SINGAPORE -- 1/27/2011, UNITED STATES--(Marketwire - January 27, 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 fourth quarter and full year 2010.
Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said,
"We are pleased to report record revenue and profits in 2010 making it the
best year in our company's history. Revenue for the fourth quarter and full
year 2010 increased by 7.0% and 26.6% to $422.4 million and $1,677.8
million compared to the fourth quarter and full year 2009, respectively.
Compared to prior quarter, revenue for the fourth quarter 2010 decreased by
2.3% as weakness in the personal computing and consumer market offset
strong demand in the communications market.
"With strong revenue growth, richer product mix and higher savings realised
from our cost improvement initiatives, profitability for the year
significantly improved over prior year. Gross margin and operating margin
increased to 20.3% and 11.2%, respectively, for the full year 2010 compared
to 15.7% and 4.0% in the prior year."
Net income for the fourth quarter and full year 2010 was $19.0 million and
$108.0 million or $0.01 and $0.05 of net income per diluted ordinary share
compared to net income of $33.8 million and $10.1 million or $0.02 and
$0.00 of net income per diluted ordinary share in fourth quarter and full
year 2009, respectively. The net income for the fourth quarter and full
year 2010 included interest expense of $11.2 million and $16.8 million,
respectively, from our recent offering of $600.0 million Senior Notes due
2015 to fund our capital reduction.
John Lau, Chief Financial Officer of STATS ChipPAC, said, "Our gross margin
in the fourth quarter 2010 was 19.3% compared to 21.2% in the fourth
quarter 2009 and 20.2% in the prior quarter. Operating margin for fourth
quarter 2010 was 9.9% of revenue compared to 11.4% in the fourth quarter
2009 and 10.6% in the prior quarter. Capital spending in the fourth
quarter and full year 2010 was $53.2 million and $276.7 million or 12.6%
and 16.5% of revenue, respectively, compared to $76.2 million and $159.2
million or 19.3% and 12.0% of revenue in the fourth quarter and full year
2009. Post the capital reduction of $600.0 million, we ended the fourth
quarter 2010 with cash, cash equivalent and marketable securities of $301.7
million and debt of $844.2 million, compared to $368.1 million and $458.0
million, respectively, as of the end of fourth quarter 2009."
Outlook
Tan Lay Koon commented, "Based on current visibility, we expect net
revenues in the first quarter of 2011 to decline by mid single-digit level
from prior quarter, with adjusted EBITDA(1) in the range of 22% to 25% of
revenue. We expect capital expenditure(2) in the first quarter of 2011 will
be approximately $80 million to $90 million."
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 and twelve months ended 26 December 2010 filed with the Singapore
Exchange Securities Trading Limited ("SGX-ST") for the major assumptions
made in preparing our outlook for the first 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. Please read the "Risk Factors" section in our 2009
Annual Report on Form 20-F furnished to the U.S. Securities and Exchange
Commission on 5 March 2010 for a discussion of the factors that could cause
our actual results to differ materially from our expectations.
Forward-looking Statements
Certain statements in this release are forward-looking statements,
including our outlook for the first 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, 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; shortages in supply of key components; 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 SGX-ST; and
other risks described from time to time in the Company's filings with the
U.S. Securities and Exchange Commission, including its annual report on
Form 20-F dated 5 March 2010. 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 fourth quarter of 2010 and fiscal year 2010 ended on
26 December 2010, while our fourth quarter of 2009 and fiscal year 2009
ended on 27 December 2009. 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"). This
is STATS ChipPAC's first quarter and full year condensed financial
statements prepared in accordance with FRS. The financial statements of
STATS ChipPAC had previously been prepared in accordance with the
accounting principles generally accepted in the United States of America
("US GAAP").
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.
Consolidated Income Statement
(In thousands of U.S. Dollars, except share and per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
------------------------ ------------------------
26 December 27 December 26 December 27 December
2010 2009 2010 2009
----------- ----------- ----------- -----------
Net revenues $ 422,359 $ 394,734 $ 1,677,834 $ 1,325,685
Cost of revenues (340,857) (311,195) (1,337,950) (1,117,308)
----------- ----------- ----------- -----------
Gross profit 81,502 83,539 339,884 208,377
Operating expenses:
Selling, general and
administrative 25,195 24,689 98,744 95,516
Research and
development 12,425 13,918 47,462 43,358
Tender offer expense - - 3,107 -
Restructuring
charges - - 1,421 16,072
Write-off of debt
issuance costs 1,970 - 1,970 -
----------- ----------- ----------- -----------
Total operating
expenses 39,590 38,607 152,704 154,946
----------- ----------- ----------- -----------
Operating income 41,912 44,932 187,180 53,431
Other income
(expenses), net:
Interest income 855 643 2,328 2,169
Interest expense (16,461) (7,569) (43,460) (31,056)
Foreign currency
exchange gain
(loss) (323) 394 (2,587) (6,469)
Share of (loss)
profit of associate (324) 21 465 (1,321)
Other non-operating
income (expense),
net (245) 73 (1,601) (2,016)
----------- ----------- ----------- -----------
Total other income
(expenses), net (16,498) (6,438) (44,855) (38,693)
----------- ----------- ----------- -----------
Income before income
taxes 25,414 38,494 142,325 14,738
Income tax expense (4,387) (3,245) (26,977) (3,712)
----------- ----------- ----------- -----------
Net income 21,027 35,249 115,348 11,026
Less: Net income
attributable to the
non-controlling
interest (2,016) (1,414) (7,370) (973)
----------- ----------- ----------- -----------
Net income
attributable to
STATS ChipPAC Ltd. $ 19,011 $ 33,835 $ 107,978 $ 10,053
=========== =========== =========== ===========
Net income per ordinary
share attributable to
STATS ChipPAC Ltd.:
Basic $ 0.01 $ 0.02 $ 0.05 $ 0.00
Diluted $ 0.01 $ 0.02 $ 0.05 $ 0.00
Ordinary shares (in
thousands) used in
per ordinary share
calculation:
Basic 2,202,218 2,202,218 2,202,218 2,202,218
Diluted 2,202,238 2,202,236 2,202,234 2,202,230
Key Ratios and
Information:
Gross Margin 19.3% 21.2% 20.3% 15.7%
Operating Expenses as a
% of Revenue 9.4% 9.8% 9.1% 11.7%
Operating Margin 9.9% 11.4% 11.2% 4.0%
Depreciation &
Amortisation,
including
Amortisation
of Debt Issuance
Costs $ 73,348 $ 67,169 $ 282,267 $ 268,349
Capital Expenditures $ 53,211 $ 76,223 $ 276,676 $ 159,222
STATS ChipPAC Ltd.
Condensed Consolidated Statement of Financial Position
(In thousands of U.S. Dollars)
(Unaudited)
26 December 27 December
2010 2009
----------- -----------
ASSETS
Current assets:
Cash, cash equivalents and financial assets,
available-for-sale $ 285,037 $ 351,195
Accounts receivable, net 230,777 208,766
Inventories 69,791 61,859
Other current assets 43,767 47,134
----------- -----------
Total current assets 629,372 668,954
Non-current assets:
Financial assets, available-for-sale 16,646 16,929
Property, plant and equipment, net 1,123,809 1,115,497
Investment in associate 8,104 7,743
Goodwill and intangible assets 468,991 470,127
Other non-current assets 2,994 6,369
----------- -----------
Total non-current assets 1,620,544 1,616,665
----------- -----------
Total assets $ 2,249,916 $ 2,285,619
----------- -----------
LIABILITIES AND EQUITY
Current liabilities:
Accounts and other payables $ 194,207 $ 182,704
Other current liabilities 125,991 99,043
Short-term borrowings 61,768 224,786
----------- -----------
Total current liabilities 381,966 506,533
Non-current liabilities:
Long-term borrowings 782,434 233,181
Other non-current liabilities 57,802 43,357
----------- -----------
Total non-current liabilities 840,236 276,538
----------- -----------
Total liabilities 1,222,202 783,071
----------- -----------
Equity attributable to equity holders of STATS
ChipPAC Ltd. 958,298 1,443,671
----------- -----------
Non-controlling interest 69,416 58,877
----------- -----------
Total liabilities and equity $ 2,249,916 $ 2,285,619
----------- -----------
STATS ChipPAC Ltd.
Other Supplemental Information
(Unaudited)
4Q 2010 3Q 2010 4Q 2009
Net Revenues by Product Line
Packaging - laminate 57.9% 56.5% 56.7%
Packaging - leaded 12.4% 15.2% 15.2%
Test 20.3% 20.0% 22.8%
Wafer level processing and other services 9.4% 8.3% 5.3%
-------- -------- --------
100.0% 100.0% 100.0%
======== ======== ========
Net Revenues by End User Market
Communications 57.4% 53.9% 48.8%
Personal Computers 11.6% 13.0% 17.7%
Consumer, Multi-applications and Others 31.0% 33.1% 33.5%
-------- -------- --------
100.0% 100.0% 100.0%
======== ======== ========
Net Revenues by Region
United States of America 63.0% 64.7% 65.5%
Asia 26.7% 26.7% 26.2%
Europe 10.3% 8.6% 8.3%
-------- -------- --------
100.0% 100.0% 100.0%
======== ======== ========
Number of Testers 942 957 962
Number of Wirebonders 4,460 4,458 4,538
Overall Equipment Utilisation Rate 62% 66% 64%
(1) Adjusted EBITDA is not required by, or presented in accordance with FRS.
We define adjusted EBITDA as net income (loss) 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.
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: