SOURCE: STATS ChipPAC

STATS ChipPAC

January 29, 2015 04:30 ET

STATS ChipPAC Reports Fourth Quarter and Full Year 2014 Results

SINGAPORE 29 JANUARY 2015 UNITED STATES--(Marketwired - Jan 29, 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 fourth quarter and full year 2014.

Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, "Revenue for the fourth quarter of 2014 increased 0.7% to $406.7 million from the third quarter of 2014. Fourth quarter came in better than our earlier guidance due to higher wireless communications revenue driven by new high-end smartphone ramps and stronger than seasonal demand in China lower tier smartphones."

Adjusted EBITDA1 in the fourth quarter of 2014 improved to $96.7 million or 23.8% of revenue compared to $90.2 million or 22.3% in the prior quarter and $91.3 million or 23.1% in the fourth quarter of 2013. Net income for the fourth quarter of 2014 was $3.5 million compared to net loss of $5.3 million in the prior quarter and $12.1 million in fourth quarter of 2013.

For the full year 2014, adjusted EBITDA1 was $353.4 million or 22.3% of revenue compared to $392.4 million or 24.5% in 2013, and net loss was $21.8 million compared to $47.5 million in 2013.

Dennis Chia, Chief Financial Officer of STATS ChipPAC, said, "Gross margin for the fourth quarter of 2014 was higher at 12.1% compared to 11.8% in the prior quarter due to higher revenue and favorable mix change in the wireless communications business. Operating margin for the fourth quarter of 2014 was 3.1% of revenue compared to 3.6% in the prior quarter. Excluding the new factory construction in Korea, capital expenditure2 for the fourth quarter was $30.1 million or 7.4% of revenue. We ended fourth quarter of 2014 with cash, cash equivalents and bank deposits of $185.2 million and debt of $1,203.3 million compared to $178.0 million and $1,137.3 million at the end of third quarter of 2014."

Investor Conference Call / Live Audio Webcast Details
A conference call has been scheduled for 8:00 a.m. in Singapore on Friday, 30 January 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 14 February 2015 at www.statschippac.com and by telephone at 800-616-2127. The conference ID number to access the conference call and replay is 5322157.

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; inability to consolidate our Malaysia operations into our China operations and uncertainty as to whether such plan will achieve the expected objectives and results; 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 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 fourth quarter of 2014 and year 2014 ended on 28 December 2014, while our third quarter of 2014, fourth quarter of 2013 and year 2013 ended on 28 September 2014, 29 December 2013 and 29 December 2013, 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     Twelve Months Ended  
  28 December     29 December     28 December    29 December  
  2014     2013     2014   2013  
$'000     $'000     $'000    $'000  
Net revenues   406,674       395,020       1,585,834       1,598,522  
Cost of revenues   (357,580 )     (353,596 )     (1,402,331 )     (1,380,941 )
Gross profit   49,094       41,424       183,503       217,581  
                               
Operating expenses:                              
  Selling, general and administrative   23,360       23,935       96,164       96,140  
  Research and development   8,927       10,502       39,200       46,432  
  Restructuring charges   4,319       1,886       4,319       1,886  
  Exchange offer and redemption expenses                     15,701  
  Write-off of debt issuance costs                     2,392  
    Operating expenses   36,606       36,323       139,683       162,551  
                               
Equipment impairment               3,713        
Total operating expenses   36,606       36,323       143,396       162,551  
Operating income before exceptional items   12,488       5,101       40,107       55,030  
  Plant closure costs                     (36,909 )
  Flood related insurance settlement                     19,582  
  Flood related plan charges                     (3,000 )
Operating income after exceptional items   12,488       5,101       40,107       34,703  
                               
Other income (expenses), net:                              
  Interest income   362       358       1,692       1,334  
  Interest expense   (13,500 )     (12,918 )     (51,432 )     (54,459 )
  Foreign currency exchange gain   3,640       3,721       3,145       3,641  
  Other non-operating expenses, net   (785 )     (1,994 )     (547 )     (1,969 )
    Total other expenses, net   (10,283 )     (10,833 )     (47,142 )     (51,453 )
                               
