SOURCE: STATS ChipPAC

STATS ChipPAC

April 21, 2015 06:33 ET

STATS ChipPAC Reports First Quarter 2015 Results

SINGAPORE--21 APRIL 2015, UNITED STATES--(Marketwired - Apr 21, 2015) - STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP) (SGX: S24), a leading provider of advanced semiconductor packaging and test services, today announced results for the first quarter 2015.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "Revenue for the first quarter of 2015 increased 1.5% to $371.1 million compared to a year ago and was 8.8% lower from the prior quarter, as we saw seasonal weakness in our personal computer and consumer end markets. In the wireless communication market, we continued to see strength in demand for emerging market handsets as well as product ramps for new high performance smartphones and wearable devices."

Gross margin for the first quarter of 2015 was 10.5% compared to 10.0% in the first quarter of 2014 and 12.1% in the prior quarter. Operating margin for the first quarter of 2015 was 2.1% of revenue, compared to 0.7% in the first quarter of 2014 and 3.1% in the prior quarter. Net loss for the first quarter of 2015 was $2.1 million compared to net loss of $15.8 million in the first quarter of 2014 and net income of $3.5 million in the prior quarter.

Dennis Chia, Chief Financial Officer of STATS ChipPAC, said, "Our adjusted EBITDA1 in the first quarter was $83.2 million or 22.4% of revenue, compared to $78.4 million and $96.7 million or 21.4% and 23.8% of revenue in the first quarter of 2014 and prior quarter, respectively. Capital expenditure2 for the first quarter 2015 was $37.0 million or 10.0% of revenue, compared to $113.6 million and $64.8 million or 31.1% and 15.9% of revenue in the first quarter of 2014 and prior quarter, respectively. Cash, cash equivalents and bank deposits increased to $197.1 million as of the end of the first quarter of 2015 compared to $185.2 million as of the end of the fourth quarter of 2014. During the quarter, we reduced debt to $1,168.9 million as of the end of the first quarter of 2015 compared to $1,203.3 million as of the end of the fourth quarter of 2014."

Investor Conference Call / Live Audio Webcast Details
A conference call has been scheduled for 8:00 a.m. in Singapore on Wednesday, 22 April 2015. During the call, time will be set-aside for analysts and investors to ask questions of executive officers.

The call may be accessed by dialing +65-6823-2299. 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 7 May 2015 at www.statschippac.com and by telephone at 800-616-2127. The conference ID number to access the conference call and replay is 8006233.

Forward-looking Statements
Certain statements in this release are forward-looking statements that involve a number of risks and uncertainties that could cause actual 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; customer credit risks; disruption of our operations; shortages in supply of key components and disruption in supply chain; disruption of our operations and other difficulties related to the relocation of our China operations; loss of directors, 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; majority beneficial ownership by Jiangsu Changjiang Electronics Technology Co., Ltd. ("JCET") upon the voluntary conditional cash offer by JCET for all the ordinary shares of our Company ("the JCET Offer") and the consummation of the JCET Offer that may result in conflicting interests with other holders of our securities; our inability to capture all or any of the benefits from acquisitions and investments in other companies and businesses; loss of customers or failure to compete effectively with the divestment or spin-off of our subsidiaries or 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"); and the potential delisting of our ordinary shares on the SGX-ST following the consummation of the JCET Offer. 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 of Results

The financial statements included in this release have been prepared in accordance with the Singapore Financial Reporting Standards ("FRS").

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 first quarter of 2015 ended on 29 March 2015, while our first quarter of 2014, and fourth quarter of 2014 ended on 30 March 2014 and 28 December 2014, 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.

       
       
STATS ChipPAC Ltd.       
Consolidated Income Statement
 (Unaudited)
     
       
    Three Months Ended  
    29 March     30 March  
    2015
$'000
    2014
$'000
 
Net revenues     371,080       365,476  
Cost of revenues     (332,144 )     (328,956 )
Gross profit     38,936       36,520  
                 
Operating expenses:                
  Selling, general and administrative     22,711       24,122  
  Research and development     8,514       9,932  
    Operating expenses     31,225       34,054  
                 
Equipment impairment           2,261  
Total operating expenses     31,225       36,315  
Operating income     7,711       205  
                 
