Chartered Semiconductor Manufacturing Ltd. (Nasdaq: CHRT, SGX-ST: CHARTERED), one of the world’s top dedicated semiconductor foundries, offers leading-edge technologies down to 65 nanometer (nm), enabling today’s system-on-chip designs. The company further serves its customers’ needs through a collaborative, joint development approach on a technology roadmap that extends to 22nm. Chartered’s strategy is based on open and comprehensive design enablement solutions, manufacturing enhancement strategies, and a commitment to flexible sourcing. In Singapore, the company operates a 300mm fabrication facility and five 200mm facilities. Information about Chartered can be found at www.charteredsemi.com.
Safe Harbor Statement under the provisions of the United States Private Securities Litigation Reform Act of 1995
This news release contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including without limitation, statements relating to our outlook for the second quarter of 2008; projected revenues and average selling prices (including Chartered's share of SMP), utilization rate, gross profit, net income and earnings per ADS; the revenue contribution from 0.13-micron and below technologies including those from 65nm as a percentage of our total business base revenues and our estimated wafer capacity in second quarter of 2008, reflect our current views with respect to future events and financial performance and are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results or those anticipated. Among the factors that could cause actual results to differ materially are changes in the demands from our major customers, manufacturing capacity constraints, excess inventory, life cycle, market outlook and trends for specific products; subprime mortgage issue and the slow down in the economic conditions in the United States as well as globally; demand and supply outlook in the semiconductor market; competition from other foundries and pricing pressures; products mix; unforeseen delays, interruptions, performance level of our fabrication facilities; our progress on leading-edge products; changes in capacity plans, allocation and process technology mix; the successful integration of Fab 3E operations into our operations; unavailability of materials, equipment, manpower and expertise; access to or delays in technological advances or our development of process technologies; the successful implementation of our partnership, technology and supply alliances (including our joint development agreements with IBM and the other joint development partners); the growth rate of fabless companies, the outsourcing strategy of integrated device manufacturers (“IDM”) and our expectation that IDMs will utilize foundry capacity more extensively. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained. In addition to the foregoing factors, a description of certain other risks and uncertainties which cause actual results to differ materially can be found in "Item 3. Key Information — D. Risk Factors" in our 2007 annual report on Form 20-F filed with the US SEC. You are cautioned not to place undue reliance on these forward-looking statements, which reflect management's current analysis of future events. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
All currency figures stated in this report are in US dollars.
The financial statement amounts in this report are determined in accordance with US GAAP.
In order to provide investors additional information regarding the Company’s financial results as determined in accordance with US GAAP, in this report Chartered also provides information on its total business base revenues, which include the Company’s share of Silicon Manufacturing Partners (“Revenues including Chartered’s share of SMP”). Silicon Manufacturing Partners (SMP or Fab 5) is a minority-owned joint-venture company and under US GAAP reporting, SMP revenues are not consolidated into Chartered’s revenues (“Revenues”). References to revenues including Chartered’s share of SMP in this report are therefore not in accordance with US GAAP. To ensure clarity, in Appendix A of this report we have included a reconciliation table which provides comparable data based on revenues determined in accordance with US GAAP, which do not include the Company’s share of SMP.
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In thousands of US Dollars, except share and per share data) | |||||||
Determined in accordance with US GAAP | |||||||
Three Months Ended
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2007 | 2008 | ||||||
Net revenue | $ | 323,796 | $ | 388,230 | |||
Cost of revenue | 252,018 | 323,628 | |||||
Gross profit | 71,778 | 64,602 | |||||
Other revenue | 5,622 | 5,610 | |||||
Operating expenses: | |||||||
Research and development | 37,570 | 45,445 | |||||
Sales and marketing | 14,245 | 17,592 | |||||
General and administrative | 9,916 | 10,794 | |||||
Other operating expenses, net | 4,782 | 2,484 | |||||
Total operating expenses | 66,513 | 76,315 | |||||
Equity in income of associated companies, net | 6,097 | 9,793 | |||||
Other income (loss), net | (1,051 | ) | 10,510 | ||||
Interest expense, net | (8,070 | ) | (10,577 | ) | |||
Income before income tax | 7,863 | 3,623 | |||||
Income tax expense | 1,537 | 1,232 | |||||
Net income | 6,326 | 2,391 | |||||
Less: Accretion to redemption value of convertible | |||||||
redeemable preference shares | 2,381 | 2,475 | |||||
Net income (loss) available to ordinary shareholders | $ | 3,945 | $ | (84 | ) | ||
Net earnings (loss) per ordinary share and ADS | |||||||
