SMIC Reports 2010 Third Quarter Results
All currency figures stated in this report are in US Dollars unless stated otherwise.
The financial statement amounts in this report are determined in accordance with US GAAP.
SHANGHAI, Nov. 2, 2010 /PRNewswire-Asia/ -- Semiconductor Manufacturing International Corporation (NYSE: SMI; SEHK: 981) ("SMIC" or the "Company"), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended September 30, 2010.
Third Quarter 2010 Highlights:
- Revenue up by 7.6% to $410.1 million in 3Q10 from $381.1 million in 2Q10 and up by 26.8% compared to 3Q09.
- Gross margins improved to 24.5% in 3Q10 compared to 15.6% in 2Q10 primarily due to an increase in fab utilization and lower depreciation costs.
- Net cash flow from operations decreased to $125.2 million in 3Q10 from $167.5 million in 2Q10.
- Gain attributable to holders of ordinary shares was US$30.4 million in 3Q10, compared to gain of US$96.0 million in 2Q10.
- Diluted EPS was $0.06 per ADS.
Fourth Quarter 2010 Guidance:
The following statements are forward-looking statements which are based on current expectation and which involve risks and uncertainties, some of which are set forth under "Safe Harbor Statements" below.
- Revenue is expected to be flat quarter-on-quarter.
- Gross margin is expected to range from 21% to 23%.
- Operating expenses excluding foreign exchange differences are expected to range from $80 million to $84 million.
- 2010 annual capital expenditures are expected to range from $750 million to $800 million.
Commenting on the quarterly results, Dr. David NK Wang, President and Chief Executive Officer of SMIC remarked, "I am pleased to report that SMIC is profitable this quarter on both operational and net income levels, due to a good overall market environment and SMIC's internal improvements. With only 3% capacity increase year-over-year, we were able to grow our revenue 27% and our gross margin from 0.8% in Q3 last year to 24.5% this year.
"Revenue contribution from 65nm doubled compared to the second quarter. Our 40nm low-leakage technology process was frozen on schedule with a leading customer's endorsement. We are accelerating our other 45nm programs, targeting revenue in the second half of 2011."
Conference Call / Webcast Announcement | ||||
Date: | Wednesday, November 3, 2010 | |||
Time: | 8:30 a.m. Shanghai time | |||
Dial-in numbers and pass code: | ||||
US | 1-617-597-5342 | (Pass code: SMIC) | ||
HK | 852-3002-1672 | (Pass code: SMIC) | ||
A live webcast of the 2010 third quarter announcement will be available at http://www.smics.com under the "Investor Relations" section, or at
URL: http://phx.corporate-ir.net/playerlink.zhtml?c=176474&s=wm&e=3448095.
An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.
About SMIC
Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981) is one of the leading semiconductor foundries in the world and the largest and most advanced foundry in Mainland China, providing integrated circuit (IC) foundry and technology services at 0.35-micron to 45/40-nanometer. Headquartered in Shanghai, China, SMIC has a 300mm wafer fabrication facility (fab) and three 200mm wafer fabs in its Shanghai mega-fab, two 300mm wafer fabs in its Beijing mega-fab, a 200mm wafer fab in Tianjin, a 200mm fab under construction in Shenzhen, and an in-house assembly and testing facility in Chengdu. SMIC also has customer service and marketing offices in the U.S., Europe, and Japan, and a representative office in Hong Kong. In addition, SMIC manages and operates a 300mm wafer fab in Wuhan owned by Wuhan Xinxin Semiconductor Manufacturing Corporation.
For more information, please visit www.smics.com.
Safe Harbor Statements
(Under the Private Securities Litigation Reform Act of 1995)
This press release contains, in addition to historical information, "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements under "Fourth Quarter 2010 Guidance" are based on SMIC's current assumptions, expectations and projections about future events. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of SMIC's senior management and involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with cyclicality and market conditions in the semiconductor industry, the downturn in the global economy and the impact on China's economy, intense competition, timely wafer acceptance by SMIC's customers, timely introduction of new technologies, SMIC's ability to capture growth opportunities in China, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, orders or judgments from pending litigation, availability of manufacturing capacity and financial stability in end markets.
Investors should consider the information contained in SMIC's filings with the U.S. Securities and Exchange Commission (SEC), including its annual report on 20-F filed with the SEC on June 29, 2010, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections, and such other documents that SMIC may file with the SEC or The Hong Kong Stock Exchange Limited ("SEHK") from time to time, including on Form 6-K. Other unknown or unpredictable factors also could have material adverse effects on SMIC's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except as required by law, SMIC undertakes no obligation and does not intend to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Summary of Third Quarter 2010 Operating Results
Amounts in US$ thousands, except for EPS and operating data | ||||||
| 3Q10 | 2Q10 | QoQ | 3Q09 | YoY | |
Sales | 410,080 | 381,142 | 7.6% | 323,356 | 26.8% | |
Cost of sales | 309,440 | 321,755 | -3.8% | 320,702 | -3.5% | |
Gross profit | 100,640 | 59,387 | 69.5% | 2,654 | 3692.0% | |
Operating expenses | 79,952 | 71,507 | 11.8% | 99,184 | -19.4% | |
Income (Loss) from operations | 20,688 | (12,120) | - | (96,530) | - | |
Other income (expenses), net | 13,358 | 101,812 | -86.9% | (3,943) | - | |
Income tax (expenses) credit | (3,634) | 6,466 | - | 31,704 | - | |
Net income (loss) after income taxes | 30,412 | 96,158 | -68.4% | (68,769) | - | |
Gain (Loss) from equity investment | 295 | 141 | 109.2% | (313) | - | |
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| ||||
Net income (loss) | 30,707 | 96,299 | -68.1% | (69,081) | - | |
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Accretion of interest to noncontrolling interest | (265) | (262) | 1.1% | (265) | 0.0% | |
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Income (Loss) attributable to Semiconductor Manufacturing International Corporation | 30,442 | 96,037 | -68.3% | (69,346) | - | |
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Gross margin | 24.5% | 15.6% | 0.8% |
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Operating margin | 5.0% | -3.2% | -29.9% |
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| ||||
Earnings (loss) per ordinary share (basic)(1) | 0.00 | 0.00 | (0.00) |
| ||
Earnings (loss) per ADS (basic) | 0.06 | 0.21 | (0.16) |
| ||
Earnings (loss) per ordinary share (diluted)(1) | 0.00 | 0.00 | (0.00) |
| ||
Earnings (loss) per ADS (diluted) | 0.06 | 0.20 | (0.16) |
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Wafers shipped (in 8" wafers)(2) | 516,792 | 496,766 | 4.0% | 429,843 | 20.2% | |
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Capacity utilization | 96.4% | 94.3% |
| 87.3% |
| |
Note: (1) Based on weighted average ordinary shares of 25,567 million (basic) and 25,747 million (diluted) in 3Q10, 22,480 million (basic) and 24,534 million (diluted) in 2Q10 and 22,368 million (basic) and 22,368 million (diluted) in 3Q09 (2) Including copper interconnects | ||||||
- Revenue increased to $410.1 million in 3Q10, up 7.6% QoQ from $381.1 million in 2Q10 due to a 4.0% increase in wafer shipments.
- Cost of sales decreased to $309.4 million in 3Q10, down 3.8% QoQ from $321.8 million in 2Q10 primarily due to lower depreciation expenses.
- Gross profit of $100.6 million in 3Q10, compared to a gross profit of $59.4 million in 2Q10 and gross profit of $2.7 million in 3Q09.
- Gross margins improved to 24.5% in 3Q10 from 15.6% in 2Q10 primarily due to an increase in fab utilization and lower depreciation costs.
- Total operating expenses increased to $80.0 million in 3Q10 from $71.5 million in 2Q10, an increase of 11.8% QoQ driven by an increase in R&D expenses and loss from sale of equipment and fixed assets.
- R&D expenses increased to $47.4 million in 3Q10, up 9.3% QoQ from $43.3 million in 2Q10 due to increase in R&D experiments.
