SOURCE: STATS ChipPAC

STATS ChipPAC

February 11, 2009 05:30 ET

STATS ChipPAC Reports Fourth Quarter and Full Year 2008 Results

SINGAPORE -- 02/11/2009, UNITED STATES--(Marketwire - February 11, 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 the fourth quarter and full year 2008.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "Revenue for the full year 2008 of $1,658.2 million increased by 0.4% over prior year and net income for the full year 2008 of $25.7 million decreased 72.6% compared to full year 2007. Fourth quarter 2008 revenue of $324.6 million decreased 31.9% over prior year and 31.3% sequentially over prior quarter. Our fourth quarter revenue reflected the contraction in demand for our services as our customers responded to the global economic crisis with sharp reduction in new build orders and aggressively reduced their inventories. In response to the severe operating environment, we took aggressive actions to reduce our operating costs that included reduction in capital expenditures and our global workforce."

Net income for full year 2008, including $19.8 million in restructuring charges and $21.1 million in equipment impairment charges, was $25.7 million or $0.01 of net income per diluted ordinary share, compared to net income of $93.7 million or $0.04 of net income per diluted ordinary share in 2007. Net loss for fourth quarter of 2008, including $13.8 million in restructuring charges, was $22.1 million or $0.01 of net loss per diluted ordinary share, compared to net income of $41.3 million or $0.02 of net income per diluted ordinary share in the fourth quarter of 2007.

John Lau, Chief Financial Officer of STATS ChipPAC, said, "We ended the year with $352.8 million of cash, cash equivalent, short and long term marketable securities and $473.5 million of debt, compared to $258.0 million and $664.6 million respectively in the prior year. Gross margin for fourth quarter of 2008 was 11.6% compared to 19.5% over prior year, and 18.5% in the prior quarter. Operating margin for fourth quarter of 2008 was (4.1)% of revenue, compared to 11.4% over prior year and 4.6% in the prior quarter. Fourth quarter 2008 operating margin included restructuring charges of $13.8 million, or 4.2% of revenue. Capital spending in the fourth quarter and full year 2008 were $22.4 million and $239.0 million or 6.9% and 14.4% of revenue respectively compared to $67.8 million and $268.8 million or 14.2% and 16.3% respectively in the prior year."

Forward-looking Statements

Certain statements in this release, including statements regarding expected future financial results, restructuring charges 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 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; our reliance on a small group of principal customers; our continued success in technological innovations; pricing pressures, including declines in average selling prices; our proposed capital reduction and cash distribution; availability of financing; prevailing market conditions; our ability to meet the applicable requirements for the termination of registration under the U.S. Securities Exchange Act of 1934, as amended; our ability to meet specific conditions imposed for the continued listing or delisting of our ordinary shares on the Singapore Exchange Securities Trading Limited ("SGX-ST"); our substantial level of indebtedness; potential impairment charges; delays in acquiring or installing new equipment; adverse tax and other financial consequences if the South Korean taxing authorities do not agree with our interpretation of the applicable tax laws; our ability to develop and protect our intellectual property; rescheduling or canceling of customer orders; changes in our product mix; intellectual property rights disputes and litigation; our capacity utilization; 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; 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 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 SEC filings, including its annual report on Form 20-F dated March 7, 2008. 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.

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 and prior to December 31. Our fiscal quarters end on a Sunday and are generally thirteen weeks in length. Our fourth quarter of 2008 ended on December 28, 2008, while our fourth quarter of 2007 ended on December 30, 2007. 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          Twelve Months Ended
                   --------------------------   --------------------------
                   December 30,  December 28,   December 30,  December 28,
                       2007          2008           2007          2008
                   ------------  ------------   ------------  ------------
Net revenues       $    476,676  $    324,613   $  1,651,560  $  1,658,188
Cost of revenues       (383,800)     (286,812)    (1,330,284)   (1,383,797)
                   ------------  ------------   ------------  ------------
Gross profit             92,876        37,801        321,276       274,391

Operating
 expenses:
  Selling, general
   and
   administrative        29,955        28,959        112,593       118,337
  Research and
   development            8,742         8,441         34,918        37,825
  Restructuring
   charges                    -        13,760            990        19,790
  Equipment
   impairment                 -             -              -        21,091
  Accelerated
   share-based
   compensation               -             -              -         1,562
  Tender offer
   expenses                   -             -         10,922             -
  Impairment of
   assets held
   for sale                   -             -          1,725             -
                   ------------  ------------   ------------  ------------
    Total
     operating
     expenses            38,697        51,160        161,148       198,605
                   ------------  ------------   ------------  ------------

