O Qisda Corporation 2 0 1 2 Q3 R e su l ts October 26, 2012 u tl ine 2012 Q3 Financial Results 2012 Q3 B usiness S um m ar y 2 1
S af e H arb or N otic e We have made forward-l ook i n g s t at emen t s i n t he p res en t at i on. O u r forwardl ook i n g s t at emen t s c on t ai n i n format i on reg ardi n g, amon g ot her t hi n g s, ou r fi n an c i al c on di t i on s, fu t u re ex p an s i on p l an s an d b u s i n es s s t rat eg i es. We have b as ed t hes e forward-l ook i n g s t at emen t s on ou r c u rren t ex p ec t at i on s an d p roj ec t i on s ab ou t fu t u re even t s. A l t hou g h we b el i eve t hat t hes e ex p ec t at i on s an d p roj ec t i on s are reas on ab l e, s u c h forward-l ook i n g s t at emen t s are i n heren t l y s u b j ec t t o ri s k s, u n c ert ai n t i es, an d as s u mp t i on s ab ou t u s. We u n dert ak e n o ob l i g at i on t o p u b l i c l y u p dat e or revi s e an y forward-l ook i n g s t at emen t s whet her as a res u l t of n ew i n format i on, fu t u re even t s or ot herwi s e. I n l i g ht of t hes e ri s k s, u n c ert ai n t i es an d as s u mp t i on s, t he forward-l ook i n g even t s mi g ht n ot oc c u r an d ou r ac t u al res u l t s c ou l d di ffer mat eri al l y from t hos e an t i c i p at ed i n t hes e forward-l ook i n g s t at emen t s. 3 D isc l aim e r T hes e fi n an c i al i n format i on i n t hi s doc u men t are b as ed on u n au di t ed res u l t s of t he O D M c on s ol i dat ed c ore b u s i n es s on l y. 4 2
2 0 1 2 Q3 F inanc ial R e su l ts Q3 I nc om e S tate m e nt: QoQ A nal y sis Amount : NT$ Billion 2 0 1 2 2 0 1 2 N e t S a l e s 2 3. 2 3 1 0 0. 0 % 2 0. 6 3 1 0 0. 0 % 1 2. 6 % ( 2 1. 6 2 ) ( 1 9. 1 4 ) G r s M a r g i n 1. 6 1 6. 9 % 1. 4 9 7. 2 % - 0. 3 p p t e x ( 1. 1 5 ) - 5. 0 % ( 1. 2 5 ) - 6. 1 % O p e r a t i n g I n c e 0. 4 6 2. 0 % 0. 2 4 1. 2 % + 0. 8 p p t N e t N o n - o p I t e m s ( 1. 0 5 ) ( 1. 1 8 ) I n c e b e f e T a x ( 0. 5 9 ) ( 0. 9 4 ) N e t I n c e ( 1. 1 1 ) - 4. 8 % ( 0. 9 3 ) - 4. 5 % - 0. 3 p p t E P S - D i l u t e d ( N T $ ) ( 0. 5 7 ) ( 0. 4 7 ) N e t W t h / S h a r e ( N T $ ) 1 0. 0 1 1 0. 7 5 Q3 Q2 QoQ COGS os Op om om or om or * U n a u d i t e d r e s u l t s o f c o n s o l i d a t e d c o r e b u s i n e s s * E P S -d i l u t e d w a s c a l c u l a t e d b a s e d o n t o t a l d i l u t e d, w e i g h t e d -a v e r a g e d o u t s t a n d i n g s h a r e s ( 1, 9 6 6 m s h a r e s ) * N e t w o r t h p e r s h a r e w a s c a l c u l a t e d b a s e d o n t o t a l o u t s t a n d i n g s h a r e s ( 1, 9 6 6 m s h a r e s ) 6 3
Q3 B al anc e S h e e t H ig h l ig h ts Amount: NT$ Billion 2 0 1 2 2 0 1 2 C a s h & E q u i v a l e n t 4. 6 6 7. 4 % 3. 9 8 6. 3 % 0. 6 8 A c c n t s R e c e i v a b l e 1 2. 5 3 2 0. 0 % 1 1. 4 7 1 8. 0 % 1. 0 6 I n v e n t y 8. 4 7 1 3. 5 % 8. 5 9 1 3. 5 % ( 0. 1 2 ) L - T I n v e s t m e n t s 2 4. 0 1 3 8. 3 % 2 3. 8 1 3 7. 4 % 0. 2 0 T a l A s s e t s 6 2. 7 6 1 0 0. 0 % 6 3. 6 4 1 0 0. 0 % ( 0. 8 8 ) F i n. D e b t 2 1. 0 0 3 3. 5 % 2 1. 5 1 3 3. 8 % ( 0. 5 1 ) A c c n t s P a y a b l e 1 7. 1 2 2 7. 3 % 1 5. 5 3 2 4. 4 % 1. 5 9 T a l L i a b i l i t i e s 4 3. 0 8 6 8. 6 % 4 2. 5 0 6 6. 8 % 0. 5 8 E q u i t y 1 9. 6 9 3 1. 4 % 2 1. 1 4 3 3. 2 % ( 1. 