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CHROMA Call Transcript 2020

Nov 4, 2020

52029_rns_2020-11-04_ffae57b4-bebe-4ea6-8b18-463305361383.pdf

Call Transcript

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CHROMA ATE INC.

2020.3Q Earnings Conference Call

Paul Ying, CFO

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29[th] October, 2020

1

Disclaimer

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This presentation contains some forward-looking statements that are subject to substantial risks and uncertainties. Typically, these statements contain words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “plan”, “forecast”, “project”, “predict”, “potential”, “continue”, “may”, “should”, “will”, and “would” or similar words. You should consider these forward-looking statements carefully because such statements are only our expectations or projections about future events, and actual results may differ materially from those expressed or implied by such statements. The forward-looking statements in this presentation include, but are not limited to, growth rates for various markets estimated by third party sources, future products and technology development, widespread market acceptance of the hosted delivery model, future revenue growth and profitability. You should be cautioned that the forward-looking statements are no guarantee of our future performance. The forward-looking statements contained in this presentation are made only as of the date of this presentation and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances, except as required by law.

This presentation and the information contained herein are the property of Chroma Ate Inc.

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2

Agenda

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•
Financial Review
•
Operation Highlights
•
Q&A
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3

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FINANCIAL REVIEW

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4

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Year 2020.1~3Q Condensed Consolidated Income Statement

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Condensed Consolidated P&L 2020.1~3Q % 2019.1~3Q % YoY %
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2020.1~3Q
%		 2020.1~3Q
%
(In Million NTD, except for EPS in NTD)
Net Sales 11,355
100%		 9,432
100%
20%
Consolidated Sales of Testing Equipment Business 8,835
78%		 7,124
76%
24%
Consolidated Sales of MAS 509
4%		 697
7%
(27%)
Consolidated Sales of New Material 1,785
16%		 1,435
15%
24%
Others 226
2%		 176
2%
28%
Cost of Goods Sold (5,742)
(51%)		 (4,849)
(51%)
18%
Gross Profit 5,613
49%		 4,583
49%
22%
Operating Expenses:
General & Administration
Research & Development		 (2,595)
(23%)
(990)
(8%)		 (2,287)
(24%)
13%
(954)
(10%)
4%
Operating Income 2,028
18%		 1,342
15%
51%
Non-Operating Income (Expenses), net 103
1%		 168
1%
(39%)
Income (Loss) Before Tax
Income Tax		 2,131
19%
(461)
(4%)		 1,510
16%
41%
(244)
(3%)
89%
Net Income 1,670
15%		 1,266
13%
32%
Other Comprehensive Income (Losses) (24)
-		 (34)
-
(29%)
Comprehensive Income $ 1,646
15%		 $ 1,232
13%
34%
Net Income (Losses) Attributable To:
Shareholders of the Parent
Noncontrolling Interests		 1,637
15%
33
-		 1,251
13%
31%
15
-
120%
$ 1,670
15%		 $ 1,265
13%
32%
EPS (Basic) $ 3.92 $ 3.03
29%
EPS (Diluted) $ 3.89 $ 2.99
30%

5

Balance Sheet Highlights & Financial Ratio

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Consolidated
(In Million NTD)		 2020. Sept 2019. Dec + / - %
Balance Sheet Highlights
Cash & Short Term Investments 4,072 3,455 18%
Inventory 3,034 2,665 14%
Short Term Debt 3,162 2,381 33%
Long Term Debt 3,076 2,422 27%
Shareholders Equity 15,307 14,785 4%
Total Assets 26,919 25,437 6%
Inventory Turnover (Day) 134 127
AR Turnover (Day) 123 133
AP Turnover (Day) 118 129
Net Debt to Equity (%) 14% 9%
ROE (%) 15% 13%
ROA (%) 8% 8%
Cash Position 2020.1~3Q 2019.1~3Q YoY
EBITDA 2,500 1,884 33%
Cash Flow from Operation 1,103 867 27%
Free Cash Flow 277 (1,191) n/a

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All ROE + ROA has been annualized.

Free Cash Flow = Net Cash Provided by Operating Activities + (Net Cash used by Investing Activities)

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6

Quarterly Highlights

2020.3Q Key Points

  • Sales Revenue: $ 2,394 million,

up 4% QoQ, up 22% YoY

  • Gross Margin: 55%

  • Operating Margin: 27%

  • Net Income: NT$ 583 million,

  • flat QoQ, up 21% YoY

  • 2020.3Q Highlights:

  • The sales revenues in third quarter is

mainly contributed from Semiconductor /

Photonics sector and Test Measurement & ATS.