Income (loss) before income taxes   2,205       (5,732 )     (7,035 )     (16,750 )
Income tax benefit (expense)   3,419       (4,193 )     (6,515 )     (22,329 )
Net income (loss)   5,624       (9,925 )     (13,550 )     (39,079 )
Less: Net income attributable to the non- controlling interest   (2,139 )     (2,147 )     (8,245 )     (8,414 )
Net income (loss) attributable to STATS ChipPAC Ltd.   3,485       (12,072 )     (21,795 )     (47,493 )
                               
Net income (loss) per ordinary share attributable to STATS ChipPAC Ltd.:                              
  Basic $ 0.00     $ (0.01 )   $ (0.01 )   $ (0.02 )
  Diluted $ 0.00     $ (0.01 )   $ (0.01 )   $ (0.02 )
                               
Ordinary shares (in thousands) used in per ordinary share calculation:                              
  Basic and Diluted   2,202,218       2,202,218       2,202,218       2,202,218  
                               
Key Ratios and Information:                              
Gross Margin   12.1 %     10.5 %     11.6 %     13.6 %
Operating Expenses as a % of Revenue   9.0 %     9.2 %     8.8 %     10.2 %
Operating Margin   3.1 %     1.3 %     2.8 %     3.4 %
                               
Depreciation & Amortisation, including Amortisation of Debt Issuance Costs   80,927       84,434       318,034       308,564  
Capital Expenditures   64,813       200,592       534,729       507,466  
                               
                               
                               
STATS ChipPAC Ltd.
Consolidated Statement of Financial Position
(Unaudited)
           
      28 December   29 December
      2014   2013
    $'000   $'000
ASSETS        
Current assets:        
  Cash and cash equivalents   117,456   129,136
  Short-term bank deposits   66,054   42,042
  Accounts receivable, net   238,684   238,441
  Other receivables   29,479   15,239
  Inventories   73,232   71,055
  Prepaid expenses and other current assets   31,565   18,970
    Total current assets   556,470   514,883
Non-current assets:        
  Long-term bank deposits   1,659   11,604
  Property, plant and equipment, net   1,637,195   1,431,247
  Intangible assets   33,617   35,117
  Goodwill   381,487   381,487
  Deferred tax assets   100   186
  Prepaid expenses and other non-current assets   3,306   3,146
    Total non-current assets   2,057,364   1,862,787
Total assets   2,613,834   2,377,670
           
LIABILITIES        
Current liabilities:        
  Accounts and other payables   198,076   138,004
  Payables related to property, plant and equipment purchases   95,592   141,998
  Accrued operating expenses   107,312   124,640
  Income taxes payable   12,327   18,207
  Short-term bank borrowings   212,597   37,947
  Short-term amounts due to related parties   31   100
    Total current liabilities   625,935   460,896
Non-current liabilities:        
  Long-term borrowings   990,688   874,281
  Deferred tax liabilities   38,689   47,476
  Other non-current liabilities   16,079   24,228
    Total non-current liabilities   1,045,456   945,985
Total liabilities   1,671,391   1,406,881
           
EQUITY        
  Share capital   873,666   873,666
  Retained earnings   29,683   51,478
  Other reserves   (13,800)   (7,712)
    Equity attributable to equity holders of STATS ChipPAC Ltd.   889,549   917,432
  Non-controlling interest   52,894   53,357
  Total equity   942,443   970,789
  Total liabilities and equity   2,613,834   2,377,670
         
 
 
STATS ChipPAC Ltd.  
Other Supplemental Information  
(Unaudited)  
               
               
    4Q 2014   3Q 2014   4Q 2013  
Net Revenues by Product Line              
Advanced Packaging ##   47.9 % 46.7 % 47.8 %
Wirebond Packaging   27.6 % 30.4 % 29.2 %
Test   24.5 % 22.9 % 23.0 %
    100.0 % 100.0 % 100.0 %
Net Revenues by End User Market              
Communications   67.7 % 65.5 % 66.7 %
Personal Computers   8.4 % 8.1 % 8.1 %
Consumer, Multi-applications and Others   23.9 % 26.4 % 25.2 %
    100.0 % 100.0 % 100.0 %
Net Revenues by Region              
United States of America   68.0 % 64.4 % 67.3 %
Asia   24.3 % 26.6 % 22.6 %
Europe   7.7 % 9.0 % 10.1 %
    100.0 % 100.0 % 100.0 %
               
Number of Testers   880   968   959  
Number of Wirebonders   3,512   3,682   4,088  
               
               

## 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. Adjusted EBITDA excludes plant closure costs related to our Malaysia plant. 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