SOURCE: STATS ChipPAC

January 30, 2008 21:22 ET

STATS ChipPAC Reports Fourth Quarter and Full Year 2007 Results

Full Year Net Income at Record High of $93.7 Million; Fourth Quarter Revenue Increased 15.1% Sequentially to $476.7 Million

UNITED STATES--(Marketwire - January 30, 2008) - SINGAPORE -- 1/31/2008 -- STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP), a leading independent semiconductor test and advanced packaging service provider, today announced results for the fourth quarter and full year 2007.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "We delivered a strong fourth quarter with record quarterly net income of $41.3 million bringing the 2007 full year net income to a record high of $93.7 million. Our revenue for the fourth quarter 2007 grew 15.1% sequentially to $476.7 million with strong demand across the computing, communications and consumer end markets, and revenue contribution from our recently acquired factory in Pathumthani, Thailand. Overall, we made good progress in 2007 growing our 3D solutions offering, such as stacked flip chip package for mobile platforms and Fan-in Package on Package, to meet our customers' continuing demand for increased functional integration, improved yield and lower cost solutions. We are also expanding our flip chip offering to provide our customers with full turnkey solution in China. We invested more in technology, including the establishment of a new research and development facility focused on advanced wafer integration."

Revenue for the fourth quarter of 2007 increased to $476.7 million, this represents 14.6% increase over the fourth quarter of 2006 and 15.1% sequential increase compared to the third quarter of 2007. Net income for the fourth quarter of 2007 improved 46.2% to $41.3 million or $0.19 per diluted ADS, compared to net income of $28.3 million or $0.13 per diluted ADS in the fourth quarter of 2006.

John Lau, Chief Financial Officer of STATS ChipPAC, said, "We significantly improved our capital efficiency in 2007. In the three months and twelve months ended December 30, 2007, we spent approximately $67.8 million and $268.8 million in capital expenditures, which were 14.2% and 16.3% of revenue, respectively, compared to 13.0% and 21.6% of revenue in the three and twelve months ended December 31, 2006, respectively. Our operating margin was 11.4% and 9.7% of revenue in the three and twelve months ended December 30, 2007, respectively, compared to 11.3% and 9.6% in the three and twelve months ended December 31, 2006, respectively. This included $10.9 million expenses incurred in connection with the tender offer by Singapore Technologies Semiconductors Pte Ltd, a wholly owned subsidiary of Temasek Holdings (Private) Limited, in 2007. We will continue to emphasize cost controls, improve efficiencies across our operations and maintain discipline in capital spending on strategic customer programs."

Forward-looking Statements

Certain statements in this release, including statements regarding expected future financial results and industry growth, 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 from our expectations include, but are not limited to, 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; the ability to meet the applicable requirements for the termination of registration under the U.S. Securities Exchange Act of 1934, as amended; ability to meet specific conditions imposed for the continued listing or delisting of the Company's securities on the SGX-ST; 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 continue to successfully integrate the operations of the former separate STATS and ChipPAC companies 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 have employed quarterly and fiscal year reporting periods. Our 52-53 week fiscal year ends on the Sunday nearest to December 31. Our fiscal quarters end on a Sunday and are generally thirteen weeks in length. Our fourth quarter of 2007 ended on December 30, 2007, while our fourth quarter of 2006 ended on December 31, 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.

About STATS ChipPAC Ltd.

STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP) 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 Singapore Exchange Securities Trading Limited (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       Twelve Months Ended
                        ------------------------  ------------------------
                          December     December     December     December
                          31, 2006     30, 2007     31, 2006     30, 2007
                        -----------  -----------  -----------  -----------
Net revenues            $   415,982  $   476,676  $ 1,616,933  $ 1,651,560
Cost of revenues           (332,145)    (383,800)  (1,290,773)  (1,330,284)
                        -----------  -----------  -----------  -----------
Gross profit                 83,837       92,876      326,160      321,276

Operating expenses:
     Selling, general
      and
      administrative         29,134       29,955      139,466      112,593
     Research and
      development             7,932        8,742       30,446       34,918
     Tender offer
      expenses                    -            -            -       10,922
     Held for sale
      asset impairment            -            -            -        1,725
     Restructuring
      charges                     -            -        1,938          990
                        -----------  -----------  -----------  -----------
       Total operating
        expenses             37,066       38,697      171,850      161,148
                        -----------  -----------  -----------  -----------

Operating income             46,771       54,179      154,310      160,128
Other income
 (expenses), net            (10,920)      (5,581)     (41,733)     (31,045)
                        -----------  -----------  -----------  -----------
Income before income
 taxes                       35,851       48,598      112,577      129,083
Income tax expense           (5,493)      (5,336)     (25,759)     (29,581)
                        -----------  -----------  -----------  -----------
Income before minority
 interest                    30,358       43,262       86,818       99,502
Minority interest            (2,083)      (1,916)     (10,010)      (5,818)
                        -----------  -----------  -----------  -----------
Net income              $    28,275  $    41,346  $    76,808  $    93,684
                        ===========  ===========  ===========  ===========

