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CHROMA Call Transcript 2023

Feb 23, 2023

52029_rns_2023-02-23_49b55f15-219b-4ba0-865f-2bde320f942e.pdf

Call Transcript

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CHROMA ATE INC.

2022.3Q Earnings Conference Call

Paul Ying, CFO

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31[st] October, 2022

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

Year 2022.1~3Q Condensed Consolidated Income Statement
Condensed Consolidated P&L
(In Million NTD, except for EPS in NTD)
2022.1~3Q
%
2021.1~3Q
%
YoY %
Net Sales
15,994
100%
12,994
100%
23%
Consolidated Sales of Testing Equipment Business
14,459
90%
10,020
77%
44%
Consolidated Sales of MAS
642
4%
509
4%
26%
Consolidated Sales of New Material
635
4%
2,139
16%
(70%)
Others
258
2%
326
3%
(21%)
Cost of Goods Sold
(7,410)
(46%)
(6,678)
(51%)
11%
Gross Profit
8,584
54%
6,316
49%
36%
Operating Expenses:
General & Administration
(3,231)
(20%)
(2,869)
(22%)
13%
Research & Development
(1,368)
(9%)
(1,103)
(9%)
24%
Operating Income
3,985
25%
2,344
18%
70%
Non-Operating Income (Expenses), net
1,337
8%
2,046
16%
(35%)
Income (Loss) Before Tax
5,322
33%
4,390
34%
21%
Income Tax
(1,014)
(6%)
(800)
(6%)
27%
Net Income
4,308
27%
3,590
28%
20%
Other Comprehensive Income (Losses)
679
4%
38
-
n/a
Comprehensive Income
$ 4,987
31%
$ 3,628
28%
37%
Net Income (Losses) Attributable To:
Shareholders of the Parent
4,243
27%
3,521
27%
21%
Noncontrolling Interests
65
-
69
1%
(6%)
$ 4,308
27%
$ 3,590
28%
20%
EPS (Basic)
$ 10.09
$ 8.39
20%
EPS (Diluted)
$ 10.01
$ 8.34
20%
Year 2022.1~3Q Condensed Consolidated Income Statement
Condensed Consolidated P&L
(In Million NTD, except for EPS in NTD)
2022.1~3Q
%
2021.1~3Q
%
YoY %
Net Sales
15,994
100%
12,994
100%
23%
Consolidated Sales of Testing Equipment Business
14,459
90%
10,020
77%
44%
Consolidated Sales of MAS
642
4%
509
4%
26%
Consolidated Sales of New Material
635
4%
2,139
16%
(70%)
Others
258
2%
326
3%
(21%)
Cost of Goods Sold
(7,410)
(46%)
(6,678)
(51%)
11%
Gross Profit
8,584
54%
6,316
49%
36%
Operating Expenses:
General & Administration
(3,231)
(20%)
(2,869)
(22%)
13%
Research & Development
(1,368)
(9%)
(1,103)
(9%)
24%
Operating Income
3,985
25%
2,344
18%
70%
Non-Operating Income (Expenses), net
1,337
8%
2,046
16%
(35%)
Income (Loss) Before Tax
5,322
33%
4,390
34%
21%
Income Tax
(1,014)
(6%)
(800)
(6%)
27%
Net Income
4,308
27%
3,590
28%
20%
Other Comprehensive Income (Losses)
679
4%
38
-
n/a
Comprehensive Income
$ 4,987
