CHROMA — Interim / Quarterly Report 2012

Feb 22, 2013

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Your Testing Quality is Our Commitment.

CHROMA ATE INC. 2013 4Q. 2012 Investor Conference

Paul Ying, CFO Leo Huang, Chairman & CEO

22[nd] February, 2013

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Disclaimer

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 forwardlooking 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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Agenda

• Corporate Profile

• • Quarterly Highlights

• • Financial Review

• • Operation Highlights

• • Q&A

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CORPORATE PROFILE

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Corporate Profile

• Founded in 1984, a world leading own brand

turnkey test & automation solution provider,

specialized in electronics test and measurement

instruments and system. Products cover test and

measurement instruments and system for various industries, and a turnkey solution of an integration of test and measurement with automation and manufacturing execution systems (MES).

• Key success: Precision, Reliability, Innovation

• 2012 Sales Revenues: NT$4,174 million

• 2012 Net Income: NT$945 million

• Total 1,245 employees, 37% in R&D (as Dec, 2012)

• Named as top 10 “Mittelstand” of Taiwan, by

Industrial Development Bureau, MoEA.

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Sales Revenues R&D Expenses
R&D Expenses in % of Sales Revenues
5,640
Parent Only
5,338
15%
14%
4,174
4,158
13%
12%
3,444
11%
603 630 637
557
481
2008 2009 2010 2011 2012
In Million NTD
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Financial Performance

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Consolidated Testing Sales Parent Only Sales Net Profit Gross Margin
Operating Margin
Consolidated NM Sales Others Parent Only
1,812
Consolidated MAS
55%
14,886 54% 1,523 54%
14,148 51%
52%
12,228
11,747
10,914 1,105
945
863 29%
25%
24%
5,640 5,338 21%
4,174
4,158
3,444 19%
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
In Million NTD
In Million NTD, Except EPS in NTD
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Financial Performance

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ROE Dividend
Parent Only EPS Cash dividend
Stock dividend
26%
5.05
4.06
20%
3.80
18%
3.38
14%
12% 2.50
2.52
2.50
2.00 2.00 2.00
0.50
0.30 0.40
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
In NTD
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Chroma Global Network

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Global Employees ： 1,639 � , Branch Offices x16, Distributors x58
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US :
Hong Kong : Neworld Irvine /
Foothill Ranch,
CA
Tempe, AZ
Europe : Netherlands / Finland Japan: Shin Yokohama
China : Shenzhen / Dongguan / Xiamen / Suzhou
Nanjing / Shanghai / Beijing / Chongqing
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Product Mix

A Turnkey Test and Automation Solution Provider

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Power
Electronics LCD Panel /
LCD Panel / Power
43.5% Video
Video Electronics
10.8%
6.7% 50.8%
Passive
Component
7.0%
Passive
Component
7.8%
IC 9.0%
Services Services
& Others & Others
7.4% * 6.3%
Customized LED 6.6% IC 16.7%
System Customized LED 3.1%
Solar 18.2%
1.6% System
Solar 2.8%
1.7%
Year 2011 Year 2012
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* Services & Others included general services and government projects.

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QUARTERLY HIGHLIGHTS

FINANCIAL REVIEW

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Quarterly Highlights

Sales Revenues Gross Margin Operating Margin

• Sales Revenue: $ 911 million,

down 28% QoQ, up 2% YoY

• Gross Margin: 57%

• Operating Margin: 19%

• Net Income: NT$ 183 million, down 42% QoQ, up 6% YoY

• 4Q 2012 Highlights:

− Gross margin improved, the highest in past eight quarters.

• The major sales driver is contributed

from IC sector, up 17% QoQ.

1,694

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1,465
1,289 1,266 57%
55% 56%
53% 53% 53%
52%
1,122
50%
911
891 875
29%
26%
24%
24%
22%
19% 19%
15%
In Million NTD
% of Sales Revenues
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1Q’11 2Q’11 3Q’11 4Q’11 1Q’12 2Q’12 3Q’12 4Q’12
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4Q’ 2012 Income Statement (QoQ / YoY Comparison)

