Download pdf version Singapore – 10/30/2008, United States – 10/29/2008
– 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 third quarter 2008.
Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC, said, “Revenue for the third quarter of 2008 of $472.2 million increased by 8.8% over prior quarter and by 14.0% over the third quarter of 2007. We recorded strong revenue growth in the third quarter despite the challenging global macroeconomic conditions with broad-based customer demand increase in all major markets.”
Net income for the third quarter of 2008, including $21.1 million in equipment impairment charges and $5.1 million in restructuring expenses, decreased by 71.7% to $7.9 million or $0.00 per diluted ordinary share, compared to net income of $27.9 million or $0.01 per diluted ordinary share in the third quarter of 2007.
John Lau, Chief Financial Officer of STATS ChipPAC, said, “We implemented cost control measures to closely align expenses with our business growth and profitability, resulting in restructuring expenses of $5.1 million in the third quarter of 2008. Gross margin for the third quarter of 2008 was 18.5% compared to 17.2% in the prior quarter, and 20.3% in the third quarter of 2007. Our operating margin for the third quarter of 2008, including $21.1 million in equipment impairment charges and $5.1 million in restructuring expenses, was 4.6% of revenue, compared to 8.1% in the prior quarter, and 11.7% in the third quarter of 2007. Capital spending in the third quarter of 2008 was 20.6% of revenue compared to 14.8% in the prior quarter, and 21.4% in the third quarter of 2007. Capital spending increased as we invested in a new wafer bump line to support the growth of our flip chip business.”
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 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 third quarter of 2008 ended on September 28, 2008, while our third quarter of 2007 ended on September 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.ir.statschippac.com. Information contained in this website does not constitute a part of this release.