STATS ChipPAC Reports Second Quarter 2008 Results
Market Wire, July 29, 2008 Tuesday 2:30 AM GMT
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STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP) (SES: S24), a leading semiconductor test and advanced packaging service provider, today announced results for the second quarter 2008.
Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "Revenue for the second quarter of 2008 of $434.1 million increased by 17.3% over the second quarter of 2007 and by 1.6% over prior quarter. Our second quarter revenue reflected stable business across most markets despite the cautious outlook of our customers as a result of the global macroeconomic uncertainty."
Net income for the second quarter of 2008 increased by 197.7% to $22.1 million or $0.01 per diluted ordinary share, compared to net income of $7.4 million or $0.00 per diluted ordinary share in the second quarter of 2007.
John Lau, Chief Financial Officer of STATS ChipPAC, said, "We continue to be disciplined in capital spending in the second quarter of 2008, investing approximately 14.8% of revenue compared to 15.0% in the second quarter of 2007 and 12.9% of revenue in the prior quarter. Due to the higher material and fuel cost, and Asian currencies appreciation, gross margin for the second quarter of 2008 was 17.2% compared to 18.1% in the second quarter of 2007, and 17.4% in the prior quarter. Our operating margin for the second quarter of 2008 increased to 8.1% of revenue compared to 6.3% in the second quarter of 2007, and 7.5% in the prior quarter.
Our debt balance decreased significantly in the second quarter of 2008 due to Singapore Technologies Semiconductors Pte Ltd's conversion of its outstanding $134.5 million principal amount of our 2.5% convertible subordinated notes due 2008 into 145.1 million ordinary shares of the Company."
Forward-looking Statements
Certain statements in this release, including statements regarding expected future financial results and industry growth, are forward-looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this release. Factors that could cause actual results to differ include, but are not limited to, general business and economic conditions and the state of the semiconductor industry; level of competition; demand for end-use applications products such as communications equipment and personal computers; decisions by customers to discontinue outsourcing of test and packaging services; our reliance on a small group of principal customers; our continued success in technological innovations; pricing pressures, including declines in average selling prices; the consummation of our tender offer and consent solicitation in respect of our senior notes; our proposed capital reduction and cash distribution; availability of financing; prevailing market conditions; our ability to meet the applicable requirements for the termination of registration under the U.S. Securities Exchange Act of 1934, as amended; our ability to meet specific conditions imposed for the continued listing or delisting of our ordinary shares on the Singapore Exchange Securities Trading Limited ("SGX-ST"); our substantial level of indebtedness; potential impairment charges; delays in acquiring or installing new equipment; adverse tax and other financial consequences if the South Korean taxing authorities do not agree with our interpretation of the applicable tax laws; our ability to develop and protect our intellectual property; rescheduling or canceling of customer orders; changes in our product mix; intellectual property rights disputes and litigation; our capacity utilization; limitations imposed by our financing arrangements which may limit our ability to maintain and grow our business; changes in customer order patterns; shortages in supply of key components; disruption of our operations; loss of key management or other personnel; defects or malfunctions in our testing equipment or packages; changes in environmental laws and regulations; exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; majority ownership by Temasek Holdings (Private) Limited ("Temasek") that may result in conflicting interests with Temasek and our affiliates; unsuccessful acquisitions and investments in other companies and businesses; labor union problems in South Korea; uncertainties of conducting business in China and other countries in Asia; natural calamities and disasters, including outbreaks of epidemics and communicable diseases; and other risks described from time to time in the Company's SEC filings, including its annual report on Form 20-F dated March 7, 2008. We do not intend, and do not assume any obligation to update any forward-looking statements to reflect subsequent events or circumstances.
Since the beginning of fiscal 2005, we have employed quarterly and fiscal year reporting periods. Our 52-53 week fiscal year ends on the Sunday nearest and prior to December 31. Our fiscal quarters end on a Sunday and are generally thirteen weeks in length. Our second quarter of 2008 ended on June 29, 2008, while our second quarter of 2007 ended on July 1, 2007. References to "US GAAP" are to Generally Accepted Accounting Principles as practiced in the United States of America and references to "$" are to the lawful currency of the United States of America.
About STATS ChipPAC Ltd.
STATS ChipPAC Ltd. is a leading service provider of semiconductor packaging design, assembly, test and distribution solutions in diverse end market applications including communications, digital consumer and computing. With global headquarters in Singapore, STATS ChipPAC has design, research and development, manufacturing or customer support offices in 10 different countries. STATS ChipPAC is listed on the SGX-ST. Further information is available at www.statschippac.com. Information contained in this website does not constitute a part of this release.
STATS ChipPAC Ltd. |
Condensed Consolidated Statements of Operations |
(In thousands of U.S. Dollars, except share and per share data) |
(Unaudited) |
Three Months Ended Six Months Ended |
-------------------- -------------------- |
July 1, June 29, July 1, June 29, |
2007 2008 2007 2008 |
--------- --------- --------- --------- |
Net revenues $ 370,183 $ 434,142 $ 760,653 $ 861,384 |
Cost of revenues (303,236) (359,452) (616,147) (712,156) |
--------- --------- --------- --------- |
Gross profit 66,947 74,690 144,506 149,228 |
Operating expenses: |
Selling, general and |
administrative 28,036 28,616 56,035 60,082 |
Research and development 8,985 9,279 17,170 19,284 |
Accelerated share-based |
compensation - 1,562 - 1,562 |
Tender offer expenses 4,114 - 10,922 - |
Held for sale asset |
impairment 1,725 - 1,725 - |
Restructuring charges 990 - 990 900 |
--------- --------- --------- --------- |
Total operating expenses 43,850 39,457 86,842 81,828 |
--------- --------- --------- --------- |
Operating income 23,097 35,233 57,664 67,400 |
Other income (expenses), net (8,503) (4,818) (17,222) (10,125) |
--------- --------- --------- --------- |
Income before income taxes 14,594 30,415 40,442 57,275 |
Income tax expense (5,782) (7,009) (13,433) (14,629) |
--------- --------- --------- --------- |
Income before minority interest 8,812 23,406 27,009 42,646 |
Minority interest (1,383) (1,290) (2,533) (2,677) |
--------- --------- --------- --------- |
Net income $ 7,429 $ 22,116 $ 24,476 $ 39,969 |
========= ========= ========= ========= |
Net income per ordinary share: |
Basic $ 0.00 $ 0.01 $ 0.01 $ 0.02 |
Diluted $ 0.00 $ 0.01 $ 0.01 $ 0.02 |
Ordinary shares (in thousands) |
used in per ordinary share |
calculation: |
Basic 2,031,435 2,118,538 2,020,633 2,085,687 |
Diluted 2,186,078 2,120,798 2,180,555 2,089,239 |
Key Ratios and Information: |
Gross Margin 18.1% 17.2% 19.0% 17.3% |
Operating Expenses as a % of |
Revenue 11.8% 9.1% 11.4% 9.5% |
Operating Margin 6.3% 8.1% 7.6% 7.8% |
Depreciation & Amortization, |
including Amortization of |
Debt Issuance Costs $ 62,687 $ 72,562 $ 124,084 $ 144,825 |
Capital Expenditures $ 55,373 $ 64,101 $ 112,159 $ 119,317 |
Share-based compensation |
expense included under SFAS |
123(R) were as follows: |
Cost of revenues $ 1,069 $ 124 $ 2,557 $ 710 |
Selling, general and |
administrative 722 179 1,740 694 |
Research and development 196 34 572 173 |
Accelerated share-based |
compensation - 1,562 - 1,562 |
--------- --------- --------- --------- |
$ 1,987 $ 1,899 $ 4,869 $ 3,139 |
========= ========= ========= ========= |
STATS ChipPAC Ltd. |
Condensed Consolidated Balance Sheets |
(In thousands of U.S. Dollars) |
December |
30, June 29, |
2007 2008 |
----------- ----------- |
(Unaudited) |
ASSETS |
Current assets: |
Cash, cash equivalents and marketable securities $ 242,691 $ 272,881 |
Accounts receivable, net 271,360 285,777 |
Inventories 83,312 85,547 |
Other current assets 38,489 40,991 |
----------- ----------- |
Total current assets 635,852 685,196 |
Marketable securities 15,296 15,437 |
Property, plant and equipment, net 1,276,490 1,263,302 |
Investment in equity investee 10,350 10,338 |
Goodwill and intangible assets 588,712 592,202 |
Other non-current assets * 70,254 62,819 |
----------- ----------- |
Total assets $ 2,596,954 $ 2,629,294 |
----------- ----------- |
LIABILITIES AND SHAREHOLDERS' EQUITY |
Current liabilities: |
Accounts and other payables $ 235,044 $ 237,600 |
Other current liabilities 128,417 156,662 |
Short-term debts 240,781 92,693 |
----------- ----------- |
Total current liabilities 604,242 486,955 |
Long-term debts 423,853 413,409 |
Other non-current liabilities 125,093 95,079 |
----------- ----------- |
Total liabilities 1,153,188 995,443 |
----------- ----------- |
Minority interest 59,797 62,103 |
----------- ----------- |
Shareholders' equity 1,383,969 1,571,748 |
----------- ----------- |
Total liabilities and shareholders' equity $ 2,596,954 $ 2,629,294 |
----------- ----------- |
* Includes $1.3million and $1.6million of non-current restricted cash as |
of June29,2008 and December 30, 2007, respectively. |
STATS ChipPAC Ltd. |
Other Supplemental Information |
(Unaudited) |
2Q 2007 1Q 2008 2Q 2008 |
Net Revenues by Product Line |
Packaging - laminate 56.0% 55.0% 57.0% |
Packaging - leaded 18.6% 18.7% 17.9% |
Test and other services 25.4% 26.3% 25.1% |
--------- --------- --------- |
100.0% 100.0% 100.0% |
========= ========= ========= |
Net Revenues by End User Market |
Communications 50.0% 53.7% 52.6% |
Personal Computers 14.8% 16.0% 14.3% |
Consumer, Multi-applications and Others 35.2% 30.3% 33.1% |
--------- --------- --------- |
100.0% 100.0% 100.0% |
========= ========= ========= |
Net Revenues by Region |
United States of America 71.6% 75.4% 73.1% |
Europe 3.5% 3.4% 4.2% |
Asia 24.9% 21.2% 22.7% |
--------- --------- --------- |
100.0% 100.0% 100.0% |
========= ========= ========= |
Number of Testers 912 1,041 1,020 |
Number of Wirebonders 3,759 4,679 4,715 |
Overall Equipment Utilization Rate 74% 69% 67% |
Investor Relations Contact: |
Tham Kah Locke |
Vice President of Corporate Finance |
Tel: (65) 6824 7788 |
Fax: (65) 6720 7826 |
email: Email Contact |
Media Contact: |
Lisa Lavin |
Deputy Director of Corporate Communications |
Tel: (208) 939 3104 |
Fax: (208) 939 4817 |
email: Email Contact |
SOURCE: STATS ChipPAC
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