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Asat Holdings Ltd · 6-K · For 1/31/01

Filed On 3/15/01 10:44am ET · SEC File 0-30842 · Accession Number 950109-1-681

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

 3/15/01  Asat Holdings Ltd                 6-K         1/31/01    1:21                                     Donnelley R R & S..01/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)                   21     95K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Condensed Consolidated Balance Sheets as of April 30, 2000 and January 31, 2001 Condensed Consolidated Statements of Cash Flows for the three months and nine months ended January 31, 2000 and 2001 Condensed Consolidated Statements of Operations and Comprehensive Income for the three months and nine months ended January 31, 2000 and 2001 Extraordinary charge Financial Statements Gross profit Legal Proceedings Management's Discussion and Analysis of Financial Condition 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 January 31, 2001
5	Condensed Consolidated Statements of Operations and Comprehensive Income for the three months and nine months ended January 31, 2000 and 2001
7	Condensed Consolidated Statements of Cash Flows for the three months and nine months ended January 31, 2000 and 2001
9	Notes to Condensed Consolidated Financial Statements
11	Item 2. Management's Discussion and Analysis of Financial Condition
14	Gross profit
"	Selling, general and administrative
"	Research and development
16	Recapitalization costs
17	Extraordinary charge
20	Item 1 Legal Proceedings
21	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)  

14th 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 nine months ended January 31, 2001, 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 

Part I   Financial Information                                                  
------------------------------                                                  

                                                        [Enlarge/Download Table]

                                                                                                                   
Item 1   Financial Statements                                                                                      

         Condensed Consolidated Balance Sheets as of April 30, 2000 and January 31, 2001.......................  1 

         Condensed Consolidated Statements of Operations and Comprehensive Income                                  
             for the three months and nine months ended January 31, 2000 and 2001..............................  2 

         Condensed Consolidated Statements of Cash Flows for the three months and nine months                      
             ended January 31, 2000 and 2001...................................................................  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 nine months ended January 31, 2000 and 2001..............................  8 

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

Item 1   Legal Proceedings..................................................................................... 17 

Signature    .................................................................................................. 18 

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 JANUARY 31, 2001 
(In thousands)  

                                                        [Enlarge/Download Table]

                                                                                          April 30,   January 31,
                                                                                            2000         2001    
                                                                                            ----         ----    
                                                                                                      (Unaudited)
                                                                                                                 
ASSETS                                                                                                           
Current assets:                                                                                                  
  Cash and cash equivalents.............................................................  $ 10,892      $96,939  
  Accounts receivable-trade (net of allowance for doubtful accounts                                              
    of $290 and $178 at April 30, 2000 and January 31, 2001, respectively)..............    40,566       29,165  
  Inventories (Note 3)..................................................................    23,302       32,490  
  Prepaid expenses and other current assets.............................................    10,911       15,517  
                                                                                          --------     --------  
  Total current assets..................................................................    85,671      174,111  
Property, plant and equipment, net of accumulated depreciation..........................   166,461      252,886  
Option to acquire ASAT, S.A., at cost...................................................    20,000            -  
Deferred charges........................................................................    10,907        4,909  
Noncompete covenants, net...............................................................       442            -  
                                                                                          --------     --------  
  Total assets..........................................................................  $283,481     $431,906  
                                                                                          ========     ========  

LIABILITIES AND SHAREHOLDERS' EQUITY                                                                             
Current liabilities:                                                                                             
  Short-term bank borrowings............................................................ $   9,000 $          -  
  Current portion of other long-term debt...............................................     5,000          324  
  Accounts payable......................................................................    24,549       20,836  
  Accrued liabilities...................................................................     6,155       11,634  
  Income taxes payable..................................................................    12,847            -  
  Amount due to QPL Group...............................................................     5,300        2,268  
  Amount due to a related company.......................................................       297          317  
                                                                                          --------     --------  
  Total current liabilities.............................................................    63,148       35,379  
Deferred income taxes...................................................................    21,992       30,019  
12.5% Senior notes due 2006.............................................................   149,217       97,420  
Other long-term debt....................................................................    35,000            -  
Shareholders' equity:                                                                                            
  Common stock..........................................................................     5,760        6,760  
   Treasury stock ......................................................................         -           (4) 
  Additional paid-in capital ...........................................................    12,457      232,819  
  (Accumulated deficit)/Retained earnings...............................................    (4,093)      29,513  
                                                                                          --------     --------  
  Total shareholders' equity............................................................    14,124      269,088  
                                                                                          --------     --------  
  Total liabilities and shareholders' equity............................................  $283,481     $431,906  
                                                                                          ========     ========  

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ASAT HOLDINGS LIMITED 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
AND COMPREHENSIVE INCOME FOR THE THREE MONTHS AND 
NINE MONTHS ENDED JANUARY 31, 2000 AND 2001 
(Unaudited) 
(In thousands, except share data) 

                                                        [Enlarge/Download Table]

                                                               Three months ended             Nine months ended     
                                                               ------------------             -----------------     
                                                          January 31,     January 31,     January 31,    January 31,
                                                              2000           2001             2000          2001    
                                                              ----           ----             ----          ----    
                                                                                                                    
Net sales:                                                                                                          
  - Third parties......................................  $      83,688   $     84,386   $      228,299  $   291,549 
  - QPL Group..........................................              -              -              101            - 
                                                         -------------   ------------   --------------  ----------- 

Total net sales........................................         83,688         84,386          228,400      291,549 
                                                         -------------   ------------   --------------  ----------- 

Cost of sales:                                                                                                      
  - Purchases from QPL Group and other related party...         10,193         14,169           39,361       46,673 
  - Other costs........................................         42,982         45,244          103,802      147,696 

                                                         -------------   ------------   --------------  ----------- 
Total cost of sales....................................         53,175         59,413          143,163      194,369 
                                                         -------------   ------------   --------------  ----------- 
Gross profit...........................................         30,513         24,973           85,237       97,180 
                                                         -------------   ------------   --------------  ----------- 

Operating expenses:                                                                                                 
  Selling, general and administrative..................          4,803          9,282           18,919       26,501 
  Research and development.............................          1,168          1,493            3,507        4,444 
  Non recurring charges for obsolete equipment                  12,340              -           12,340            - 

                                                         -------------   ------------   --------------  ----------- 

Total operating expenses...............................         18,311         10,775           34,766       30,945 
                                                         -------------   ------------   --------------  ----------- 

Income from operations.................................         12,202         14,198           50,471       66,235 
Other (expense) income, net............................            322          1,757              246        4,957 
Interest expense:                                                                                                   
  - amortization of deferred charges...................           (447)          (214)            (461)        (902)
  - third parties......................................         (6,176)        (3,430)          (9,640)     (13,745)
  - QPL Group..........................................              -              -           (2,404)           - 
Recapitalization costs.................................           (134)             -           (6,627)           - 

                                                         -------------   ------------   --------------  ----------- 
Income before income taxes and extraordinary charge....          5,767         12,311           31,585       56,545 
Provision for income taxes.............................         (1,332)        (1,598)          (6,788)      (9,813)
                                                         -------------   ------------   --------------  ----------- 

Income before extraordinary charge.....................          4,435         10,713           24,797       46,732 
Extraordinary charge on early extinguishment of debt                                                                
  (net of income tax benefit $1,108 for the nine months                                                             
    ended January 31, 2001) (Note 4)...................              -              -                -      (13,126)
                                                         -------------   ------------   --------------  ----------- 

Net income and comprehensive income....................          4,435         10,713           24,797       33,606 
                                                         =============   ============   ==============  =========== 

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ASAT HOLDINGS LIMITED 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
AND COMPREHENSIVE INCOME  
FOR THE THREE MONTHS AND NINE MONTHS  
ENDED JANUARY 31, 2000 AND 2001 - Continued 

(Unaudited) 
(In thousands, except share data) 

                                                        [Enlarge/Download Table]