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Sales Revenues

Gross Margin Operating Margin

2,571

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2,394
2,313
2,053
2,037
1,961
1,541
55% 55% 55%
51% 52% 52%
47%
27%
25% 25%
23%
20% 21%
19%
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2019.1Q 2019.2Q 2019.3Q 2019.4Q 2020.1Q 2020.2Q 2020.3Q

7

Year 2020.3Q Condensed Income Statement

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Condensed P&L – Parent Only 2020.3Q % 2020.2Q % QoQ 2019.3Q % YoY
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2020.3Q
%		 2020.3Q
%
(In Million NTD, except for EPS in NTD) %
%
Net Sales 2,394
100%		 2,313
100%
4%
1,961
100%
22%
Cost of Goods Sold (1,088)
(45%)		 (1,112)
(48%)
(2%)
(948)
(48%)
15%
Gross Profit 1,306
55%		 1,201
52%
9%
1,013
52%
29%
Operating Expenses:
General & Administration
Research & Development		 (353)
(15%)
(307)
(13%)		 (330)
(14%)
7%
(265)
(13%)
33%
(302)
(13%)
2%
(304)
(16%)
1%
Operating Income 646
27%		 569
25%
14%
444
23%
45%
Non-Operating Income (Expenses), net 50
2%		 145
6%
(66%)
106
5%
(53%)
Income (Loss) Before Tax 696
29%		 714
31%
(3%)
550
28%
27%
Income Tax (113)
(5%)		 (130)
(6%)
(13%)
(70)
(4%)
61%
Net Income $ 583
24%		 $ 584
25%
-
$ 480
24%
21%
Other Comprehensive Income 47
2%		 (1)
-
n/a
(95)
(4%)
n/a
Comprehensive Income $ 630
26%		 $ 583
25%
8%
$ 385
20%
64%
EPS (Basic) $ 1.39 $ 1.40
(1%)
$ 1.16
20%
EPS (Diluted) $ 1.38 $ 1.39
(1%)
$ 1.15
20%

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100% owned subsidiaries’ income - New Material: 5m (QoQ ↑25%, YoY ↓ 38%), MAS: (106m).

8

Year 2020.1~3Q Condensed Income Statement

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2020.1~3Q % 2019.1~3Q % YoY
Condensed P&L – Parent Only
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2020.1~3Q
%		 2020.1~3Q
%
(In Million NTD, except for EPS in NTD) %
Net Sales 6,759
100%		 5,539
100%
22%
Cost of Goods Sold (3,129)
(46%)		 (2,647)
(48%)
18%
Gross Profit 3,630
54%		 2,892
52%
26%
Operating Expenses:
Selling and General & Administration
Research & Development		 (1,025)
(16%)
(887)
(13%)		 (892)
(16%)
15%
(860)
(15%)
3%
Operating Income 1,717
25%		 1,139
21%
51%
Non-Operating Income (Expenses), net 259
4%		 265
5%
(2%)
Income (Loss) Before Tax 1,976
29%		 1,405
26%
41%
Income Tax (339)
(5%)		 (154)
(3%)
120%
Net Income $ 1,637
24%		 $ 1,251
23%
31%
Other Comprehensive Income (15)
-		 (35)
(1%)
(57%)
Comprehensive Income $ 1,622
24%		 $ 1,216
22%
33%
EPS (Basic) $ 3.92 $ 3.03
29%
EPS (Diluted) $ 3.89 $ 2.99
30%

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Non-operating Income included 100% owned subsidiaries’ income - New Material: 20m (YoY ↓ 20%), MAS: (163m).

9

Balance Sheet Highlights & Financial Ratio

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Parent Only
(In Million NTD)		 2020. Sept 2019. Dec + / - %
Balance Sheet Highlights
Cash & Short Term Investment 770 459 68%
Inventory 2,381 2,026 18%
Short Term Debt 2,400 1,615 49%
Long Term Debt 2,850 2,285 25%
Shareholders Equity 14,986 14,489 3%
Total Assets 23,293 21,807 7%
Inventory Turnover (Day) 190 178
AR Turnover (Day) 109 123
AP Turnover (Day) 91 102
Net Debt to Equity (%) 30% 24%
ROE (%) 15% 13%
ROA (%) 10% 9%
Cash Position 2020. 1~3Q 2019.1~3Q YoY
EBITDA 2,168 1,590 36%
Cash Flow from Operation 816 1,160 (30%)
Free Cash Flow (106) (850) n/a

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All ROE + ROA has been annualized.