Parent Only (In Million NTD, except for EPS in NTD) Net Sales Cost of Goods Sold Gross Profit Operating Expenses: General & Administration Research & Development Operating Income Non-Operating Income Non-Operating Expenses Income (Loss) Before Tax Income Tax Net Income EPS		4Q’ 2012 %	3Q’ 2012 % QoQ %	4Q’ 2011 % YoY % 891 100.0% 2% (421) (47.3%) (6%) 470 52.7% 10% (186) (20.8%) 3% (152) (17.1%) - 132 14.8% 30% 73 8.2% (36%) - - n/a 205 23.0% (2%) (32) (3.6%) (44%) 173 19.4% 6% $ 0.46 6%
		911 100.0%	1,266 100.0% (28%)
		(396) (43.5%)	(614) (48.5%) (36%)
		515 56.5%	652 51.5% (21%)
		(191) (20.9%) (152) (16.7%)	(200) (15.8%) (5%) (177) (14.0%) (14%)
		172 18.9%	275 21.7% (37%)
		47 5.2% (18) (2.0%)	95 7.5% (51%) (15) (1.2%) 20%
		201 22.1% (18) (2.0%)	355 28.0% (43%) (41) (3.2%) (56%)
		183 20.1%	314 24.8% (42%)
		$ 0.49	$ 0.84 (42%)

Non-operating Income included the gain from equity investments total of 6m (QoQ � 87%), including 100% owned subsidiaries - New Material: 3m (QoQ � 86%), MAS: 24m (QoQ � 60%). Currency loss of 16m.

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Year 2012 Income Statement ( YoY Comparison)

Parent Only (In Million NTD, except for EPS in NTD) Net Sales Cost of Goods Sold Gross Profit Operating Expenses: General & Administration Research & Development Operating Income Non-Operating Income Non-Operating Expenses Income (Loss) Before Tax Income Tax Net Income EPS		2012 %		2011 % YoY % 5,338 100.0% (22%) (2,562) (48.0%) (26%) 2,776 52.0% (18%) (827) (15.5%) (8%) (630) (11.8%) 1% 1,319 24.7% (34%) 413 7.8% (37%) (14) (0.3%) 186% 1,718 32.2% (36%) (195) (3.7%) (23%) 1,523 28.5% (38%) $ 4.06 (38%)
		4,174 100.0%
		(1,905) (45.6%)
		2,269 54.4%
		(757) (18.1%) (637) (15.3%)
		875 21.0%
		261 6.3% (40) (1.0%)
		1,096 26.3% (151) (3.6%)
		945 22.7%
		$ 2.52

Non-operating Income included the gain from equity investments total of 116m (YoY � 55%), including 100% owned subsidiaries - New Material: 43m (YoY � 14%), MAS: 79m (YoY � 28%).

Currency loss of 34m.

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Year 2012 Income Statement (Consolidated)

	Consolidated (In Million NTD, except for EPS in NTD)	Consolidated (In Million NTD, except for EPS in NTD)	2012 %	2012 %	2011 % YoY % 14,148 100.0% (17%) (10,231) (72.3%) (19%) 3,917 27.7% (13%) (1,615) (11.4%) 2% (662) (4.7%) 3% 1,640 11.6% (34%) 195 1.4% (25%) (27) (0.2%) 144% 1,808 12.8% (36%) (304) (2.2%) (27%) 1,504 10.6% (37%) 19 0.2% n/a 1,523 10.8% (38%)
			2012 %
	Net Sales		11,747 100.0%
	Cost of Goods Sold		(8,328) (70.9%)
	Gross Profit		3,419 29.1%
	Operating Expenses: General & Administration Research & Development		(1,655) (14.1%) (681) (5.8%)
	Operating Income		1,083 9.2%
	Non-Operating Income Non-Operating Expenses		147 1.3% (66) (0.6%)
	Income (Loss) Before Tax Income Tax		1,164 9.9% (223) (1.9%)
	Net Income before Minority Interest		941 8.0%
	Minority Interest		4 0.0%
	Net Income		945 8.0%

Balance Sheet Highlights & Financial Ratio

Parent Only(In Million NTD) Balance Sheet Highlights Cash & Short Term Investment Inventory Short Term Debt Long Term Debt Shareholders Equity Total Assets Inventory Turnover (Day) AR Turnover (Day) AP Turnover (Day) Net Debt to Equity (%) ROE (%) ROA (%) Cash Position EBITDA Cash Flow from Operation Free Cash Flow			Dec. 2012 547 1,073 380 - 7,795	Dec. 2011 + / - % 654 - 16% 1,373 - 22% 50 660% - - 7,765 - 9,547 - 195 130 81 - 20% 16% QoQ 2012 YoY (38%) 1,298 (32%) (72%) 1,213 (30%) n/a 415 (70%)
			9,559	9,547
			234 154 89 -	195 130 81 -
			12%	20%
			10%	16%
	4Q’ 2012 253 167	3Q’ 2012 406 591		QoQ (38%) (72%)
	(3)	543		n/a

