mmh sgxnet 03 12 final

8/2/2019 MMH SGXnet 03 12 Final

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MICRO-MECHANICS (HOLDINGS) LTD

Unaudited Third Quarter Financial Statements Announcement for the year ending 30/06/2012

PART I INFORMATION REQUIRED FOR ANNOUNCEMENTS OF THIRD QUARTER RESULTS

1(a) A statement of comprehensive income (for the group) together with a comparative statement for thecorresponding period of the immediately preceding financial year.

Group

3Q Year-to-Date (9 months)

Note

Jan to Mar2012S$

Jan to Mar2011S$

ChangeJul to Mar

2012S$

Jul to Mar2011S$

Change

Revenue (1) 9,353,529 11,105,983 (15.8%) 28,449,203 34,209,954 (16.8%)

Cost of sales (2) (5,046,855) (6,062,756) (16.8%) (15,591,360) (18,159,978) (14.1%)

Gross profit 4,306,674 5,043,227 (14.6%) 12,857,843 16,049,976 (19.9%)Other income (3) 106,575 190,649 (44.1%) 605,072 594,453 1.8%

Distribution costs (738,563) (803,157) (8.0%) (2,298,769) (2,463,413) (6.7%)

Administrative expenses (1,845,877) (1,862,664) (0.9%) (5,561,794) (5,729,329) (2.9%)

Other operating expenses (4) (581,940) (513,066) 13.4% (1,655,694) (1,569,776) 5.5%

Profit from operations 1,246,869 2,054,989 (39.3%) 3,946,658 6,881,911 (42.7%)

Finance costs - - - - -

Profit before taxation (5) 1,246,869 2,054,989 (39.3%) 3,946,658 6,881,911 (42.7%)

Taxation (6) (374,492) (382,277) (2.0%) (1,082,881) (1,418,947) (23.7%)

Profit after tax 872,377 1,672,712 (47.8%) 2,863,777 5,462,964 (47.6%)

Minority interests - - - - -

Net profit for the period 872,377 1,672,712 (47.8%) 2,863,777 5,462,964 (47.6%)

Statement ofComprehensive Income

Profit for the period 872,377 1,672,712 (47.8%) 2,863,777 5,462,964 (47.6%)Other comprehensiveincome:Foreign currencytranslation differences

(164,217) (125,588) 30.8% 327,096 (899,698) (136.4%)

Total comprehensiveincome for the period

708,160 1,547,124 (54.2%) 3,190,873 4,563,266 (30.1%)

n.m.: Not meaningful

Notes:(1) Please refer to section 8 of this announcement for an analysis of the Groups revenue.

(2) Cost of sales decreased in line with Group sales. Production headcount decreased to 354 in 3Q12, from 435 in3Q11 mainly due to right-sizing exercise in Thailand and Malaysia plant. Depreciation of equipment increased byS$34k.


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(3) Other income consists of:

3Q Year-to-Date (9 months)Jan to Mar

2012

S$

Jan to Mar2011

S$

ChangeJul to Mar

2012

S$

Jul to Mar2011

S$

Change

Gain on disposal ofproperty, plant andequipment

40,977 - n.m. 195,900 216,814 (9.6%)

Interest incomefrom banks andothers

28,931 18,462 56.7% 98,473 61,220 60.9%

Government grant Job CreditScheme & TrainingScheme

4,088 110,677 (96.3%) 33,864 173,886 (80.5%)

Exchange gain - - - 167,123 - n.m.

Others 32,579 61,510 (47.0%) 109,712 142,533 (23.0%)

(4) Please refer to section 8 of this announcement for an analysis of the Groups other operating expenses.

(5) Profit before taxation includes the following expenses:

(6) For 3Q12, the Groups effective tax rate was 30.0%, compared to 18.6% for 3Q11. This was mainly due to lossesincurred by our USA and Thailand subsidiaries. The corporate tax was S$325k while the withholding tax ondividend remitted by subsidiaries to the Holding Company was S$49k.

3Q Year-to-Date (9 months)Jan to Mar

2012S$

Jan to Mar2011S$

ChangeJul to Mar

2012S$

Jul to Mar2011S$

Change

Trade receivableswritten off

- - - - - -

Loss on disposal of

property, plant andequipment

- 14,582 (100.0%) - - -

Depreciation ofproperty, plant andequipment

987,733 939,637 5.1% 2,941,065 2,663,575 10.4%

Exchange loss 13,623 2,259 503.1% - 59,551 (100.0%)Inventories writtenoff

28,576 4,982 473.6% 56,469 47,863 18.0%


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1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of theimmediately preceding financial year.

