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NEWS RELEASE
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MEDIA CONTACTS:
Chartered Singapore: For Chartered:
Rita Srinivasan Laurie Stanley, Wired Island, Ltd.
(65) 360.4368 (1)510.206.4295
[email protected] [email protected]
INVESTOR CONTACT:
Larry James Suresh Kumar
(1) 408.941.1110 (65) 360.4060
[email protected] [email protected]
ALL CURRENCY FIGURES STATED IN THIS REPORT ARE IN US DOLLARS
CHARTERED REPORTS RECORD THIRD-QUARTER 2000 RESULTS
Strong Third-Quarter Performance Due To
Higher Wafer Shipments, Improved Productivity and Richer Mix
- REVENUES OF $305.6 MILLION, UP 67% FROM 3Q 1999
- EARNINGS PER ADS OF $0.51, UP $0.57 FROM 3Q 1999
- EARNINGS PER ORDINARY SHARE OF $0.05, UP $0.06 FROM 3Q 1999
SINGAPORE -- October 19, 2000 -- Chartered Semiconductor Manufacturing
(Nasdaq: CHRT and SGX-ST: CHARTERED) today announced record revenues and net
income for its third-quarter ended September 30, 2000, marking the seventh
consecutive quarter of solid growth and improved financial performance.
"Our strong third-quarter results reflect both our ability to successfully
execute our strategies in high growth targeted markets and to make step function
improvements toward operational excellence in our fabs. The focus and
dedication of Chartered employees worldwide has allowed the company to deliver
financial performance unequaled in our history," reported Barry Waite, president
& CEO of Chartered, summarizing the results of the quarter.
HIGHLIGHTS OF THIRD-QUARTER PERFORMANCE
- Net revenues grew to $305.6 million for third-quarter 2000, up 67%
compared to $183.3 million in third-quarter 1999. The significant increase
in revenues was due primarily to higher shipments,
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improved customer and product mix, and to a lesser extent, enhanced
pricing. Including Chartered's share of its minority-owned joint-venture
company, net revenues were $328.8 million, up 79% from $183.8 million in
the same quarter a year ago.
- Gross profit was $103.6 million, or 33.9% of net revenues, up from
$48.4 million, or 26.4% of net revenues, in the same quarter a year ago,
driven primarily by higher revenues and strong operational improvement
across our fabs. Without the start-up related impact of Chartered Silicon
Partners (Fab 6), gross profit margin would have been approximately
8 percentage points higher.
- Recurring operating expenses as a percentage of net revenues were
16.0% compared to 17.7% in third-quarter 1999. Research and development
(R&D) expense increased by $3.9 million primarily due to additional
investments in next generation technology and modules in support of our
strategy to provide a full suite of process technologies necessary for
enabling system level integration. General and administrative (G&A)
expenses increased $12.7 million due primarily to increased staffing and
other payroll related expenses.
- Nonrecurring operating expenses were $13.6 million in third-quarter
2000 compared to $8.8 million in third-quarter last year. Pre-production
start-up costs in Fab 7 were $1.6 million in the third quarter. Stock-based
compensation charges were $0.5 million compared to $8.8 million in
third-quarter 1999. This quarter also included a provision of $11.6 million
for the estimated impact on a licensing agreement resulting from faster
technology migration in the marketplace and the recent acceleration of
Chartered's technology roadmap.
- Equity in income of our joint venture fab, Silicon Manufacturing
Partners (Fab 5) was $5.0 million compared to a loss of $6.6 million in the
comparable period last year, reflecting the fab's continuing progress in
executing its manufacturing ramp. Other income was $4.8 million compared
to $0.1 million in the same period last year, primarily due to grant income
related to our R&D and training activities. Net interest income was
$12.0 million compared to a net expense of $4.1 million in the same period
last year, primarily due to the receipt of proceeds from the company's
initial public offering in October 1999 and the follow-on offering in May
2000.