Operating income
 (loss)                  54,179       (13,359)       160,128        75,786
Other income
 (expenses), net         (5,581)       (8,999)       (31,045)      (26,464)
                   ------------  ------------   ------------  ------------
Income (loss)
 before income
 taxes                   48,598       (22,358)       129,083        49,322
Income tax benefit
 (expense)               (5,336)          378        (29,581)      (19,172)
                   ------------  ------------   ------------  ------------
Income (loss)
 before minority
 interest                43,262       (21,980)        99,502        30,150
Minority interest        (1,916)         (169)        (5,818)       (4,448)
                   ------------  ------------   ------------  ------------
Net income (loss)  $     41,346  $    (22,149)  $     93,684  $     25,702
                   ============  ============   ============  ============

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

Ordinary shares
 (in thousands)
 used in per
 ordinary share
 calculation:
  Basic               2,047,333     2,202,192      2,032,962     2,143,934
  Diluted             2,209,813     2,202,192      2,188,687     2,146,249

Key Ratios and
 Information:
Gross Margin               19.5%         11.6%          19.5%         16.5%
Operating Expenses
 as a % of Revenue          8.1%         15.7%           9.8%         11.9%
Operating Margin           11.4%         (4.1)%          9.7%          4.6%

Depreciation &
 Amortization,
 including
 Amortization of
 Debt Issuance
 Costs             $     69,946  $     68,376   $    256,913  $    286,428
Capital
 Expenditures      $     67,778  $     22,441   $    268,754  $    239,020

Share-based
 compensation
 expense included
 under SFAS 123(R)
 were as follows:
  Cost of
   revenues        $      1,111  $         98   $      4,783  $        905
  Selling,
   general and
   administrative           636           124          3,118           875
  Research and
   development              192            36            968           228
  Accelerated
   share-based
   compensation               -             -              -         1,562
                   ------------  ------------   ------------  ------------
                   $      1,939  $        258   $      8,869  $      3,570
                   ============  ============   ============  ============




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


                                                 December 30,  December 28,
                                                     2007          2008
                                                 ------------  ------------
                                                               (Unaudited)
ASSETS
Current assets:
  Cash, cash equivalents and marketable
   securities                                    $    242,691  $    337,230
  Accounts receivable, net                            271,360       139,520
  Inventories                                          83,312        60,717
  Other current assets                                 38,489        33,841
                                                 ------------  ------------
    Total current assets                              635,852       571,308

  Marketable securities                                15,296        15,587
  Property, plant and equipment, net                1,276,490     1,216,342
  Investment in equity investee                        10,350         9,001
  Goodwill and intangible assets                      588,712       595,894
  Other non-current assets *                           70,254        38,931
                                                 ------------  ------------
    Total assets                                 $  2,596,954  $  2,447,063
                                                 ------------  ------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts and other payables                    $    235,044  $    148,931
  Other current liabilities                           128,417       152,836
  Short-term debts                                    240,781        76,953
                                                 ------------  ------------
    Total current liabilities                         604,242       378,720
Long-term debts                                       423,853       396,500
Other non-current liabilities                         125,093        64,144
                                                 ------------  ------------
    Total liabilities                               1,153,188       839,364
                                                 ------------  ------------
Minority interest                                      59,797        59,042
                                                 ------------  ------------
Shareholders' equity                                1,383,969     1,548,657
                                                 ------------  ------------
    Total liabilities and shareholders' equity   $  2,596,954  $  2,447,063
                                                 ------------  ------------

  * Includes $1.0 million and $1.6 million of non-current restricted cash
    as of December 28, 2008 and December 30, 2007, respectively.




                            STATS ChipPAC Ltd.
                      Other Supplemental Information
                                (Unaudited)


                                          4Q 2007     3Q 2008     4Q 2008
Net Revenues by Product Line
Packaging - laminate                        54.5%       58.7%       55.0%
Packaging - leaded                          19.3%       17.5%       18.0%
Test and other services                     26.2%       23.8%       27.0%
                                          --------    --------    --------
                                           100.0%      100.0%      100.0%
                                          ========    ========    ========
Net Revenues by End User Market
Communications                              54.6%       51.7%       48.2%
Personal Computers                          16.2%       15.8%       21.8%
Consumer, Multi-applications and Others     29.2%       32.5%       30.0%
                                          --------    --------    --------
                                           100.0%      100.0%      100.0%
                                          ========    ========    ========
Net Revenues by Region
United States of America                    75.8%       71.4%       69.0%
Europe                                       3.1%        5.2%        8.3%
Asia                                        21.1%       23.4%       22.7%
                                          --------    --------    --------
                                           100.0%      100.0%      100.0%
                                          ========    ========    ========

Number of Testers                          1,051         994         977
Number of Wirebonders                      4,519       4,760       4,684

Overall Equipment Utilization Rate            79%         70%         48%

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