SINGAPORE -- 29 JANUARY 2013, UNITED STATES--(Marketwire - Jan 28, 2013) - STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP) (SGX: S24), a leading provider of advanced semiconductor packaging and test services, announced today that it has signed a definitive Patent License and Settlement Agreement with Tessera, Inc. (the "Agreement").
This Agreement results in the dismissal of all claims and counterclaims between Tessera, Inc. and STATS ChipPAC and its subsidiaries STATS ChipPAC, Inc. and STATS ChipPAC (BVI) Limited and ends the patent litigation between the companies. In October 2012, the United States District Court for the Northern District of California granted the parties' stipulated dismissal of the breach of license claims and counterclaims, so that this Agreement ends all outstanding litigation between the parties. The Agreement also provides STATS ChipPAC and its subsidiaries with a 5-year license to Tessera Inc.'s complete patent portfolio for semiconductor packaging technology.
On 4 January 2013, the Company updated its outlook for the Company's fourth quarter 2012, when the Company expected net revenues to be approximately $475 million to $482 million, an increase of approximately 16% to 18% compared to the prior quarter, with adjusted EBITDA1 in the range of 25% to 26% of revenue, and capital expenditure2 of approximately $55 million to $60 million in the fourth quarter of 2012.
STATS ChipPAC now expects net revenues for the fourth quarter 2012 to be approximately $480 million, an increase of approximately 18% compared to the prior quarter due to strong demand in advanced packaging and test services for high end smartphones and tablets. As a result of the Agreement, STATS ChipPAC expects adjusted EBITDA1 to be approximately 21% of revenue. Capital expenditure2 is expected to be approximately $55 million in the fourth quarter of 2012. Excluding the Agreement, adjusted EBITDA would have been within our previous outlook guidance issued on 4 January 2013.
The information and estimates provided in this update is subject to a number of risks and uncertainties that could cause final reported figures to differ materially from those disclosed in the fourth quarter 2012 update statements. These statements are based on our management's beliefs and assumptions, which involve judgments about 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 nine months ended 23 September 2012 filed with the Singapore Exchange Securities Trading Limited ("SGX-ST") for the major assumptions made in preparing our outlook, including the update above, for the fourth quarter 2012. 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.
Certain statements in this release are forward-looking statements, including our update for the fourth quarter 2012, that involve a number of risks and uncertainties that could cause final reported figures to differ materially from those described in this release. Factors that could cause final reported figures to differ include, but are not limited to, the amount of the business interruption insurance claim due to flooding of the Thailand Plant; 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.
Basis of Preparation
Our 52-53 week fiscal year ends on the Sunday nearest and prior to 31 December. Our fiscal quarters end on a Sunday and our 14-week fourth quarter of 2012 and 53-week year 2012 ended on 30 December 2012, while our 13-week third quarter of 2012, fourth quarter of 2011 and 52-week year 2011 ended on 23 September 2012, 25 December 2011 and 25 December 2011, respectively. References to "$" are to the lawful currency of the United States of America.
About STATS ChipPAC Ltd.
STATS ChipPAC Ltd. (SGX-ST Code: S24) 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 throughout Asia, the United States and Europe. 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, goodwill and equipment 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, asset upgrades and infrastructure investments.