ChipMOS REPORTS THIRD QUARTER 2013 RESULTS
3Q13 Highlights (as compared to 2Q13):
- Net Revenue Increased 3.5% to US$172.9 Million from US$167.1 Million
- Gross Profit Increased to US$38.3 Million from US$25.7 Million
- Gross Margin Increased to 22.2% from 15.4%
- Operating Profit Increased to US$27.9 Million from US$20.7 Million
- Net Earnings of US$0.51 Per Basic Common Share and US$0.49 Per Diluted Common Share Compared to US$0.42 Per Basic Common Share and US$0.41 Per Diluted Common Share
- Retained Balance of Cash and Cash Equivalents at US$432.0 Million
Hsinchu, Taiwan, November 18, 2013 - ChipMOS TECHNOLOGIES (Bermuda) LTD. ("ChipMOS" or the "Company") (Nasdaq: IMOS), an industry leading provider of outsourced semiconductor assembly and test services ("OSAT"), today reported unaudited consolidated financial results for the third quarter ended September 30, 2013. All U.S. dollar figures in this release are based on the exchange rate of NT$29.56 against US$1.00 as of September 30, 2013.
Net revenue for the third quarter of 2013 was NT$5,111.9 million or US$172.9 million, an increase of 3.5% from NT$4,939.2 million or US$167.1 million in the second quarter of 2013 and a decrease of 0.5% from NT$5,139.9 million or US$173.9 million for the same period in 2012.
Net income for the third quarter of 2013 was NT$442.5 million or US$15.0 million, and NT$14.97 or US$0.51 per basic common share and NT$14.60 or US$0.49 per diluted common share, as compared to net income for the second quarter of 2013 of NT$358.5 million or US$12.1 million, and NT$12.28 or US$0.42 per basic common share and NT$12.00 or US$0.41 per diluted common share, and compared to net income in the third quarter of 2012 of NT$374.1 million or US$12.7 million, and NT$13.69 or US$0.46 per basic common share and NT$13.28 or US$0.45 per diluted common share.
The unaudited consolidated financial results of ChipMOS for the third quarter ended September 30, 2013 included the financial results of ChipMOS TECHNOLOGIES INC. ("ChipMOS Taiwan"), ChipMOS U.S.A., Inc., ThaiLin Semiconductor Corp. ("ThaiLin") and MODERN MIND TECHNOLOGY LIMITED and its wholly-owned subsidiary ChipMOS TECHNOLOGIES (Shanghai) LTD.
S.J. Cheng, Chairman and Chief Executive Officer of ChipMOS, said, "Strong third quarter results reflect our continued ability to drive higher utilization of our assembly, bumping and LCD driver capacity, benefit of a favorable customer mix, and successful ongoing operating cost reduction initiatives in our assembly and bumping segments. Revenue increased 3.5% in 3Q13 compared to 2Q13, while our utilization rate increased to 81% from 79% in 2Q13, and 75% in 1Q13. Importantly, our gross margin exceeded the high end of our 3Q13 guidance of 16% to 20%, reaching 22.2% in 3Q13 from 15.4% 2Q13 and 13.9% in 1Q13. We remain confident in our business strategy and growth prospects but do expect to see the impact of typical seasonality in 4Q13 on both our large and small panel LCD businesses. We would expect this to be followed by a resumption of growth in the 1Q14. At the same time, we continue to make significant progress in the Taiwan listing application for our majority-owned subsidiary, ChipMOS TECHNOLOGIES INC. (Gre Tai Securities Market: Ticker 8150) ("ChipMOS Taiwan"), including the recent sale of its shares to meet ownership guidelines of the Taiwan Stock Exchange ("TSE"). We expect shareholders to benefit from our ongoing actions as we work to achieve a higher market valuation."
S.K. Chen, Chief Financial Officer of ChipMOS, said, "The leverage of our business is clearly evidenced in our results. For the first nine months of 2013, we more than doubled our net income to US$1.31 per diluted share compared to US$0.60 per diluted share in the first nine months of 2012, while revenue level remained relatively unchanged at US$489.6 million compared to US$485.6 million, in 2013 and 2012, respectively. Our 3Q13 gross margin of 22.2% reached the highest level since 4Q07 when we achieved a 24.6% gross margin. Our ability to support customer growth programs in higher margin segments on lower capital expenditures ("CapEx") has made a significant impact. CapEx in the third quarter were US$34.7 million, as we pulled in some investments planned for 2014 in support of growth opportunities, a strategy we outlined at the end of 2Q13. Depreciation and amortization expenses in 3Q13 came in at US$26.3 million, a US$2.6 million reduction compared to 2Q13. We expect the depreciation and amortization expenses in 4Q13 to be flat as compared to Q313 at approximately US$26 million. We generated free cash flow of US$8.5 million in 3Q13. We exited the third quarter with a balance of cash and cash equivalents of US$432.0 million. This does not fully reflect the Company's sale of 180 million outstanding shares of ChipMOS Taiwan, which closed on October 3, 2013 and generated net proceeds to the Company of US$119.3 million. Total debt stood at US$281.5 million resulting in decrease of net debt to equity ratio to -33.3% compared to -14.1% in Q213."