Net income per
 ordinary share:
     Basic              $      0.01  $      0.02  $      0.04  $      0.05
     Diluted            $      0.01  $      0.02  $      0.04  $      0.04

Net income per ADS:
     Basic              $      0.14  $      0.20  $      0.39  $      0.46
     Diluted            $      0.13  $      0.19  $      0.37  $      0.44

Ordinary shares (in
 thousands) used in
 per ordinary share
 calculation:
     Basic                2,000,590    2,047,333    1,991,110    2,032,962
     Diluted              2,169,571    2,209,813    2,161,545    2,188,687

ADS (in thousands) used
 in per ADS
 calculation:
     Basic                  200,059      204,733      199,111      203,296
     Diluted                216,957      220,981      216,154      218,869

Key Ratios and
 Information:
Gross Margin                   20.2%        19.5%        20.2%        19.5%
Operating Expenses as a
 % of Revenue                   8.9%         8.1%        10.6%         9.8%
Operating Margin               11.3%        11.4%         9.6%         9.7%


Depreciation &
 Amortization,
 including
     Amortization
      of Debt
      Issuance Costs    $    64,538  $    69,946  $   268,689  $   256,913
     Capital
      Expenditures      $    54,019  $    67,778  $   348,495  $   268,754



Share-based
 compensation expense
 included under
 SFAS 123(R) were as
 follows:
     Cost of revenues   $     1,435  $     1,111  $     5,965  $     4,783
     Selling, general
      and
      administrative          1,259          636        6,143        3,118
     Research and
      development               332          192        1,580          968
                        -----------  -----------  -----------  -----------
                        $     3,026  $     1,939  $    13,688  $     8,869
                        ===========  ===========  ===========  ===========






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


                                               December 31,   December 30,
                                                   2006           2007
                                              ============== ==============
                                                              (Unaudited)
ASSETS
Current assets:
  Cash, cash equivalents and marketable
   securities                                 $      216,583 $      242,691
  Accounts receivable, net                           243,779        271,360
  Inventories                                        111,614         83,312
  Other current assets                                27,845         38,489
                                              ============== ==============
    Total current assets                             599,821        635,852

  Marketable securities                               15,358         15,296
  Property, plant and equipment, net               1,192,830      1,276,490
  Investment in equity investee                       10,292         10,350
  Goodwill and intangible assets                     555,358        588,712
  Other non-current assets *                          84,621         70,254
                                              ============== ==============
    Total assets                              $    2,458,280 $    2,596,954
                                              ============== ==============

LIABILITIES AND SHAREHOLDERS'  EQUITY
Current liabilities:
  Accounts and other payables                 $      201,999 $      235,044
  Other current liabilities                          104,482        128,417
  Short-term debts                                    65,373        240,781
                                              ============== ==============
    Total current liabilities                        371,854        604,242
Long-term debts                                      697,523        423,853
Other non-current liabilities                         84,807        125,093
                                              ============== ==============
    Total liabilities                              1,154,184      1,153,188
                                              ============== ==============
Minority interest                                     57,946         59,797
                                              ============== ==============
Shareholders' equity                               1,246,150      1,383,969
                                              ============== ==============
    Total liabilities and shareholders'
     equity                                   $    2,458,280 $    2,596,954
                                              ============== ==============


  * Includes $1.6 million and $1.0 million of non-current restricted cash
    as of December 30, 2007 and December 31, 2006, respectively.





                            STATS ChipPAC Ltd.
                      Other Supplemental Information
                                (Unaudited)


                                                 4Q 2006  Q3 2007  Q4 2007
Net Revenues by Product Line
Packaging - array                                   57.8%    56.4%    54.5%
Packaging - leaded                                  17.1%    18.5%    19.3%
Test and other services                             25.1%    25.1%    26.2%
                                                 -------  -------  -------
                                                   100.0%   100.0%   100.0%
                                                 =======  =======  =======
Net Revenues by End User Market
Communications                                      57.0%    52.4%    54.6%
Personal Computers                                  17.5%    14.6%    16.2%
Consumer, Multi-applications and Others             25.5%    33.0%    29.2%
                                                 -------  -------  -------
                                                   100.0%   100.0%   100.0%
                                                 =======  =======  =======
Net Revenues by Region
United States of America                            74.3%    73.9%    75.8%
Europe                                               3.2%     3.3%     3.1%
Asia                                                22.5%    22.8%    21.1%
                                                 -------  -------  -------
                                                   100.0%   100.0%   100.0%
                                                 =======  =======  =======

Number of Testers                                    985      891    1,051
Number of Wirebonders                              3,812    3,933    4,519

Overall Equipment Utilization Rate                    75%      78%      79%

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) 939 3104
    Fax: (208) 939 4817
    email: Email Contact