SINGAPORE--4/21/2011, UNITED STATES--(Marketwire - Apr 21, 2011) - STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP), a leading semiconductor test and advanced packaging service provider, today announced results for the first quarter 2011.
Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "The first quarter of 2011 was a challenging one due to seasonally weaker demand and rising costs. Revenue for the first quarter of 2011 increased by 5.5% to $409.4 million over the first quarter of 2010 and decreased by 3.1% from prior quarter."
Net income for the first quarter of 2011 was $6.3 million or $0.00 of net income per diluted ordinary share compared to net income of $27.5 million or $0.01 of net income per diluted ordinary share in the first quarter of 2010 and net income of $19.0 million or $0.01 of net income per diluted ordinary share in the prior quarter. The net income for the first quarter of 2011 and fourth quarter of 2010 included interest expense of $11.2 million in each quarter from our offering of $600.0 million Senior Notes due 2015 to fund our capital reduction and debt issuance cost write off of $7.6 million and $2.0 million, respectively, from the $234.5 million and $60.0 million voluntary repayment of our senior credit facility.
John Lau, Chief Financial Officer of STATS ChipPAC, said, "Our gross margin in the first quarter of 2011 was 16.8% compared to 20.0% in the first quarter of 2010 due to unfavorable product mix, higher material costs and rise in labour costs arising primarily from the appreciation of Asian currencies against United States dollar. Operating margin for first quarter of 2011 was 5.7% of revenue compared to 11.2% in the first quarter of 2010. Our adjusted EBITDA(1) in the first quarter of 2011 was 24.8% of revenue compared to 28.1% in the first quarter of 2010. Capital spending in the first quarter of 2011 was $86.5 million or 21.1% of revenue, compared to $99.4 million or 25.6% of revenue in the first quarter of 2010, and reflected the front-end loaded capital spending this year. Post full repayment of the $234.5 million of loan outstanding under our $360.0 million senior credit facility and the issuance of $200.0 million of 5.375% Senior Notes due 2016, we ended the first quarter of 2011 with cash, cash equivalent and marketable securities of $234.5 million and debt of $828.0 million, compared to $301.7 million and $844.2 million, respectively, as of the end of fourth quarter of 2010."
Outlook
Tan Lay Koon commented, "Our current business visibility is clouded by the potential disruptions to the semiconductor supply chain due to the Japan earthquake of March 2011. Based on current visibility, we expect net revenues in the second quarter of 2011 to be flat to mid single digit level increase from prior quarter, with adjusted EBITDA(1) in the range of 21% to 26% of revenue. We expect capital expenditure(2) in the second quarter of 2011 will be approximately $100 million to $110 million as our capital spending is front-end loaded to support customers' forecast."
The outlook is subject to a number of risks and uncertainties that could cause actual events or results to differ materially from those disclosed in the outlook statements. These statements are based on our management's beliefs and assumptions, which involve judgments about future trends, events and conditions, all of which are subject to change and many of which are beyond our control. Please refer to our Financial Statements for the three months ended 27 March 2011 filed with the Singapore Exchange Securities Trading Limited ("SGX-ST") for the major assumptions made in preparing our outlook for the second quarter of 2011. Investors should consider these assumptions and make their own assessment of the future performance of STATS ChipPAC and note that there may not be a direct correlation between the net income of the Company with adjusted EBITDA as a percentage of revenue.
Investor Conference Call / Live Audio Webcast Details
A conference call has been scheduled for 8:00 a.m. in Singapore on Monday, 25 April 2011. During the call, time will be set-aside for analysts and interested investors to ask questions of executive officers.
The call may be accessed by dialing +65-6723-9381. A live audio webcast of the conference call will be available on STATS ChipPAC's website at www.statschippac.com. A replay of the call will be available 2 hours after the live call through 9 May 2011 at www.statschippac.com and by telephone at 800-616-3021. The conference ID number to access the conference call and replay is 60153347.
Forward-looking Statements
Certain statements in this release are forward-looking statements, including our outlook for the second quarter of 2011, 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, shortages in supply of key components and disruption in supply chain; general business and economic conditions and the state of the semiconductor industry; prevailing market conditions; demand for end-use applications products such as communications equipment, consumer and multi-applications and personal computers; decisions by customers to discontinue outsourcing of test and packaging services; level of competition; our reliance on a small group of principal customers; our continued success in technological innovations; pricing pressures, including declines in average selling prices; intellectual property rights disputes and litigation; our ability to control operating expenses; our substantial level of indebtedness and access to credit markets; potential impairment charges; availability of financing; changes in our product mix; our capacity utilisation; delays in acquiring or installing new equipment; limitations imposed by our financing arrangements which may limit our ability to maintain and grow our business; returns from research and development investments; changes in customer order patterns; customer credit risks; disruption of our operations; loss of key management or other personnel; defects or malfunctions in our testing equipment or packages; rescheduling or cancelling of customer orders; adverse tax and other financial consequences if the taxing authorities do not agree with our interpretation of the applicable tax laws; classification of our Company as a passive foreign investment company; our ability to develop and protect our intellectual property; 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; labour union problems in South Korea; uncertainties of conducting business in China and changes in laws, currency policy and political instability in other countries in Asia; natural calamities and disasters, including outbreaks of epidemics and communicable diseases; the continued trading and listing of our ordinary shares on the Singapore Exchange Securities Trading Limited ("SGX-ST"). You should not unduly rely on such statements. We do not intend, and do not assume any obligation, to update any forward-looking statements to reflect subsequent events or circumstances.
Our 52-53 week fiscal year ends on the Sunday nearest and prior to 31 December. Our fiscal quarters end on a Sunday and are generally thirteen weeks in length. Our first quarter of 2011 ended on 27 March 2011, while our first quarter of 2010 and fiscal year 2010 ended on 28 March 2010 and 26 December 2010, respectively. References to "$" are to the lawful currency of the United States of America.
Basis of Preparation of Results
The financial statements included in this release have been prepared in accordance with the Singapore Financial Reporting Standards ("FRS").
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.
1. Adjusted EBITDA is not required by, or presented in accordance with Singapore Financial Reporting Standards ("FRS"). We define adjusted EBITDA as net income attributable to STATS ChipPAC Ltd. plus income tax expense, interest expense, net, depreciation and amortisation, restructuring charges, share-based compensation, held for sale asset impairment, tender offer expenses and write-off of debt issuance cost. We present adjusted EBITDA as a supplemental measure of our performance. Management believes the non- FRS financial measure is useful to investors in enabling them to perform additional analysis.
2. Capital expenditure refers to acquisitions of production equipment and asset upgrades.
STATS ChipPAC Ltd.
Consolidated Income Statement
(Unaudited)
Three Months Ended
------------------------
27 March 28 March
2011 2010
$'000 $'000
----------- -----------
Net revenues 409,380 387,947
Cost of revenues (340,622) (310,270)
----------- -----------
Gross profit 68,758 77,677
Operating expenses:
Selling, general and administrative 25,552 22,583
Research and development 12,304 11,538
Write-off of debt issuance costs 7,593 -
----------- -----------
Total operating expenses 45,449 34,121
----------- -----------
Operating income 23,309 43,556
Other income (expenses), net:
Interest income 389 414
Interest expense (15,065) (7,467)
Foreign currency exchange gain (loss) (569) (928)
Share of profit of associate 90 6
Other non-operating income (expense), net 84 111
----------- -----------
Total other expenses, net (15,071) (7,864)
----------- -----------
Income before income taxes 8,238 35,692
Income tax expense (379) (6,983)
----------- -----------
Net income 7,859 28,709
Less: Net income attributable to the
non-controlling interest (1,587) (1,259)
----------- -----------
Net income attributable to STATS ChipPAC Ltd. 6,272 27,450
=========== ===========
Net income per ordinary share attributable
to STATS ChipPAC Ltd.:
Basic $ 0.00 $ 0.01
Diluted $ 0.00 $ 0.01
Ordinary shares (in thousands) used in
per ordinary share calculation:
Basic 2,202,218 2,202,218
Diluted 2,202,234 2,202,238
Key Ratios and Information:
Gross Margin 16.8% 20.0%
Operating Expenses as a % of Revenue 11.1% 8.8%
Operating Margin 5.7% 11.2%
Depreciation & Amortisation, including
Amortisation of Debt Issuance Costs 73,532 67,815
Capital Expenditures 86,544 99,387
STATS ChipPAC Ltd.
