<PAGE> 1
FOR IMMEDIATE RELEASE
EARNINGS RELEASE
----------------
MEDIA CONTACTS:
Lim Beng See Lisa Lavin
Director, Corporate Communications Manager, Marketing
Tel: 65-7511111, Fax: 65-7555431 Tel: 208-672 6112, Fax: 888-390 7499
email:[email protected] email:[email protected]
INVESTOR CONTACTS:
Drew Davies Elaine Ang
Director, Investor Relations Manager, Investor Relations
Tel: (408) 941 3021, Fax: (408) 941 3014 Tel: (65) 751 1738, Fax: (65) 755 1585
email:[email protected] email:[email protected]
STATS REPORTS RECORD THIRD QUARTER 2000 RESULTS
- NET REVENUES OF $90.5 MILLION, UP BY 68.6% FROM 3RD QUARTER 1999
- NET PROFIT OF $16.5 MILLION, UP BY 1050.7% FROM 3RD QUARTER 1999
- EARNINGS PER ADS OF $0.17, UP BY $0.15 FROM 3RD QUARTER 1999
EARNINGS PER ORDINARY SHARE OF $0.017, UP BY $0.015 FROM 3RD QUARTER 1999
SINGAPORE -- OCTOBER 20, 2000 -- ST Assembly Test Services Ltd (Nasdaq: STTS and
SGX: ST Assembly) today reported record net revenues and net income for the
quarter ended September 30, 2000.
Commenting on the results of the quarter, Tan Bock Seng, Chairman and Chief
Executive Officer, said: "Our strong performance in this quarter is driven
primarily by robust volume growth in all segments of our business. We are
pleased to see that our strategy of offering complete backend turnkey services
focusing on communications customers, and leveraging off our leadership position
in mixed signal testing, is enjoying support in the marketplace."
HIGHLIGHTS OF THIRD-QUARTER PERFORMANCE
Net revenues for the third quarter of 2000 were a record $90.5 million, an
increase of 68.6% over the same period in 1999 and 19.5% sequentially over
second quarter 2000. This significant increase was due to higher unit shipments
in both the test and assembly business.
Net revenues from assembly services grew to $49.6 million or 54.8% of revenues,
a 19.5% increase over assembly revenues reported in the previous quarter, while
test revenues grew to $41.0 million or 45.2% of revenues, a 19.5% increase over
test revenues in second quarter 2000.
Gross profit was $27.3 million or a gross margin of 30.2% compared to gross
profit of $19.0 million or a gross margin of 35.4% in the same quarter a year
ago. Gross margin for this quarter was down 3.3% from the 33.5% in the second
quarter 2000 due principally to higher demand for ball grid array packages that
have lower gross margin.
<PAGE> 2
Said Tan Lay Koon, Chief Financial Officer, "Volume for ball grid array packages
increased by 65% over the second quarter, and our array business was 18% of our
assembly revenues in this quarter. The strong growth of our array business,
which is strategically important, will have however a negative impact on our
gross margin in the near term."
Depreciation expense and cost of leasing production equipment for this quarter
was $23.8 million or 26.2% of net revenues, compared to $19.9 million or 26.3%
of revenues in the second quarter.
Operating expenses, which include stock-based compensation charges, were $14.3
million or 15.8% of net revenues compared to $13.9 million or 18.3% of net
revenues in second quarter 2000. Selling, general and administrative expenses
were $10.2 million or 11.2% of net revenues compared to $9.7 million or 12.9% of
revenues in the second quarter as a result of higher net revenues and modest
increase in payroll related expenses.
Research and development expenses were $4.1 million, or 4.5% of net revenues as
the Company continues to invest in advanced packaging technologies in support of
our strategy of offering complete backend turnkey services to our customers.
Net income was $16.5 million, or 18.2% of revenues, an increase of 1050.7% over
third quarter 1999 net income of $1.4 million and 16.7% sequentially over second
quarter 2000.
Diluted earnings per ADS and diluted earnings per ordinary share were $0.17 and
$0.017 respectively compared to $0.02 and $0.002 respectively in third quarter
1999 and $0.14 and $0.014 in second quarter 2000.
