WAYNE, Pa. and AUSTIN, Texas, April 10
/Xinhua-PRNewswire-FirstCall/ -- Ascend Acquisition Corp.
("Ascend") (OTC Bulletin Board: ASAQ; ASAQU; ASAQW), a specified
purpose acquisition company, today announced the financial results
for the fourth quarter and full year ended December 31, 2007, for
its merger partner, e.PAK Resources (S) Pte. Ltd. ("ePAK"). Fourth
Quarter Highlights -- Net sales increased 39% year-over-year to
$13.9 million -- Gross profit rose 40% year-over-year to $5.0
million -- Adjusted EBITDA increased 69% year-over-year to $2.6
million -- Net income increased 13% year-over-year to $647,000 2007
Highlights -- Net sales increased 29% year-over-year to $46.8
million -- Gross profit rose 25% year-over-year to $16.3 million --
Adjusted EBITDA increased 32% year-over-year to $7.6 million -- Net
income increased 13% year-over-year to $2.5 million -- Tripled
manufacturing space at Shenzhen facility to 600,000 square feet --
Expanded cleanroom space by about 50% due to strong demand for
wafer and disk drive products Fourth Quarter 2007 Results In the
fourth quarter of 2007, ePAK generated net sales of $13.9 million,
up 39.3% from $10.0 million in the same quarter in 2006. This
growth was primarily the result of a substantial increase in sales
of wafer shippers, wafer transport media and data storage devices
to new customers and an increase in sales to existing customers.
Sales of IC handling products also increased during the quarter.
"In 2007, we achieved growth across all product lines, particularly
our high margin wafer handling business. Despite our capacity
constraints, we delivered another year of record revenue, gross
profit and adjusted EBITDA," said Steve Dezso, ePAK's CEO. "Our
gross margin in 2007 was slightly lower than in 2006 due to higher
raw material costs, large scale facilities expansion, and high cost
subcontract manufacturing due to demand outpacing internal
capacity. We expect additional improvement in revenue and gross
margin as we expand our manufacturing capacity to fill the
available space and reduce the need for high cost subcontracting."
Don K. Rice, Chairman of the Board and CEO of Ascend, commented,
"We look forward to closing the transaction, which we believe will
allow ePAK to meet the significant demand from its customer base,
and as a result, accelerate growth in revenues and profits." Gross
profit increased 40.2% in the fourth quarter of 2007 to $5.0
million. Gross margin was 36.2% in the fourth quarter of 2007, up
from 35.9% in the same quarter of 2006. The slight improvement in
gross margin was due to the increased contribution of higher margin
wafer products to the product sales mix, which was partially offset
by higher outsourcing costs resulting from the full capacity status
of ePAK's manufacturing facilities. Operating expenses were $3.6
million, up 30.8% from $2.7 million in the same quarter of 2006,
primarily due to higher selling and administrative expenses in
support of increased sales and increased costs at its manufacturing
facilities in China. Operating expenses accounted for 25.7% of
sales in the fourth quarter of 2007, down from 27.3% of sales in
the year ago period. Operating profit increased 70.4% to $1.5
million and adjusted EBITDA increased 69.4% to $2.6 million in the
fourth quarter of 2007. Income tax expense was $430,000, up from
$104,000 in the same quarter of 2006, due to an increase in
uncertain tax positions associated with the adoption of FIN 48 in
2007. Net income was $647,000, up 12.9% from $573,000 in the same
quarter of 2006. After an accretion of convertible contingently
redeemable common shares, which will be eliminated following the
close of ePAK's merger with Ascend, net income attributable to
common shareholders was $252,000, up from $58,000 in the fourth
quarter of 2006. Full Year 2007 Results Net sales 2007 increased
29.4% to $46.8 million, compared to $36.1 million in 2006. Gross
profit increased 24.8% to $16.3 million, up from $13.1 million in
2006. Gross margin was 34.9%, compared to 36.1% in 2006. Operating
profit increased 41.1% to $4.4 million and adjusted EBITDA
increased 32.4% to $7.6 million in 2007. The Company adopted FIN 48
as of January 1, 2007. Included in the total income tax expenses
for the year ended December 31, 2007 of $846,000, there was
$479,000 in income tax expenses accrued for uncertain tax positions
resulting from the adoption of FIN 48 of which the Company believes
$114,000 was non-recurring in nature. By excluding the
non-recurring expenses, the effective tax rate for the Company was
approximately 22% for the year ended December 31, 2007. Net income
was $2.5 million, up 13.2% from $2.2 million in 2006. After an
accretion of convertible contingently redeemable common shares, net
income attributable to common shareholders was $543,000, up from
$119,000 in 2006. Financial Condition At December 31, 2007, ePAK
had cash and cash equivalents of $2.8 million, total assets of
$43.2 million, short-term bank borrowings of approximately $7.4
million and long-term debt, including the current portion, of
approximately $1.5 million. In 2007, ePAK generated $15.5 million
of cash flow from operations, up from $12.4 million in 2006. ePAK's
cash flow from operations remained strong, despite the need to
increase inventories in order to support its rapid revenue growth.
In 2007, ePAK had capital expenditures of approximately $5.7
million, which was used to triple its manufacturing space to
600,000 square feet and install new equipment. Outlook "We believe
that our expanded manufacturing capabilities, including
substantially greater clean room space, will allow us to produce
strong organic growth in 2008. Up to this point, capital to fund
our growth has been constrained to the cash flow generated by our
operations. Following our merger with Ascend, we will have
significant cash available to increase capital expenditures and
pursue strategic acquisitions in the years ahead," said Mr. Dezso.
Mr. Rice commented, "ePAK has clearly established itself as a
best-in- class competitor in the semiconductor transport media
industry. The company is already serving a global blue chip
customer base and has penetrated and excelled in every market which
it has chosen to pursue. We are excited about the growth
opportunities available to ePAK, and look forward to closing the
transaction." In July 2007, Ascend entered into a definitive
agreement to acquire ePAK. Under the terms of the agreement, as
amended, at the closing of the transaction, the public company will
become a Bermuda public company and acquire 100% of the outstanding
capital stock of ePAK. Upon completion of the transaction, which is
expected in the second quarter of 2008, the resulting public
company will be named ePAK International Ltd. It is expected that
ePAK International Ltd.'s common stock and warrants will trade on
the NASDAQ Global Market. Additional Information A registration
statement and proxy statement under Form S-4 has been filed under
the issuer name "EPAK INTERNATIONAL LIMITED" with the Securities
and Exchange Commission in connection with the proposed acquisition
of ePAK and redomestication of the public company to Bermuda.
STOCKHOLDERS OF ASCEND AND OTHER INTERESTED PERSONS ARE ADVISED TO
READ, WHEN AVAILABLE, THE FINAL PROSPECTUS AND DEFINITIVE PROXY
STATEMENT IN CONNECTION WITH THE TRANSACTIONS AND THE SOLICIATION
OF PROXIES FOR THE SPECIAL MEETING OF ASCEND'S STOCKHOLDERS BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. The final prospectus and
definitive proxy statement will be mailed to Ascend's stockholders
as of a record date to be established for voting on the merger and
redomestication. These documents also will be available without
charge online at the Securities and Exchange Commission's Internet
site ( http://www.sec.gov/ ) and by mail through requests to Ascend
Acquisition Corp., 435 Devon Park Drive, Bldg. 400 Wayne, PA 19087,
Attention: T. Anderson. Stockholders and other interested persons
can also read Ascend's final prospectus, dated May 11, 2006, for a
description of the security holdings of Ascend's directors and
officers and of EarlyBirdCapital, Inc., the underwriters of
Ascend's initial public offering, and their respective interests in
the successful consummation of the proposed transactions. Use of
Non-GAAP Financial Information This press release contains adjusted
EBITDA, a financial measure that is not defined by US GAAP.
Adjusted EBITDA was derived by calculating earnings before
interest, taxes, depreciation and amortization and non-cash charges
including share based compensation, and provisions for bad debt,
inventory and property, plant and equipment and foreign exchange
differences. The Company's management uses adjusted EBITDA as an
important financial measure to assess the ability of ePAK's assets
to generate cash sufficient to pay interest on its indebtedness,
meet capital expenditure and working capital requirements, and
otherwise meet its obligations as they become due. The Company's
management believes that the presentation of adjusted EBITDA
provides useful information regarding ePAK's results of operations
because it assists in analyzing and benchmarking the performance
and value of ePAK's business. The Company's calculation of adjusted
EBITDA may not be consistent with similarly titled measures of
other companies. The table below presents a reconciliation of
adjusted EBITDA to net income, its most directly comparable U.S.
GAAP financial measure, on a historical basis, for the periods
presented. About e.PAK Resources (S) Pte. Ltd. ePAK is a
full-service designer, manufacturer and supplier of precision
engineered products and solutions for the automated transport and
handling of semiconductor and electronic devices. ePAK's product
areas include front-end wafer handling, back-end IC transport, and
end-system sub-assembly handling. The Company's products are sold
globally to top tier global customers including semiconductor
companies, system OEMs, and IC assembly and test operations. The
company's low cost, large-scale manufacturing operations in
Shenzhen, the People's Republic of China ("PRC") are centrally
located to the semiconductor industry. ePAK's executive offices are
located in Austin, Texas and the Company maintains nine sales and
applications engineering offices worldwide. About Ascend
Acquisition Corporation Ascend Acquisition Corp. was formed on
December 5, 2005 for the purpose of effecting a merger, capital
stock exchange, asset acquisition or other similar business
combination with an operating business. Ascend's registration
statement for its initial public offering was declared effective on
May 11, 2006 and the offering closed on May 22, 2006, generating
net proceeds of approximately $38.5 million from the sale of 6.9
million units, including the full exercise of the underwriters'
over-allotment option and the sale of 166,667 units to the Ascend's
Chairman and CEO, Don K. Rice. Each unit was comprised of one share
of Ascend common stock and two warrants, each with an exercise
price of $5.00. As of January 31, 2008, Ascend held approximately
$40.8 million in a trust account maintained by an independent
trustee, which will be released to Ascend upon the consummation of
the business combination. FORWARD LOOKING STATEMENTS This press
release may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 about
Ascend, ePAK and their combined business after completion of the
proposed business combination. These forward-looking statements are
based on current expectations and projections about future events.
These forward-looking statements are subject to known and unknown
risks, uncertainties and assumptions about us that may cause actual
results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity,
capital expenditures, performance or achievements expressed or
implied by such forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as "may,"
"will," "should," "could," "would," "expect," "plan," "anticipate,"
"believe," "estimate," "continue," or the negative of such terms or
other similar expressions. Factors that might cause or contribute
to such a discrepancy include, but are not limited to, Ascend's
ability to effect a business combination, ePAK's ability to grow
future revenues and earnings, changes in demand for ePAK's
products, market acceptance of the ePAK's products, changes in the
laws of the People's Republic of China that affect ePAK's
operations, and other factors that may be detailed from time to
time in Ascend's filings with the United States Securities and
Exchange Commission and other regulatory authorities. -FINANCIAL
TABLES FOLLOW- e.PAK RESOURCES AND SUBSIDIARIES UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (United States dollars in
thousands) Three Months ended Year ended December 31, December 31,
2007 2006 2007 2006 (Unaudited) (Unaudited) Net sales $ 13,949 $
10,015 $ 46,767 $ 36,146 Cost of sales (8,902) (6,416) (30,466)
(23,083) Gross profit 5,047 3,599 16,301 13,063 Selling, general
and administrative expenses (3,685) (2,695) (11,887) (9,797)
Research and development 105 (43) (60) (180) Operating profit 1,467
861 4,354 3,086 Interest income 7 8 22 22 Other income 10 -- 18 15
Interest expense (120) (118) (471) (354) Other expense (287) (74)
(611) (268) Income before income taxes 1,077 677 3,312 2,501 Income
tax expense (430) (104) (846) (322) Net income 647 573 2,466 2,179
Accretion of convertible contingently redeemable common shares
(395) (515) (1,923) (2,060) Net income attributable to common
shareholders $ 252 $ 58 $ 543 $ 119 e.PAK RESOURCES AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (United States dollars in
thousands, except number of shares and per share data) December 31,
2007 2006 ASSETS Current assets: Cash and cash equivalents $ 2,752
$ 2,624 Restricted cash and cash equivalents 400 381 Accounts
receivable, net of allowance for doubtful accounts of $16 and $28,
at December 31, 2007 and 2006, respectively 9,353 6,535 Inventories
9,421 8,994 Due from Parent Company 83 -- Deferred transaction
costs 1,937 -- Deferred tax assets 104 8 Other current assets 399
462 Total current assets $ 24,449 $ 19,004 Long-term deposits 13 13
Property, plant and equipment, net 18,689 14,506 Total assets $
43,151 $ 33,523 LIABILITIES AND SHAREHOLDERS' DEFICIT Current
liabilities: Accounts payable $ 12,536 $ 9,432 Accrued liabilities
2,393 1,571 Current maturities of long-term debt 729 501 Short-term
borrowings 7,406 4,964 Short-term loan from Parent Company 4,890
4,903 Income taxes payable 277 930 Total current liabilities $
28,231 $ 22,301 Non-current liabilities: Long-term debt, less
current maturities 739 1,061 Deferred tax liabilities 370 147
Accrual of uncertain tax positions 1,334 -- Redeemable common
shares: Convertible contingently redeemable common shares at
redemption value: 13,166,667 26,128 24,205 Shareholders' deficit:
Common shares, 24,000,000 shares authorized; issued and outstanding
shares: 2,000,000 400 400 Common share warrants -- 19 Accumulated
deficit (14,054) (14,698) Non-distributable reserves 121 121
Accumulated other comprehensive loss (118) (33) Total shareholders'
deficit $ (13,651) $ (14,191) Total liabilities and shareholders'
deficit $ 43,151 $ 33,523 e.PAK RESOURCES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (United States dollars in
thousands) Year ended December 31, 2007 2006 Cash flows from
operating activities Net income $ 2,466 $ 2,179 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment 2,928 2,300
Share-based compensation 82 300 Provision for doubtful accounts 3 6
Write-off of inventory 493 228 Property, plant and equipment
written off 62 -- Deferred tax expense 127 144 Accrual of uncertain
tax positions 479 -- Foreign exchange differences 286 83 Increase
(decrease) in cash from changes in: Accounts receivable (2,828)
(808) Inventories (924) (3,388) Due from Parent Company (83) 125
Other current assets 63 65 Deferred expenses (1,499) -- Accounts
payable 12,829 10,668 Accrued liabilities 829 391 Income tax
payables 200 138 Net cash flows provided by operating activities
15,513 12,431 Cash flows from investing activities Purchase of
property, plant and equipment (5,651) (5,099) Net cash flows used
in investing activities (5,651) (5,099) Cash flows from financing
activities Increase in restricted cash and cash equivalents (19)
(17) Proceeds from short-term borrowings 24,176 19,417 Repayment of
short-term borrowings (33,699) (26,868) Proceeds from long-term
debt 490 1,622 Repayment of long-term debt (584) (644) Proceeds
from loans from Parent Company -- -- Repayment of loans from Parent
Company (13) (150) Net cash flows used in financing activities
(9,649) (6,640) Net increase in cash and cash equivalents 213 692
Cash and cash equivalents at beginning of year 2,624 1,979 Effects
of exchange rates on cash and cash equivalents (85) (47) Cash and
cash equivalents at end of year $ 2,752 $ 2,624 Supplemental cash
flow disclosures: Cash paid for interest 482 346 Cash paid for
income taxes 38 40 Non-cash purchase of property, plant and
equipment through accounts payable 1,522 688 Non-cash settlement of
accounts payable through issuance of notes payables 11,959 9,494
e.PAK RESOURCES (S) PTE. LTD. AND SUBSIDIARIES Reconciliation of
Net Income to Adjusted EBITDA (Amounts expressed in United States
dollars, in thousands; US GAAP) Three Months Ended Year Ended
December 31, December 31, 2007 2006 2007 2006 Net income 647 573
2,466 2,179 Income taxes 430 104 846 322 Interest 113 110 449 332
Depreciation and amortization 879 572 2,928 2,300 Non-cash items
509 163 926 617 Adjusted EBITDA 2,578 1,522 7,615 5,750 For more
information, please contact: Ascend Acquisition Corporation Don K.
Rice, Chairman and CEO Tel: +1-610-519-1336 Email: Web:
http://www.ascendgrowth.com/ ePAK International Inc. Steve Dezso,
CEO Tel: +1-512-231-8083 Email: Web: http://www.epak.com/ Investor
Relations: Crocker Coulson, President CCG Investor Relations Tel:
+1-646-213-1915 Email: Web: http://www.ccgir.com/ DATASOURCE:
Ascend Acquisition Corp. Web site: http://www.ascendgrowth.com/
http://www.epak.com/ http://www.ccgir.com/
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