Aspocomp Group Oyj — Interim / Quarterly Report 2011

Apr 20, 2011

ASPOCOMP'S INTERIM REPORT JANUARY 1 - MARCH 31, 2011

ASPOCOMP'S INTERIM REPORT JANUARY 1 - MARCH 31, 2011

Espoo, Finland, 2011-04-20 08:00 CEST (GLOBE NEWSWIRE) --
Aspocomp Group Plc., Interim Report, April 20, 2011 at 9:00 a.m.

Key figures in brief

• Net sales: EUR 4.9 million (EUR 4.3 million 1-3/2010)
• Operating result before depreciation (EBITDA): EUR 0.8 million (0.7)
• Operating result (EBIT): EUR 0.4 million (0.4)
• Profit for the period: EUR 0.1 million (0.1)
• Earnings per share (EPS): EUR 0.00 (0.00)
• Cash flow from operations: EUR -0.7 million (0.8)

The company expects to see net sales growth in 2011. The operating result is
anticipated to be in the black, but to fall short of 2010.

PRESIDENT AND CEO'S REVIEW

“The final months of 2010 were tough and 2011 got off to a slow start, but net
sales eventually rose to a good level thanks to the pickup in quick-turn
deliveries. The operating result - EUR 0.4 million, or about nine percent of
net sales - was also satisfactory.

“Cash flow in turn slumped into the red as a result of the decline in sales in
the previous quarter and payments that are mainly due in the first months of
the year but which are recognized over the entire financial year.

“The short-term market outlook appears to be upbeat, but the rise in material
prices still overshadows profitability. As usual, we have only been partly able
to transfer the higher material costs to the prices of the final products.
Fortunately, it seems that demand for quick-turn deliveries will compensate for
the higher costs and, all in all, the financial year ahead will most likely be
good.

“The consequences of the natural catastrophe in Japan are not expected to have
a significant impact on Aspocomp's business.”

NET SALES AND EARNINGS IN JANUARY-MARCH

First-quarter net sales amounted to EUR 4.9 million, up 13 percent on 1-3/2010.
The five largest customers accounted for 80 percent of net sales (79%). In
geographical terms, 93 percent of net sales were generated in Europe (90%) and
7 percent in Asia (10%).

The operating result was EUR 0.4 million (0.4). Profitability remained on a par
with the comparison period, with the operating margin amounting to 8.9 percent.
Quick-turn deliveries and the more favorable product mix supported
profitability.

The Group's net financial expenses likewise remained at the same level as in
the comparison period, EUR -0.3 million. Consequently, the result for the
review period, EUR 0.1 million, and earnings per share, EUR 0.00, were also on
a par with the comparison period.

INVESTMENTS AND R&D

Investments amounted to EUR 0.1 million (EUR 0.7 million 1-3/2010).

R&D costs consist of general production development costs. These costs do not
fulfill the IAS 38 definition of either development or research and are
therefore booked into overhead costs.

FINANCING

The Group's financial position remained challenging, but stable. Cash assets
amounted to EUR 3.9 million at the end of the period (EUR 3.1 million 3/2010).

Cash flow from operations during the period was EUR -0.7 million (EUR 0.8
million 1-3/2010).

The nominal value of interest-bearing liabilities was EUR 23.5 million (EUR
24.2 million). Gearing decreased to 490.8 percent (591.2%).
Non-interest-bearing liabilities amounted to EUR 7.8 million (6.5).

The Group's equity ratio at the end of the period stood at 11.1 percent (10.1%).

RECEIVABLE FROM TTM TECHNOLOGIES INC.

Aspocomp has booked a receivable from TTM Technologies Inc. (TTM) in its
balance sheet. The receivable is related to Aspocomp's ownership arrangements
in 2007, where Aspocomp's production facilities in China and India were
transferred to Meadville Aspocomp (BVI) Holdings Ltd. (MAH), a company
established together with Meadville Holdings Limited. Meadville originally
bought an 80 percent stake in MAH, and a put and call option deed was signed
for the remaining 20 percent. According to IFRS this arrangement is considered
a hundred-percent sale and therefore Aspocomp's 20 percent holding under the
option agreement is presented in other receivables.