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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OPERATION HIGHLIGHT

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Sales Breakdown By Testing Solution

(Unit: Million NTD) Power Electronics Testing Component Testing LCD Panel / Video Testing IC Testing LED Testing Solar Power Testing Customized System Service & Others Total	(Unit: Million NTD) Power Electronics Testing Component Testing LCD Panel / Video Testing IC Testing LED Testing Solar Power Testing Customized System Service & Others Total	2012 % 2,121 50.8% 328 7.8% 453 10.8% 696 16.7% 129 3.1% 115 2.8% 70 1.7% 262 6.3%	2012 % 2,121 50.8% 328 7.8% 453 10.8% 696 16.7% 129 3.1% 115 2.8% 70 1.7% 262 6.3%	2011 % YoY 2,321 43.5% (9%) 371 7.0% (12%) 362 6.7% 25% 485 9.0% 44% 352 6.6% (63%) 970 18.2% (88%) 84 1.6% (17%) 393 7.4% (33%) 5,338 100.0% (22%)
		2012 % 2,121 50.8% 328 7.8% 453 10.8% 696 16.7% 129 3.1% 115 2.8% 70 1.7% 262 6.3%
		4,174 100.0%

Sales Breakdown By Industries

Innovation, Integration Capability, Market Penetration

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In million NTD / % of Sales
$ 4,158 $ 3,444 $ 5,640 $ 5,338 $ 4,174
100%
5%
17% 31% 35% 24%
80%
60%
40%
20% 48% 40% 44% 45% 47%
0%
2008 2009 2010 2011 2012
Other Sectors Clean IC Panel (Video & LCM) Power (Power & Component)
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* Clean Technology included solar, LED, battery cell formation and EV OEM business.

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Year 2013 Guidance

The year 2012 sales revenues were mainly contributed from IC and LCD display sectors, increased by 44% and 25% respectively, while the power electronics sector remains in solid position. Expected IC and LED to be the major drivers of year 2013 sales revenues, due to development of new IC package and accelerating transformation of LED lighting.

Aggressively promoting the turnkey solutions for emerging market opportunity, particularly in LED lighting and battery pack industries. Sales contributed from US, Europe and Japan markets have increased by 18% to 21% of sales revenues in 2012, target to reach 30% through increase recognition from global top-tier customers with high customer satisfaction.

Proposed the year 2012 dividend payout of NT2 in cash only.

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Awarded Chroma the Taiwan Mittelstand

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Innovations in Test & Automation Solutions

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Innovation in FPD, Video & Color Test Solution

• Support 4Kx2K ultra high resolution TV

• Comply with HDMI 1.4b standard

• 3D / HDCP / EDID / CEC test functions

(Model: 22294-A)

• High density design for high efficient productivity

• Full protection from ESD

• Latest signaling in LVDS / eDP / MIPI / V by One

• Fully protection in OVP / OCP / OTP

• Temperature consistency up to 2 ℃

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Innovation in OLED Test Solution

• Design for large size OLED panels (eg. OLED TV)

• Optional thermal control solution

• Cost-effective testing solution

• Rated number 1 among end-users

(Model: 58166)

• Individual PMU for each UUT

• Test Function: electrical characteristics, brightness, programmable driving waveform

• � Modular OLED test cards

• Maximum 34 UUTs/system

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(Model: 58131)
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Innovation in Power Electronics Test Solution

• Bi-directional AC source with full 4-quadrant capability

• High power 60KVA with 1 & 3-phase output

• Parallelable up to 300KVA

• Grid simulating for PV inverter testing

• EV charger / battery inverter for smart grid application

(Model: 61800)

• Compact size 4-phase power meter

• Measure 3-phase AC line and DC line with one unit

• Individual channels application for multi-UUT ATS

• Meet IEC62301 standard

(Model: 66204)

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Innovation in Passive Component & Electrical Safety Test Solution

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New Patent
(Model: 19036)
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• AC & DC Hi-Pot, IR, DCR, Impulse 5 in 1 test function

• Built-in 4-terminals scanner

• 200MHz Sampling rate (IWT)

