txc corporation investor conference · 84 98 528 979 1,332 302 61.08% 71.77% 65.05% 2.65% 2.88%...
TRANSCRIPT
Think of Frequency, Think of TXC TXC Proprietary 1
TXC Corporation
Investor ConferenceMay 23, 2008
Think of Frequency, Think of TXC TXC Proprietary 2
Agenda
• Financial Results
• Sales & Marketing
• Technology and Product
• Highlights
• Q & A
Think of Frequency, Think of TXC TXC Proprietary 3
Unit: NT$ in MillionYoY
Net Sales 1,322 1,383 1,709 1,836 6,250 5,206 20.1%
Cost of Sales 913 976 1,185 1,283 4,357 3,704 17.6%
Gross Profit 409 407 524 553 1,893 1,502 26.0%
Gross Margin (%) 30.9% 29.4% 30.7% 30.1% 30.3% 28.9%
Operating Expenses 146 154 182 167 649 506 28.3%
Operating Income 263 253 342 386 1,244 996 24.9%
Net Non Income(Expense) 1 4 (21) (22) (38) (36) 5.6%
Pre-tax Income(Loss) 264 257 321 364 1,206 960 25.6%
Net Income(Loss) 244 219 297 380 1,140 842 35.4%
Net Profit (%) 18.5% 15.8% 17.4% 20.7% 18.2% 16.2%
EPS (NT$) 1.01 0.91 1.23 1.57 4.72 4.09 15.3%
(2007/12/E Capital stock : 2.42Bn)
200620071Q'07 2Q'07 3Q'07 4Q'07
2007 Consolidated IS-Audited
Think of Frequency, Think of TXC TXC Proprietary 4
Unit: NT$ in MillionYoY
Net Sales 1,614 1,614 1,836 1,322 -12.1% 22.1%
Cost of Sales 1,190 1,181 1,283 913 -8.0% 29.4%
Gross Profit 424 433 553 409 -21.7% 5.9%
Gross Margin (%) 26.3% 26.8% 30.1% 30.9%
Operating Expenses 208 185 167 146 10.8% 26.7%
Operating Income 216 248 386 263 -35.8% -5.7%
Net Non Income(Expense) 1 1 (22) 1 -104.5% 0.0%
Pre-tax Income(Loss) 217 249 364 264 -31.6% -5.7%
Net Income(Loss) 206 233 380 244 -38.7% -4.5%
Net Profit (%) 12.8% 14.4% 20.7% 18.5%
EPS (NT$) 0.85 0.96 1.57 1.01 -38.7% -4.5%
*1Q'08 results do not include expenses of employee bonus and rewards for Board of Directors.(2008/03/E Capital stock : 2.42Bn)
QoQ1Q'08 1Q'08* 4Q'07 1Q'07
2008Q1 Consolidated IS-Audited
Think of Frequency, Think of TXC TXC Proprietary 5
Revenue Trend
Unit: NT$ in Million
1,125
1,359 1,3831,322
1,6141,709 1,836
1,5031,219
7.4%
-12.1%
23.6%
4.6%
-26.9%-12.0%
10.6%11.5%8.4%
-
200
400
600
800
1,0001,200
1,400
1,600
1,800
2,000
1Q '06 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 3Q '07 4Q '07 1Q '08-30%
-20%
-10%
0%
10%
20%
30%
Revenue Q oQ
Think of Frequency, Think of TXC TXC Proprietary 6
Profit Trend
244
297
219
380
233
14.4%20.7%17.4%15.8%18.5%
-30.3%
19.1%
9.7%
-14.2%
-5.0%
(30)2070
120170220270320370420
1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 -40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Net Profit NP Margin (% ) NP QoQ
Unit: NT$ in Million
*1Q’08 Net Profit do not include expenses of employee bonus and rewards for Board of Directors and Supervisors .