UNIT SHIPMENTS AND AVERAGE SELLING PRICES
Unit shipments for the test business in third quarter 2000 increased by 82.1%
over the same quarter a year ago, and 32.1% sequentially over the second quarter
2000. Unit shipments in our assembly business increased by 85.5% over the same
quarter a year ago, and 24.4% sequentially over the second quarter 2000.
In this quarter, test average selling prices (ASPs) decreased by about 9.9% over
second quarter 2000 due principally to a change in product mix with more volume
testing of devices requiring less test time. In the assembly business, the ASPs
for this quarter declined by 3.9% from the second quarter of 2000.
Mixed signal testing continued to be the largest contributor to our test
revenues, comprising 78.2% of test revenues, and reaffirming our leadership
position in mixed signal testing.
<TABLE>
<CAPTION>
TEST REVENUES BREAKDOWN BY TESTING TYPE
THREE MONTHS ENDING
30 JUNE, 2000 30 SEPTEMBER, 2000
------------------------------------------------------------------------------
TYPE OF TESTING % OF TEST REVENUES % OF TEST REVENUES
------------------------------------------------------------------------------
<S> <C> <C>
Mixed Signal 72.5 78.2
------------------------------------------------------------------------------
Digital 27.4 21.4
------------------------------------------------------------------------------
Memory 0.1 0.4
------------------------------------------------------------------------------
</TABLE>
CAPITAL EXPENDITURES
In this quarter, the Company incurred $97.5 million in capital expenditures
principally for new production equipment, peripherals, and equipment upgrades,
and added 19 testers and 69 wirebonders to its production capacity. Our capital
expenditures year-to-date are $251.2 million. As of 30 September 2000, the
Company has 228 testers and 529 wirebonders.
We expect our capital expenditures for the year 2000 to be $290 million.
<PAGE> 3
MARKET DYNAMICS
The communications segment continued to be our largest revenue contributor in
this quarter with 60.8% of net revenues, in line with our strategic focus on
communications customers. U.S. remained our largest revenue contributor by
region although the strong growth in demand by European Integrated Device
Manufacturers ("IDM") made Europe the fastest growing region in this quarter.
Revenues from IDMs grew significantly in this quarter and now contributed to
48.6% of our net revenues, reflecting our success in engaging IDM customers.
<TABLE>
<CAPTION>
REVENUES BREAKDOWN BY MARKET SEGMENT
THREE MONTHS ENDING
30 JUNE, 2000 30 SEPTEMBER, 2000
----------------------------------------------------------------------------
MARKET SEGMENT % OF NET REVENUES % OF NET REVENUES
----------------------------------------------------------------------------
<S> <C> <C>
Communications 60.1 60.8
----------------------------------------------------------------------------
Computer 29.9 31.5
----------------------------------------------------------------------------
Consumer, Industrial and Others 10.0 7.7
----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REVENUES BREAKDOWN BY REGION
THREE MONTHS ENDING
30 JUNE, 2000 30 SEPTEMBER, 2000
----------------------------------------------------------------------------
REGION % OF NET REVENUES % OF NET REVENUES
----------------------------------------------------------------------------
<S> <C> <C>
United States 76.5 76.9
----------------------------------------------------------------------------
Europe 10.7 17.5
----------------------------------------------------------------------------
Asia 12.8 5.6
----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REVENUES BREAKDOWN BY CUSTOMER TYPE
THREE MONTHS ENDING
30 JUNE, 2000 30 SEPTEMBER, 2000
----------------------------------------------------------------------------
CUSTOMER TYPE % OF NET REVENUES % OF NET REVENUES
----------------------------------------------------------------------------
<S> <C> <C>
Foundries 7.7 8.2
----------------------------------------------------------------------------
Fabless 48.8 43.2
----------------------------------------------------------------------------
IDMs 43.5 48.6
----------------------------------------------------------------------------
</TABLE>
HIGHLIGHTS OF 3RD QUARTER ACHIEVEMENTS
In July, STATS announced the addition of new test instrumentation to expand its
capabilities in Radio frequency (RF) test development and production testing to
support frequencies up to 6.0GHz bandwidth (both source and measure). STATS can
now accommodate testing of wireless communication devices used in cell phones,
two-way pagers, wireless local networks (WLAN), global positioning by satellite
(GPS), and the important frequency hopping (FH), required by Bluetooth(TM)
technology devices.
During the quarter STATS also received a patent from both the U.S. and Singapore
patent offices on technical test handler enhancement. This technical
modification to the handler improves pick and place accuracy of IC's, speeds
setup time and utilization rates, as well as improves yields by reducing the
occurrence of bent leads.
On the assembly front, STATS launched its Flip Chip Small-Thin Plastic Ball Grid
Array (FCstPBGA) during the quarter. This new near Chip Scale Package (CSP) is
one of several scheduled for release in the next 12 months. STATS has earlier
this year introduced CSP packages such as Quad Leadless Package (QLP) and Small
Thin Plastic Ball Grid Array (stPBGA) package. FCstPBGA benefits include
shrinking size, enhanced electrical and thermal performance and reduced costs.
The area-efficiency and high electrical
<PAGE> 4
performance properties make it an ideal packaging technique for mobile station
modem (MSM) and base-band analog (BBA) integrated circuits used to process sound
in wireless handheld devices.
An additional 80,000sqft. of Class 10K clean room space was added during the
quarter increasing STATS' total operational clean room area by a third to over
300,000sqft. The additional space allows STATS to quickly ramp up in response
to any increase in customer demand. As an indication of its size, the new floor
space can accommodate up to 200 more testers.
<PAGE> 5
ST ASSEMBLY TEST SERVICES LTD AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
AS OF DECEMBER 31, 1999 AND SEPTEMBER 30, 2000
IN THOUSANDS OF US DOLLARS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1999 2000
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 16,568 $161,521
Accounts receivable, net 37,404 65,529
Amounts due from ST affiliates 6,532 5,115
Other receivables 9,572 10,811
Inventories 11,313 15,652
Marketable securities -- 11,460
Prepaid expenses 7,079 15,092
-------- --------
Total current assets 88,468 285,180
Property, plant and equipment, net 251,298 420,915
Other receivables 1,835 --
Marketable securities -- 8,635
Prepaid expenses 10,364 17,839
-------- --------
Total Assets $351,965 $732,569
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt 60,000 --
Current installments of long-term debt 7,420 14,719
Accounts payable 13,070 13,568
Amounts due to ST and ST affiliates 5,533 2,445
Accrued operating expenses 20,559 24,189
Other payables 55,238 66,123
Income taxes payable 678 2,446
-------- --------
Total current liabilities 162,498 123,490
Deferred grant 1,923 2,736
Long-term debt, excluding current installments 46,360 29,438
-------- --------
Total Liabilities 210,781 155,664
SHAREHOLDERS' EQUITY
Share capital 129,827 159,314
Additional paid-in capital 26,305 386,186
Accumulated other comprehensive income (loss) (9,731) (9,731)
Retained earnings (5,217) 41,136
-------- --------
Total Shareholders' Equity 141,184 576,905
-------- --------
Total Liabilities and Shareholders' Equity $351,965 $732,569
======== ========
</TABLE>
<PAGE> 6
ST ASSEMBLY TEST SERVICES LTD AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 2000
(UNAUDITED)
IN THOUSANDS OF US DOLLARS (EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1999 2000
-------- --------
<S> <C> <C>
Net revenues $ 53,688 $ 90,538
Cost of revenues (34,692) (63,202)
-------- --------
Gross profit 18,996 27,336
-------- --------
Operating expenses:
Selling, general and administrative 7,223 10,151
Research and development 2,359 4,078
Stock-based compensation 6,699 17
Other general expenses (net) 25 41
-------- --------
Total operating expenses 16,306 14,287
-------- --------
Operating income 2,690 13,049
-------- --------
Other income (expense):
Interest income (expense), net (1,262) 2,684
Foreign currency exchange gain (loss) (506) 606
Other non-operating income, net 656 967
-------- --------
Total other income (expense) (1,112) 4,257
-------- --------
Income before income taxes 1,578 17,306
Income tax expense (148) (851)
-------- --------