Basic net earnings (loss) per ordinary share | $ | 0.00 | $ | (0.00 | ) | ||
Diluted net earnings (loss) per ordinary share | $ | 0.00 | $ | (0.00 | ) | ||
Basic net earnings (loss) per ADS | $ | 0.02 | $ | (0.00 | ) | ||
Diluted net earnings (loss) per ADS | $ | 0.02 | $ | (0.00 | ) | ||
Number of ordinary shares (in millions) used in computing: | |||||||
Basic net earnings (loss) per ordinary share | 2,536.8 | 2,540.0 | |||||
Effect of dilutive securities | 7.0 | - | |||||
Diluted net earnings (loss) per ordinary share | 2,543.8 | 2,540.0 | |||||
Number of ADS (in millions) used in computing: | |||||||
Basic net earnings (loss) per ADS | 253.7 | 254.0 | |||||
Effect of dilutive securities | 0.7 | - | |||||
Diluted net earnings (loss) per ADS | 254.4 | 254.0 |
CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands of US Dollars) | |||||||
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Determined in accordance with US GAAP |
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As of | |||||||
December 31, | March 31, | ||||||
2007 |
2008 (h) |
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(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 743,173 | $ | 505,092 | |||
Restricted cash | 45,092 | 45,510 | |||||
Marketable securities | 2,822 | 1,743 | |||||
Receivables, net | 237,312 | 303,175 | |||||
Inventories | 213,524 | 230,014 | |||||
Other investments | 89,290 | 58,153 | |||||
Other current assets | 22,520 | 23,976 | |||||
Total current assets | 1,353,733 | 1,167,663 | |||||
Investment in associated companies | 30,112 | 30,965 | |||||
Technology licenses, net | 62,699 | 65,437 | |||||
Property, plant and equipment, net | 2,463,789 | 2,692,450 | |||||
Other non-current assets | 115,228 | 61,154 | |||||
Total assets | $ | 4,025,561 | $ | 4,017,669 | |||
LIABILITIES, CONVERTIBLE REDEEMABLE PREFERENCE SHARES AND SHAREHOLDERS' EQUITY | |||||||
Payables | $ | 212,618 | $ | 267,583 | |||
Short-term debt | 270,000 | - | |||||
Current installments of long-term debt and capital lease obligations | 78,663 | 148,962 | |||||
Other current liabilities | 114,630 | 99,008 | |||||
Total current liabilities | 675,911 | 515,553 | |||||
Long-term debt and capital lease obligations, excluding current installments | |||||||
1,499,917 | 1,635,087 | ||||||
Other non-current liabilities | 52,747 | 66,803 | |||||
Total liabilities | 2,228,575 | 2,217,443 | |||||
Convertible redeemable preference shares | 255,837 | 258,312 | |||||
Shareholders' equity | 1,541,149 | 1,541,914 | |||||
Total liabilities, convertible redeemable preference shares and shareholders' equity | |||||||
$ | 4,025,561 | $ | 4,017,669 | ||||
(h) The unaudited condensed consolidated balance sheet as of March 31, 2008 includes the assets acquired and liabilities assumed in connection with the acquisition of Hitachi Semiconductor Singapore Pte Ltd. |
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CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES | |||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(In thousands of US Dollars) | |||||||||
Determined in accordance with US GAAP | |||||||||
For The Three Months Ended |
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March 31, | March 31, | ||||||||
2007 | 2008 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
Net income | $ | 6,326 | $ | 2,391 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Equity in income of associated companies, net | (6,097 | ) | (9,793 | ) | |||||
Cash dividends received from associated companies | 8,376 | 8,972 | |||||||
Depreciation and amortization | 119,495 | 133,247 | |||||||
Foreign exchange gain, net | (578 | ) | (165 | ) | |||||
(Gain) loss on disposal of property, plant and equipment, net | (642 | ) | 46 | ||||||
Others, net | 2,646 | 4,385 | |||||||
Changes in assets and liabilities: | |||||||||
Receivables | 26,330 | 11,138 | |||||||
Inventories | (13,410 | ) | 823 | ||||||
Other assets | (3,623 | ) | (1,312 | ) | |||||
Payables and other liabilities | (13,328 | ) | (7,734 | ) | |||||
Net cash provided by operating activities | 125,495 | 141,998 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
Payments for property, plant and equipment | (287,023 | ) | (95,498 | ) | |||||
Payments for technology licenses | (3,015 | ) | (3,986 | ) | |||||
Purchase of a subsidiary, net of cash acquired | - | (234,602 | ) | ||||||
Refund of deposits placed with a vendor | - | 400 | |||||||
Proceeds from sale of property, plant and equipment | 4,551 | 2,715 | |||||||
Proceeds from redemption of other investments | - |
30,048 |
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Return of capital from associated companies | 4,900 | - | |||||||
Others, net | (1,196 | ) | 17 | ||||||
Net cash used in investing activities | (281,783 | ) | (300,906 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
Debt | |||||||||
Borrowings | - | 230,151 | |||||||
Repayments | (36,750 | ) | (307,013 | ) | |||||
Capital lease payments | (980 | ) | (1,117 | ) | |||||
Refund of customer deposits | (10,550 | ) | (5,609 | ) | |||||
Issuance of ordinary shares | 1,422 | 584 | |||||||
(Increase) decrease in cash restricted for debt repayments | 1,663 | (418 | ) | ||||||
Others, net | (900 | ) | - | ||||||
Net cash used in financing activities | (46,095 | ) | (83,422 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 1,847 | 4,249 | |||||||
Net decrease in cash and cash equivalents | (200,536 | ) | (238,081 | ) | |||||
Cash and cash equivalents at the beginning of the period | 718,982 | 743,173 | |||||||
Cash and cash equivalents at the end of the period | $ |
518,446 |
$505,092 |