LAGUNA, PHILIPPINES – Integrated Micro-Electronics (IMI) reported first-quarter consolidated revenues of $199.1 million, down 1.1% year-over-year.

Net income fell 3.7% to $6.5 million during the period ended Mar. 31.

Operating income rose 8.4% to $9.2 million, and operating income margin and EBITDA margin rose 40 basis points and 71 basis points, respectively, to 4.6% and 7.9%, respectively. Net income margin dipped 9 basis points to 3.3%.

The company cited its shift in revenue mix to new platform technologies for the results. The transition reflects a change in strategy to limit some low-margin consumer electronics businesses and computer peripherals in favor of automotive and industrial programs.

IMI’s China operations posted $66.6 million in revenues, down 3.3%, mainly due to slower customer demand for consumer electronics, including programs with phased out models and reaching end-of-life. The decrease was partly offset by a stronger performance of the telecom segment which grew 24%, driven by turnkey projects for various customers.

European and Mexican operations generated $73.3 million revenues in the quarter, up 6.4% from the prior year as demand growth for automotive body controls and lighting systems in Bulgaria and Czech Republic mitigated the effect of a weaker euro. In Mexico, revenues increased 15% due to higher demand for plastic injection and assembly. Excluding the impact of changes in foreign currency exchange rates, total revenues for IMI’s Europe and Mexico plants jumped 11.2%.

The EMS operations in the Philippines decreased 2.3% to $51.4 million in revenues. Certain programs in the automotive and industrial segments such as automotive camera, security access controls, asset tag sensors and lighting controls delivered robust growth that partially filled the revenue gap from computer peripherals.

Capital investments in the first quarter reached a total of $8.6 million, up 57% from last year largely related to the company’s investments in Mexico, Bulgaria, China and the Philippines to support line expansion and new product introduction. The new programs will commence production ramp-up in 2017.

In a press release, IMI president and chief executive Arthur Tan said, “Cautiously optimistic about global economic performance for 2016, we are encouraged by the firmer demand that we began to see from advanced markets. In China, as the government continues to implement wide ranging economic reforms, the slowdown of its economy may be short-lived. Soon, the rising middle class in China will be a major driver of domestic consumption of high-end and durable goods like cars and electronics. IMI will capitalize on this trend as we remain an integral part of the global supply chain for electronic products in the automotive and industrial space.

“We see 2016 as a transition year for IMI. We are upgrading our different manufacturing sites to be capable of producing next-generation products. After investing $35.1 million in capex last year, we expect to spend additional $40.8 million in 2016 which will drive future acceleration in top-line growth. Despite our aggressive expansion, our balance sheet is in the same strong position. We returned $8.6 million to shareholders through cash dividends which were paid during the quarter, reflecting our confidence in the company’s financial strength and growth opportunities.

“Our foray into motorcycle assembly as the chosen subcontractor for manufacturing for the Ayala Automotive-KTM AG partnership will open new doors for IMI, both in electronics product development and manufacturing and in non-electronics assembly.”

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