                                                       Three months ended            Nine months ended        
                                                       ------------------            -----------------        
                                                  January  31,    January 31,   January  31,    January 31,   
                                                      2000           2001           2000           2001       
                                                      ----           ----           ----           ----       
                                                                                                              
Net income per ordinary share:                                                                                
  Basic:                                                                                                      
  Income before extraordinary charge........... $       0.01       $      0.02   $      0.04      $      0.07 
  Extraordinary charge.........................            -                 -             -            (0.02)

                                                ------------       -----------   -----------      ----------- 
Net income..................................... $       0.01       $      0.02   $      0.04             0.05 

                                                ------------       -----------   -----------      ----------- 

Basic weighted average number of ordinary                                                                     
  shares outstanding...........................  576,000,000       675,987,391   576,000,000      649,184,203 
                                                ------------       -----------   -----------      ----------- 

Net income per ADS :                                                                                          
  Basic:                                                                                                      
    Income before extraordinary charge......... $       0.04       $      0.08   $      0.22      $      0.36 
    Extraordinary charge.......................            -                 -             -            (0.10)
                                                ------------       -----------   -----------      ----------- 
  Net income................................... $       0.04       $      0.08   $      0.22      $      0.26 
                                                ------------       -----------   -----------      ----------- 

Basic weighted average number of ADSs                                                                         
   outstanding.................................  115,200,000       135,197,478   115,200,000      129,836,841 
                                                ------------       -----------   -----------      ----------- 

The dilutive earnings per share and ADS are the same as the basic earnings per  
share and ADS for the three months ended January 31, 2001 and the nine months   
ended January 31, 2001.                                                         

The extraordinary charge of $13.1 million for the nine months ended January 31, 
2001 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 $2 million.                                                       

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ASAT HOLDINGS LIMITED 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE THREE MONTHS AND NINE MONTHS ENDED JANUARY 31, 2000 AND 2001  
(Unaudited) 
(In thousands)  

                                                        [Enlarge/Download Table]

                                                                      Three months ended           Nine months ended       
                                                                      ------------------           -----------------       
                                                                  January 31,   January  31,     January 31,   January  31,
                                                                     2000           2001             2000          2001    
                                                                     ----           ----             ----          ----    
                                                                                                                           
Operating activities:                                                                                                      
  Net income....................................................    $  4,435   $   10,713       $  24,797      $  33,606   
  Adjustments to reconcile net income to net cash                                                                          
      provided by operating activities:                                                                                    
      Depreciation and amortization:                                                                                       
         Property, plant and equipment and noncompete covenants.       6,351        8,652          18,727         23,446   
         Deferred charges and debt discount.....................         673          357             687          1,427   
      Deferred income taxes.....................................      (1,973)       1,675          (1,494)         8,027   
      Loss (gain) on disposal of property, plant and equipment..           4          (28)            607           (388)  
      Loss on disposal of marketable securities.................           -            -             156              -   
      Non recurring charges for obsolete equipment..............      12,340            -          12,340              -   
      Deferred charges written off..............................           -            -               -          5,496   
      Cost incurred by QPL Group on behalf of ASAT.............            -            -             701              -   
      Provision for doubtful debts..............................         801         (125)            801           (106)  
      Cost incurred by ASAT Group on behalf of ASAT SA..........           -         (201)              -           (201)  
      Others....................................................          44            -               -              -   
Changes in operating assets and liabilities:....................                                                           
  Accounts receivable-trade.....................................      (6,197)      13,414          (4,257)        11,895   
  Inventories...................................................      (2,838)      (1,784)         (4,455)        (6,360)  
  Prepaid expenses and other current assets.....................      (4,016)         791          (4,610)        (1,322)  
  Accounts payable..............................................      (1,631)      (1,232)          2,440         (9,606)  
  Accrued liabilities...........................................         248           59           4,016          3,942   
  Amount due to a related company...............................         (87)        (255)            286             20   
  Income taxes payable..........................................       3,304      (12,345)          8,282        (12,847)  
                                                                     -------      -------         -------        -------   
    Net cash provided by operating activities...................      11,458       19,691          59,024         57,029   
                                                                     -------      -------         -------        -------   

Investing activities:                                                                                                      
  Acquisition of property, plant and equipment..................     (14,167)     (25,882)        (29,792)       (93,996)  
  Proceeds from sale of property, plant and equipment...........         413           24           5,436            652   
  Options to acquire ASAT S.A...................................           -            -         (20,000)             -   
  Acquisition of a subsidiary, net cash inflow..................           -        5,930               -          5,930   
  Sale proceeds of marketable securities........................           -            -             119              -   
  Decrease in restricted cash...................................           -            -             665              -   
                                                                     -------      -------         -------        -------   
    Net cash used in investing activities.......................     (13,754)     (19,928)        (43,572)       (87,414)  
                                                                     -------      -------         -------        -------   
Financing activities:                                                                                                      
  Proceeds from initial public offerings, net of expenses.......           -            -               -        222,001   
  Issue of shares...............................................           -            -             120              -   
  Issue of 12.5% senior notes due 2006..........................           -            -         151,502              -   
  35% redemption of 12.5% senior notes due 2006.................           -            -               -        (52,321)  
  Increase in other long-term debt..............................           -            -          40,000              -   
  Repayment of other long-term debt.............................         (51)           -         (39,399)       (40,000)  
  Net increase (decrease) in short-term bank borrowings.........       2,665            -         (42,208)        (9,000)  
  Net increase (decrease) in other amounts due to QPL Group.....       4,620       (2,820)          5,097         (3,406)  
  Dividend paid to QPL .........................................           -            -        (101,374)             -   
  Deferred charges..............................................        (375)        (128)        (11,359)          (400)  
  Repurchase of Shares..........................................           -         (442)              -           (442)  
  Proceeds from accounts receivable financing...................           -            -          40,221              -   
  Repayment under accounts receivable financing.................           -            -         (47,709)             -   
                                                                     -------      -------         -------        -------   
    Net cash provided by (used in) financing activities.........       6,859       (3,390)         (5,109)       116,432   
                                                                     -------      -------         -------        -------   

Net increase (decrease) in cash and cash equivalents............       4,563       (3,627)         10,343         86,047   
Cash and cash equivalents at beginning of the period............       7,189      100,566           1,409         10,892   
                                                                     -------      -------         -------        -------   
Cash and cash equivalents at end of the period.................. $    11,752      $96,939     $    11,752        $96,939   
                                                                     =======      =======         =======        =======   

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ASAT HOLDINGS LIMITED 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE THREE MONTHS AND NINE MONTHS ENDED JANUARY 31, 2000 AND 2001--continued 
(Unaudited) 
(In thousands)  

                                                        [Enlarge/Download Table]

                                                                      Three months ended         Nine months ended     
                                                                  -------------------------- --------------------------
                                                                   January 31,  January 31,  January 31,  January 31,  
                                                                      2000          2001         2000         2001     
                                                                  ------------- ------------ ------------ -------------
                                                                                                                       
Supplemental disclosure of cash flow information:                                                                      
  Cash paid during the period for:...............................                                                      
    Interest.....................................................          $412            -       $6,352       $9,791 
    35% redemption of 12.5% senior notes due 2006,-..............             -            -            -       61,031 
    including $6,781 charged related primarily to                             -       12,009            -       13,799 
    premium for early redemption and associated fees                                                                   
    Income taxes.................................................                                                      
Acquisition of a Subsidiary:                                                                                           
Net assets acquired:                                                                                                   
    Cash & cash equivalents......................................             -         4162            -         4162 
    Accounts receivable - trade..................................             -          389            -          389 
    Inventories..................................................             -        2,828            -        2,828 
    Prepaid expenses and other current assets....................             -          247            -          247 
    Amount due from a fellow subsidiary..........................             -        1,828            -        1,828 
    Property, plant & equipment, net of accumulated depreciation.             -       14,814            -       14,814 
    Other long-term debt.........................................             -         (324)           -         (324)
    Accounts payable.............................................             -       (1,974)           -       (1,974)
    Account due to QPL group.....................................             -         (374)           -         (374)
    Amount due to immediate holding company......................             -          (60)           -          (60)
    Accrued liabilities..........................................             -       (1,536)           -       (1,536)
                                                                  ------------- ------------ ------------ ------------ 
                                                                              -       20,000            -       20,000 
Goodwill arising on acquisition..................................             -            -            -            - 
                                                                  ------------- ------------ ------------ ------------ 
                                                                              -       20,000            -       20,000 
                                                                  ============= ============ ============ ============ 

Cash paid upon exercise of Option................................             -            -            -            - 
Less: Cash and cash equivalents..................................             -       (4,162)           -       (4,162)
         Amount due from a fellow subsidiary.....................             -       (1,828)           -       (1,828)
         Amount due to immediate holding company.................             -           60            -           60 
                                                                  ------------- ------------ ------------ ------------ 
Net cash inflow..................................................             -        5,930            -        5,930 
                                                                  ============= ============ ============ ============ 

-------------------                                                             
On December 29, 2000, we exercised our option to acquire ASAT S.A. The  
option price amounted to $20.0 million was paid in October 1999.        

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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:                

                                                                [Download Table]

                                                    April         January  
                                                  30, 2000       31, 2001  
                                                  --------       --------  
                                                                (Unaudited)
                                                                           
Raw materials...................................   $20,726        $31,593  
Work-in-progress................................     2,576            897  
                                                  --------       --------  

                                                   $23,302        $32,490  
                                                  ========       ========  

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 January 31, 2001, the Company had contracted
         for capital expenditure on property, plant and equipment of $55,561 and
$35,568 respectively.                                         

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Item 2     Management's Discussion and Analysis of Financial Condition          
 -----------------------------------------------------------
          and Results of Operations for the three months and nine months ended
          --------------------------------------------------------------------
January 31, 2000 and 2001                                 
-------------------------                                 

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, which is highly cyclical. The industry experienced strong growth in   
the first half of calendar year 2000. We benefited from this growth and achieved
levels of production, revenue, gross margins and operating margins above our    
historical levels. We made investments and incurred expenses as part of a major 
expansion strategy in expectation of continued strong industry, growth and      
demand. The industry is now experiencing a cyclical downturn. As a result, our  
customers have cut back production orders, reflecting inventory corrections and 
lower demand experienced in their end markets. Beginning in mid-December, sales 
declined sharply as result of a sharp cutback in production orders by our       
customers, reflecting inventory corrections and lower demand experienced in     
their end market. As a result, our recent utilization levels are approximately  
55% to 60%, down from the 76% to 80% levels experienced in the quarter ended    
October 31, 2000.                                                               

Cyclical industry downturns in the past have often been severe and we don't know
how long it will continue. This downturn, combined with our higher levels of    
expenses and capacity, could have a severe adverse effect on our financial      
performance and condition.                                                      

Recent Developments                                                             

We are taking prudent steps to meet the challenge of current market conditions, 
including reducing costs and capital expenditures. Our cost reduction measures  
have included a reduction in the workforce. We will continue with our plans to  
construct an assembly site in China, positioning ASAT to serve that market. On  
December 29, 2000, we exercised our option to acquire ASAT S.A. in Nancy,       
France, positioning ASAT to better serve the European and eastern U.S. markets. 

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In mid-January 2001 we announced a $20.0 million ADS buyback program. Since that
time we have repurchased ADSs valued at $1.5 million.                           

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.                                                      

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                         Nine Months Ended             
                                         ------------------                         -----------------             
                                     January 31,          January 31,           January 31,         January 31,   
                                         2000                 2001                 2000                 2001      
                                  ----------------      ---------------      ---------------     -----------------
                                                    ($ in millions, except margin amounts)                        
                                                                                                                  