4 5 ) Q3 Q2 QoQ ou or ot ou ot * U n a u d i t e d r e s u l t s o f c o n s o l i d a t e d c o r e b u s i n e s s * F i n. d e b t i n c l u d e d l o n g t e r m a n d s h o r t t e r m f i n a n c i a l d e b t s 7 Q3 K e y F inanc ial R atios A / R T u r n o v e r 4 8 d a y s 4 8 d a y s + d a y s I n v e n t o r y T u r n o v e r d a y s 4 d a y s - 5 d a y s A / P T u r n o v e r 7 6 d a y s 7 9 d a y s - d a y s C a s h C o n v e r s i o n C y c l e 9 d a y s d a y s - d a y s R O A - 8 % - 5 % - p p t R O E - 5. 4 % - 4. - p p t C u r r e n t r a t i o. 4 % + 7 p p t F i n. D e b t / T o t a l A s s e t s 5 % 8 % - p p t 2012 Q3 2012 Q2 Qo Q 0 37 2 3 11 2 1. 1. 0. 3 3% 1. 1 104 1% 103. 0. 33. 33. 0. 3 * U n a u d i t e d r e s u l t s o f c o n s o l i d a t e d c o r e b u s i n e s s * R O A a n d R O E w e r e c a l c u l a t e d o n a q u a r t e r l y b a s i s 8 4
2 0 1 2 Q3 B u sine ss S u m m ary R e v e nu e B re ak dow 1 1 0 9 6 8 1 1 7 1 0 6 00% 7% % 0% % 7% 0% 7% 7% 0% % % 0% n b y P rodu c t L ine 1 0 % 1 1 % 7% 5 % 7% 8 % 1 2 % 1 3 % 1 2 % 4 % 6 % 1 4 % 5 0% 4 0% 6 9 % 6 6 % 6 4 % 6 3 % 6 4 % 3 0% 2 0% 1 0% 0% 3 Q 1 1 4 Q 1 1 1 Q 1 2 2 Q 1 2 3 Q 1 2 10 o n i t o r r o j e c t o r r i n t e r o b i l e t h e r s Note: O th er s i n c l u d es p r od u c ts w i th a r ev en u e s h a r e b el ow 3 %, s u c h a s p r of es s i on a l & i n d u s tr i a l d i s p l a y s, a u tom ob i l e el ec tr on i c s, a n d oth er s 5
2 0 1 2 Q3 B u sine ss S u m m ary Monitor: Unit shipment increased by 15% QoQ P roj e c tor: Unit shipment increased by 2 2 % QoQ C ol or l a s e r p rinte r: Unit shipment decreased by 4 % QoQ Mob il e d e v ic e s : Unit shipment increased by 16 % QoQ 11 6
U Qisda Corporation. nau dite d Core B u sine ss Consol idate d B al anc e S h e e t S e 3 0, 2 0 1 2 L k h e q u L i i l i C a s h & c a s h e q u i v a l e n t s, 5 9 3, 7 6 5. 3 % S h o r t - t e r m b o r r o w i n g s, 1, 3 2 2. 7 % F i n a n c i a l a s s e t s a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s u r r e n t 3 3, 6 4 1 % F i n a n c i a l l i a b i l i t i e s a t f a i r v a l u e t h r o u g h p r o f i t o r l o s s u r r e n t 8, 3 1 % t e s a n d a c c o u n t s r e c e i v a b l e, n e t, 4 5 7, 8 5 6 3 % P & A / P 5, 3 8 8, 7 6 9 4. 5 % R & A / R f r o m r e l a t e d p a r t i e s, 9,. 7 % P & A / P t o r e l a t e d p a r t i e s, 7 3 4 4 5. 8 % O t h e r r e c e i v a b l e s, n e t, 9 6 7 8 % O t h e r p a y a b l e t o r e l a t e d p a r t i e s 1, 3 8 O t h e r r e c e i v a b l e f r o m r e l a t e d p a r t i e s 2 3, 4 5 9 5 % L o n g - t e r m d e b t d u e w i t h i n o n e y e a r 8 5, 7 2. 3 % O t h e r f i n a n c i a l a s s e t s c u r r e n t 1, 8 6 8 1 % A c c r u e d e x p. & o t h e r c u r r e n t l i a b., 1 9 1, 2. 7 % t i n v e n t o r i e s, 4 7 1, 6 7 9 3. 5 % T o c l i i l i 8, 2 5 1 4 8 5. P r e p a i d e x p e n s e s a n d o t h e r c u r r e n t a s s e t s, 7 5 7, 1. 4 % L o n g t e r m l o a n 4, 1 1 1, 7 7 2. 5 % D e f e r r e d i n c o m e t a x a s s e t s c u r r e n t 3 5, 3 4 1 2 % B o n d s p a y a b l e T o c 9, 4, 6 7 5 6. 9 % O t h e r l i a b i l i t i e s 1 4, 8 3 6. 1 % L o n g - t e r m i n v e s t m e n t s 4, 3 1 7 8. 3 % T o l i i l i 3, 6, 7 5 4 8. 6 % F i x, 7 8 9, 7 4. S c k h o l d L e s s A c c u m u l a t e d d e p r e c i a t i o n a n d a l l o w n a c e f o r i m p a i r e m e n t 2, 8 5 7, 7 4 3 ). 6 % C o m m o n s t o c k 9, 6 6 7, 8 2 1. 3 % T o f i x, 9 3 1, 2 9 4. 5 % C a p i t a l s u r p l u s, 5 3 2, 3. 6 % O t h e r a s s e t s, 4 1 3, 8 7 4. 4 % L e g a l r e s e r v e r e a l i z e d g a i n o r l o s s o n a v a i l a b l e - f o r - s a l e f i n a n c i a l a s s e t s 6 3 6, 5 ) 1. R e t a i n e d e a r n i n g s 3, 1 6 6 7 5. C u m u l a t i v e t r a n s l a t i o n a d j u s t m e n t, 8 3 9 5 % e a s u r y s t o c k 2 4, 8 7 8 ) T o c k h o l d 9, 6 8 6, 4 1. 4 % p. UNIT : NT$K sse ts iab il itie s and stoc ol de rs' ity Current assets : ab ti es 04 -c 0 0. -c 06 0. No 0. N/ N/ 06 09 0 N/ 0, 03 0. 0 0. 0% 0. 0-0. 06 Ne tal urrent ab ti es 0, 0% 01 0-0. 0 0. 0% tal urrent assets 07 01 0, tal ab ti es 07 ed assets : 03 0% to ers' eq ui ty : 0 tal ed assets 09 0 0. 0% Un 01 0% 0, 0) 0% 07 0. Tr 0. 0% tal sto ers' eq ui ty 06 T otal A sse ts $ 2, 7 6 3, 1 6 0 00. 0% otal L iab il itie s and stoc k h ol de rs' e q u ity $ 2, 7 6 3, 1 6 0 00. 0% U B u I e S m e J S e 2 0 1 2 Qisda Corporation. nau dite d Core sine ss Consol idate d nc om tate nt an.~ p. UNIT : NT$K N 4, 5 6 9, 2 2 4 C o s t o f g o o d s s o l d 6 4, 2 7 8 ) 9 3. 1 % p f i 4, 4 8 4, 9 4 6. 9 % O p p S & M 1, 4, 2 7 8 ) 2. 2 % G & A 4 7 3 8 6 ) 7 % R & D 1, 7 5 1, 8 6 1 ) 2. 7 % T o O p p 3, 6 3 1, 5 2 4 ) 5. 6 % p i o m ( l o 5 3, 4 2 2. 3 % o o p i o m ( l o 1, 8 5 4, 8 ) 2. 9 % b o i o m 1,, 3 8 1. 6 % o m p 5 2 7, 8 ) 8 % f i, 5 2 8, 4 3 8 ) 2. 4 % et sal es $ 00. 0% 0, 08 ro ss ro t erati ng ex ense : 09 0, 0. tal erati ng ex ense erati ng nc e ss) n- erati ng nc e ss) 02 arni ng ef re nc e tax 001 0) nc e tax ex ense 05 0. ro t af ter tax $1
Qisda Corporation Reviewed Non-consolidated Balance Sheets September 30, 2011 and 2012 (Expressed in thousands of New Taiwan dollars and US dollars) 2011 2012 2011 2012 Assets NT$ NT$ US$ Liabilities and Stockholders Equity NT$ NT$ US$ Current assets: Current liabilities: Cash and cash equivalents 645,607 932,034 31,765 Short-term borrowings 4,124,262 2,084,468 71,040 Financial assets at fair value through profit or loss current 53,520 33,640 1,146 Financial liabilities at fair value through profit or loss current 164,079 38,306 1,306 Available-for-sale financial assets current 3,306,278 - - Accounts payable 2,399,339 2,873,583 97,934 Accounts receivable, net 4,195,607 4,677,019 159,397 Accounts payable to related parties 8,971,426 11,821,231 402,877 Accounts receivable from related parties 8,446,011 9,017,197 307,314 Other payable to related parties 95,223 34,141 1,164 Other receivables, net 729,279 477,707 16,281 Accrued expenses 3,362,466 2,213,270 75,430 Other receivable from related parties 1,060,121 86,470 2,947 Advance receipts 318,830 138,497 4,720 Inventories 2,900,835 3,189,636 108,705 Bonds payable due within one year 119,639 - - Prepaid expenses and other current assets 61,346 70,594 2,406 Long-term debt due within one year 1,742,280 785,720 26,778 Deferred income tax assets current 81,953 - - Other current liabilities 202,017 160,890 5,483 Total current assets 21,480,557 18,484,297 629,961 Deferred income tax liabilities-current - 150,163 5,118 Long-term investments: Deferred inter-company profits 16,481 16,373 558 Equity method 32,486,815 28,813,312 981,982 Total current liabilities 21,516,042 20,316,642 692,408 Available-for-sale financial assets non-current 148,806 2,000,499 68,179 Long-term debt 11,793,720 12,644,670 430,941 Financial assets carried at cost non-current 17,774 - - Other liabilities Total long-term investments 32,653,395 30,813,811 1,050,161 Deposit-in 2,530 2,530 86 Property, plant and equipment: Deferred gain on sale-and-leaseback transaction non-current 527,687 418,511 14,263 Land 600,168 635,066 21,644 Other