According to the Rule No. 0990004943 issued by the Financial Supervisory Commission ("FSC") on February 2, 2010, companies with shares listed on the TSE or traded on the Gre Tai Securities Market or the emerging stock board need to prepare their consolidated financial statements in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, the International Financial Reporting Standards ("IFRSs"), the International Accounting Standards, and interpretations as well as related guidance translated by Accounting Research and Development Foundation and issued by the FSC for the year ending December 31, 2013. Therefore, the Company is following its listed subsidiary, ThaiLin, and will prepare its consolidated financial statements for the year ending December 31, 2013 in accordance with IFRSs. The unaudited financial information for this quarter is prepared in accordance with IFRSs. The comparative figures have been presented in accordance with IFRSs for better comparison.
Taiwan Listing Update
As part of the efforts in ensuring success in establishing the eligibility for listing on the TSE of the shares of ChipMOS Taiwan, ChipMOS Bermuda is required to reduce its current ownership interest of 83.4% in ChipMOS Taiwan to 70% or less. As a result, the Company completed the sale of 180 million outstanding common shares of ChipMOS Taiwan at the price of NT$20.0 (US$0.67) per common share on October 3, 2013, generating net proceeds to the Company of US$119.3 million. Approximately 22 million common shares of ChipMOS Taiwan were purchased by the Company's management and the Board of Directors. Shares purchased by the Company's management and the Board of Directors are not included for purposes of meeting the foregoing ownership requirement.
In aggregate, the sale reduces the Company's ownership in ChipMOS Taiwan to approximately 523.4 million common shares, representing approximately 62.1% of the outstanding shares of ChipMOS Taiwan, from a previous holding of approximately 83.4%.
We expect to continue to work towards satisfying the eligibility requirements for listing ChipMOS Taiwan onto the TSE in the second quarter of 2014.
Fourth Quarter 2013 Outlook
The Company expects fourth quarter of 2013 revenue to be approximately 4% to 8% lower than the third quarter of 2013, reflecting the impact of normal seasonality, along with inventory adjustments at a limited number of customers. The Company expects gross margin on a consolidated basis to be in the range of approximately 16% to 20% for the fourth quarter of 2013. The Company anticipates depreciation and amortization expenses for the fourth quarter of 2013 to be approximately US$26 million. Operating expenses are expected to be approximately 6% to 8% of revenues in the fourth quarter of 2013. The Company expects CapEx spending to be approximately US$41 million in the fourth quarter of 2013, with CapEx spending for the full year 2013 to be approximately US$122 million, as it pulls in CapEx that was previously planned for the first half of 2014 in support of growth programs. This acceleration is expected to result in full year 2014 CapEx coming in lower at approximately US$70 million. The total number of the Company's outstanding common shares at the end of the fourth quarter of 2013 is expected to be approximately 30 million.
Investor Conference Call / Webcast Details
ChipMOS will review detailed third quarter 2013 results on Monday, November 18, 2013 at 8:00AM Eastern Time (9:00PM, Monday, November 18, Taiwan time). The conference call-in number is +1-201-689-8562. A live webcast of the conference call will be available at ChipMOS' website at http://www.chipmos.com. The playback is scheduled to be available in 2 hours after the conclusion of the conference call and will be accessible by dialing +1-858-384-5517, with confirmation ID number 10000560.
About ChipMOS TECHNOLOGIES (Bermuda) LTD.:
ChipMOS TECHNOLOGIES (Bermuda) LTD. ("ChipMOS" or the "Company") (NASDAQ: IMOS) (http://www.chipmos.com) is an industry leading provider of semiconductor testing and assembly services. With advanced facilities in Hsinchu and Southern Taiwan Science Parks in Taiwan and Shanghai, ChipMOS and its subsidiaries provide testing and assembly services to a broad range of customers, including leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries. The Company's majority-owned subsidiary, ChipMOS Taiwan, is listed on Taiwan's emerging stock board of the Gre Tai Securities Market under Stock Ticker 8150.
Forward-Looking Statements
Certain statements contained in this announcement may be viewed as "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of the Company to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements. Further information regarding these risks, uncertainties and other factors is included in the Company's most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the "SEC") and in the Company's other filings with the SEC.
Contacts:
In Taiwan
Dr. S.K. Chen
ChipMOS TECHNOLOGIES (Bermuda) LTD.
+886-6-507-7712
s.k._chen@chipmos.com
In the U.S.
David Pasquale
Global IR Partners
+1-914-337-8801
dpasquale@globalirpartners.com