ChipMOS Reports Second Quarter 2019 Results

HSINCHU,Aug. 6,2019 /PRNewswire-FirstCall/ --

Q2'19 Highlights (as compared to Q1'19):

Revenue Grows 9.9% to US$158.2 Million Compared to US$143.9 Million

Gross Profit Improves to US$27.0 Million Compared to US$21.6 Million

Gross Margin Increases to 17.1% Compared to 15.0%

Net Earnings of NT$1.75 or US$0.06 per Basic Common Share or US$1.13 per Basic ADS

Reduction of US$30.1 Million in Net Debt Balance to US$160.1 Million,while Retained Balance of Cash and Cash Equivalents at US$171.8 Million

Cash Dividend of NT$1.20 Per Common Share or Approximately US$0.77 Per ADS Approved by Shareholders

ChipMOS TECHNOLOGIES INC. ("ChipMOS" or the "Company") (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS),an industry leading provider of outsourced semiconductor assembly and test services ("OSAT"),today reported unaudited consolidated financial results for the second quarter ended June 30,2019. All U.S. dollar figures cited in this press release are based on the exchange rate of NT$31.01 against US$1.00 as of June 28,2019.

All the figures were prepared in accordance with Taiwan-International Financial Reporting Standards ("Taiwan-IFRS").

Revenue for the second quarter of 2019 was NT$4,905.3 million or US$158.2 million,an increase of 9.9% from NT$4,462.0 million or US$143.9 million in the first quarter of 2019 and an increase of 9.2% from NT$4,491.6 million or US$144.8 million for the same period in 2018.

Net profit attributable to equity holders of the Company for the second quarter of 2019 was NT$1,274.6 million or US$41.1 million,and NT$1.75 or US$0.06 per basic common share,as compared to net profit attributable to equity holders of the Company for the first quarter of 2019 of NT$193.7 million or US$6.3 million,and NT$0.27 or US$0.01 per basic common share,and compared to net profit attributable to equity holders of the Company in the second quarter of 2018 of NT$124.1 million or US$4.0 million,and NT$0.15 or US$0.005 per basic common share. Net earnings for the second quarter of 2019 were US$1.13 per basic ADS,compared to US$0.17 per basic ADS for the first quarter of 2019 and US$0.09 per basic ADS in the second quarter of 2018.

S.J. Cheng,Chairman and President of ChipMOS,said,"We achieved 9.9% revenue growth in Q2 compared to Q1,improved our gross margin to 17.1% and delivered a significant improvement in net profit to NT$1.75 or US$0.06 per basic common share or US$1.13 per basic ADS,which includes the benefit of the JMC share disposal we previously noted. We continue to execute and are benefitting from the strategic diversification in our customer base and end markets,which is driving healthy utilization levels. Growth in our flash business from new module house customers is helped drive 14.4% revenue growth from Flash products in Q2 compared to Q1,and improved our assembly utilization rate to 75%. Customer demand remains strong in our TDDI and 12" fine pitch COF businesses. As a result,revenue from TDDI products grew 24% in Q2 compared to Q1,and represented about 32% of DDIC revenue in Q2. Growth is expected to continue led by higher demand for new bezel-less smartphone panels,with increasing TDDI product penetration of the HD panel segment from FHD panels. We remain focused on expanding utilization across all segments,while further improving gross margin,overall profitability,and our cash generation. These sustainable improvements will help build further value for the Company and shareholders."

Silvia Su,Vice President of Finance and Accounting,commented,"We continue to manage our business to profitability,with the right resource level and operating structure to fully support our customers and new growth opportunities. We completed the sale of 9.1 million common shares of JMC in the beginning of April and recognized a disposal gain of approximately US$31.7 million,after the deduction of related tax and expense. That was used to further strengthen our Company's financial structure,while increasing our balance of working capital and decreasing the debt ratio. We ended the second quarter with a balance of cash and cash equivalents of US$171.8 million,after reducing our net debt by about US$30.1 million to US$160.1 million with a net debt to equity ratio of 26.6%. In addition,we invested US$23.1 million in CapEx in the second quarter,the majority of which was invested in expanding our LCD driver capacity to meet customer demand levels,mainly for DDIC test and 12" fine pitch COF. Our latest cash dividend,NT$1.20 per common share or US$0.77 per ADS,was approved by shareholders at our AGM this past June,with distributions expected to be on August 30th to common stock holders and followed shortly after by the distribution to ADS holders."

Selected Operation Data

Q2'19

Q1'19

Revenue by segment

Testing

20.1%

22.2%

Assembly

24.7%

23.1%

LCD Driver

36.0%

35.1%

Bumping

19.2%

19.6%

CapEx

US$23.1 million

US$20.3 million

Testing

25.2%

25.0%

Assembly

8.5%

7.3%

LCD Driver

56.4%

59.3%

Bumping

9.9%

8.4%

Depreciation and amortization expenses

US$29.7 million

US$29.0 million

Utilization by segment

Testing

69%

64%

Assembly

75%

58%

LCD Driver

81%

76%

Bumping

70%

79%

Overall

75%

70%

Condensed consolidated statements of cash flows

Period ended

Jun. 30,2019

Period ended

Jun. 30,2018

US$ million

US$ million

Net cash generated from (used in) operating activities

78.7

47.8

Net cash generated from (used in) investing activities

(43.6)

(101.9)

Net cash generated from (used in) financing activities

(13.1)

(73.5)

Net increase (decrease) in cash and cash equivalents

22.0

(127.6)

Effect of exchange rate changes on cash

0.1

0.2

Cash and cash equivalents at beginning of period

149.7

259.1

Cash and cash equivalents at end of period

171.8

131.7

Investor Conference Call / Webcast Details

ChipMOS will host two conference calls on Tuesday,August 6,2019 to discuss the Company's financial results for the second quarter of 2019.

1. Date: Tuesday,2019

Time:

4:00PM Taiwan (4:00AM New York)

Dial-In:

+886-2-21928016

Password:

661807#

Replay Starting 2 Hours After Live Call Ends: www.chipmos.com

Language: Mandarin

2. Date: Tuesday,2019

Time:

8:00PM Taiwan (8:00AM New York)

Dial-In:

+1-323-701-0225

Password:

8155889

Replay Starting 2 Hours After Live Call Ends: +1-412-317-6671,with ID 8155889

Webcast of Live Call and Replay: www.chipmos.com

Language: English

About ChipMOS TECHNOLOGIES INC.:

ChipMOS TECHNOLOGIES INC. ("ChipMOS" or the "Company") (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS) (https://www.chipmos.com) is an industry leading provider of outsourced semiconductor assembly and test services. With advanced facilities in Hsinchu Science Park,Hsinchu Industrial Park and Southern Taiwan Science Park in Taiwan,ChipMOS provide assembly and test services to a broad range of customers,including leading fabless semiconductor companies,integrated device manufacturers and independent semiconductor foundries.

Forward-Looking Statements

This press release may contain certain forward-looking statements. These forward-looking statements may be identified by words such as 'believes,' 'expects,' 'anticipates,' 'projects,' 'intends,' 'should,' 'seeks,' 'estimates,' 'future' or similar expressions or by discussion of,among other things,strategy,goals,plans or intentions. These statements may include financial projections and estimates and their underlying assumptions,statements regarding plans,objectives and expectations with respect to future operations,products and services,and statements regarding future performance. Actual results may differ materially in the future from those reflected in forward-looking statements contained in this document,due to various factors. Further information regarding these risks,uncertainties and other factors are included in the Company's most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the "SEC") and in the Company's other filings with the SEC.

About Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures

To supplement the consolidated financial results presented in accordance with the Taiwan-IFRS,ChipMOS uses non-GAAP free cash flow,non-GAAP earnings before interest,taxes,depreciation and amortization ("EBITDA") and non-GAAP net debt to equity ratio in this press release. The non-GAAP free cash flow represents operating profit plus depreciation,amortization and interest income and less capital expenditures,interest expense,income tax expense and dividend. The non-GAAP EBITDA represents operating profit plus depreciation and amortization. The non-GAAP net debt to equity ratio represents the ratio of net debt,the sum of debt less cash and cash equivalent,divided by equity attributable to equity holders of the Company. These non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently.

The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the Taiwan-IFRS.

ChipMOS considers the use of non-GAAP free cash flow,non-GAAP EBITDA and non-GAAP net debt to equity ratio provides useful information to management to manage the Company's business and make financial and operational decisions and also to the investors to understand and evaluate the Company's business and operating performance. For more information on these non-GAAP financial measures,please refer to the table captioned "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" in this press release.

Contacts:

In Taiwan

Jesse Huang

ChipMOS TECHNOLOGIES INC.

+886-6-5052388 ext. 7715

jesse_huang@chipmos.com

In the U.S.

David Pasquale

Global IR Partners

+1-914-337-8801

dpasquale@globalirpartners.com

- FINANCIAL TABLES FOLLOW BELOW -

ChipMOS TECHNOLOGIES INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended Jun. 30,Mar. 31,2019,and Jun. 30,2018

Figures in Millions of U.S. dollars (USD)(1)

Except for Per Share Amounts and Weighted Average Shares Outstanding

Three months ended

Jun. 30,2019

Mar. 31,2019

Jun. 30,2018

USD

USD

USD

Revenue

158.2

143.9

144.8

Cost of revenue

(131.2)

(122.3)

(121.1)

Gross profit

27.0

21.6

23.7

Research and development expenses

(8.5)

(7.6)

(8.0)

Sales and marketing expenses

(0.4)

(0.4)

(0.4)

General and administrative expenses

(4.5)

(3.6)

(3.9)

Other operating income (expenses),net

1.0

0.3

2.0

Operating profit

14.6

10.3

13.4

Non-operating income (expenses),net

29.6

(2.1)

2.0

Profit (loss) before tax

44.2

8.2

15.4

Income tax benefit (expense)

(3.1)

(1.9)

(11.4)

Profit (loss) for the period

41.1

6.3

4.0

Other comprehensive income (loss)

Exchange differences on translation of

foreign operations

(1.1)

2.2

(0.8)

Unrealized gain (loss) on valuation of

equity instruments at fair value through

other comprehensive income

0.6

(1.0)

0.4

Share of other comprehensive income

(loss) of associates and joint ventures

accounted for using equity method

(0.0)

0.0

(0.0)

Income tax effect

(0.1)

0.2

(0.1)

Total other comprehensive income (loss)

(0.6)

1.4

(0.5)

Total comprehensive income (loss)

40.5

7.7

3.5

Profit (loss) attributable to the Company -

basic

41.1

6.3

4.0

Earnings (loss) per share attributable to the

Company - basic

0.06

0.01

0.005

Earnings (loss) per ADS equivalent - basic

1.13

0.17

0.09

Weighted average shares outstanding (in

thousands) - basic

727,032

726,925

849,672

Profit (loss) attributable to the Company -

diluted

41.1

6.3

4.0

Earnings (loss) per share attributable to the

Company - diluted

0.06

0.01

0.005

Earnings (loss) per ADS equivalent - diluted

1.12

0.17

0.09

Weighted average shares outstanding (in

thousands) - diluted

733,661

728,302

857,028

Note:

(1) All U.S. dollar figures in this release are based on the exchange rate of NT$31.01 against US$1.00 as of Jun. 28,2019.

The convenience translation should not be construed as representations that the NT dollar amounts have been,or could be

in the future be,converted into US dollars at this or any other exchange rate.

ChipMOS TECHNOLOGIES INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended Jun. 30,2018

Figures in Millions of NT dollars (NTD)

Except for Per Share Amounts andWeighted Average Shares Outstanding

Three months ended

Jun. 30,2018

NTD

NTD

NTD

Revenue

4,905.3

4,462.0

4,491.6

Cost of revenue

(4,067.0)

(3,793.7)

(3,756.4)

Gross profit

838.3

668.3

735.2

Research and development expenses

(263.7)

(236.7)

(249.5)

Sales and marketing expenses

(14.3)

(11.6)

(13.9)

General and administrative expenses

(138.6)

(112.2)

(120.9)

