STATS ChipPAC Reports Third Quarter Results (2006)
• Expects record annual revenue and profitability for 2006
• Expects to return to quarter-over-quarter revenue growth in the fourth quarter
United States — 10/25/2006, Singapore — 10/26/2006 — STATS ChipPAC Ltd. (“STATS ChipPAC†or the “Company†— NNM:
STTS and SGX-ST: STATSChP), a leading independent semiconductor test and advanced packaging service provider, today announced results for the third quarter of 2006. Revenue for the third quarter of 2006 increased 31.8% to $397.1 million, compared to $301.3 million in the third quarter of 2005. However, this represents a sequential decline of 5.0% compared to thesecond quarter of 2006. On a US GAAP basis, net income for the third quarter of 2006 was $18.5 million or $0.09 per diluted ADS, compared to a net loss of $(1.0) million or a loss of
$(0.01) per diluted ADS in the third quarter of 2005. US GAAP results for the third quarter of 2006 include $8.8 million in special items and costs associated with the merger of STATS and ChipPAC. US GAAP results for the third quarter of 2005 include $14.0 million in special items and costs associated with the merger of STATS and ChipPAC. Excluding the special items and
including certain adjustments, non-GAAP adjusted net income for the third quarter of 2006 was $27.3 million or $0.13 per diluted ADS, compared to a non-GAAP adjusted net income of $13.0 million or $0.06 per diluted ADS in the third quarter of 2005. Results for the third quarter of 2006 include approximately $3.4 million in share-based compensation expenses as required under SFAS 123(R).
Tan Lay Koon, President and Chief Executive Officer of STATS ChipPAC said, “The operating environment was challenging in the third quarter as a small group of our customers in the communications segment took aggressive measures to adjust their inventory levels downward. Even though we did see some improvement from our consumer andmulti-applications customers, this was not enough to offset the weakness in our communications segment. As a result, our revenue declined by 5.0% from the prior quarter. However, this quarter’s results still represent strong growth of 31.8% from the same quarter a year ago, and reaffirm that 2006 will be a very strong growth year for us. Despite the challenging operating environment, we maintained our profitability on a US GAAP basis compared to the prior quarter. We believe this demonstrates the resiliency of our business model post merger. On a year-over-year comparison, our growth in revenue, gross margin and profitability shows that our emphasis on profitable growth and capital discipline has continued to benefit our company. Our cost savings activities, including reducing our labor force at the beginning of the quarter, also contributed to our ability to maintain our margins and profitability.â€