- Net income of $71.6 million, or 23.4% of net revenues, reflected an
improvement of $77.8 million from negative $6.2 million, or negative 3.4%
of net revenues, in the same quarter a year ago. Net income, after
excluding stock-based compensation charges was $72.1 million in
third-quarter 2000 compared to $2.7 million in third-quarter 1999.
- Earnings per American Depositary Share (ADS) and earnings per share
(EPS) in third-quarter 2000 were $0.51 and $0.05 respectively on a diluted
basis, compared with a loss of $0.06 and $0.01 respectively in
third-quarter 1999. Earnings per American Depositary Share (ADS) and
earnings per share (EPS), after excluding stock-based compensation charge
were $0.52 and $0.05
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respectively on a diluted basis, compared with $0.03 and $0.003
respectively in third-quarter 1999. Average diluted ADS count and ordinary
share count increased by 41.0 million and 409.7 million respectively,
primarily due to the initial public offering in October 1999 and the
follow-on offering in May 2000.
WAFER SHIPMENTS AND AVERAGE SELLING PRICES
- Shipments in third-quarter 2000 were 246.0 thousand wafers (eight-inch
equivalent), an increase of 39% compared to 176.8 thousand in third-quarter
1999. High growth communications and consumer markets accounted for the
majority of this increased demand.
- Average Selling Price (ASP) increased by 22% to $1,242 per wafer in
third-quarter 2000 compared to $1,014 per wafer (adjusted to exclude the
terminated print-head business) in third-quarter 1999. ASP improved as a
result of customer and product mix enrichment and enhanced pricing.
- Capacity utilization was 103% in third-quarter of the year, the same as the
comparable quarter last year.
MARKET DYNAMICS
The communications segment continued to be the largest contributor to revenues,
in line with our strategic emphasis on delivering a suite of technologies and
services centered on the needs of the communications markets.
REVENUE BREAKDOWN BY MARKET SEGMENT*
<TABLE>
<CAPTION>
Twelve months ending
June 30, 2000 September 30, 2000
---------------------------------------------------------------------------
Market Segment % of Net revenues % of Net revenues
---------------------------------------------------------------------------
<S> <C> <C>
Communications 52 52
---------------------------------------------------------------------------
Computer 25 25
---------------------------------------------------------------------------
Consumer 15 15
---------------------------------------------------------------------------
Memory 7 7
---------------------------------------------------------------------------
Other 1 1
---------------------------------------------------------------------------
</TABLE>
*Including Chartered's share of its minority-owned joint-venture company
REVENUE BREAKDOWN BY REGION*
<TABLE>
<CAPTION>
Twelve months ending
June 30, 2000 September 30, 2000
---------------------------------------------------------------------------
Region % of Net revenues % of Net revenues
---------------------------------------------------------------------------
<S> <C> <C>
America 59 58
---------------------------------------------------------------------------
Europe 24 25
---------------------------------------------------------------------------
Asia - Pacific 13 13
---------------------------------------------------------------------------
Japan 4 4
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</TABLE>
*Including Chartered's share of its minority-owned joint-venture company
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HIGHLIGHTS OF THIRD-QUARTER ACTIVITIES AND ACHIEVEMENTS
- During the quarter the company announced five supply agreements,
exemplifying the success and breadth of its partnering strategy.
- Broadcom of the U.S for leading-edge logic and mixed signal for
communications
- Dialog of Germany for mixed signal and system-on-chip for
communications
- Oki of Japan for RFCMOS development and production for Bluetooth
applications
- Ricoh of Japan for logic for computer peripherals and optical mass
storage
- Conexant of the U.S, a memorandum of understanding for leading-edge
logic and mixed signal for communications
- The company also announced during the quarter a landmark, five year,
$700 million joint development agreement with Lucent Technologies
Microelectronics Group. The non-exclusive agreement brings together a
global team of 600 people to develop logic, mixed signal and embedded SRAM
process technologies at the 0.13-micron, 0.10-micron and 0.08-micron
technology nodes. A key aspect of this agreement is the establishment of a
jointly staffed Bell Labs R&D center on Chartered's campus in Singapore.
Chartered believes its "communications-smart" approach to silicon
manufacturing will produce robust, reliable solutions that are especially
well suited for communications products as well as for consumer and
computer peripheral electronics.
- In September, Chartered Silicon Partners (Fab 6), one of company's
joint venture fabs, successfully concluded a 6-year term loan and guarantee
facility for $820 million funded by a syndicate of leading banks. Funds
will be used, as required, primarily for funding its capacity ramp.
REVIEW AND OUTLOOK
Progress in recent years has clearly placed Chartered in the top tier of foundry
service providers. Chartered has moved rapidly toward operational excellence in
its fabs, and its facilities today successfully compete with the best in the
industry. Our leveraged R&D and joint venture agreements provide both strength
and reduced risk, and our newly accelerated technology roadmap provides a clear,
customer-driven path through the next series of product generations necessary to
support the growth opportunities in future years.
"Perhaps more than anything else, Chartered highly values its interdependent
customer relationships which are built on a level of trust which tightly couples
us to leaders in communications and other high growth markets. We've never felt
better about our strategic positioning and ability to take advantage of the long
term growth in both the communications and the foundry services markets,"
concluded Barry Waite.
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CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands of US Dollars, except share and per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 2000 1999 2000
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenue $183,287 $305,630 $478,025 $815,421
Cost of revenue 134,917 202,048 382,174 532,974
-------- -------- -------- --------
Gross profit 48,370 103,582 95,851 282,447
-------- -------- -------- --------
Operating expenses:
Research and development 13,506 17,388 36,461 52,502
Fab start-up costs -- 1,590 -- 18,832
Sales and marketing 9,169 9,182 29,737 26,177
General and administrative 9,775 22,476 32,476 60,912
Stock-based compensation 8,849 470 12,138 2,311
Costs incurred on termination of development program -- -- 6,500 --
Other nonrecurring operating expenses -- 11,570 -- 11,570
-------- -------- --------- -------
Total operating expenses 41,299 62,676 117,312 172,304
-------- -------- --------- -------
Operating income (loss) 7,071 40,906 (21,461) 110,143
Equity in loss of CSP (3,591) -- (9,528) --
Equity in income (loss) of SMP (6,647) 4,960 (18,698) 2,932
Other income 148 4,778 798 7,421
Interest income 474 17,101 1,681 37,945
Interest expense (4,531) (5,081) (13,625) (12,868)
Exchange gain 1,116 2,917 6,181 7,042
-------- -------- --------- -------
Income (loss) before income taxes (5,960) 65,581 (54,652) 152,615
Income tax expense (211) (4,721) (39) (12,733)
-------- -------- --------- -------
Income (loss) before minority interest (6,171) 60,860 (54,691) 139,882
Minority interest in loss of CSP(1) -- 10,776 -- 27,532
--------- --------- --------- --------
Net income (loss) $ (6,171) $ 71,636 $(54,691) $167,414
========= ========= ========= ========
Net income (loss) per share and ADS
Basic net income (loss) per share $ (0.01) $ 0.05 $ (0.06) $ 0.13
Diluted net income (loss) per share (0.01) 0.05 (0.06) 0.12
Basic net income (loss) per ADS $ (0.06) $ 0.52 $ (0.55) $ 1.26
Diluted net income (loss) per ADS (0.06) 0.51 (0.55) 1.24
Number of shares (in millions) used in computing:
- basic net income (loss) per share 987.2 1,376.8 986.1 1,330.4
- diluted net income (loss) per share 987.2 1,396.9 986.1 1,354.6
Number of ADS (in millions) used in computing:
- basic net income (loss) per ADS 98.7 137.7 98.6 133.0
- diluted net income (loss) per ADS 98.7 139.7 98.6 135.4
Other Data:
Wafer shipped (8-inch equivalent, in thousands) 176.8 246.0 504.1 682.4
Depreciation & Amortization 63,960 90,046 206,577 243,613
Capital expenditures and net equity
Investments in JVs(2) 110,962 199,139 255,993 609,440
</TABLE>
(See notes below)
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CHARTERED SEMICONDUCTOR MANUFACTURING LTD AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands of US Dollars)
<TABLE>
<CAPTION>
As of
----------------------------------