Other operating income (expenses),net

30.8

10.4

63.2

Operating profit

452.5

318.2

414.1

Non-operating income (expenses),net

917.0

(64.3)

62.9

Profit (loss) before tax

1,369.5

253.9

477.0

Income tax benefit (expense)

(94.9)

(60.2)

(352.9)

Profit (loss) for the period

1,274.6

193.7

124.1

Other comprehensive income (loss)

Exchange differences on translation of

foreign operations

(33.8)

68.1

(25.3)

Unrealized gain (loss) on valuation of

equity instruments at fair value through

other comprehensive income

17.4

(31.5)

14.1

Share of other comprehensive income

(loss) of associates and joint ventures

accounted for using equity method

(0.2)

1.9

(0.8)

Income tax effect

(3.5)

6.3

(2.8)

Total other comprehensive income (loss)

(20.1)

44.8

(14.8)

Total comprehensive income (loss)

1,254.5

238.5

109.3

Profit (loss) attributable to the Company -

basic

1,274.6

193.7

124.1

Earnings (loss) per share attributable to the

Company - basic

1.75

0.27

0.15

Earnings (loss) per ADS equivalent - basic

35.06

5.33

2.92

Weighted average shares outstanding (in

thousands) - basic

727,672

Profit (loss) attributable to the Company

diluted

1,274.6

193.7

124.1

Earnings (loss) per share attributable to the

Company - diluted

1.74

0.27

0.14

Earnings (loss) per ADS equivalent - diluted

34.75

5.32

2.90

Weighted average shares outstanding (in

thousands) - diluted

733,028

ChipMOS TECHNOLOGIES INC.

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of Jun. 30,2018

Figures in Millions of U.S. dollars (USD)(1)

Jun. 30,2018

ASSETS

USD

USD

USD

Current assets

Cash and cash equivalents

171.8

163.5

131.7

Current financial assets at amortized cost

5.6

5.5

0.5

Accounts and notes receivable,net

146.8

132.2

140.0

Inventories

55.3

53.8

58.1

Other current assets

20.1

19.7

16.7

Total current assets

399.6

374.7

347.0

Non-current assets

Financial assets at fair value through profit or loss

0.4

0.4

0.4

Financial assets at fair value through other

comprehensive income

5.2

4.6

3.7

Non-current financial assets at amortized cost

3.2

3.2

2.0

Investments accounted for using equity method

114.7

125.3

132.7

Property,plant & equipment

526.6

532.9

510.9

Right-of-use assets

28.7

28.6

-

Other non-current assets

12.2

11.4

9.3

Total non-current assets

691.0

706.4

659.0

Total assets

1,090.6

1,081.1

1,006.0

LIABILITIES AND EQUITY

LIABILITIES

Current liabilities

Short-term bank loans

-

9.7

-

Accounts payable and payables to contractors and

equipment suppliers

38.4

40.5

43.2

Current lease liabilities

1.3

1.3

-

Long-term bank loans,current portion

24.1

24.1

24.1

Long-term lease obligations payable,current portion

-

-

0.4

Other current liabilities

91.4

70.3

72.4

Total current liabilities

155.2

145.9

140.1

Non-current liabilities

Long-term bank loans

279.5

291.7

245.6

Non-current lease liabilities

27.0

26.9

-

Long-term lease obligations payable

-

-

0.4

Other non-current liabilities

26.4

26.1

24.4

Total non-current liabilities

332.9

344.7

270.4

Total liabilities

488.1

490.6

410.5

EQUITY

Capital stock – common stock

238.7

242.8

285.7

Capital surplus

198.8

202.5

202.6

Retained earnings

175.9

170.9

135.3

Other equity interest

4.7

5.3

4.4

Treasury stock

(15.6)

(31.0)

(32.5)

Equity attributable to equity holders of the Company

602.5

590.5

595.5

Total equity

602.5

590.5

595.5

Total liabilities and equity

1,006.0

Note:

(1) All U.S. dollar figures in this release are based on the exchange rate of NT$31.01 against US$1.00 as of Jun. 28,converted into US dollars at this or any other exchange rate.

ChipMOS TECHNOLOGIES INC.

