Exhibit 99.1
Outlook
As STATS ChipPAC Ltd. (“STATS ChipPAC” or the “Company” — NNM: STTS and SGX-ST: STATSChP) enters what it believes will be a strong quarter, it remains focused on profitable growth, financial discipline and improving its asset utilization. The Company believes that its balanced portfolio of package and test solutions, including advanced areas like flip chip and 3D packaging, put it in a strong position in the fourth quarter. In addition, STATS ChipPAC sees increased opportunities in China, Europe and Japan as it benefits from its global footprint, technology leadership, larger scale and a more competitive platform. In terms of guidance for the fourth quarter, STATS ChipPAC expects revenue will be approximately 14% to 18% higher than the third quarter 2005, with US GAAP net income per diluted ADS of $0.02 to $0.05.
Certain statements in this press release, including statements regarding expected future financial results and industry growth, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ include our ability to successfully integrate the operations of former STATS and ChipPAC and their employees; general business and economic conditions and the state of the semiconductor industry; demand for end-use applications products such as communications equipment and personal computers; reliance on a small group of principal customers; decisions by customers to discontinue outsourcing of test and packaging services; changes in customer order patterns; rescheduling or canceling of customer orders; changes in product mix; capacity utilization; level of competition; pricing pressures including declines in average selling prices; continued success in technological innovations; delays in acquiring or installing new equipment; shortages in supply of key components; availability of financing; exchange rate fluctuations; litigation and other risks described from time to time in the Company’s SEC filings, including its annual report on Form 20-F dated March 18, 2005, the Registration Statement on Form F-4 (File No. 333-128061) of STATS ChipPAC and the Registration Statement on Form F-3/S-3 (File Nos. 333-119705 and 333-119705-1) of STATS ChipPAC and STATS ChipPAC, Inc., respectively. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. References to “US GAAP” are to Generally Accepted Accounting Principles as practiced in the United States of America and references to “$” are to the lawful currency of the United States of America.
STATS ChipPAC Ltd.
Condensed Consolidated Statements of Operations
(In thousands of U.S. Dollars, except share and per share data)
(Unaudited)
Condensed Consolidated Statements of Operations
(In thousands of U.S. Dollars, except share and per share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2004 | 2005 | 2004 | 2005 | |||||||||||||
| Net revenues | $ | 231,951 | $ | 301,298 | $ | 503,274 | $ | 799,790 | ||||||||
| Cost of revenues | (193,600 | ) | (250,588 | ) | (419,906 | ) | (688,877 | ) | ||||||||
| Gross profit | 38,351 | 50,710 | 83,368 | 110,913 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 28,286 | 34,041 | 50,187 | 100,092 | ||||||||||||
| Research and development | 5,781 | 6,243 | 11,770 | 18,721 | ||||||||||||
| Restructuring charges | — | — | — | 830 | ||||||||||||
| Other general expenses (income), net | 11 | (7 | ) | (537 | ) | (51 | ) | |||||||||
| Total operating expenses | 34,078 | 40,277 | 61,420 | 119,592 | ||||||||||||
| Operating income (loss) | 4,273 | 10,433 | 21,948 | (8,679 | ) | |||||||||||
| Non-operating income (expenses), net | (8,652 | ) | (8,041 | ) | (16,227 | ) | (27,478 | ) | ||||||||
| Income (loss) before income taxes | (4,379 | ) | 2,392 | 5,721 | (36,157 | ) | ||||||||||
| Income tax expense | (1,713 | ) | (1,247 | ) | (2,345 | ) | (3,545 | ) | ||||||||
| Income (loss) before minority interest | (6,092 | ) | 1,145 | 3,376 | (39,702 | ) | ||||||||||
| Minority interest | (1,352 | ) | (2,156 | ) | (2,097 | ) | (3,491 | ) | ||||||||
| Net income (loss) | $ | (7,444 | ) | $ | (1,011 | ) | $ | 1,279 | $ | (43,193 | ) | |||||
| Net income (loss) per ordinary share : | ||||||||||||||||
| Basic | $ | (0.00 | ) | $ | (0.00 | ) | $ | 0.00 | $ | (0.02 | ) | |||||
| Diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | 0.00 | $ | (0.02 | ) | |||||
| Net income (loss) per ADS : | ||||||||||||||||
| Basic | $ | (0.05 | ) | $ | (0.01 | ) | $ | 0.01 | $ | (0.22 | ) | |||||
| Diluted | $ | (0.05 | ) | $ | (0.01 | ) | $ | 0.01 | $ | (0.22 | ) | |||||
| Ordinary shares (in thousands) used in per ordinary share calculation: | ||||||||||||||||
| Basic | 1,611,435 | 1,968,330 | 1,256,291 | 1,957,175 | ||||||||||||
| Diluted | 1,611,435 | 1,968,330 | 1,267,468 | 1,957,175 | ||||||||||||
| ADS (in thousands) used in per ADS calculation : | ||||||||||||||||
| Basic | 161,144 | 196,833 | 125,629 | 195,717 | ||||||||||||
| Diluted | 161,144 | 196,833 | 126,747 | 195,717 | ||||||||||||
Key Ratios & Information: | ||||||||||||||||
| Gross Margin | 16.5 | % | 16.8 | % | 16.6 | % | 13.9 | % | ||||||||
| Operating Expenses as a % of Revenue | 14.7 | % | 13.3 | % | 12.2 | % | 15.0 | % | ||||||||
| Operating Margin | 1.8 | % | 3.5 | % | 4.4 | % | -1.1 | % | ||||||||
| Depreciation & Amortization, including amortization of debt issuance costs | $ | 53,530 | $ | 64,593 | $ | 126,961 | $ | 189,862 | ||||||||
| Capital Expenditures | $ | 75,839 | $ | 101,431 | $ | 212,663 | $ | 171,970 | ||||||||
STATS ChipPAC Ltd.
Condensed Consolidated Balance Sheets
(In thousands of U.S. Dollars)
(Unaudited)
Condensed Consolidated Balance Sheets
(In thousands of U.S. Dollars)
(Unaudited)
| December 31, | September 30, | |||||||
| 2004 | 2005 | |||||||
ASSETS | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents and marketable securities | $ | 229,569 | $ | 235,243 | ||||
| Accounts receivable, net | 149,650 | 202,254 | ||||||
| Inventories | 54,690 | 59,378 | ||||||
| Other current assets | 58,272 | 45,263 | ||||||
| Total current assets | 492,181 | 542,138 | ||||||
| Marketable securities | 18,121 | 18,150 | ||||||
| Property, plant and equipment, net | 1,035,803 | 1,056,276 | ||||||
| Goodwill and intangible assets | 649,428 | 607,624 | ||||||
| Other non-current assets | 76,169 | 72,860 | ||||||
| Total assets | $ | 2,271,702 | $ | 2,297,048 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts and other payables | $ | 120,211 | $ | 152,969 | ||||
| Other current liabilities | 66,074 | 92,181 | ||||||
| Short-term debts | 181,868 | 35,692 | ||||||
| Total current liabilities | 368,153 | 280,842 | ||||||
| Long-term debts | 652,946 | 782,215 | ||||||
| Other non-current liabilities | 50,362 | 63,369 | ||||||
| Total liabilities | 1,071,461 | 1,126,426 | ||||||
| Minority interest | 40,891 | 46,417 | ||||||
| Shareholders’ equity | 1,159,350 | 1,124,205 | ||||||
| Total liabilities and shareholders’ equity | $ | 2,271,702 | $ | 2,297,048 | ||||