409
524
407
553433
26.8%30.1%30.7%29.4%30.9%
-10.9%
-1.8%4.2%
-4.9%0.9%
0
100
200
300
400
500
600
700
1Q'07 2Q'07 3Q'07 4Q'07 1Q'08-20%
-10%
0%
10%
20%
30%
40%
Gross Profit Gross Margin (% ) GM QoQ
■ Net Profit■ Gross Profit
Think of Frequency, Think of TXC TXC Proprietary 7
Unit: NT$ in Million
618716
41 84 98
528
979
1,332
302
61.08%
71.77%65.05%
3.73%2.88%2.65%
-
200
400
600
800
1,000
1,200
1,400
2005 2006 20070%
10%
20%
30%
40%
50%
60%
70%
80%
Available Allocation Dividend PSE Payout Ratio (%) Yield
Dividend Distribution
* PSE includes Employee Profit sharing expensing and rewards for Board of Directors and Supervisors.** 2005 & 2006 Yield according to the closing share price on the Shareholders meeting date,
2007 on the Board of Directors date.
Think of Frequency, Think of TXC TXC Proprietary 8
Unit: NT$ in Million
Impact of PSE per Share
*EPS after Employee Profit sharing expensing (PSE) according to the Par value.** 2005 & 2006 EPS after PSE according to the closing share price on the Shareholders meeting date,
2007 on the Board of Directors date.
1,140
842
480
1,042
758
439
4.884.46
3.70
4.13
2.73
2.50
3.72
2.69
1.96
-
200
400
600
800
1,000
1,200
2005 2006 2007-
1
2
3
4
5
6
Net Income Net Income after PSE EPS EPS-By PV* EPS-By MV**
Think of Frequency, Think of TXC TXC Proprietary 9
Unit: NT$ in Million
Cash & Marketable Securities 1,008 13.0% 1,244 16.0%Accounts Receivable 1,981 25.5% 2,214 28.5%Inventory 968 12.5% 747 9.6%Current Assets 4,139 53.4% 4,342 56.0%Long-Term Investments 3 0.0% 3 0.0%Fixed Assets 3,478 44.8% 3,221 41.5%Total Assets 7,757 100.0% 7,694 100.0%Accounts Payable 1,416 18.3% 1,386 17.9%Short-Term Debt 668 8.6% 692 8.9%Current Liabilities 2,384 30.7% 2,126 27.4%Long-Term Debt 199 2.6% 441 5.7%Total Liabilities 2,592 33.4% 2,577 33.5%Total Equity 5,165 66.6% 5,117 66.5%
Key IncicesA/R Turnover Days 121 119 Inventory Turnover Days 57 54 Current Ratio 207% 222%Total Assets turnover Rate 0.81 0.81
1Q'08 4Q'07
Balance Sheets & Key Indices
Think of Frequency, Think of TXC TXC Proprietary 10
Unit: NT$ in Million
-Net Income -Depreciation & Amortization -OthersFrom Operating Activities
-Capital Expenditure -Marketable Financial Instruments -OthersFrom Investing Activities
-Increase(Decrease) in Loans -Share buybacks & Stock option -Cash Dividends (Common Stock) -OthersFrom Financing ActivitiesEffect of changes in exchange ratesNet Cash Position ChangeEnding Cash Balance
(485)
(90)(1) (43)
(260)884 1,144
244
(349)(18)
Q1'08 4Q'071,140528
1,645
(1,111)
(412)(123)
0
62(87)
(1,136)
997
84
206165(38)333
(492)30(23)
34
(23)
Cash Flows
Think of Frequency, Think of TXC TXC Proprietary 11
CapEx Line Amount$ Date (F) Capacity/M Revenue/M (F)
Ping-Cheng factoryexpansion plant (2)
400
SMD Seam X’tal (TWN)3225 / 2520 / 2016 4 240 1Q 4.0M 40
SMD CXO (TWN)5032 / 3225 / 2520 2 140 1Q.3Q 2.0M 16
SMD TCXO (TWN)3225 / 2520 1 100 3Q 0.5M 12
NGB factoryexpansion plant 220
SMD Glass X’tal (NGB)5032 / 3225 2 100 2Q 2M 10
SMD Seam X’tal (NGB)5032 / 3225
4 220 2Q.3Q 4M 24
Total 13 1,420 12.5M 102
20082008 Unit:NT$ Million
Capital Expenditures
Think of Frequency, Think of TXC TXC Proprietary 12
Worldwide Industrial Overview
X’TAL & Oscillator growth trend:
Source:TIC
9,81510,867
14,53616,099
17,939
4,640
13,13911,975
4,1983,8213,5643,2863,0692,883
14.7%
11.4%10.8%10.6%9.7%10.2%10.7%
10.5%9.9%7.2%8.5%
7.1%6.5%
12.6%
02,0004,0006,0008,000
10,000
12,00014,00016,00018,00020,000
2004 2005 2006 2007 2008(f) 2009(f) 2010(f)0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Units Revenue Units(YoY) Revenue(YoY)
Units: M Pcs ; Revenue: US$ Million
Think of Frequency, Think of TXC TXC Proprietary 13
Worldwide Rank
Worldwide Revenue of the Top Crystal and Oscillator Suppliers (Millions of Dollars)
* Data Courtesy of CS & A
2006 Rank
2007 Rank
Company Name 2005
Revenue 2006
Revenue 2007
Revenue
% Change
(05-06)
% Change
(06-07)
2007 Market Share
1 1 Epson Toyocom 589 645 656 9.5% 1.7% 18.4%
2 2 NDK 515 626 649 21.6% 3.7% 18.2%
3 3 Kyocera Kinseki 338 372 380 10.1% 2.2% 10.7%
4 4 KDS 253 290 293 14.6% 1.0% 8.2%
5 5 Vectron 188 211 206 12.2% -2.4% 5.8%
6 6 TXC 117 161 192 37.6% 19.3% 5.4%
9 7 Rakon 53 59 109 11.3% 84.7% 3.1%
7 8 TEW 83 88 88 6.0% 0.0% 2.5%
8 9 Micro Crystal 56 60 62 7.1% 3.3% 1.7%
10 10 River 63 59 60 -6.3% 1.7% 1.7%
11 11 Pericom 45 49 57 8.9% 16.3% 1.6%
12 12 Fox 39 48 51 23.1% 6.3% 1.4%
Other Companies 730 618 761 -15.3% 23.1% 21.3%
Total Revenue 3,069 3,286 3,564 7.1% 8.5% 100.0%
Think of Frequency, Think of TXC TXC Proprietary 14
Business Model
Global Giants
IC DesignHouses EMS/CMs
TXC
Our Target Customers• Global Giants
• EMS/CMs
• IC Design Houses
Think of Frequency, Think of TXC TXC Proprietary 15
S/I/D21%
Mobile9%
PC22%
Automotive0.2%Digital Home
1%
Others6%
Global14%
Networking27%
S/I/D18%
Global14%
Digital Home0.8%
Others7%
PC19%
Automotive0.3%
Mobile15%
Networking26%
S/I/D18%
Mobile16%
PC19%
Automotive0.8%
DigitalHome
1%
Others6%
Global13%
Networking27%
Sales by IndustrySales by Industry
2007 2008 forecast
2008 Q1
Think of Frequency, Think of TXC TXC Proprietary 16
Sales by ApplicationSales by Application
Storage12%
Others8%
NB14%
Bluetooth3%
MP3/PMP11%
Mobile8%
Wireless21%
Game Console2%
DSC4%
STB5%
MB5%
NetworkCommunication
7%
2007 2008 forecast
NB13%
Storage11%
MP3 /PMP7%
Mobile13%
Wireless/WiMax21%
NetworkCommunicati
on7%
GameConsole
4%
Others9%
Bluetooth3%
MB3%
DSC3%
STB6%
Think of Frequency, Think of TXC TXC Proprietary 17
DIP X'tal14%
Seam 503216%
GLASS 804510%
Seam 6035/70509%
GLASS 50329%
Seam 322522%
TCXO/VCXO0.25%
Other0.04%
Automotive0.07%
SAW1.2%T/F
2%
LVPECL/LVDS4%
CXO 2520/32253%
Glass 3225/50321.3%Seam 2016/2520
1.9%
CXO 5032/70507%
Seam 6035/705010%
DIP X'tal16%
Seam 503214%
GLASS 50329%
GLASS 804510%
Seam 322516%
CXO 5032/70507%
LVPECL/LVDS3.2%
TCXO/VCXO0.8%
Seam 2016/25204%
T/F5%
CXO 2520/32254%
SAW0.7%
Glass 3225/50320.03%
Other0.02%
Automotive0.03%
Sales by Product CategorySales by Product Category
2007
2008Q1
18Think of Frequency, Think of TXC TXC Proprietary
Wireless Communication
Wireless Communication
Mobile
Bluetooth
WLAN
GPS
Networking INetworking I
WAN
Others
Networking IINetworking II
MAN
Long Haul
Crystal / SAW
PC / SID / ITPC / SID / IT
Multimedia
Desktop/Laptop
Peripherals
Digital Imaging
Others
Compact Low Power
HFF LVPECL / LVDS / HF VCXO / FX / VCSO
Stratum 3 / CS / CDR / OCXOSmaller Crystal
Smaller CXO TCXO SAWF SAWR Tuning Fork
High Frequency
Low Jitter
High Reliability
High Reliability
High Frequency
High Stability
Quartz SensorQuartz Sensor
Pressure
Gyroscopes
Gases
AutomotiveProducts
AutomotiveProducts
Non-Safety
TPMS
Products and Technology Strategy
DIP Crystal SMD CrystalSMD CXO
Current and MaturedCurrent and Matured
Technology Integration
ZERO Defect
Safety
RFID
Think of Frequency, Think of TXC TXC Proprietary 19
Technologies Roadmap
Think of Frequency, Think of TXC TXC Proprietary 20
Pursuit of Zero Defect Goal
TXC Zero Defect
Goal
Manufacturing
TestingCapabilityEnhancement
Continuous Improvement
Design
Application
TXC is striving for Zero
Defect and Manufacturing
Excellence!
Think of Frequency, Think of TXC TXC Proprietary 21
2008 Highlights
Q208 Revenue is expected 8-10% growth than Q108 (YoY 25%).
Gross margin should be maintained between 26% and 28%.
Operating income ratio should be maintained between 13% and 15%.
Sales contributed from Telecom application (i.e., wireless network and mobile devices) is expected to increase from 39% (’07) to 46% (’08) and will become the major driving force of sales growth .
Think of Frequency, Think of TXC TXC Proprietary 22
2008 Highlights
Getting the certification from top automotive companies, TXC expects to enjoy 200% sales growth in 2008 compared with year before.
Growth rate of high frequency/stability devices (i.e., LVPECL, TCXO, and SAW Filter) is expected to be 6.6% in 2008 other than 3.9% last year. Product applications include Fiber Channels, Gigabit Ethernet, GPS, and CDMA.
Sales from miniaturized crystal parts (i.e., 3225, 2520, and 2016) goes up from 24% (’07) to 36% (’08) and it is the main source contributed to our profit margin.
Think of Frequency, Think of TXC TXC Proprietary 23
2008 Highlights
Total production capacity will be increased to 160 million pcs per month (YoY 20%).
Expect to be listed as one of the Top 5 FCP suppliers in 2008.
Launch KM . TCRM . e-Learning systems, to share and maintain information efficiently.
Expect to establish 2~3 new sales offices in Asia.
Think of Frequency, Think of TXC TXC Proprietary 24
Q & A
Thanks!
http://www.txccorp.com