In 2010, the PCB operations of Meadville Holdings Ltd. were acquired by TTM.
The rights and responsibilities of MAH were transferred by agreements to TTM
and Aspocomp.

The receivable is booked under non-current receivables at the minimum value
specified in the put and call option deed. The minimum value was EUR 16.7
million at the end of the period. The other two valuation scenarios presented
in the option deed are considered non-substantive due to the challenging
current and expected future operations of MAH. See also TTM's report (page 9):
http://www.ttmtechnologies.com/investors/documents/quarterly/q3_2010.pdf.

GROUP STRUCTURE

Aspocomp Oulu Oy - in which Aspocomp has a 90 percent holding - manufactures
and sells PCBs for telecom, industrial, and automotive electronics
applications. Its service portfolio includes prototype and quick-turn
deliveries, fulfillment of urgent PCB needs in high-volume operations as well
as development and commercialization of new technologies. Aspocomp Oulu Oy's
primary technologies are HDI (High Density Interconnection), multilayer and
special material PCBs.

In addition, Aspocomp holds a 13.2 percent share in PCB Center, a Thai company.
PCB Center's production is currently stopped due to a fire at the plant in June
2010. It is likely that the operations of the company will be wound up.
However, this has no financial impact on Aspocomp, as the related holding has
no value in Aspocomp's balance sheet and Aspocomp has no outstanding
receivables from PCB Center.

Aspocomp also has a 5.3 percent shareholding in Imbera Electronics Inc., which
provides state-of-the-art embedding solutions for the electronics industry.

SHAREHOLDERS' EQUITY OF THE PARENT COMPANY

In accordance with the requirements of the Companies Act, the Trade Register
has been notified of the loss of share capital on May 14, 2008. The
shareholders' equity of Aspocomp Group's parent company, Aspocomp Group Plc.,
was EUR 4.0 million negative at the end of the first quarter. However, the
shareholders' equity of Aspocomp Group was EUR 3.7 million positive.

SHARES AND SHARE CAPITAL

The total number of Aspocomp's shares at March 31, 2011 was 49,905,130 and the
share capital stood at EUR 20,082,052. The parent company held 200,000 treasury
shares, which have a nominal value of approximately EUR 758 thousand. This
represents 0.4 percent of the number of and the aggregate votes conferred by
all the shares. Aspocomp's subsidiaries do not hold any shares in the parent
company.

A total of 47,210,737 Aspocomp Group Plc. shares were traded on NASDAQ OMX
Helsinki during the period from January 1 to March 31, 2011. The aggregate
value of the shares exchanged was EUR 12,230,599. The shares traded at a low of
EUR 0.17 and a high of EUR 0.37. The average share price was EUR 0.26. The
closing price at March 31, 2011 was EUR 0.23, which translates into market
capitalization of EUR 11,478,179.

Nominee-registered shares accounted for 3.79 percent of the total shares.

PERSONNEL

During the period, Aspocomp had an average of 101 employees (98). The personnel
count on March 31, 2011 was 101 (97). Of them, 70 (67) were non-salaried and 31
(30) salaried employees.

DECISIONS OF THE ANNUAL GENERAL MEETING

The Annual General Meeting of Aspocomp Group Plc. held on April 13, 2010
re-elected the current Board and decided that the remunerations of the members
of the Board will remain the same as in 2009. The General Meeting also decided
to amend the company's Articles of Association. Furthermore, the Meeting
decided not to pay dividend for the period of 2009.

The Annual General Meeting decided to set the number of Board members at three
(3) and re-elected the current members of the Board: Johan Hammarén, Tuomo
Lähdesmäki, and Kari Vuorialho. The Meeting re-elected PricewaterhouseCoopers
Oy as the company's auditor for the 2010 financial year.

Annual remuneration of EUR 24,000 will be paid to the chairman of the Board and
EUR 12,000 to the other Board members. 60 percent of the annual remuneration
will be paid in cash and 40 percent in company shares, which will be acquired
and distributed to Board members. EUR 1,000 per meeting will be paid to the
chairman and EUR 500 per meeting to the other members. The members of the Board
residing outside of the Greater Helsinki Area are reimbursed for reasonable
travel and lodging expenses. The auditor will be paid according to invoice.

The Annual General Meeting decided to amend the Articles of Association such
that the following sentence was added to the end of Article 10 (notice of
meeting): “However, the notice to the Annual General Meeting must be conveyed
no later than nine (9) days before the record date of the Annual General
Meeting.” The amendment is based on the recent amendment of the Companies Act.

THE BOARD OF ASPOCOMP GROUP PLC., AUTHORIZATIONS GIVEN TO THE BOARD

In its organization meeting, the Board of Directors of Aspocomp Group Plc.
re-elected Tuomo Lähdesmäki as chairman of the Board. As the Board only
comprises three (3) members, Board committees were not established.

The Annual General Meeting 2008 of Aspocomp Group Plc. authorized the Board to
decide on issuing new shares and conveying the Aspocomp shares held by the
company. A maximum of 55,000,000 new shares can be issued and/or granted on the
basis of special rights. The authorization is valid five years from the
respective Annual General Meeting.

The Annual General Meeting 2008 also decided about issuing stock options to the
CEO. The Board of Directors has not granted the said stock options.

Details of the authorizations can be found on pages 10-11 of the Annual Report
2008 (www.aspocomp.com/linked/investor/ar_2008.pdf).

ASSESSMENT OF BUSINESS RISKS

Significant indebtedness

The Aspocomp Group's interest-bearing liabilities at March 31, 2011 had a
nominal value of about EUR 23.5 million and amounted to about EUR 22.1 million
under IFRS.

Liquidity and financial risks

Because of the agreement on debt restructuring, management of the Group's
liquidity risk is based on the cash assets of the parent company and the cash
flow generated by the Oulu plant. If Aspocomp Group Plc. does not obtain
financing from Aspocomp Oulu Oy or other ways of financing, the company may
ultimately become insolvent.

Litigations

In 2007, the French Supreme Court ordered the company to pay approximately EUR
11 million to 388 former employees of Aspocomp S.A.S. The company made the
payment in 2007.

In January 2009, the Labor Court of Evreux, France ruled that the company has
to pay approximately EUR 0.5 million in compensation, with interest, to a
further 13 former employees. Aspocomp appealed, but the Court of Appeal of
Rouen confirmed the decision in May 2010. The payment has not been made, but
Aspocomp made a related provision in its 2007 financial statements.

In October 2010, Aspocomp was informed that six former employees reasserted
their suspended claims in a French Court. In addition, one new claim has been
made. These hearings will be held in May 2011. The total amount of the claims
is EUR 0.3 million.

The aforementioned compensations and claims do not have a profit impact during
the financial year, because Aspocomp has made a reservation in its 2007
financial statements.

There is a risk that the remaining approximately 90 employees may also
institute proceedings. Under legislation that came into effect in June 2008,
the statute of limitations for filing a suit is five years after the law came
into effect.

Increased material cost and lack of capacity

Strong global PCB demand and higher raw material prices have raised the prices
of laminates and chemicals used in PCB production. If Aspocomp fails to
transfer the increased raw material cost to its products, profitability will
weaken.

Increasingly complicated PCB designs add load to certain parts of the PCB
production process. If the company fails to add capacity to these
sub-processes, the total production volume will suffer, and the potential
demand will not materialize as net sales growth.

OUTLOOK FOR THE FUTURE

The outlook for operations in Oulu and Group's lean cost structure enable the
continuity of Aspocomp's operations. Group's financial position is
satisfactory.

As operations focus on prototypes and quick-turn deliveries, it is very
difficult to forecast full-year net sales. The company expects to see net sales
growth in 2011. The operating result is anticipated to be in the black, but to
fall short of 2010.

In addition to developing the continuing operations of the company, the Board
of Directors is looking into various structural development solutions,
including carrying out company reorganization in the future.

TABLES AND ACCOUNTING POLICIES

The reported operations include Aspocomp Oulu Oy and the Group's parent
company, Aspocomp Group Plc. These operations comprise a single business
segment.

All figures are unaudited. The interim report has been prepared in accordance
with IAS 34, Interim Financial Reporting. The accounting principles that were
applied in the preparation of the financial statements of December 31, 2010
have been applied in the preparation of this report, with the exception of the
following new or modified standards that the company has applied as from
January 1, 2011:

• IAS 1 (amendment), Presentation of Financial Statements - Statement of
  Changes in Equity
• IAS 24 (revised), Related Party Disclosures
• IAS 27 (amendment), Consolidated and Separate Financial Statements
• IAS 32 (amendment), Financial Instruments: Presentation - Classification of
  Rights Issues
• IAS 34 (amendment), Interim Financial Reporting
• IFRS 3 (amendments), Measurement of Non-controlling Interests
• IFRS 7 (amendment), Financial Instruments: Financial Statement Disclosures
• IFRIC 14 (amendment), Prepayments of a Minimum Funding Requirement
• IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments

The application of the aforementioned standards did not have a significant
impact on the reported figures.

PROFIT & LOSS STATEMENT, JANUARY-MARCH 1-3/11 1-3/10 1-12/1
0
1000 e % 1000 e % 1000 e %
NET SALES 4 921 100,0 4 348 100,0 18 785 100,0
Other operating income 1 0,0 65 1,5 231 1,2
Materials and services -1 566 -31,8 -1 493 -34,3 -5 912 -31,5
Personnel expenses -1 554 -31,6 -1 216 -28,0 -5 750 -30,6
Other operating costs -1 034 -21,0 -1 000 -23,0 -4 250 -22,6
Depreciation and amortization -327 -6,6 -316 -7,3 -1 265 -6,7

---

OPERATING PROFIT/LOSS 442 9,0 387 8,9 1 841 9,8
Financial income and expenses -307 -6,2 -304 -7,0 -1 167 -6,2

---

PROFIT/LOSS BEFORE TAX 135 2,7 83 1,9 673 3,6
Income taxes -3 -0,1 2 0,0 2 0,0

---

PROFIT/LOSS FOR THE PERIOD 133 2,7 85 2,0 675 3,6
Other comprehensive income for the period, net of tax
Translation differences 1 0,0 7 0,2 15 0,1

---

TOTAL COMPREHENSIVE INCOME FOR 133 2,7 92 2,1 690 3,7
THE PERIOD
Profit/loss for the period attributable to:
Non-controlling interests 76 1,6 63 1,4 293 1,6
Equity shareholders 56 1,1 22 0,5 382 2,0
Total comprehensive income attributable to:
Non-controlling interests 76 1,6 63 1,4 293 1,6
Equity shareholders 57 1,1 29 0,7 397 2,1
Earnings per share
Basic EPS 0,00 0,00 0,01
Diluted EPS 0,00 0,00 0,01

CONSOLIDATED BALANCE SHEET 3/11 3/10 Change 12/10
1000 e 1000 e % 1000 e
ASSETS
NON-CURRENT ASSETS
Intangible assets 3 000 3 000 0,0 3 000
Tangible assets 3 425 3 408 0,5 3 669
Available for sale investments 16 44 -62,9 16
Other non-current receivables 16 698 16 313 2,4 16 601

---

TOTAL NON-CURRENT ASSETS 23 139 22 765 1,6 23 287
CURRENT ASSETS
Inventories 2 162 1 816 19,1 2 114
Short-term receivables 4 485 4 309 4,1 3 763
Cash and bank deposits 3 857 3 056 26,2 4 712

---

TOTAL CURRENT ASSETS 10 505 9 181 14,4 10 589
TOTAL ASSETS 33 644 31 946 5,3 33 876
SHAREHOLDERS' EQUITY AND LIABILITIES
Share capital 20 082 20 082 0,0 20 082
Share premium 27 918 27 918 0,0 27 918
Treasury shares -758 -758 0,0 -758
Special reserve 45 989 45 989 0,0 45 989
Reserve for invested non-restricted equity 23 885 23 885 0,0 23 885
Retained earnings -114 224 -114 649 -0,4 -114 281
Equity attributable to shareholders 2 891 2 467 17,2 2 835
Non-controlling interests 835 769 8,6 758

---

TOTAL EQUITY 3 726 3 236 15,1 3 593
Long-term financing loans 20 640 21 996 -6,2 20 522
Provisions 215 319 -32,6 215
Short-term financing loans 1 503 189 694,6 1 503
Trade and other payables 7 559 6 205 21,8 8 042

---

TOTAL LIABILITIES 29 918 28 710 4,2 30 283
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 33 644 31 946 5,3 33 876

CONSOLIDATED CHANGES IN EQUITY, JANUARY-MARCH
1000 e
Equity attributable to the shareholders of the parent company
Trans Non-
la Re cont
tion tai rol
Share Share Other Own diffe ned ling
capi pre re sha ren earn inte Total
tal mium serve res ces ings Total rests equity

---

Balance at 20 082 27 918 69 874 -758 6 -114 287 2 835 758 3 593
1.1.11
Comprehensive income for the period 1 56 57 76 133
Translation differences 0 0 0

---

Balance at 20 082 27 918 69 874 -758 6 -114 230 2 892 835 3 726
31.3.11
Equity attributable to the shareholders of the parent company
Trans Non-
la Re cont
tion tai rol
Share Share Other Own diffe ned ling
capi pre re sha ren earn inte Total
tal mium serve res ces ings Total rests equity

---

Balance at 20 082 27 918 69 874 -758 -9 -114 669 2 438 706 3 143
1.1.10
Comprehensive income for the period 22 22 63 85
Translation differences 7 7 7

---

Balance at 20 082 27 918 69 874 -758 -2 -114 647 2 467 769 3 236
31.3.10

CONSOLIDATED CASH FLOW STATEMENT, JANUARY-MARCH
1000 e 1-3/11 1-3/10 1-12/10
Profit for the period 132 85 675
Adjustments 637 642 2 286
Change in working capital -1 456 78 1 096
Received interest income and dividends 7 1 43
Paid interest expenses -16 -2 -6
Paid taxes -3 2 1

---

Operational cash flow -698 805 4 095
Investments -113 -691 -1 754
Proceeds from sale of property, plant and equipment 0 0 75

---

Cash flow from investments -113 -691 -1 679
Decrease in financing -43 -96 -742
Increase in financing 0 0 0

---

Cash flow from financing -43 -96 -742
Change in cash and cash equivalents -854 18 1 674
Cash and cash equivalents at the beginning of period 4 712 3 038 3 038
Currency exchange differences 0 0 0

---

Cash and cash equivalents at the end of period 3 857 3 056 4 712

KEY FINANCIAL INDICATORS 3/11 3/10
Equity per share, EUR 0,06 0,05
Equity ratio, % 11,1 10,1
Gearing, % 490,8 591,2
Earnings per share (EPS)
Basic and diluted EPS, EUR 0,00 0,00

CONTINGENT LIABILITIES
1000 e 3/11 3/10 12/10
Mortgages given as security for bank loans
shares of a subsidiary 5 514 5 514 5 514
other receivables 16 697 16 313 16 601
Operating lease liabilities 670 666 670
Other liabilities 100 100 100

---

Total 22 981 22 593 22 885

FORMULAS FOR KEY INDICATORS
Equity/share, EUR = Equity attributable to
shareholders
--------------------------
Number of shares at the
end of period
Equity ratio, % = Equity x 100
--------------------------
Total assets - advances
received
Gearing, % = Net interest-bearing x 100
liabilities
-------------------------- Total equity
Earnings/share (EPS), EUR = Profit attributable to
equity shareholders
-------------------------------------------------
Adjusted weighted average number of shares
outstanding

All figures are unaudited.

Espoo, April 20, 2011

Aspocomp Group Plc.
Board of Directors

For further information, please contact Sami Holopainen, CEO,
tel. +358 9 59 181.

www.aspocomp.com

Some statements in this stock exchange release are forecasts and actual results
may differ materially from those stated. Statements in this stock exchange
release relating to matters that are not historical facts are forecasts. All
forecasts involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performances or achievements of the
Aspocomp Group to be materially different from any future results, performances
or achievements expressed or implied by such forecasts. Such factors include
general economic and business conditions, fluctuations in currency exchange
rates, increases and changes in PCB industry capacity and competition, and the
ability of the company to implement its investment program.

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