Net Sales........................ 83.7      100.0%      84.4     100.0%     228.4     100.0%     291.5     100.0% 
Cost of Sales.................... 53.2       63.6%      59.4      70.4%     143.2      62.7%     194.4      66.7% 
Gross Profit..................... 30.5       36.4%      25.0      29.6%      85.2      37.3%      97.1      33.3% 
Selling, general and                                                                                              
administrative...................  4.8        5.7%       9.3      11.0%      18.9       8.3%      26.5       9.1% 
Research and development.........  1.2        1.4%       1.5       1.8%       3.5       1.5%       4.4       1.5% 
Non recurring changes for                                                                                         
obsolete equipment .............. 12.3       14.7%         -          -      12.3       5.4%         -          - 
Total operating expenses......... 18.3       21.8%      10.8      12.8%      34.7      15.2%      30.9      10.6% 
Income from operations........... 12.2       14.6%      14.2      16.8%      50.5      22.1%      66.2      22.7% 

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                         Nine Months Ended             
                                      ------------------                         -----------------             
                                  January 31,          January 31,           January 31,         January 31,   
                                      2000                 2001                 2000                 2001      
                               ----------------      ---------------      ---------------     -----------------
                                                 ($ in millions, except margin amounts)                        
                                                                                                               
Gross Profit..................      30.5                25.0                  85.2                  97.2       
Gross Margin..................      36.4%               29.6%                 37.3%                 33.3%      
EBITDA(1).....................      30.9                22.9                  81.5                  89.7       
EBITDA Margin(1)..............      36.9%               27.1%                 35.7%                 30.8%      

(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                         

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defined in this footnote, may not be comparable to similarly titled   
measures used by other companies.                                     

EBITDA decreased in dollar terms in the three-month period ended January 31,    
2001, compared with January 31, 2000. This decrease is primarily due to         
increased cost of sales and a different mix of business experienced during the  
period.                                                                         

Market indicators for the last quarter of our fiscal 2001 lead management to    
anticipate that the outlook will be weak.                                       

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Three Months Ended January 31, 2000 Compared to Three Months Ended January 31,  
2001                                                                            

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                          Nine Months Ended             
                                         ------------------                          -----------------             
                                      January 31,          January 31,           January 31,         January 31,   
                                          2000                 2001                 2000                 2001      
                                   ----------------      ---------------      ---------------     -----------------
                                                        ($ in millions; % of net sales)                            
                                                                                                                   
Leaded:                                                                                                            
         Standard................ 26.9      32.1%       16.0      19.0%       76.4      33.5%       63.0      21.6%
         Advanced................ 18.0      21.5%       24.3      28.8%       55.6      24.3%       75.7      25.9%
BGA:                                                                                                               
         Standard................  4.6       5.5%        1.2       1.4%       15.6       6.8%        6.9       2.4%
         Advanced................ 26.6      31.8%       38.7      45.8%       59.6      26.1%      129.3      44.4%
Testing & others.................  7.6       9.1%        4.2       5.0%       21.2       9.3%       16.6       5.7%
Total............................ 83.7     100.0%       84.4       100%      228.4     100.0%      291.5     100.0%

Net sales slightly increased 0.8% to $84.4 million in the three months ended    
January 31, 2001 from $83.7 million for the three months ended January 31, 2000.
This slight increase was mainly due to volume growth in assembly sales of       
advanced BGA and advanced leaded packages. Revenue from advanced packages       
accounted for 53.3% of sales in the three months ended January 31, 2000 and grew
to 74.6% of sales in the three months ended January 31, 2001. The revenue growth
reflected a continuation of growth of our core business in advance packaging to 
the communication sectors.                                                      

Gross Profit                                                                    

Gross profit decreased 18.0% to $25.0 million in the three months ended January 
31, 2001 from $30.5 million in the three months ended January 31, 2000. Gross   
margin was 29.6% in the three months ended January 31, 2001 compared to 36.4% in
the three months ended January 31, 2000. Gross margin decreased primarily due to
a decrease in testing revenue as a percentage of net sales in the January 2001  
quarter and due to special consignment business experienced for the three months
ended January 2000.                                                             

Selling, General and Administrative                                             

Selling, general and administrative expenses increased 93.8% to $9.3 million in 
the three months ended January 31, 2000 from $4.8 million in the three months   
ended January 31, 2000. As a percentage of net sales, selling, general and      
administrative expenses increased from 5.7% to 11.0%. The increase is attributed
primarily to (1) the addition of sales and marketing personnel to help grow the 
business, and (2) fees for external consulting on business improvement.         