December 31, September 30,
1999 2000
------------ -------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 544,996 $ 1,021,203
Accounts receivable 141,226 155,491
Inventories 33,619 37,971
Other current assets 9,946 12,634
------------ ------------
Total current assets 729,787 1,227,299
Property, plant and equipment, net 1,282,106 1,672,363
Investment in SMP 47,036 85,753
Other non-current assets 73,979 45,231
------------ ------------
Total assets $ 2,132,908 $ 3,030,646
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 152,401 $ 111,335
Current installments of obligations under capital leases 5,767 6,363
Current installments of long-term debt 119,991 155,887
Accrued operating expenses 127,147 227,208
Other current liabilities 29,919 39,402
------------ ------------
Total current liabilities 435,225 540,195
============ ============
Obligations under capital leases, excluding current
installments 7,822 4,615
Long-term debt, excluding current installments 423,668 429,979
Other liabilities 67,279 58,063
------------ ------------
Total liabilities 933,994 1,032,852
Minority interests 57,164 109,347
Shareholders' equity 1,141,750 1,888,447
------------ ------------
Total liabilities and shareholders' equity $ 2,132,908 $ 3,030,646
============ ============
</TABLE>
Notes for Statement of Operations:
Note (1)
The equity accounting method was applied for the investment in CSP in the period
prior to October 1, 1999. From October 1, 1999 forward, CSP was treated as a
consolidated subsidiary
Note (2)
Chartered's capital expenditures and equity investments in Fab 5 net of equity
inflow from Fab 6 partners (assumes consolidated reporting of Fab 6 in 1999)
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ABOUT CHARTERED
Chartered Semiconductor Manufacturing is one of the world's top three silicon
foundries. The Company's business model is distinguished by its strategy to
build trusted long-term relationships, where manufacturing is part of a larger
customer-service focus that includes joint development and implementation of new
process technologies supporting novel applications within the broad
communications market. Chartered operates five semiconductor fabrication
facilities at its Singapore headquarters, with a sixth fab under construction.
A company with both global presence and perspective, Chartered is traded on both
the Nasdaq Stock Market in the United States (NASDAQ:CHRT) and on the Singapore
Exchange Securities Trading Limited in Singapore (SGX-ST:CHARTERED). The Company
reported 1999 revenues of US$694.3 million. More than 3400 Chartered employees
are based at 11 locations around the world. Information about Chartered
Semiconductor Manufacturing 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 United States Private Securities Litigation Reform Act
of 1995. These forward-looking statements, including the statements relating to
the Company's continued ability to implement its partnering, technology and
growth strategies, the Company's emphasis on the communications market, the
success of the Lucent joint development agreement, the outlook for longer-term
growth in the communications and foundry services market and the appropriateness
of the Company's business model and strategy, reflect the Company's 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. For example, the
forward looking statements could be affected by the Company's continued ability
to maintain the performance levels of all its fabs; the amendment or termination
of the Lucent joint development agreement; unforeseen delays or difficulties in
the implementation of the Company's technology roadmap, the Lucent joint
development agreement, the Company's R&D, JV or supply agreements or the $820
million facility for Fab 6; and changes in the semiconductor industry, market
outlook or customer demands. Although the Company believes the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, it can give no assurance that its expectations will be attained. A
description of certain of the risks and uncertainties which could cause actual
results to differ materially from those indicated in the forward-looking
statements can be found in the section captioned "Risk Factors" in the Company's
Annual Report on Form 20-F filed with the U.S. Securities and Exchange
Commission. 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.
