UNITED STATES -- (MARKET WIRE) -- April 25, 2007 -- SINGAPORE -- 4/26/2007 -- STATS ChipPAC Ltd.
("STATS ChipPAC" or the "Company") (NASDAQ: STTS) and (SGX-ST: STATSChP), a
leading independent semiconductor test and advanced packaging service
provider, today announced results for the first quarter 2007.
Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC said,
"Despite the seasonal weakness and lingering inventory correction by our
customers, we were able to achieve the high end of our guidance for both
revenue and profitability. Our customer diversification, more balanced end
markets exposure, improved operational efficiency and better material
management helped us mitigate much of the seasonal revenue and gross margin
pressure."
Revenue for the first quarter of 2007 increased 1.2% to $390.5 million,
compared to $385.7 million in the first quarter of 2006. This represents a
sequential decline of 6.1% compared to the fourth quarter of 2006. On a US
GAAP basis, net income for the first quarter of 2007 was $17.0 million or
$0.08 per diluted ADS, compared to net income of $12.0 million or $0.06 per
diluted ADS in the first quarter of 2006. Net income for the first quarter
of 2007 included $2.9 million in share-based compensation expense as
required under SFAS 123(R), and also approximately $6.8 million in expenses
related to the ongoing tender offer from Singapore Technologies
Semiconductors Pte Ltd, a wholly-owned subsidiary of Temasek Holdings
(Private) Limited.
Michael G. Potter, Chief Financial Officer of STATS ChipPAC said, "Our end
market leadership and customer diversification helped us to keep revenue
fairly consistent across the quarter. The combination of ongoing prudent
capital expenditure spending and continued strong cash flow enabled us to
pay down an additional $60.5 million in net debt in the quarter. In the
first quarter of 2007, we incurred approximately $56.8 million in capital
expenditures which were 14.5% of revenue compared to 21.6% of revenue in
year 2006."
Investor Conference Call / Webcast Details
A conference call has been scheduled for 8:00 a.m. in Singapore on
Thursday, April 26, 2007. This will be 8:00 p.m. in New York on Wednesday,
April 25, 2007. 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 +1-201-689-8560. A live 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 noon on Thursday, May 3, 2007 (in Singapore) or
midnight on Wednesday, May 2, 2007 (in New York) at www.statschippac.com
and by telephone at +1-201-612-7415. The account number to access the
replay is 3055 and the conference ID number is 237457.
Forward Looking Statements
Certain statements in this release 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 or implied in this
release. A variety of factors could cause actual events to differ from our
expectations including 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; reliance on a small group of principal customers;
continued success in technological innovations; availability of financing;
pricing pressures including declines in average selling prices; tender
offer by Singapore Technologies Semiconductors Pte Ltd, a subsidiary of
Temasek Holdings (Private) Limited (Temasek Holdings); our substantial
level of indebtedness; potential impairment charges; adverse tax and other
financial consequences if the South Korean taxing authorities do not agree
with our interpretation of the applicable tax laws; ability to develop and
protect our intellectual property; rescheduling or canceling of customer
orders; changes in products mix; intellectual property rights disputes and
litigation; capacity utilization; delays in acquiring or installing new
equipment; 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; significant ownership by Temasek
Holdings that may result in conflicting interests with Temasek Holdings and
our affiliates; unsuccessful acquisitions and investments in other
companies and businesses; our ability to successfully integrate the
operations of former STATS and ChipPAC and their employees; labor union
problems in South Korea; uncertainties of conducting business in China;
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
12, 2007. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Since the beginning of fiscal 2005, we employed quarterly and fiscal year
reporting periods that end on the Sunday nearest to end of each calendar
quarter or calendar year, as the case may be. Our first quarter of 2007
ended on April 1, 2007, while our first quarter of 2006 ended on March 26,
2006. 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.
STATS ChipPAC Ltd.
Condensed Consolidated Statements of Operations
(In thousands of U.S. Dollars, except share and per share data)
(Unaudited)
Three Months Ended
------------------------
March 26, April 1,
2006 2007
----------- -----------
Net revenues $ 385,709 $ 390,470
Cost of revenues (309,116) (312,911)
----------- -----------
Gross profit 76,593 77,559
Operating expenses:
Selling, general and administrative 39,711 27,999
Research and development 6,973 8,185
Tender offer expenses - 6,808
----------- -----------
Total operating expenses 46,684 42,992
----------- -----------
Operating income 29,909 34,567
Other income (expenses), net (9,430) (8,719)
----------- -----------
Income before income taxes 20,479 25,848
Income tax expense (5,918) (7,651)
----------- -----------
Income before minority interest 14,561 18,197
Minority interest (2,545) (1,150)
----------- -----------
Net income $ 12,016 $ 17,047
=========== ===========
Net income per ordinary share:
Basic $ 0.01 $ 0.01
Diluted $ 0.01 $ 0.01
Net income per ADS:
Basic $ 0.06 $ 0.08
Diluted $ 0.06 $ 0.08
Ordinary shares (in thousands) used in per
ordinary share calculation:
Basic 1,981,209 2,009,832
Diluted 2,155,584 2,191,760
ADS (in thousands) used in per ADS calculation:
Basic 198,121 200,983
Diluted 215,558 219,176
Key Ratios and Information:
Gross Margin 19.9% 19.9%
Operating Expenses as a % of Revenue 12.1% 11.0%
Operating Margin 7.8% 8.9%
Depreciation & Amortization, including $ 69,520 $ 61,397
Amortization of Debt Issuance Costs
Capital Expenditures $ 132,854 $ 56,786
Share-based compensation expense included
under SFAS 123(R) were as follows:
Cost of revenues $ 1,514 $ 1,488
Selling, general and administrative 2,470 1,018
Research and development 461 376
----------- -----------
$ 4,445 $ 2,882
=========== ===========
STATS ChipPAC Ltd.
Condensed Consolidated Balance Sheets
(In thousands of U.S. Dollars)
December 31, April 1,
2006 2007
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and marketable
securities $ 216,583 $ 187,640
Accounts receivable, net 243,779 242,765
Inventories 111,614 97,139
Other current assets 27,845 26,051
------------ ------------
Total current assets 599,821 553,595
Marketable securities 15,358 15,535
Property, plant and equipment, net 1,192,830 1,186,372
Investment in equity investee 10,292 9,996
Goodwill and intangible assets 555,358 553,677
Other non-current assets * 84,621 74,264
------------ ------------
Total assets $ 2,458,280 $ 2,393,439
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts and other payables $ 201,999 $ 171,696
Other current liabilities 104,482 98,179
Short-term debts 65,373 19,159
------------ ------------
Total current liabilities 371,854 289,034
Long-term debts 697,523 682,120
Other non-current liabilities 84,807 88,363
------------ ------------
Total liabilities 1,154,184 1,059,517
------------ ------------
Minority interest 57,946 58,393
------------ ------------
Shareholders' equity 1,246,150 1,275,529
------------ ------------
Total liabilities and shareholders' equity $ 2,458,280 $ 2,393,439
------------ ------------
* Includes $977 and $981 of non-current restricted cash as of April 1, 2007
and December 31, 2006, respectively.
STATS ChipPAC Ltd.
Other Supplemental Information
(Unaudited)
1Q 2006 4Q 2006 1Q 2007
Net Revenues by Product Line
Packaging - array 54.6% 57.8% 58.6%
Packaging - leaded 18.6% 17.1% 16.9%
Test and other services 26.8% 25.1% 24.5%
-------- -------- --------
100.0% 100.0% 100.0%
======== ======== ========
Net Revenues by End User Market
Communications 55.4% 57.0% 52.5%
Personal Computers 20.2% 17.5% 16.1%
Consumer, Multi-applications and Others 24.4% 25.5% 31.4%
-------- -------- --------
100.0% 100.0% 100.0%
======== ======== ========
Net Revenues by Region
United States of America 73.1% 74.3% 77.1%
Europe 2.9% 3.2% 2.2%
Asia 24.0% 22.5% 20.7%
-------- -------- --------
100.0% 100.0% 100.0%
======== ======== ========
Number of Testers 974 985 938
Number of Wirebonders 3,677 3,812 3,808
Overall Equipment Utilization Rate 76% 75% 75%
Contact Information: Contact:
Singapore Contact:
Tham Kah Locke
Tel: (65) 6824 7635
Fax: (65) 6720 7826
email: Email Contact
US Contacts:
Lisa Lavin
Marcom Manager
Tel: (208) 939 3104
Fax: (208) 939 4817
email: Email Contact
The Ruth Group
David Pasquale - Executive Vice President
Tel: (646) 536 7006
email: Email Contact