SOURCE: STATS ChipPAC

STATS ChipPAC

October 27, 2009 05:30 ET

STATS ChipPAC Reports Third Quarter 2009 Results

SINGAPORE--10/27/2009, UNITED STATES--(Marketwire - October 27, 2009) - STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP), a leading semiconductor test and advanced packaging service provider, today announced results for third quarter 2009.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "We had a good third quarter. Revenue for third quarter of 2009 increased by 21.5% to $389.8 million compared to prior quarter and decreased by 17.5% over the third quarter of 2008. Our third quarter revenue growth reflected continued improvement in the semiconductor industry. As a result of realized savings from our cost reduction efforts, our profitability in the third quarter was significantly better than the prior quarter and the third quarter of 2008."

Net income for third quarter of 2009 was $25.1 million or $0.01 of net income per diluted ordinary share, compared to net income of $2.2 million or $0.00 per diluted ordinary shares in the prior quarter, and $7.9 million or $0.00 of net income per diluted ordinary share in the third quarter of 2008.

John Lau, Chief Financial Officer of STATS ChipPAC, said, "Our gross margin in third quarter of 2009 was 20.2% compared to 15.1% in the prior quarter, and 18.5% in the third quarter of 2008. Operating margin for third quarter of 2009 was 9.4% of revenue, compared to 4.7% in the prior quarter, and 4.6% in the third quarter of 2008. Capital spending in the third quarter of 2009 was $40.9 million or 10.5% of revenue compared to $97.3 million or 20.6% of revenue in the third quarter of 2008. We ended the third quarter of 2009 with $348.0 million of cash, cash equivalent and marketable securities and $468.2 million of debt, compared to $352.8 million and $473.5 million, respectively, as of the fourth quarter of 2008."

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 in this release. Factors that could cause actual results to differ include, but are not limited to, extent of deterioration in 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; customer credit risks; possible future application of push-down accounting; 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; our ability to generate cash; potential impairment charges; availability of financing; adverse tax and other financial consequences if the taxing authorities do not agree with our interpretation of the applicable tax laws; classification of the Company as a passive foreign investment company; our ability to develop and protect our intellectual property; rescheduling or canceling of customer orders; changes in our product mix; our 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; returns from research and development investments; 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; our ability to meet specific conditions imposed for the continued listing or delisting of our ordinary shares under the Singapore Exchange Securities Trading Limited ("SGX-ST"); 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 changes in laws, currency policy and political instability in 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 filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F dated March 9, 2009. 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 December 31. Our fiscal quarters end on a Sunday and are generally thirteen weeks in length. Our third quarter of 2009 ended on September 27, 2009, while our third quarter of 2008 and fiscal year 2008 ended on September 28, 2008 and December 28, 2008, respectively. 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             Nine Months Ended
                ----------------------------  ----------------------------
                September 28,  September 27,  September 28,  September 27,
                    2008           2009           2008           2009
                -------------  -------------  -------------  -------------
Net revenues    $     472,191  $     389,768  $   1,333,575  $     930,951
Cost of
 revenues            (384,829)      (311,161)    (1,096,985)      (806,113)
                -------------  -------------  -------------  -------------
Gross profit           87,362         78,607        236,590        124,838

Operating
 expenses:
  Selling,
   general and
   administrative      29,296         26,714         89,378         70,827
  Research and
   development         10,100         12,044         29,384         29,440
  Restructuring
   charges              5,130          3,139          6,030         16,072
  Equipment
   impairment          21,091              -         21,091              -
  Accelerated
   share-based
   compensation             -              -          1,562              -
                -------------  -------------  -------------  -------------
    Total
     operating
     expenses          65,617         41,897        147,445        116,339
                -------------  -------------  -------------  -------------

Operating
 income                21,745         36,710         89,145          8,499
Other income
 (expenses),
 net                   (7,340)       (11,090)       (17,465)       (32,255)
                -------------  -------------  -------------  -------------
Income (loss)
 before income
 taxes                 14,405         25,620         71,680        (23,756)
Income tax
 benefit
 (expense)             (4,921)           315        (19,550)          (467)
                -------------  -------------  -------------  -------------
Net income
 (loss)                 9,484         25,935         52,130        (24,223)
Less: Net
 (income) loss
 attributable
 to the
 noncontrolling
 interest              (1,602)          (873)        (4,279)           441
                -------------  -------------  -------------  -------------
Net income
 (loss)
 attributable
 to STATS
 ChipPAC Ltd.   $       7,882  $      25,062  $      47,851  $     (23,782)
                =============  =============  =============  =============

Net income
 (loss) per
 ordinary share
 attributable
 to STATS
 ChipPAC Ltd.:
  Basic         $        0.00  $        0.01  $        0.02  $       (0.01)
  Diluted       $        0.00  $        0.01  $        0.02  $       (0.01)

Ordinary shares
 (in thousands)
 used in per
 ordinary share
 calculation:
  Basic             2,202,163      2,202,218      2,124,512      2,202,218
  Diluted           2,204,307      2,202,236      2,127,594      2,202,218

Key Ratios and
 Information:
Gross Margin             18.5%          20.2%          17.7%          13.4%
Operating Expenses
 as a % of Revenue       13.9%          10.8%          11.0%          12.5%
Operating Margin          4.6%           9.4%           6.7%           0.9%

Depreciation &
 Amortization,
 including
 Amortization of
 Debt Issuance
 Costs          $      73,227  $      67,201  $     218,052  $     201,180
Capital
 Expenditures   $      97,262  $      41,156  $     216,579  $      82,999




                            STATS ChipPAC Ltd.
                  Condensed Consolidated Balance Sheets
                      (In thousands of U.S. Dollars)



                                                December 28,  September 27,
                                                    2008          2009
                                                ------------- -------------
                                                               (Unaudited)
ASSETS
Current assets:
  Cash, cash equivalents and marketable
   securities                                   $     337,230 $     330,897
  Accounts receivable, net                            139,520       208,408
  Inventories                                          60,717        61,343
  Other current assets                                 33,841        35,227
                                                ------------- -------------
    Total current assets                              571,308       635,875

  Marketable securities                                15,587        17,110
  Property, plant and equipment, net                1,216,342     1,104,852
  Investment in equity investee                         9,001         7,654
  Goodwill and intangible assets                      595,894       592,631
  Other non-current assets *                           38,931        31,072
                                                ------------- -------------
    Total assets                                $   2,447,063 $   2,389,194
                                                ------------- -------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts and other payables                   $     148,931 $     171,499
  Other current liabilities                           152,836       108,099
  Short-term debts                                     76,953       218,601
                                                ------------- -------------
    Total current liabilities                         378,720       498,199
Long-term debts                                       396,500       249,637
Other non-current liabilities                          64,144        52,245
                                                ------------- -------------
    Total liabilities                                 839,364       800,081
                                                ------------- -------------
STATS ChipPAC Ltd. shareholders' equity             1,548,657     1,531,631
                                                ------------- -------------
Noncontrolling interest                                59,042        57,482
                                                ------------- -------------
    Total liabilities and equity                $   2,447,063 $   2,389,194
                                                ------------- -------------

* Includes $0.4 million and $1.0 million of non-current restricted cash as
  of September 27, 2009 and December 28, 2008, respectively.



                            STATS ChipPAC Ltd.
                      Other Supplemental Information
                                (Unaudited)

                                              3Q 2008   2Q 2009   3Q 2009
Net Revenues by Product Line
Packaging - laminate                              58.7%     58.5%     59.4%
Packaging - leaded                                17.5%     14.7%     14.4%
Test and other services                           23.8%     26.8%     26.2%
                                              --------  --------  --------
                                                 100.0%    100.0%    100.0%
                                              ========  ========  ========
Net Revenues by End User Market
Communications                                    51.7%     53.3%     48.6%
Personal Computers                                15.8%     17.5%     18.2%
Consumer, Multi-applications and Others           32.5%     29.2%     33.2%
                                              --------  --------  --------
                                                 100.0%    100.0%    100.0%
                                              ========  ========  ========
Net Revenues by Region
United States of America                          71.4%     76.2%     72.4%
Europe                                             5.2%      3.9%      4.9%
Asia                                              23.4%     19.9%     22.7%
                                              --------  --------  --------
                                                 100.0%    100.0%    100.0%
                                              ========  ========  ========

Number of Testers                                  994       962       973
Number of Wirebonders                            4,760     4,596     4,554

Overall Equipment Utilization Rate                  70%       51%       60%

Contact Information

  • 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) 867 9859
    email: Email Contact