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Free Cash Flow = Net Cash Provided by Operating Activities + (Net Cash used by Investing Activities)

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10

OPERATION HIGHLIGHT

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11

2020.3Q Product Mix and Consolidated Sales Breakdown

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(Unit: Million NTD) 2020. 3Q % QoQ YoY
Test Instruments & Automatic Testing System (ATS) 1,262 53% 2% 16%
Semiconductor / Photonics Test Solutions 841 35% 2% 21%
Turnkey Solutions 26 1% (57%) (55%)
Service & Others 265 11% 42% 119%
Total of Parent Company Sales 2,394 100% 4% 22%
+ Sales from Overseas Operations & Related
Subsidiaries		 861 21% 72%
Chroma Consolidated Testing Equipment Business 3,255 78% 8% 32%
MAS 203 5% 57% (31%)
New Material 614 15% - 6%
Others 83 2% 28% 11%
Consolidated Sales 4,155 100% 9% 22%

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12

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2020.1~3Q Product Mix and Consolidated Sales Breakdown

(Unit: Million NTD)
Test Instruments & Automatic Testing
System (ATS)
Semiconductor / Photonics Test Solutions
Turnkey Solutions
Service & Others
Total of Parent Company Sales
+ Sales from Overseas Operations &
Related Subsidiaries
Chroma Consolidated Testing Equipment
Business
MAS
New Material
Other Subsidiaries
Consolidated Sales		 (Unit: Million NTD)
Test Instruments & Automatic Testing
System (ATS)
Semiconductor / Photonics Test Solutions
Turnkey Solutions
Service & Others
Total of Parent Company Sales
+ Sales from Overseas Operations &
Related Subsidiaries
Chroma Consolidated Testing Equipment
Business
MAS
New Material
Other Subsidiaries
Consolidated Sales		 (Unit: Million NTD)
Test Instruments & Automatic Testing
System (ATS)
Semiconductor / Photonics Test Solutions
Turnkey Solutions
Service & Others
Total of Parent Company Sales
+ Sales from Overseas Operations &
Related Subsidiaries
Chroma Consolidated Testing Equipment
Business
MAS
New Material
Other Subsidiaries
Consolidated Sales		 2020.1~3Q
%
YoY		 2019
%
Test Instruments & Automatic Testing
System (ATS)
Semiconductor / Photonics Test Solutions
Turnkey Solutions
Service & Others
Total of Parent Company Sales
+ Sales from Overseas Operations &
Related Subsidiaries
Chroma Consolidated Testing Equipment
Business		 Test Instruments & Automatic Testing
System (ATS)		 3,672
54%
12%		 4,605
57%
Semiconductor / Photonics Test Solutions 2,347
35%
42%		 2,311
28%
Turnkey Solutions 140
2%
(37%)		 632
8%
Service & Others 600
9%
61%		 563
7%
Total of Parent Company Sales 6,759
100%
22%		 8,111
100%
+ Sales from Overseas Operations &
Related Subsidiaries		 2,076
31%		 2,435
8,835
78%
24%		 10,546
76%
509
4%
(27%)
1,785
16%
24%
226
2%
28%		 1,009
7%
2,097
15%
258
2%
11,355
100%
20%		 13,910
100%

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13

Year 2020 Guidance

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Chroma first three quarters consolidated sales revenues reached 11.4 billion NTD, presented a growth of 20% YoY. The Parent Company sales reached 6.8 billion, presented a growth of 22% YoY, mainly contributed from Semiconductor / Photonics testing solutions which increased 42% compared to last year.

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2020 Business Outlook:

  • Rapidly development of AIoT (convergence of AI and IoT) and increasing the applications of high performance chips, such as CPU/GPU, Sensors, RF connections etc. which will be continuously driving the sales growth in Semiconductors / Photonics testing solutions. Particularly from:

  • High Reliability Testing Solutions : Burn-in Test, SLT Test and thermal control / temperature stimulation.

  • VCSEL / ToF testing for 3D sensing

  • OFC (Optical Fiber Communication) testing

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  • The Test Instruments & ATS for power testing solutions are launching new generation of power electronics testing, which will enhance the power density and functional testing for using in green energy, included EV related components, battery module / pack and smart-grid and 5G / Server related power testing.

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14

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Driving Innovation to Success

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Thank You !

Get more information by downloading Chroma ATE Solutions APP

www.chromaate.com

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Copyright © 2020 Chroma ATE Inc. All rights reserved.

15

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