31%
$ 3,628
28%
37%
Net Income (Losses) Attributable To:
Shareholders of the Parent
4,243
27%
3,521
27%
21%
Noncontrolling Interests
65
-
69
1%
(6%)
$ 4,308
27%
$ 3,590
28%
20%
EPS (Basic)
$ 10.09
$ 8.39
20%
EPS (Diluted)
$ 10.01
$ 8.34
20%
Year 2022.1~3Q Condensed Consolidated Income Statement
Condensed Consolidated P&L
(In Million NTD, except for EPS in NTD)
2022.1~3Q
%
2021.1~3Q
%
YoY %
Net Sales
15,994
100%
12,994
100%
23%
Consolidated Sales of Testing Equipment Business
14,459
90%
10,020
77%
44%
Consolidated Sales of MAS
642
4%
509
4%
26%
Consolidated Sales of New Material
635
4%
2,139
16%
(70%)
Others
258
2%
326
3%
(21%)
Cost of Goods Sold
(7,410)
(46%)
(6,678)
(51%)
11%
Gross Profit
8,584
54%
6,316
49%
36%
Operating Expenses:
General & Administration
(3,231)
(20%)
(2,869)
(22%)
13%
Research & Development
(1,368)
(9%)
(1,103)
(9%)
24%
Operating Income
3,985
25%
2,344
18%
70%
Non-Operating Income (Expenses), net
1,337
8%
2,046
16%
(35%)
Income (Loss) Before Tax
5,322
33%
4,390
34%
21%
Income Tax
(1,014)
(6%)
(800)
(6%)
27%
Net Income
4,308
27%
3,590
28%
20%
Other Comprehensive Income (Losses)
679
4%
38
-
n/a
Comprehensive Income
$ 4,987
31%
$ 3,628
28%
37%
Net Income (Losses) Attributable To:
Shareholders of the Parent
4,243
27%
3,521
27%
21%
Noncontrolling Interests
65
-
69
1%
(6%)
$ 4,308
27%
$ 3,590
28%
20%
EPS (Basic)
$ 10.09
$ 8.39
20%
EPS (Diluted)
$ 10.01
$ 8.34
20%
Condensed Consolidated P&L
(In Million NTD, except for EPS in NTD)
2022.1~3Q
%
2021.1~3Q
%
YoY %
Net Sales 15,994
100%
12,994
100%
23%
Consolidated Sales of Testing Equipment Business 14,459
90%
10,020
77%
44%
Consolidated Sales of MAS 642
4%
509
4%
26%
Consolidated Sales of New Material 635
4%
2,139
16%
(70%)
Others 258
2%
326
3%
(21%)
Cost of Goods Sold (7,410)
(46%)
(6,678)
(51%)
11%
Gross Profit 8,584
54%
6,316
49%
36%
Operating Expenses:
General & Administration
Research & Development
(3,231)
(20%)
(1,368)
(9%)
(2,869)
(22%)
13%
(1,103)
(9%)
24%
Operating Income 3,985
25%
2,344
18%
70%
Non-Operating Income (Expenses), net 1,337
8%
2,046
16%
(35%)
Income (Loss) Before Tax
Income Tax
5,322
33%
(1,014)
(6%)
4,390
34%
21%
(800)
(6%)
27%
Net Income 4,308
27%
3,590
28%
20%
Other Comprehensive Income (Losses) 679
4%
38
-
n/a
Comprehensive Income $ 4,987
31%
$ 3,628
28%
37%
Net Income (Losses) Attributable To:
Shareholders of the Parent
Noncontrolling Interests
4,243
27%
65
-
3,521
27%
21%
69
1%
(6%)
$ 4,308
27%
$ 3,590
28%
20%
EPS (Basic) $ 10.09 $ 8.39
20%
EPS (Diluted) $ 10.01 $ 8.34
20%

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2022/2Q included the gain from disposal of investment (ADLINK) of NTD 414 million plus revert the gain from disposal of property to ADLINK of NTD 90m.

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2021/1Q included the gain from disposal of property and plant (Hua-ya HQ) of NTD 1,730 million with Capital gain tax of NTD 200 million.

5

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Year 2022.3Q Condensed Consolidated Income Statement
Condensed Consolidated P&L 2022.3Q % 2022.2Q % QoQ % 2021.3Q % YoY %
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Condensed Consolidated P&L 2022.3Q
%
2022.2Q
%
QoQ %
2021.3Q
%
YoY %
2022.2Q
%
QoQ %
2021.3Q
%
YoY %
(In Million NTD, except for EPS in NTD)
Net Sales 6,660
100%
4,935
100%
35%
4,276
100%
56%
Consolidated Sales of Testing Equipment Business 6,341
95%
4,644
94%
37%
3,315
78%
91%
Consolidated Sales of MAS 233
4%
188
4%
24%
145
3%
61%
Consolidated Sales of New Material 0
0%
17
-
n/a
682
16%
n/a
Others 86
1%
86
2%
-
134
3%
(36%)
Cost of Goods Sold (3,163)
(47%)
(2,033)
(41%)
56%
(2,132)
(50%)
48%
Gross Profit 3,497
53%
2,902
59%
21%
2,144
50%
63%
Operating Expenses:
General & Administration
Research & Development
(1,192)
(18%)
(524)
(8%)
(1,093)
(22%)
9%
(922)
(22%)
29%
(443)
(9%)
18%
(357)
(8%)
47%
Operating Income 1,781
27%
1,366
28%
30%
865
20%
106%
Non-Operating Income (Expenses), net 475
7%
696
14%
(32%)
148
4%
221%
Income (Loss) Before Tax
Income Tax
2,256
34%
(491)
(7%)
2,062
42%
9%
1,013
24%
123%
(376)
(8%)
31%
(191)
(4%)
157%
Net Income 1,765
27%
1,686
34%
5%
822
20%
115%
Other Comprehensive Income (Losses) 229
3%
161
3%
42%
(168)
(5%)
n/a
Comprehensive Income $ 1,994
30%
$ 1,847
37%
8%
$ 654
15%
205%
Net Income (Losses) Attributable To:
Shareholders of the Parent
Noncontrolling Interests
1,731
26%
34
1%
1,661
34%
4%
793
19%
118%
25
-
36%
29
1%
17%
$ 1,765
27%
$ 1,686
34%
5%
$ 822
20%
115%
EPS (Basic) $ 4.11 $ 3.95
4%
$ 1.89
117%
EPS (Diluted) $ 4.07 $ 3.92
4%
$ 1.87
118%

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2022/2Q included the gain from disposal of investment (ADLINK) of NTD 414 million plus revert the gain from disposal of property to ADLINK of NTD 90m.

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6

Balance Sheet Highlights & Financial Ratio

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Consolidated
(In Million NTD)
2022. Sept 2021. Dec + / - %
Balance Sheet Highlights
Cash & Short Term Investments 5,480 4,947 11%
Inventory 4,783 3,916 22%
Short Term Debt 3,774 2,114 79%
Long Term Debt 1,272 1,447 - 12%
Shareholders Equity 21,128 18,947 12%
Total Assets 34,364 29,546 16%
Inventory Turnover (Day) 158 139
AR Turnover (Day) 75 98
AP Turnover (Day) 106 114
Net Debt to Equity (%) Net Cash Net Cash
ROE (%) 28% 24%
ROA (%) 18% 15%
Cash Position 2022.1~3Q 2021.1~3Q YoY
EBITDA 5,867 4,838 21%
Cash Flow from Operation 2,681 1,303 106%
Free Cash Flow 2,597 3,224 (19%)

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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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7

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Quarterly Highlights

2022.3Q Key Points

  • Sales Revenue: $ 4,170 million,

  • up 12% QoQ, up 50% YoY

  • Gross Margin: 54%

  • Operating Margin: 29%

  • Net Income: NT$ 1,731 million, up 4% QoQ, up 118% YoY

  • 2022.3Q Highlights:

− The major growth in third quarter is mainly contributed from Test Instruments & ATS and Semiconductor / Photonics sectors, which presented a growth of 31% and 78% YoY

respectively.

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Sales Revenues Gross Margin Operating Margin

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4,170
3,720
2,867
2,774
2,666
2,449 2,419
53% 54% 52% 51% 54%
51%
48%
29%
28%
26% 25% 25%
22%
18%
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8

2021.1Q 2021.2Q 2021.3Q 2021.4Q 2022.1Q 2022.2Q 2022.3Q

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Year 2022.3Q Condensed Income Statement

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Condensed P&L – Parent Only 2022.3Q % 2022.2Q % QoQ 2021.3Q % YoY
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2022.3Q
%
2022.3Q
%
(In Million NTD, except for EPS in NTD) %
%
Net Sales 4,170
100%
3,720
100%
12%
2,774
100%
50%
Cost of Goods Sold (1,911)
(46%)
(1,810)
(49%)
6%
(1,355)
(49%)
41%
Gross Profit 2,259
54%
1,910
51%
18%
1,419
51%
59%
Operating Expenses:
General & Administration
Research & Development
(590)
(14%)
(465)
(11%)
(490)
(13%)
20%
(386)
(14%)
53%
(380)
(10%)
22%
(334)
(12%)
39%
Operating Income 1,204
29%
1,040
28%
16%
699
25%
72%
Non-Operating Income (Expenses), net 883
21%
902
24%
(2%)
243
9%
263%
Income (Loss) Before Tax 2,087
50%
1,942
52%
7%
942
34%
122%
Income Tax (356)
(9%)
(281)
(7%)
27%
(149)
(5%)
139%
Net Income $ 1,731
42%
$ 1,661
45%
4%
$ 793
29%
118%
Other Comprehensive Income 211
5%
154
4%
37%
(167)
(6%)
n/a
Comprehensive Income $ 1,942
47%
$ 1,815
49%
7%
$ 626
23%
210%
EPS (Basic) $ 4.11 $ 3.95
4%
$ 1.89
117%
EPS (Diluted) $ 4.07 $ 3.92
4%
$ 1.87
118%

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100% owned subsidiaries’ income - MAS: NTD 134m.

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2022/2Q included the gain from disposal of investment (ADLINK) of NTD 414 million plus revert the gain from disposal of property to ADLINK of NTD 90m.

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9

Year 2022.1~3Q Condensed Income Statement

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2022.1~3Q % 2021.1~3Q % YoY
Condensed P&L – Parent Only
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2022.1~3Q
%
2022.1~3Q
%
(In Million NTD, except for EPS in NTD) %
Net Sales 10,757
100%
7,890
100%
36%
Cost of Goods Sold (5,219)
(48%)
(3,741)
(47%)
40%
Gross Profit 5,538
52%
4,149
53%
33%
Operating Expenses:
Selling and General & Administration
Research & Development
(1,469)
(14%)
(1,187)
(11%)
(1,133)
(15%)
30%
(1,011)
(13%)
17%
Operating Income 2,882
27%
2,005
25%
44%
Non-Operating Income (Expenses), net 2,094
19%
2,173
28%
(4%)
Income (Loss) Before Tax 4,976
46%
4,178
53%
19%
Income Tax (732)
(7%)
(657)
(8%)
11%
Net Income $ 4,244
39%
$ 3,521
45%
21%
Other Comprehensive Income 644
6%
46
-
n/a
Comprehensive Income $ 4,888
45%
$ 3,567
45%
37%
EPS (Basic) $ 10.09 $ 8.39
20%
EPS (Diluted) $ 10.01 $ 8.34
20%

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100% owned subsidiaries’ income - MAS: NTD 160m.

10

Balance Sheet Highlights & Financial Ratio

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Parent Only
(In Million NTD)
Balance Sheet Highlights
2022. Sept
2021. Dec
+ / - %
Cash & Short Term Investment
1,021
1,274
- 20%
Inventory
3,356
2,989
12%
Short Term Debt
3,100
1,400
121%
Long Term Debt
1,050
1,250
- 16%
Shareholders Equity
20,618
18,514
11%
Total Assets
29,483
25,359
16%
Inventory Turnover (Day)
164
199
AR Turnover (Day)
93
89
AP Turnover (Day)
79
95
Net Debt to Equity (%)
15%
8%
ROE (%)
29%
24%
ROA (%)
21%
17%
Cash Position
2022. 1~3Q
2021. 1~3Q
YoY
EBITDA
5,339
4,457
20%
Cash Flow from Operation
926
775
20%
Free Cash Flow
1,305
3,155
(59%)

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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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11

OPERATION HIGHLIGHT

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12

2022.3Q & 1~3Q Product Mix and Consolidated Sales Breakdown

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(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
2022.3Q
%
QoQ
YoY
2022.1~3Q
%
YoY
2021
%
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)
2,032
49%
26%
31%
5,206
48%
29%
5,531
54%
Semiconductor / Photonics Test Solutions 1,652
40%
13%
78%
3,982
37%
43%
3,589
35%
Turnkey Solutions 59
1%
(79%)
119%
514
5%
89%
347
3%
Service & Others 427
10%
16%
58%
1,055
10%
31%
841
8%
Total of Parent Company Sales 4,170
100%
12%
50%
10,757
100%
36%
10,308
100%
+ Sales from Overseas Operations &
Related Subsidiaries
2,171
135%
301%
3,702
74%
3,247
6,341
95%
37%
91%
14,459
90%
44%
13,555
77%
233
4%
24%
61%
642
4%
26%
0
-
n/a
n/a
635
4%
(70%)
86
1%
-
(36%)
258
2%
(21%)
780
4%
2,804
16%
445
3%
6,660
100%
35%
56%
15,994
100%
23%
17,584
100%

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