Note

Group31 Mar 12

S$

Group30 Jun 11

S$

Company31 Mar 12

S$

Company30 Jun 11

S$

Non-current assets

Property, plant and equipment 25,133,359 24,702,462 - -Investment in subsidiaries - - 17,257,474 17,257,474Trade and receivables - - 2,974,688 2,789,150

25,133,359 24,702,462 20,232,162 20,046,624

Current assets

Inventories 2,221,144 2,076,029 - -Trade and other receivables 9,072,439 9,424,631 773,077 1,745,443

Cash and cash equivalents 5,441,128 7,463,246 849,872 1,002,747

16,734,711 18,963,906 1,622,949 2,748,190

Total assets 41,868,070 43,666,368 21,855,111 22,794,814

Shareholders equity

Share capital (1) 14,782,931 14,685,321 14,782,931 14,685,321Foreign currency translation reserve (2) (2,009,195) (2,336,291) - -Accumulated profits 23,122,915 24,430,094 6,832,853 7,805,876

35,896,651 36,779,124 21,615,784 22,491,197

Non-current liabilities

Deferred tax liabilities 1,485,197 1,472,627 - -

1,485,197 1,472,627 - -

Current liabilities

Trade and other payables 3,577,423 4,461,689 237,686 302,686Provision for taxation 908,799 952,928 1,641 931

4,486,222 5,414,617 239,327 303,617

Total liabilities 5,971,419 6,887,244 239,327 303,617

Total equity and liabilities 41,868,070 43,666,368 21,855,111 22,794,814

Notes:

(1) On 10 October 2011, the Company issued 227,000 shares at S$0.43 per share pursuant to Micro-MechanicsPerformance Share Plan to eligible employees.

(2) The movement in foreign currency translation reserves was mainly due to the depreciation of the Singapore Dollaragainst Renminbi, Malaysia Ringgit and Thai Baht as at 31 March 2012, when compared to 30 June 2011.


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1(b)(ii) Aggregate amount of groups borrowings and debt securities.

Amount repayable in one year or less or on demand

As at 31 Mar 12 As at 31 Mar 11

Secured Unsecured Secured UnsecuredNil Nil Nil Nil

Amount repayable after one year

As at 31 Mar 12 As at 31 Mar 11

Secured Unsecured Secured Unsecured

Nil Nil Nil Nil

Details of any collateral

Not applicable


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1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding periodof the immediately preceding financial year.

Group3Q Year-to-Date (9 months )

Note

Jan to Mar

2012S$

Jan to Mar

2011S$

Jul to Mar

2012S$

Jul to Mar

2011S$

Operating activities

Profit before taxation 1,246,869 2,054,989 3,946,658 6,881,911

Adjustments for:Depreciation of property, plant andequipment 987,733 939,637 2,941,065 2,663,575(Gain)/loss on disposal of property, plantand equipment (40,977) 14,582 (195,900) (216,814)

Interest income (28,931) (18,462) (98,473) (61,220)

Operating profit before changes in

working capital 2,164,694 2,990,746 6,593,350 9,267,452Inventories (18,530) 11,965 (145,114) (152,371)

Trade and other receivables (239,640) (857,165) 347,548 (1,214,051)

Trade and other payables (136,697) (581,675) (844,312) (1,731,608)

Cash generated from operations 1,769,827 1,563,871 5,951,472 6,169,422

Interest received 34,720 20,028 103,117 73,775

Income tax paid (276,950) (405,967) (1,073,935) (1,161,613)

Cash flows from operating activities 1,527,597 1,177,932 4,980,654 5,081,584

Investing activities

Purchase of property, plant and equipment (794,352) (1,422,494) (3,188,321) (5,762,457)Proceeds from disposal of property, plantand equipment 81,841 49,088 263,089 311,528

Cash flows from investing activities (712,511) (1,373,406) (2,925,232) (5,450,929)

Financing activities

Proceeds from issue of ordinary shares - - - 66,000

Dividends paid (1) (1,390,319) (1,388,049) (4,170,956) (4,164,147)

Deposits pledged (115) 315 (947) 5,305

Cash flows from financing activities (1,390,434) (1,387,734) (4,171,903) (4,092,842)

Net increase/ (decrease) in cash and cashequivalents (575,348) (1,583,208) (2,116,481) (4,462,187)Cash and cash equivalents at beginning ofthe period 5,896,513 6,621,131 7,314,746 9,795,162

Effect of exchange rate fluctuations (29,484) (62,791) 93,416 (357,843)

Cash and cash equivalents at end of theperiod (2) 5,291,681 4,975,132 5,291,681 4,975,132

Notes:(1) The Company paid an interim dividend of 1.0 cent per ordinary share (one-tier tax exempt) on 23 February 2012

in respect of financial year ended 30 June 2012.


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(2) Cash and cash equivalent is derived from:

Group31 Mar 12

S$

Group31 Mar 11

S$

Cash and cash equivalent balances 5,441,128 5,127,123

Less: Pledged cash placed with bank (149,447) (151,991)5,291,681 4,975,132

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity otherthan those arising from capitalisation issues and distributions to shareholders, together with a comparativestatement for the corresponding period of the immediately preceding financial year.

ShareCapital

ForeignCurrency

TranslationReserve

AccumulatedProfits

Total

S$ S$ S$ S$

The Group

As at 1 July 2010 14,619,321 (1,029,297) 21,768,340 35,358,364

Total comprehensive income for the period

Net profit for the period - - 3,790,252 3,790,252

Other comprehensive income

Foreign currency translation differences, net of tax - (774,110) - (774,110)

Total comprehensive income for the period - (774,110) 3,790,252 3,016,142

Transactions with owners, recorded directly in equity

Issue of 150,000 ordinary shares @ 44.0 cents per share 66,000 - - 66,000

Final dividend of 2 cents per share (one tier tax-exempt) inrespect of FY2010

- - (2,776,098) (2,776,098)

Total transactions with owners, recorded directly in equity 66,000 - (2,776,098) (2,710,098)

As at 31 December 2010 14,685,321 (1,803,407) 22,782,494 35,664,408

As at 1 January 2011 14,685,321 (1,803,407) 22,782,494 35,664,408

Total comprehensive income for the period:

Net profit - - 1,672,712 1,672,712

Other comprehensive income:

Foreign currency translation difference - (125,588) - (125,588)

Total comprehensive income for the period - (125,588) 1,672,712 1,547,124

Transactions with owners, recorded directly in equityInterim dividend of 1.0 cent per share (one tier tax-exempt) in respect of FY2011 - - (1,388,049) (1,388,049)

Total transactions with owners, recorded directly in equity - - (1,388,049) (1,388,049)

As at 31 March 2011 14,685,321 (1,928,995) 23,067,157 35,823,483


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ShareCapital

ForeignCurrency

TranslationReserve

AccumulatedProfits

Total

S$ S$ S$ S$

The GroupAs at 1 July 2011 14,685,321 (2,336,291) 24,430,094 36,779,124




Foreign currency translation differences, net of tax - 491,313 - 491,313

Total comprehensive income for the period - 491,313 1,991,400 2,482,713

Transactions with owners, recorded directly in equity

Issue of 227,000 ordinary shares @ 43.0 cents per share 97,610 - - 97,610

Final dividend of 2 cents per share (one tier tax-exempt) in

respect of FY2011

- - (2,780,637) (2,780,637)


As at 31 December 2011 14,782,931 (1,844,978) 23,640,857 36,578,810

As at 1 January 2012 14,782,931 (1,844,978) 23,640,857 36,578,810


Net profit for the period - - 872,377 872,377


Foreign currency translation differences, net of tax - (164,217) - (164,217)

Total comprehensive income for the period - (164,217) 872,377 708,160

Transactions with owners, recorded directly in equityInterim dividend of 1.0 cent per share (one tier tax-exempt) in respect of FY2012

- - (1,390,319) (1,390,319)


As at 31 March 2012 14,782,931 (2,009,195) 23,122,915 35,896,651


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ShareCapital

ForeignCurrency

TranslationReserve

AccumulatedProfits

Total

The Company

As at 1 July 2010 14,619,321 - 7,363,496 21,982,817Total comprehensive income for the period


Total comprehensive income for the period - - 2,035,137 2,035,137

Transactions with owners, recorded directly in equityIssue of 150,000 ordinary shares at 44.0 cents per share 66,000 - - 66,000Final dividend of 2 cents per share (one tier tax-exempt) inrespect of FY2010

- - (2,776,098) (2,776,098)


As at 31 December 2010 14,685,321 - 6,622,535 21,307,856

As at 1 January 2011 14,685,321 - 6,622,535 21,307,856

Total comprehensive income for the periodNet profit for the period - - 915,205 915,205

Total comprehensive income for the period - - 915,205 915,205

Transactions with owners, recorded directly in equityInterim dividend of 1.0 cent per share (one tier tax-exempt) in respect of FY2011 - - (1,388,049) (1,388,049)


As at 31 March 2011 14,685,321 - 6,149,691 20,835,012

ShareCapital

ForeignCurrency

TranslationReserve

AccumulatedProfits

Total

The CompanyAs at 1 July 2011 14,685,321 - 7,805,876 22,491,197




Transactions with owners, recorded directly in equityIssue of 227,000 ordinary shares @ 43.0 cents per share 97,610 - - 97,610Final dividend of 2 cents per share (one tier tax-exempt) inrespect of FY2011

- - (2,780,637) (2,780,637)

Total transactions with owners, recorded directly in equity 97,610 - (2,780,637) (2,683,027)As at 31 December 2011 14,782,931 - 6,392,784 21,175,715

As at 1 January 2012 14,782,931 - 6,392,784 21,175,715




Transactions with owners, recorded directly in equityInterim dividend of 1.0 cent per share (one tier tax-exempt) in respect of FY2012 - -

(1,390,319) (1,390,319)


As at 31 March 2012 14,782,931 - 6,832,853 21,615,784


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1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-

backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of sharesfor cash or as consideration for acquisition or for any other purpose since the end of the previous periodreported on. State also the number of shares that may be issued on conversion of all the outstandingconvertibles as at the end of the current financial period reported on and as at the end of the corresponding

period of the immediately preceding financial year.

On 10 October 2011, the Company issued 227,000 shares at S$0.43 per share pursuant to Micro-MechanicsPerformance Share Plan to eligible employees.

1(d)(iii)To show the total number of issued shares excluding treasury shares as at the end of the current financialperiod and as at the end of the immediately preceding year.

The total number of shares were 139,031,881 ordinary shares as at 31 March 2012 and 138,804,881 ordinaryshares as at 31 March 2011. The Company does not have any treasury shares as at the end of the current financialperiod and as at the end of the immediately preceeding period.

1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of

the current financial period reported on.

Not applicable.

2. Whether the figures have been audited or reviewed and in accordance with which auditing standard orpractice.

The figures have not been audited or reviewed by the auditors.

3. Where the figures have been audited or reviewed, the auditors report (including any qualifications oremphasis of a matter).

Not applicable.

4. Whether the same accounting policies and methods of computation as in the issuers most recently auditedannual financial statements have been applied.

Yes.

5. If there are any changes in the accounting policies and methods of computation, including any required byan accounting standard, what has changed, as well as the reasons for, and the effect of, the change.

Not applicable

6. Earnings per ordinary share of the group for the current financial period reported on and thecorresponding period of the immediately preceding financial year, after deducting any provision for

preference dividends.

Group

3Q 9 months

Jan to Mar2012

Jan to Mar2011

Jul to Mar2012

Jul to Mar2011

Earnings per ordinary share for the periodbased on net profit after tax and minorityinterest:-(i) Based on weighted average number ofordinary shares in issue

0.63 cents 1.21 cents 2.06 cents 3.94 cents

(ii) On a fully diluted basis 0.63 cents 1.21 cents 2.06 cents 3.94 cents

The calculation is based on the weighted average number of shares in issue during the period. The weightedaverage number of shares outstanding during the year was 138,948,510 (31 March 2011: 138,770,939).


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7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer atthe end of the:-(a) current financial period reported on; and(b) immediately preceding financial year.

Group Group Company Company

31 Mar 12 30 Jun 11 31 Mar 12 30 Jun 11Net Asset Value per ordinary share (cents) 25.82 26.50 15.55 16.20

The net asset value per ordinary share is calculated based on net assets of S$35.9 million (30 June 2011: S$36.8million) and 139,031,881 (30 June 2011: 138,804,881) shares in issue at the end of the currrent financial periodreported on/immediately preceding financial year.

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of thegroups business. It must include a discussion of the following:-(a)any significant factors that affected the turnover, costs, and earnings of the group for the current

financial period reported on, including (where applicable) seasonal or cyclical factors; and(b)any material factors that affected the cash flow, working capital, assets or liabilities of the group during

the current financial period reported on.

REVIEW OF PROFIT AND LOSS

Semiconductor industry review

The global semiconductor industry began the year 2012 on a weak note. Based on data from the SemiconductorIndustry Association, worldwide chip sales fell 8.8% to US$23.2 billion in January and 7.3% to US$22.9 billionin February 2012, compared with the same months in 2011. The SIA will release sales data for March 2012 inearly May 2012. The SIA attributed the weak sales at the start of the year to the weakened global economy amidstinflation concerns and the European debt crisis. However, the SIA said semiconductor sales are expected toimprove due to positive demand drivers, an improved economic outlook for the USA and resolution of the floodproblem in Thailand which the industry body believes point to recovery and growth as 2012 progresses.

