Exhibit 1
Outlook
Based on current customer forecasts, STATS ChipPAC Ltd. (“STATS ChipPAC” or the “Company”) believes the worst is behind the Company. STATS ChipPAC expects to return to a growth mode in the second quarter 2005, with an increase in revenue quarter over quarter. The Company remains confident in its prospects due to the compelling strategic advantages of its business model, its strong financial position, its leadership in test and advanced packages, and its geographic leadership in fast growth regions. Specifically, for the second quarter 2005, STATS ChipPAC expects revenues to be approximately 10% to 15% higher than the first quarter 2005, with US GAAP net loss per ADS of $0.05 to $0.08 for the second quarter of 2005.
Certain statements in this press release including statements regarding expected future financial results and industry growth, and all statements made under the heading “Outlook”, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ include our ability to successfully integrate the operations of former STATS and ChipPAC and employees; general business and economic conditions and the state of the semiconductor industry; demand for end-use applications products such as communications equipment and personal computers; reliance on a small group of principal customers; decisions by customers to discontinue outsourcing of test and assembly services; changes in customer order patterns; rescheduling or canceling of customer orders; changes in product mix; capacity utilization; level of competition; pricing pressures including declines in average selling prices; continued success in technological innovations; delays in acquiring or installing new equipment; shortages in supply of key components; availability of financing; exchange rate fluctuations; litigation and other risks described from time to time in the Company’s SEC filings, including its annual report on Form 20-F dated March 18, 2005, the Registration Statement on Form F-3/S-3 (File Nos. 333-119705 and 333-119705-1) of STATS ChipPAC and STATS ChipPAC, Inc. respectively and the Registration Statement on Form F-4 (File No. 333-123480 of STATS ChipPAC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Unless otherwise specified, references to “$” are to the lawful currency of the United States of America. Unless otherwise specified, references to “US GAAP” are to Generally Accepted Accounting Principles as practiced in the United States of America.
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STATS ChipPAC Ltd. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands of US Dollars, except share and per share data)
(Unaudited)
Three months ended March 31, | ||||||||
2004 | 2005 | |||||||
Net revenues | $ | 132,328 | $ | 234,146 | ||||
Cost of revenues | (111,949 | ) | (209,748 | ) | ||||
Gross profit | 20,379 | 24,398 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative | 10,253 | 32,285 | ||||||
Research and development | 3,085 | 5,942 | ||||||
Restructuring charges | – | 830 | ||||||
Other general expenses (income), net | (37 | ) | (39 | ) | ||||
Total operating expenses | 13,301 | 39,018 | ||||||
Operating income (loss) | 7,078 | (14,620 | ) | |||||
Non-operating income (expenses), net | (2,221 | ) | (11,382 | ) | ||||
Income (loss) before income taxes | 4,857 | (26,002 | ) | |||||
Provision for income taxes | (509 | ) | (1,139 | ) | ||||
Income (loss) before minority interest | 4,348 | (27,141 | ) | |||||
Minority interest | (282 | ) | 22 | |||||
Net income (loss) | $ | 4,066 | $ | (27,119 | ) | |||
Net income (loss) per ordinary share | ||||||||
Basic | $ | 0.00 | $ | (0.01 | ) | |||
Diluted | $ | 0.00 | $ | (0.01 | ) | |||
Net income (loss) per ADS | ||||||||
Basic | $ | 0.04 | $ | (0.14 | ) | |||
Diluted | $ | 0.04 | $ | (0.14 | ) | |||
Ordinary shares (in thousands) used in per ordinary share calculation: | ||||||||
Basic | 1,076,713 | 1,948,396 | ||||||
Diluted | 1,081,215 | 1,948,396 | ||||||
ADS (in thousands) used in per ADS calculation: | ||||||||
Basic | 107,671 | 194,840 | ||||||
Diluted | 108,122 | 194,840 | ||||||
Key Ratios & Information: | ||||||||
Gross Margin | 15.4 | % | 10.4 | % | ||||
Operating Expenses as a % of Revenue | 10.1 | % | 16.7 | % | ||||
Operating Margin | 5.3 | % | (6.2 | )% | ||||
Depreciation & Amortization Expense, including Amortization of Debt Issuance Cost | $ | 35,628 | $ | 61,170 | ||||
Capital Expenditure | $ | 69,798 | $ | 17,147 |
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STATS ChipPAC Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands of US Dollars)
(Unaudited)
December 31, | March 31, | |||||||
2004 | 2005 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and marketable securities | $ | 229,569 | $ | 161,129 | ||||
Accounts receivable, net | 149,650 | 166,630 | ||||||
Inventories | 58,272 | 47,948 | ||||||
Other current assets | 54,690 | 65,680 | ||||||
Total current assets | 492,181 | 441,387 | ||||||
Marketable securities | 18,121 | 17,750 | ||||||
Property, plant and equipment, net | 1,035,803 | 1,004,583 | ||||||
Goodwill and intangible assets | 649,428 | 636,087 | ||||||
Other non-current assets | 76,169 | 69,806 | ||||||
Total assets | $ | 2,271,702 | $ | 2,169,613 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts and other payables | $ | 120,211 | $ | 90,683 | ||||
Other current liabilities | 66,074 | 82,888 | ||||||
Short-term debts | 181,868 | 145,098 | ||||||
Total current liabilities | 368,153 | 318,669 | ||||||
Long-term debts | 652,946 | 617,127 | ||||||
Other non-current liabilities | 50,362 | 57,490 | ||||||
Total liabilities | 1,071,461 | 993,286 | ||||||
Minority interest | 40,891 | 40,742 | ||||||
Shareholders’ equity | 1,159,350 | 1,135,585 | ||||||
Total liabilities and shareholders’ equity | $ | 2,271,702 | $ | 2,169,613 | ||||
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