liabilities 48,188 170,234 5,802 Buildings 1,426,072 1,460,301 49,768 Total other liabilities 578,405 591,275 20,151 Machinery and equipment 881,567 872,682 29,742 Total liabilities 33,888,167 33,552,587 1,143,500 Furniture and fixtures 91,469 98,886 3,369 Miscellaneous equipment 57,471 57,471 1,959 Stockholders equity: Prepayments for plant and equipment 14,036 2,682 91 Common stock 19,667,820 19,667,820 670,297 3,070,783 3,127,088 106,573 Capital surplus 3,652,334 3,532,309 120,384 Less: accumulated depreciation (1,573,181) (1,641,545) (55,945) Legal reserve 312,870 - - Net property, plant and equipment 1,497,602 1,485,543 50,628 Special reserve 286,915 - - Intangible assets 56,340 44,549 1,518 Retained earnings (accumulated deficit) (221,780) (3,160,670) (107,718) Other assets: Cumulative translation adjustment 730,908 307,840 10,491 Assets for lease 211,793 154,569 5,268 Unrealized loss on available-for-sale financial assets (965,011) (636,015) (21,676) Idle assets 104,324 104,324 3,555 Treasury stock (79,721) (24,878) (848) Restricted deposits 3,051 761,718 25,960 Total stockholders equity 23,384,335 19,686,406 670,930 Refundable deposits 93,834 58,543 1,995 Deferred expenses 104,969 36,935 1,259 Deferred income tax assets non-current 947,016 1,179,132 40,186 Prepaid pension cost 119,621 115,572 3,939 Total other assets 1,584,608 2,410,793 82,162 Commitments and contingencies Total assets 57,272,502 53,238,993 1,814,430 Total liabilities and stockholders equity 57,272,502 53,238,993 1,814,430 (Note:Translation of New Taiwan dollar financial statement amounts into U.S. dollar amounts is included solely for the convenience of the readers, using the spot rate of the Bank of Taiwan as of September 30, 2012, of NT$29.342 to US$1 uniformly for all the financial statements accounts. )
Qisda Corporation Reviewed Non-consolidated Statements of Operations For the nine-month periods ended September 30, 2011 and 2012 (Expressed in thousands of New Taiwan dollars and US dollars, expect earnings per share) 2011 2012 NT$ NT$ US$ Net sales 49,601,265 58,016,071 1,977,236 Cost of goods sold (47,193,385) (56,049,567) (1,910,216) Gross profit 2,407,880 1,966,504 67,020 Change in deferred inter-company profits 72,425 8,334 284 Realized gross profit 2,480,305 1,974,838 67,304 Operating expenses: Selling (357,758) (609,147) (20,760) Administrative (453,996) (176,969) (6,031) Research and development (1,626,539) (1,497,975) (51,052) (2,438,293) (2,284,091) (77,843) Operating income(loss) 42,012 (309,253) (10,539) Non-operating income: Interest income 32,126 14,799 504 Dividend income 272,786 154,412 5,262 Foreign currency exchange gain, net 267,037 90,030 3,068 Evaluation gain on financial instruments, net - 33,025 1,126 Others 636,052 399,154 13,604 1,208,001 691,420 23,564 Non-operating expenses: Interest expense (384,146) (392,878) (13,390) Investment loss recorded under the equity method, net (1,790,931) (1,511,115) (51,500) Evaluation loss on financial instruments, net (447,346) - - Others (1,338) (6,612) (225) (2,623,761) (1,910,605) (65,115) Loss before income tax (1,373,748) (1,528,438) (52,090) Income tax expense (27,192) - - Net loss (1,400,940) (1,528,438) (52,090) Earnings per share (expressed in New Taiwan dollars and US dollars): Basic earnings per share (0.70) (0.78) 0 Diluted earnings per share (0.71) (0.78) 0
Qisda Corporation Reviewed Non-consolidated Statements of Cash Flows For the nine-month periods ended September 30, 2011 and 2012 (Expressed in thousands of New Taiwan dollars and US Dollars) 2011 2012 NT$ NT$ US$ Cash flows from operating activities: Net loss (1,400,940) (1,528,438) (52,090) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 74,845 58,459 1,992 Amortization 29,059 21,242 724 Change in allowance for bad debt and sales discount 42,100 18,180 620 Amortization of bond discount and bond issuance costs 23,289 27,631 942 Change in provision for inventory obsolescence 1,142 (20,174) (688) Investment loss recorded under the equity method, net 1,790,931 1,511,115 51,500 Cash dividends received from investments recorded under the equity method 513,467 144,874 4,937 Loss (gain) on disposal of property, plant and equipment, net (842) 1,960 67 Other investment gain - (1,982) (68) Amortization of deferred profits on sale-and-leaseback transaction (81,882) (81,882) (2,791) Differences in accounts in the accompanying balance sheets: Financial assets and liabilities at fair value through profit or loss 447,346 (33,025) (1,126) Accounts receivable 13,495 (859,792) (29,302) Receivables from related parties (2,647,233) (1,424,683) (48,554) Other receivables (133,865) 381,213 12,992 Other receivables from related parties 60,701 (22,146) (755) Inventories (1,142,697) (693,502) (23,635) Prepaid expenses and other current assets (14,208) (6,602) (225) Prepaid pension (534) 1,800 61 Accounts payable 569,411 776,641 26,469 Payables to related parties 6,071,485 1,985,652 67,673 Income tax payable (132,075) - - Accrued expenses and other current liabilities (1,909,970) (688,383) (23,461) Other payables to related parties 62,571 (62,714) (2,137) Deferred inter-company profit (72,425) (8,334) (284) Net cash provided by (used in) operating activities 2,163,171 (502,890) (17,139) Cash flows from investing activities: Proceeds from capital return of investees - 3,574 122 Additions to property, plant and equipment (56,723) (15,683) (534) Proceeds from disposal of property, plant and equipment 890 5,010 171 Increase in restricted deposits - (761,718) (25,960) Decrease (increase) in refundable deposits (2,600) 3,045 104 Increase in deferred expenses (25,347) (34,552) (1,178) Decrease in other receivables from related parties 461,049 939,777 32,028 Net cash provided by in investing activities 377,269 139,453 4,753 Cash flows from financing activities: (Decrease) increase in short-term borrowings 4,124,262 (1,626,186) (55,422) Redemption of bonds - (120,900) (4,120) Increase in long-term debt 2,000,000 7,720,390 263,117 Decrease in long-term debt (7,520,500) (8,819,460) (300,574) Distribution of cash dividends (964,108) - - Net cash provided by (used in) financing activities (2,360,346) (2,846,156) (96,999) Net increase (decrease) in cash and cash equivalents 180,094 (3,209,593) (109,385) Cash and cash equivalents at beginning of period 465,513 4,141,627 141,150 Cash and cash equivalents at end of period 645,607 932,034 31,765 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest 377,355 403,792 13,762 Income taxes 109,715 1,776 61 Supplemental disclosure of non-cash investing and financial activities: Increase (decrease) in cumulative translation adjustment 628,949 (439,306) (14,972) Adjustments of net equity of investee companies 80,837 (151,097) (5,150) Changes in unrealized loss on available-for-sale financial assets (509,588) 195,581 6,666 Changes in available-for-sale financial assets in investee accounted for under long-term equity investments (66,549) 75,401 2,570