Group Revenue

1Q 2Q 3Q 4Q Full Year

FY2012 S$10,370,649 S$8,725,025 S$9,353,529 NA NA

FY2011 S$11,677,646 S$11,426,325 S$11,105,983 S$11,098,199 S$45,308,153REVENUE

% growth (11.2%) (23.6%) (15.8%) NA NA

For the 3 months ended 31 March 2012 (3Q12), Group revenue decreased 15.8% to S$9.4 million as businessconditions in the semiconductor industry remained sluggish due to continuing global economic uncertainties.Revenues derived from our two main product segments and many of our geographic markets declined during the

period under review which had an adverse impact on the Group results in 3Q12. Although the first three monthsof the calendar year is generally a seasonally slower period, revenue in 3Q12 showed a 7.2% quarter-on-quarter(qoq) increase from S$8.7 million in 2Q12.

For the 9 months ended 31 March 2012 (9M12), Group revenue decreased 16.8% to S$28.4 million from S$34.2million in 9M11, reflecting the slowdown in the semiconductor industry since the middle of 2011.

Revenue breakdown by product segment


FY2012 S$8,812,748 S$7,369,355 S$7,748,417 NA NA

FY2011 S$9,633,183 S$9,447,503 S$8,990,745 S$8,932,632 S$37,004,063

SEMI-CONDUCTOR

TOOLINGREVENUE

% growth (8.5%) (22.0%) (13.8%) NA NA


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FY2012 S$1,557,901 S$1,355,670 S$1,605,112 NA NA

FY2011 S$2,044,463 S$1,978,822 S$2,115,238 S$2,165,567 S$8,304,090CMAREVENUE

% growth (23.8%) (31.5%) (24.1%) NA NA

Revenue from the Groups semiconductor tooling segment, which serves customers involved in the assembly andtesting of semiconductors, decreased 13.8% to S$7.7 million in 3Q12, from S$9.0 million in 3Q11. This was duemainly to slower global chip manufacturing activity, as well as the rightsizing of our operations in Thailand tomatch the lower requirements of this market in the aftermath of the countrys severe floods last year. On asequential basis however, semiconductor tooling revenue in 3Q12 gained 5.1% from S$7.4 million in 2Q12 ascustomer demand in most of our markets showed a gradual improvement.

Revenue from our Custom Machining & Assembly (CMA) division, which mainly serves high technology capitalequipment manufacturers in the aerospace, medical, laser and wafer fabrication industries, continued to beaffected by slower demand for capital equipment due to the uncertain global economic outlook. Coupled with theimpact of the US dollars depreciation against the Singapore dollar (which fell about 4% compared to 3Q11), ourCMA sales declined 24.1% to S$1.6 million in 3Q12, from S$2.1 million in 3Q11. On a sequential basis however,

CMA sales in 3Q12 were up 18.4% qoq from S$1.4 million in 2Q12.

For 9M12, our semiconductor tooling and CMA segments accounted for 83% and 17% respectively of theGroups revenue.

Revenue breakdown by Geographical Market

Group

2Q12 3Q12 3Q11 9M12 9M11Country

S$ m % S$ m %

%change S$ m % S$ m %

%change

Singapore 0.5 0.7 7% 0.4 3% 73.2% 1.8 6% 1.4 4% 27.1%

Malaysia 2.0 1.9 20% 2.2 20% (16.3%) 6.0 21% 6.9 20% (12.6%)

Philippines 0.6 0.8 8% 0.7 7% 5.0% 2.2 8% 2.4 7% (8.2%)Thailand 0.3 0.5 6% 1.1 9% (47.3%) 1.8 6% 2.9 8% (38.4%)

China 1.7 1.8 19% 1.8 16% (0.3%) 5.5 19% 5.4 16% 2.1%

USA 1.5 1.5 16% 2.6 23% (41.7%) 4.5 16% 7.7 23% (41.6%)

Europe 0.4 0.5 5% 0.4 4% 13.7% 1.4 5% 1.3 4% 5.9%

Japan 0.4 0.3 3% 0.4 4% (25.4%) 1.1 4% 1.5 4% (26.3%)

Taiwan 0.9 0.9 10% 0.9 8% (4.6%) 2.7 10% 3.0 9% (8.8%)

Rest ofWorld

0.4 0.5 6% 0.6 6% (9.2%) 1.4 5% 1.7 5% (18.4%)

Total 8.7 9.4 100% 11.1 100% (15.8%) 28.4 100% 34.2 100% (16.8%)

The slowdown in global chip manufacturing activity continued to dampen sales of our semiconductor tools in the

Groups markets during 3Q12.

Revenue contributed by the Malaysia market in 3Q12 decreased 16.3% to S$1.9 million. Our continuing efforts tostrengthen the Groups competitive position in China enabled our sales in this market to hold steady at S$1.8million in 3Q12. Malaysia and China continued to be our largest markets for semiconductor tools with acombined contribution of 39% of Group revenue in 3Q12.

Sales to the Thailand market decreased by 47.3% to S$0.5 million in 3Q12 from S$1.1 million in 3Q11 as manyof our customers there have yet to resume their operations after the severe floods last year. As a result, Thailandcontributed a lower 6% of Group revenue in 3Q12, compared to 9% in 3Q11.

The USA, which is mainly a market for our CMA business, witnessed a sales decline of 41.7% to S$1.5 million in3Q12, from S$2.6 million in 3Q11, due mainly to lower demand for capital equipment. Revenue contribution

from the USA would have been higher if not for the depreciation of the US dollar against Singapore dollarbetween the two reporting periods.


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While Singapore is mainly a market for the Groups semiconductor tools, revenue from this market increased73.2% to S$0.7 million in 3Q12, from S$0.4 million in 3Q11.

Capacity Utilisation


FY2012 55% 46% 41% NA NACapacityUtilisation

FY2011 56% 54% 58% 55% 56%

Our average capacity utilisation rate decreased to 41% in 3Q12, compared to 58% in 3Q11, as a result of slowerGroup sales during the period under review.

Gross Profit (GP) Margin


FY2012 45.1% 44.4% 46.0% NA NAGroupGP Margin FY2011 48.9% 46.4% 45.4% 42.7% 45.9%


Semiconductor 52.2% 52.5% 53.1% NA NAFY2012

CMA 4.8% 0.1% 12.0% NA NA

Semiconductor 56.8% 54.3% 53.1% 50.1% 53.7%

Gross ProfitMargin

(By ProductSegment) FY2011

CMA 11.4% 8.0% 12.8% 12.6% 11.3%

The Groups gross profit (GP) decreased 14.6% to S$4.3 million in 3Q12, from S$5.0 million in 3Q11 in tandemwith the decline in sales. Nonetheless, Group GP margin in 3Q12 remained steady at 46.0%, compared to 45.4%in 3Q11 and 44.4% in 2Q12.

Although semiconductor industry conditions continued to be challenging in 3Q12, our semiconductor tooling

segment maintained a healthy GP margin of 53.1%. This is attributable to our continuous efforts to improvequality, cost and cycle time which helped to mitigate selling price pressures and the impact of US dollardepreciation.

The GP margin of our CMA division also held fairly steady at 12.0% in 3Q12, compared to 12.8% in 3Q11. Thiswas a substantial improvement from the divisions GP margin of 0.1% in 2Q12 and 4.8% in 1Q12 which can bemainly attributed to our continued focus on lowering costs and improving the efficiency of our manufacturingoperation in the USA. In addition, GP margin in 3Q12 benefited from our decision to move a number of engineersfrom manufacturing roles to the team responsible for developing our new 24/7 manufacturing line which reducedmanufacturing overhead by about S$35k during the quarter.

Other income, Distribution Cost, Administrative Expenses and Other Operating Expenses


FY2012 S$2,971,438 S$2,879,942 S$3,059,805 NA NA% of sales 28.7% 33.0% 32.7%

FY2011 S$3,196,322 S$2,983,505 S$2,988,238 S$2,990,680 S$12,158,745

Admin,Distribution andOther OperatingExpenses (net of

other income)% of sales 27.4% 26.1% 26.9% 26.9% 26.8%

Other income decreased 44.1% to S$106k in 3Q12 (S$191k in 3Q11) due primarily to less government grants.

We continued to keep a close watch on our expense structure during 3Q12. Administrative expenses remainedsteady at S$1.8 million, due mainly to lower Performance Bonus Incentive payments and reduction in staff costs.Distribution costs declined 8.0% to S$739k in 3Q12 (S$803k in 3Q11) as Sales Incentive Payments were lower inline with decreased sales, lower headcount and other expenses related to sales and marketing.

Other operating expenses increased 13.4% to S$582k (S$513k in 3Q11). This was mainly attributable toadditional expenses of about S$35k related to design and engineering as a number of engineers were moved from


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manufacturing roles at our USA operation into our team responsible for developing our new 24/7 manufacturingline during 3Q12.

In total, our administrative, distribution and other operating expenses (inclusive of other income) increasedslightly to S$3.1 million in 3Q12, from S$3.0 million in 3Q11. In total, these overhead costs were 32.7% of Groupsales in 3Q12, compared to 26.9% in 3Q11.

Profit before Tax and Net Profit


FY2012 S$1,243,964 S$747,436 S$872,377 NA NA

FY2011 S$1,989,284 S$1,800,968 S$1,672,712 S$1,362,937 S$6,825,901Net Profit after

tax% growth (37.5%) (58.5%) (47.8%) - -

As a result of the above, the Group reported profit before tax of S$1.2 million in 3Q12, a decrease of 39.3% fromS$2.1 million in 3Q11. After deducting taxation of S$374k (S$382k in 3Q11), the Groups net profit declined47.8% to S$872k in 3Q12, from S$1.7 million in 3Q11.

For 9M12, the Group recorded profit before tax of S$3.9 million, a decline of 42.7% from S$6.9 million in 9M11.After deducting taxation of S$1.0 million (S$1.4 million in 9M11), Group net profit decreased 47.6% to S$2.9million in 9M12, from S$5.5 million in 9M11. The Groups net profit margin in 9M12 contracted to 10.1% from16.0% in 9M11. The effective tax rate in 9M12 was 27.4%, compared to 20.6% for 9M11.

Balance Sheet

As at 31 March 2012, the Group remained in a sound financial position with a balance sheet that had total assetsof S$41.9 million, shareholders equity of S$35.9 million, cash and cash equivalents of S$5.4 million and no bankborrowings.

Accounts Receivable

As at end of 1Q As at end of 1H As at end of 3Q As at end of 2H

FY2012 S$6,851,204 S$5,607,679 S$6,152,980 NA

> 90 days 0.8% 0.1% 0.8%

Write-off Nil Nil Nil

FY2011 S$7,244,402 S$6,675,224 S$7,114,194 S$6,661,972

> 90 days 1.8% 1.9% 1.8% 1.1%

AccountsReceivable

Write-off Nil Nil Nil Nil

Total trade receivables as at 31 March 2012 amounted to S$6.1 million. Of this, 0.8% was outstanding for 90 daysor more (1.8% at end of 31 March 2011). There were no bad debts for the period under review.

As at 31 March 2012, our trade payables totaled S$0.7 million, of which S$31k were outstanding for 30 days ormore. Non-trade payables totaled S$0.7 million, of which S$67k were outstanding for more than 30 days.

Inventory

As a percentage of annualised sales, our inventory of S$2.2 million at the end of 3Q12 remained steady at 5.9%(5.1% at end-3Q11). Inventory written off in 3Q12 totaled S$29k, compared to S$5k in 3Q11.

Capital Expenditure


FY2012 S$1,454,606 S$939,363 S$794,353 NA NA

% of salesFY2011 S$2,647,412 S$1,692,551 S$1,422,494 S$976,161 S$6,738,618

CapitalExpenditure

% of sales 14.9%


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During 3Q12, our capital expenditure totaled S$0.8 million of which S$0.6 million was invested on newproduction equipment mainly for our Suzhou plant and, while S$0.2 million was for the ERP system.

Cash Flow Analysis

Despite the decline in profit before tax, the Group generated net cash from operating activities of S$1.5 million in

3Q12 which is comparable to S$1.2 million in 3Q11, due primarily to a reduction in our working capital. Net cashused for investing activities amounted to S$0.8 million mainly for purchases of production equipment and ERPsytem. The Group used net cash of S$1.4 million for financing activities during 3Q12, due mainly to payment ofan interim dividend in respect of FY2012. We closed the period with cash of S$5.3 million (after adjusting for theeffect of exchange rate fluctuations) and no bank borrowings.

9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variancebetween it and the actual results.

No forecast or prospect statement had been issued for the current financial reporting period. There is no materialvariance from our previous financial year commentary under Section 10.

10. A commentary at the date of the announcement of the significant trends and competitive conditions of the

industry in which the group operates and any known factors or events that may affect the group in the nextreporting period and the next 12 months.

Semiconductor tooling businessThe third quarter of FY2012 was a difficult period for our Group. Based on data from the SIA, world-wide salesof semiconductors fell 8.8% in January and 7.3% in February compared with the same months a year ago (the SIAhas not yet released figures for March 2012). Although we maintained a healthy GP margin of 53% for oursemiconductor tooling segment in 3Q12, the 14% decline in sales to S$7.7 million resulted in the gross profitcontribution of our tooling business falling about S$0.7 million compared with the same period a year ago.

Update on Thailand operationsAfter ensuring the floodwater level had receded to safe levels, the Group re-opened its semiconductor toolingfactory in Pathumthani, Thailand in mid-December 2011. However, with about half of our customers in Thailand

affected by the flooding, we decided to scale-back the size of our factory. After spending S$64k during 2Q12, wespent another S$64k during 3Q12 to complete this restructuring and make repairs to plant and equipmentdamaged in the flood. Although our people in Thailand have worked very hard to restore our factory and resumesupport to our customers, our sales there declined by almost 50% during 3Q12 compared with the same period ayear ago. It is still too early to know how many of our customers will resume their manufacturing operations inThailand. During the next six months, we will carefully monitor the market in Thailand to ensure that ouroperation is right-sized to the markets requirements.

CMA DivisionDuring the quarter in review, our CMA sales fell 24% to S$1.6 million due to reduced demand for capitalequipment especially from customers tied to the semiconductor industry. Nonetheless, we are continuing to focuson lowering costs and building a foundation for growth based on innovation, uncompromising quality andefficient manufacturing of complex parts. During the last several quarters, we have been developing a pilot line of

machines designed to manufacture parts in a highly efficient and automated environment. With the engineeringphase of this project nearing completion, we intend to capitalize our investment of S$3.7 million in thesemachines, which includes fixtures, tools and accessories, by the end of FY2012.

Focusing on our fundamentalsThe world economy seems to have averted, at least for now, a major meltdown from the soverign debt crisis inEurope. But the latest developments in Iran, Syria and North Korea could spill over at any time and add furtheruncertainty to the already volatile and unpredictable markets. As such, we intend to stay focused on thefundamentals of competitiveness, including a continued emphasis on keeping costs low. During 3Q12, ouradministrative, distribution and other overhead costs increased just 2% to S$3.1 milion in the same period a yearago. At the same time, we plan to stay focused on working to build a great company for the long term. During thequarter, we invested S$0.8 million in new plant and equipment (bringing our total investment in new assets so farfor FY2012 to S$3.2 million). Together with an interim dividend of S$1.4 million paid to our shareholders in

February, we ended the quarter with S$5.3 million in cash and a balance sheet that includes S$36 million in netassets and no bank borrowings.


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According to the SIA, the growing level of semiconductor content embedded across a wide range of consumer,industrial, business and government applications points to continued growth over the next two years. Although theWSTS Autumn 2011 forecast predicted global chip sales to grow by 2.6% to US$310 billion in 2012, recent SIAdata showed declining chip sales during the first two months of 2012. As such, the environment remains uncertainand we are tailoring our plans for the rest of 2012 with a cautious approach to spending, hiring and investment.

Corporate governance initiatives start at the top with the Board of Directors and Group executives. However, theunderpinnings of accuracy, completeness and transparency - the right way of doing things - depend on everyperson in the Group. In October 2011, we received an award from the Securities Investors Association ofSingapore (SIAS) for The Most Transparent Company (Runner-up, Mainboard Small Caps) which marked thefifth time in seven years that Micro-Mechanics has been recognized by SIAS for our efforts to promote thehighest standards of corporate governance and transparency. In the latest Governance and Transparency Index(GTI) released on 27 April 2012, Micro-Mechanics achieved an improved overall score of 71 points and wasranked 22nd out of 674 companies listed on the Singapore Exchange. Only 4% or 24 companies scored 70 pointsand over in the GTI.

As we enter the last quarter of FY2012, we appreciate the commitment, hardwork and sacrifices made by ourpeople. We look forward to working together for continued progress and to build value for all our stakeholders.

11. Dividend

(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on?

Nil

(b) Corresponding Period of the Immediately Preceding Financial Year

Nil

(c) Date payable

Not applicable

(d) Books closure date

Not applicable

12. If no dividend has been declared/recommended, a statement to that effect.

Not applicable

PART II ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT(This part is not applicable to Q1, Q2, Q3 or Half Year Results)

13. Segmented revenue and results for business or geographical segments (of the group) in the form presentedin the issuers most recently audited annual financial statements, with comparative information for theimmediately preceding year.

Not applicable

14. In the review of performance, the factors leading to any material changes in contributions to turnover andearnings by the business or geographical segments.

Not applicable

15. A breakdown of sales.

Not applicable


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16. A breakdown of the total annual dividend (in dollar value) for the issuers latest full year and its previous

full year.

Not applicable

17. Interested Persons Transactions

There areno interested party transactions for the 9-months financial period ending 31 March 2012.

18. Confirmation Pursuant to Rule 705(4) of Listing Manual

To the best of the Board of Directors knowledge, nothing has come to their attention which may render thefinancial results to be false or misleading.

On behalf of the Board of Directors

.. .

Christopher Reid Borch Chow Kam WingChief Executive Officer Chief Financial Officer

BY ORDER OF THE BOARD

CHOW KAM WINGCompany Secretary28 April 2012

mmh sgxnet 03 12 final

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