Other income (expenses), net:                
  Interest income     437       562  
  Interest expense     (14,325 )     (12,375 )
  Foreign currency exchange loss     (459 )     (210 )
  Other non-operating income (expenses), net     (1,389 )     9  
    Total other expenses, net     (15,736 )     (12,014 )
                 
Loss before income taxes     (8,025 )     (11,809 )
Income tax benefit (expense)     7,154       (2,938 )
Net loss     (871 )     (14,747 )
Less: Net income attributable to the non-controlling interest     (1,194 )     (1,060 )
Net loss attributable to STATS ChipPAC Ltd.     (2,065 )     (15,807 )
                 
Net loss 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     2,202,218       2,202,218  
                 
Key Ratios and Information:                
Gross Margin     10.5 %     10.0 %
Operating Expenses as a % of Revenue     8.4 %     9.3 %
Operating Margin before equipment impairment     2.1 %     0.7 %
                 
Depreciation & Amortisation, including Amortisation of Debt Issuance Costs     80,421       78,952  
Capital Expenditures     36,956       113,620  
                 
                 
 

STATS ChipPAC Ltd.
 
Consolidated Statement of Financial Position
(Unaudited)
 
             
    29 March     28 December  
    2015     2014  
    $'000     $'000  
ASSETS            
Current assets:            
  Cash and cash equivalents   150,665     117,456  
  Short-term bank deposits   44,757     66,054  
  Accounts receivable   221,031     238,684  
  Other receivables   13,479     29,479  
  Inventories   74,552     73,232  
  Assets held for sale   11,373     11,373  
  Prepaid expenses and other current assets   18,670     20,192  
    Total current assets   534,527     556,470  
Non-current assets:            
  Long-term bank deposits   1,669     1,659  
  Property, plant and equipment   1,595,659     1,637,195  
  Intangible assets   33,781     33,617  
  Goodwill   381,487     381,487  
  Deferred tax assets   211     100  
  Prepaid expenses and other non-current assets   8,504     3,306  
    Total non-current assets   2,021,311     2,057,364  
  Total assets   2,555,838     2,613,834  
             
LIABILITIES            
Current liabilities:            
  Accounts and other payables   187,968     198,076  
  Payables related to property, plant and equipment purchases   48,242     95,592  
  Accrued operating expenses   93,729     107,312  
  Income taxes payable   12,274     12,327  
  Short-term bank borrowings   224,404     212,597  
  Short-term amounts due to related parties   224     31  
    Total current liabilities   566,841     625,935  
Non-current liabilities:            
  Long-term borrowings   944,501     990,688  
  Deferred tax liabilities   32,154     38,689  
  Deferred government compensation for plant relocation   49,347      
  Other non-current liabilities   17,564     16,079  
    Total non-current liabilities   1,043,566     1,045,456  
  Total liabilities   1,610,407     1,671,391  
             
EQUITY            
  Share capital   873,666     873,666  
  Retained earnings   27,618     29,683  
  Other reserves   (10,852 )   (13,800 )
    Equity attributable to equity holders of STATS ChipPAC Ltd.   890,432     889,549  
  Non-controlling interest   54,999     52,894  
  Total equity   945,431     942,443  
  Total liabilities and equity   2,555,838     2,613,834  
             
   
   
STATS ChipPAC Ltd.
Other Supplemental Information
(Unaudited)
             
             
    1Q 2015   4Q 2014   1Q 2014
Net Revenues by Product Line            
Advanced Packaging ##   49.1%   47.9%   49.1%
Wirebond Packaging   27.3%   27.6%   29.7%
Test   23.6%   24.5%   21.2%
    100.0%   100.0%   100.0%
Net Revenues by End User Market            
Communications   66.2%   67.7%   67.2%
Personal Computers   8.0%   8.4%   8.6%
Consumer, Multi-applications and Others   25.8%   23.9%   24.2%
    100.0%   100.0%   100.0%
Net Revenues by Region            
United States of America   62.6%   68.0%   65.1%
Asia   30.0%   24.3%   24.6%
Europe   7.4%   7.7%   10.3%
    100.0%   100.0%   100.0%
             
Number of Testers   873   880   948
Number of Wirebonders   3,402   3,512   4,118
             
             

## Advanced Packaging includes flip-chip and wafer level packaging.

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, asset impairment, tender offer, debt exchange or debt redemption expenses and write-off of debt issuance costs. 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.

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 Marketing Communications
    Tel: (208) 867-9859
    email: Email Contact