• High speed contact check function (HSCC)

• Application: Motor, Transformer, Choke

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(Model: 11300)
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• 300A max DC output (World-leading)

• Measure frequency response from 20Hz~1MHz

• Forward / Reverse current

• L- I curve test function

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Innovation in Semiconductor/IC Test Solution

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• 50/100 MHz clock rate

• 1024 I/O pins

• Up to 1024 sites parallel testing

• Various VI options

• Flexible HW architecture (Interchangeable I/O, VI, ADDA)

(Model: 3380)

• FT + SLT Handler – Two In One

• Auto tray loading/unloading & device sorting

• Tester zero waiting time

• Tri-temp IC test function

• Close-Loop Active Thermal Control (ATC) Module

• Unity PTC (Passive Thermal Control)

• Cooling Pipe

• High power cooling function

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(Model: 3110)
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Innovation in Semiconductor/ IC Test Solution

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New
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• 1X4 Quad sites, Flexible DUT Configuration.

• Chamberless tri-temperature

• Vision alignment

• Sorter arm RCAA function for engineering adjustment.

• � Temperature range from -55 up to 150 ℃

• (Model: 3160C)

Patent

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• Reliable high-speed pick & place handler

• PoP Function

• Air damper for contact balance

• IC-in-socket protection

• � Tri-Temp Control � Invention patents: 190373, 190377, 1227324 & 125307

• (Model: 3260)

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Innovation in LED/Lighting Test Solution

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(Model: 58173-FC)
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• Wide LED power test range (200V/2A)

• Chroma Huge Photo Detector

• (Measurement Angle=148 ° )

• Unique chuck design providing more accurate measurement

• Unique on-screen intuitive pin adjustment

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New Patent
(Model: 58158-SC)
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• High speed and low labor cost

• Test LED lamps in steady states

• All-in-one measurement function

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Innovation in LED/Lighting Test Solution

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• Fully auto assembly and test

• High throughput

• Low labor cost

• Module design

• Easy-to-change type

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Automation MES
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Test & Measurement
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Video: Worldwide First LED Bulb Automatic Assembly & Test Line

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Innovation in PV Test Solution

• Applied Wafers: mono/poly/quasi crystalline wafers, both 5” and 6”

• Inspection Items: 2D geometry, front-side surface, back-side surface, sawmarks

• � UPH: 3000~3600

(Model: 7200)

• Compact size 2KW solar array simulator

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• User define I-V curve profile with high response

• Constant power profile with 3 times capability

• Test for micro-inverter and DC-DC optimizer

(Model: 62150H-600S/1000S)

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Innovation in Electric Vehicle Test Solution

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• Applicable for EV/PHEV test

• Flexible hardware & software architecture

• Meets QC/T 895 & GB/T 24347 test requirement

• Credibility: Used by China Motor( 中華汽車 ), BYD ( 比亞迪 ), VW ( 上海大眾 ), Changan Automotive ( 長安汽車 )

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• Worldwide first SAE J1772 communication protocol automatic test system (ATS) certification issued by UL.

• Applicable for AC level 1 & AC level 2 EVSE

• Open architecture software platform

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Innovation in Battery Cell/Pack Test Solution

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• High precision output and measurement up to 0.02%

• Independent channel execution & testing

• High sampling rate

• CC/CC-CV/CP charge/discharge mode

(Model: 17011)

• 32ch New Patent � Charge/discharge mode � Regenerative efficiency: 85%

• 16ch

• 8ch � Driving cycle simulation � High precision measurement accuracy � Fast current conversion

• (Model: 17020)

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Innovation in Battery Cell/Pack Test Solution

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(Model: 17030)

• High power /voltage (250kW/900V) charge/discharge test

� Dynamic current waveform for EV driving cycle test

� Life cycle test for smart grid storage battery

• Regenerative efficiency: 90%

� Software integrating for data logger/chamber/CAN bus

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Innovation in Laser Diode Test Solution

• For Burn-In, Reliability and Life Testing

• Up to 800 channels

• Up to 150 ℃

• Batch processing via device carrier-sharing design

(Model: 58601)

• Full Turn-Key Automated Test

• High precision and large capacity carrier

• Fully automated alignment for fiber-coupled tests

• Automated optical inspection

• Highly accurate TEC temperature controller with stability up to ± 0.01

(Model: 58620)

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www.chromaate.com

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The World for You & for Me… Thank You!

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