Net income $ 1,430 $ 16,455
-------- --------
Basic and diluted net income per
ordinary share $ 0.002 $ 0.017
Basic and diluted net income per ADS $ 0.02 $ 0.17
Ordinary shares (in thousands) used in
per ordinary share calculation:
- basic 769,407 984,774
- effect of dilutive options 10,714 7,200
-------- --------
- diluted 780,121 991,974
-------- --------
ADS (in thousands) used in per ADS calculation:
- basic 76,941 98,477
- effect of dilutive options 1,071 720
-------- --------
- diluted 78,012 99,197
-------- --------
</TABLE>
<PAGE> 7
ST ASSEMBLY TEST SERVICES LTD AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 2000
(UNAUDITED)
IN THOUSANDS OF US DOLLARS (EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1999 2000
--------- ---------
<S> <C> <C>
Net revenues $ 135,981 $ 238,473
Cost of revenues (93,582) (158,668)
--------- ---------
Gross profit 42,399 79,805
--------- ---------
Operating expenses:
Selling, general and administrative 19,194 29,484
Research and development 5,125 10,972
Stock-based compensation 8,456 363
Other general expenses (net) 23 (192)
--------- ---------
Total operating expenses 32,798 40,627
--------- ---------
Operating income 9,601 39,178
--------- ---------
Other income (expense):
Interest income (expense), net (4,118) 5,756
Foreign currency exchange gain 1,873 1,068
Other non-operating income, net 1,790 2,741
--------- ------
Total other income (expense) (455) 9,565
--------- ---------
Income before income taxes 9,146 48,743
Income tax expense (660) (2,390)
--------- ---------
Net income $ 8,486 $ 46,353
--------- ---------
Basic net income per ordinary share $ 0.011 $ 0.049
Diluted net income per ordinary share $ 0.011 $ 0.048
Basic net income per ADS $ 0.11 $ 0.49
Diluted net income per ADS $ 0.11 $ 0.48
Ordinary shares (in thousands) used in per ordinary
share calculation:
- basic 769,144 955,160
- effect of dilutive options 7,941 7,894
--------- ---------
- diluted 777,085 963,054
--------- ---------
ADS (in thousands) used in per ADS calculation:
- basic 76,914 95,516
- effect of dilutive options 794 789
--------- ---------
- diluted 77,708 96,305
--------- ---------
</TABLE>
<PAGE> 8
ABOUT ST ASSEMBLY TEST SERVICES LTD. (STATS)
ST Assembly Test Services Ltd ("STATS" - NNM: STTS and SGX: ST Assembly), is a
leading semiconductor test and assembly service provider to fabless companies,
integrated device manufacturers and wafer foundries. With its principal
operations in Singapore and global operations in the United States, United
Kingdom, Japan and Taiwan, STATS offers full back-end turnkey solutions to
customers worldwide. STATS' expertise is in testing mixed-signal semiconductors
which are extensively used in fast growing communications applications such as
data networking, broadband and mobile communications. STATS also offers advanced
assembly services and has developed a wide array of traditional and advanced
leadframe and laminate based products, including various ball grid array
packages to serve some of the world's technological leaders. STATS was listed on
the Nasdaq National Market and The Singapore Exchange in January 2000. Further
information is available at www.stats.com.sg or www.statsus.com.
Certain of the statements in this press release are forward-looking statements
that involve a number of risks and uncertainties which could cause actual
results to differ materially. Factors that could cause actual results to differ
include : 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; decisions by customers to
discontinue outsourcing of test and assembly services; changes in customer order
patterns; rescheduling or cancellation of customer orders; changes in product
mix; capacity utilization; level of competition; pricing pressures; continued
success in technological innovation; delays in acquiring or installing new
equipment; 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 30,
2000. 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.