Research and Development                                                        

Research and development increased 25.0% to $1.5 million for the three months   
ended January 31, 2001 from $1.2 million for the three months ended January 31, 
2000. These costs increased as a percentage of net sales from 1.4% to 1.8%. 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 decreased from $6.6 million during the three months ended      
January 31, 2000 to $3.6 million during the same period in 2001, a $3.0 million 
decrease. Interest in the period ended January 31, 2001 was related to our      
senior unsecured notes of which 35% were early redeemed in August 2000. Interest
in the quarter ended January 2000 was attributed to our senior unsecured notes  
and to term debt and a revolving credit facility, both of which were            
extinguished subsequent to our 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 $0.3 million net income in   
the three months ended January 31, 2000 to $1.8 million net income in the three 
months ended January 31, 2001. 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 $0.3 million to $1.6 million in the three months
ended January 31, 2001 from $1.3 million in the three months ended January 31,  
2000 mainly due to an increase in pre-tax income. The effective tax rate was    
13.0% in the three months ended January 31, 2001 and 22.6% (excluding the       
non-deductible recapitalization costs) in the three months ended January 31,    
2000. The decrease in effective tax rate was due to change of view on the       
deductibility of certain interest expenses.                                     

Nine Months Ended January 31, 2000 Compared to Nine Months Ended January 31,    
2001                                                                            

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]

                                                          Nine Months Ended                     
                                                          -----------------                     
                                              January 31,                   January 31,         
                                                  2000                          2001            
                                           -----------------             -----------------      
                                                   ($ in millions; % of net sales)              
                                                                                                
Assembly Leaded:                                                                                
         Standard........................     76.4           33.5%            63.0         21.6%
         Advanced........................     55.6           24.3%            75.7         25.9%
Assembly BGA:                                                                                   
         Standard........................     15.6            6.8%             6.9          2.4%
         Advanced........................     59.6           26.1%           129.3         44.4%
Testing  .................................    21.2            9.3%            16.6          5.7%
         Total............................   228.4            100%           291.5          100%

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Net sales increased 27.6% to $291.5 million in the nine months ended January 31,
2001 from $228.4 million in the nine months ended January 31, 2000. This        
increase was mainly due to volume growth in assembly sales of BGA and advanced  
leaded packages. Revenue from advanced packages accounted for 70.3% of sales in 
the nine months ended January 31, 2001, compared with 50.4% of sales in the nine
months ended January 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 14.0% to $97.1 million in the nine months ended January  
31, 2001, compared with $85.2 million in the nine months ended January 31, 2000.
Gross margin was 33.3% in the nine months ended January 31, 2001, compared to   
37.3% in the nine months ended January 31, 2000. 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.       
However, higher sales volumes in the nine months ended January 31, 2001 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 40.2% to $26.5 million in
the nine months ended January 31, 2001 from $18.9 million in the nine months    
ended January 31, 2000. The increase resulted primarily from (1) additions to   
sales and marketing personnel to help grow the business, and (2) consultancy    
fees for external consultants on business improvement. The increase in          
administration costs were offset to some extent by the elimination of the       
management fee paid historically to QPL in the nine months ended January 31,    
2000. As a percentage of net sales, selling, general and administrative expenses
increased slightly from 8.3% to 9.1% for the nine months ended January 31, 2001.

Research and Development                                                        

Research and development increased 25.7% to $4.4 million in the nine months     
ended January 31, 2001 from $3.5 million in the nine months ended January 31,   
2000. These costs however, as a percentage of net sales were maintained at 1.5%.
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 $12.5 million during the nine months ended      
January 31, 2000 to $14.6 million during the same period in 2001, a $2.1 million
increase. Interest in the quarter ended January 2000 was attributed to our      
senior unsecured notes and to term debt and a revolving credit facility, both of
which were extinguished subsequent to our IPO.                                  

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 $0.2 million net expenses in 
the nine months ended                                                           

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January 31, 2000 to $5.0 million net income in the nine months ended January 31,
2001. 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 our IPO.                                                           

Income Taxes                                                                    

Income tax expense increased by $3.0 million to $9.8 million in the nine months 
ended January 31, 2001 from $6.8 million in the nine months ended January 31,   
2000 mainly due to an increase in pre-tax income. The effective tax rate was    
17.4% in the nine months ended January 31, 2001, and was 17.8% (excluding the   
non-deductible recapitalization costs) in the nine months ended January 31,     
2000.                                                                           

Extraordinary Charge                                                            

During the nine months ended January 31, 2001, 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 $17.0 
million and 35% of our 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 the nine months ended January 31, 2001, 
our capital expenditures totalled approximately $44.0 million, $27.5 million,   
$56.0 million and $94.0 million, respectively. These expenditures were incurred 
primarily to develop our BGA and other advanced packaging capabilities and      
expand our testing capabilities.                                                

We financed these 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 $57.0 million in fiscal years 1998, 1999 and 2000 and the nine
months ended January 31, 2001. Our net operating cash flow was also used to     
support QPL during the financial difficulties it incurred during the fiscal     
years 1998, 1999 and the period in fiscal 2000 until our recapitalization. Since
our recapitalization, we have discontinued our financial support of QPL.        

Prior to our recapitalization in October 1999, we used a varying combination of 
short-term and long-term, secured and unsecured bank borrowings to finance our  
activities. We also made increasing use of capital leases to finance part of our
capital expenditures programs during those years. As part of our                
recapitalization in fiscal year 2000, we refinanced our outstanding debt by     
issuing $155.0 million aggregate principal amount of 12.5% senior notes due in  
2006 and obtaining a five year $40.0 million secured term loan facility and a   
$25.0 million revolving credit facility.                                        

We expect our future capital requirements to consist primarily of purchases of  
production machinery and equipment to expand capacity. We currently intend to   
incur an aggregate of approximately $100 and $60 million of expenditures during 
fiscal years 2001 and 2002, respectively. We expect to focus these expenditures 
primarily on acquiring assembly and test equipment. A portion will also be used 
for conversion of available space in our building for assembly use and expansion
of our testing operations using our recently acquired facility in Hong Kong. We 
intend to finance our planned expansion of capacity during fiscal years 2001 and
2002 with the net proceeds from our initial public offering and cash generated  
from operations. We used part of the net proceeds from the initial public       
offering to repay our $40.0 million term loan facility and the $17.0 million    
revolving credit facility in the three months ended July 31, 2000. We also used 
the net proceeds from the offering to redeem 35% of the aggregate principal     

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amount of the outstanding notes at a price of 112.5% of the principal amount in 
August 2000. Upon repayment of the term loan facility, our revolving credit     
facility was terminated.                                                        

We may obtain a new unsecured credit facility for working capital purposes in   
fiscal 2002. We did not incur any expenditure in connection with our undeveloped
property in the People's Republic of China during fiscal year 2000 and the nine 
months ended January 31, 2001. We intend to use approximately $20.0 million in  
fiscal 2002 to open an additional assembly facility on the property over the    
next 9-12 months to accommodate high volume production items.                   

We believe that, based on current market conditions and our current business    
plan, our existing cash balances and cash flow from operations will be          
sufficient to meet our projected capital expenditures, working capital and other
cash requirements for the fiscal years 2001 and 2002.                           

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: March 15, 2001                                                            

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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
	1/31/00	3	17
	4/30/00	4	10
	5/1/00	9
	7/14/00	9
	7/31/00	10	17
	8/23/00	10
	10/31/00	11		6-K
	12/29/00	8	11
For The Period Ended	1/31/01	2	18
Filed On / Filed As Of	3/15/01	21

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

Asat Holdings Ltd · 6-K · For 1/31/01

Filed On 3/15/01 10:44am ET · SEC File 0-30842 · Accession Number 950109-1-681

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