Consolidated Statement of Financial Position
(Unaudited)
27 March 26 December
2011 2010
$'000 $'000
------------ -----------
ASSETS
Current assets:
Cash and cash equivalents 130,776 196,395
Financial assets, available-for-sale 103,737 88,642
Accounts receivable, net 243,785 230,777
Short-term amounts due from related parties 17,105 17,105
Other receivables 9,611 9,435
Inventories 76,920 69,791
Prepaid expenses and other current assets 22,304 17,227
------------ -----------
Total current assets 604,238 629,372
Non-current assets:
Financial assets, available-for-sale - 16,646
Property, plant and equipment, net 1,139,443 1,123,809
Investment in associate 8,181 8,104
Intangible assets 38,511 38,857
Goodwill 430,134 430,134
Long-term restricted cash 421 416
Prepaid expenses and other non-current assets 1,939 2,578
------------ -----------
Total non-current assets 1,618,629 1,620,544
------------ -----------
Total assets 2,222,867 2,249,916
============ ===========
LIABILITIES
Current liabilities:
Accounts and other payables 152,050 151,473
Payables related to property, plant and
equipment purchases 41,449 42,734
Accrued operating expenses 87,757 113,584
Income taxes payable 8,474 12,385
Short-term borrowings 37,928 61,768
Short-term amounts due to related parties 41 22
------------ -----------
Total current liabilities 327,699 381,966
Non-current liabilities:
Long-term borrowings 790,081 782,434
Deferred tax liabilities 49,596 44,335
Other non-current liabilities 13,629 13,467
------------ -----------
Total non-current liabilities 853,306 840,236
------------ -----------
Total liabilities 1,181,005 1,222,202
============ ===========
EQUITY
Share capital 873,666 873,666
Retained earnings 91,182 84,910
Other reserves 5,198 (278)
------------ -----------
Equity attributable to equity holders of
STATS ChipPAC Ltd. 970,046 958,298
Non-controlling interest 71,816 69,416
------------ -----------
Total equity 1,041,862 1,027,714
------------ -----------
Total liabilities and equity 2,222,867 2,249,916
============ ===========
STATS ChipPAC Ltd.
Other Supplemental Information
(Unaudited)
1Q 2011 4Q 2010 1Q 2010
Net Revenues by Product Line
Packaging - laminate 54.9% 57.9% 55.5%
Packaging - leaded 15.3% 12.4% 15.3%
Test 19.7% 20.3% 22.2%
Wafer level processing and other services 10.1% 9.4% 7.0%
------- ------- -------
100.0% 100.0% 100.0%
======= ======= =======
Net Revenues by End User Market
Communications 52.4% 57.4% 52.3%
Personal Computers 14.1% 11.6% 15.4%
Consumer, Multi-applications and Others 33.5% 31.0% 32.3%
------- ------- -------
100.0% 100.0% 100.0%
======= ======= =======
Net Revenues by Region
United States of America 64.8% 63.0% 61.5%
Asia 26.5% 26.7% 25.7%
Europe 8.7% 10.3% 12.8%
------- ------- -------
100.0% 100.0% 100.0%
======= ======= =======
Number of Testers 914 942 929
Number of Wirebonders 4,567 4,460 4,538
Overall Equipment Utilisation Rate 62% 62% 63%
Contact Information: Investor Relations Contact: Tham Kah Locke Vice President of Corporate Finance Tel: (65) 6824 7788 Fax: (65) 6720 7826 email: Media Contact: Lisa Lavin Deputy Director of Corporate Communications Tel: (208) 867 9859 email: