings

	10/29/99	2
	10/31/99	3	16
	4/30/00	4	10
	5/1/00	9
	7/14/00	9
	7/31/00	10
	8/23/00	10
For The Period Ended	10/31/00	2	17
Filed On / Filed As Of	12/22/00	20
	11/1/06	17

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Filing Submission - Alternative Formats (Word / Rich Text, HTML, Plain Text, SGML, XML, et al.)

Asat Holdings Ltd · 6-K · For 10/31/00

Filed On 12/22/00 12:02pm ET · SEC File 0-30842 · Accession Number 1021408-0-4178

Report of a Foreign Private Issuer · Form 6-KFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Report of a Foreign Private Issuer · Form 6-K
Filing Table of Contents