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of Jun. 30,2018

Figures in Millions of NT dollars (NTD)

Jun. 30,2018

ASSETS

NTD

NTD

NTD

Current assets

Cash and cash equivalents

5,326.4

5,069.0

4,082.6

Current financial assets at amortized cost

173.2

171.2

15.9

Accounts and notes receivable,net

4,552.3

4,099.9

4,341.9

Inventories

1,716.6

1,667.0

1,800.3

Other current assets

623.8

612.3

518.4

Total current assets

12,392.3

11,619.4

10,759.1

Non-current assets

Financial assets at fair value through profit or loss

11.6

11.7

11.8

Financial assets at fair value through other

comprehensive income

160.2

142.8

114.7

Non-current financial assets at amortized cost

99.9

99.2

62.4

Investments accounted for using equity method

3,557.1

3,884.5

4,114.0

Property,plant & equipment

16,329.2

16,524.7

15,844.2

Right-of-use assets

890.5

888.9

-

Other non-current assets

377.3

352.5

289.2

Total non-current assets

21,425.8

21,904.3

20,436.3

Total assets

33,818.1

33,523.7

31,195.4

LIABILITIES AND EQUITY

LIABILITIES

Current liabilities

Short-term bank loans

-

300.0

-

Accounts payable and payables to contractors and

equipment suppliers

1,189.3

1,256.2

1,341.8

Current lease liabilities

39.7

40.2

-

Long-term bank loans,current portion

748.2

748.1

747.3

Long-term lease obligations payable,current portion

-

-

11.6

Other current liabilities

2,833.4

2,180.8

2,244.9

Total current liabilities

4,810.6

4,525.3

4,345.6

Non-current liabilities

Long-term bank loans

8,668.0

9,044.3

7,616.7

Non-current lease liabilities

836.9

835.0

-

Long-term lease obligations payable

-

-

12.0

Other non-current liabilities

818.8

808.8

755.1

Total non-current liabilities

10,323.7

10,688.1

8,383.8

Total liabilities

15,134.3

15,213.4

12,729.4

EQUITY

Capital stock – common stock

7,400.9

7,528.3

8,859.8

Capital surplus

6,165.9

6,280.7

6,281.2

Retained earnings

5,453.4

5,298.3

4,196.4

Other equity interest

146.2

165.5

136.2

Treasury stock

(482.6)

(962.5)

(1,007.6)

Equity attributable to equity holders of the Company

18,683.8

18,310.3

18,466.0

Total equity

18,466.0

Total liabilities and equity

33,195.4

RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

(Figures in Millions of U.S. dollars (USD))

The table below sets forth a reconciliation of our operating profit to non-GAAP free cash flow for the periods indicated:

Three months ended

Jun. 30,2018

USD

USD

USD

Operating profit

14.6

10.3

13.4

Add: Depreciation

29.7

29.0

27.2

Interest income

0.6

0.5

0.4

Less: Capital expenditures

(23.1)

(20.3)

(31.5)

Interest expense

(1.4)

(1.4)

(1.2)

Income tax expense

(3.1)

(1.9)

(11.4)

Non-GAAP free cash flow

17.3

16.2

(3.1)

The table below sets forth a reconciliation of our operating profit to non-GAAP EBITDA for the periods indicated:

Three months ended

Jun. 30,2018

USD

USD

USD

Operating profit

14.6

10.3

13.4

Add: Depreciation

29.7

29.0

27.2

Non-GAAP EBITDA

44.3

39.3

40.6

The table below sets forth a calculation of our non-GAAP net debt to equity ratio for the periods indicated:

Jun. 30,2018

USD

USD

USD

Short-term bank loans

-

9.7

-

Long-term bank loans

(including current portion)

303.6

315.8

269.7

Long-term lease obligations payable

(including current portion)

-

-

0.8

Lease liabilities

(including current portion)

28.3

28.2

-

Less: Cash and cash equivalents

(171.8)

(163.5)

(131.7)

Net debt

160.1

190.2

138.8

Equity attributable to equity holders of

the Company

602.5

590.5

595.5

Net debt to equity ratio

26.6%

32.2%

23.3%

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