- G&A expenses increased to $16.8 million in 3Q10 from $15.0 million in 2Q10 due to foreign exchange gains of $5.4 million in 2Q10.
- Selling & marketing expenses increased to $7.8 million in 3Q10, up 10.7% QoQ from $7.0 million in 2Q10 primarily due to an increase in selling activities and related fees.
Analysis of Revenues | ||||
Sales Analysis |
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| |
By Application | 3Q10 | 2Q10 | 3Q09 | |
Computer | 3.6% | 3.4% | 5.3% | |
Communications | 45.9% | 47.1% | 46.7% | |
Consumer | 42.5% | 42.2% | 41.9% | |
Others | 8.0% | 7.4% | 6.1% | |
By Service Type | 3Q10 | 2Q10 | 3Q09 | |
Logic(1) | 90.2% | 90.6% | 90.1% | |
Memory | 1.1% | 1.7% | 4.0% | |
Mask making, testing, others | 8.7% | 7.7% | 5.9% | |
By Customer Type | 3Q10 | 2Q10 | 3Q09 | |
Fabless semiconductor companies | 74.9% | 66.1% | 67.3% | |
Integrated device manufacturers (IDM) | 15.2% | 16.1% | 16.1% | |
System companies and others | 9.9% | 17.8% | 16.6% | |
By Geography | 3Q10 | 2Q10 | 3Q09 | |
North America | 52.1% | 52.2% | 59.2% | |
China(2) | 32.2% | 28.7% | 36.6% | |
Eurasia(3) | 15.7% | 19.1% | 4.2% | |
Wafer Revenue Analysis |
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By Technology (logic, memory & copper interconnect only) | 3Q10 | 2Q10 | 3Q09 | |
0.065um | 7.1% | 3.7% | 0.5% | |
0.09um | 16.2% | 19.9% | 15.8% | |
0.13um | 33.0% | 32.2% | 36.5% | |
0.15um | 2.3% | 1.8% | 2.6% | |
0.18um | 25.6% | 26.8% | 27.8% | |
0.25um | 0.5% | 0.5% | 0.6% | |
0.35um | 15.3% | 15.1% | 16.2% | |
Note: (1) Including 0.13um copper interconnects (2) Including Hong Kong (3) Excluding China | ||||
- Advanced technology shipments comprising 0.13um and below made up 56.3% of overall wafer revenue in 3Q10.
Capacity* | |||
Fab / (Wafer Size) | 3Q10 | 2Q10 | |
Shanghai Mega Fab (8") | 86,000 | 84,000 | |
Beijing Mega Fab (12") | 50,625 | 46,125 | |
Tianjin Fab (8") | 33,300 | 33,000 | |
Total monthly wafer fabrication capacity | 169,925 | 163,125 | |
Note: * Wafers per month at the end of the period in 8" equivalent wafers | |||
Shipment and Utilization | ||||
8" equivalent wafers | 3Q10 | 2Q10 | 3Q09 | |
Wafer shipments including copper interconnects | 516,792 | 496,766 | 429,843 | |
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Utilization rate(1) | 96.4% | 94.3% | 87.3% | |
Note: (1) Capacity utilization based on total wafer out divided by estimated capacity | ||||
- Wafer shipments increased 4.0% QoQ to 516,792 units of 8-inch equivalent wafers in 3Q10 from 496,766 units of 8-inch equivalent wafers in 2Q10, and up 20.2% YoY from 429,843 8-inch equivalent wafers in 3Q09.
Detailed Financial Analysis
Gross Profit Analysis | ||||||
Amounts in US$ thousands | 3Q10 | 2Q10 | QoQ | 3Q09 | YoY | |
Cost of sales | 309,440 | 321,755 | -3.8% | 320,702 | -3.5% | |
Depreciation | 116,501 | 131,188 | -11.2% | 155,949 | -25.3% | |
Other manufacturing costs | 192,941 | 189,620 | 1.8% | 157,843 | 22.2% | |
Share-based compensation | (2) | 947 | - | 1,024 | - | |
Gross profit | 100,640 | 59,387 | 69.5% | 2,654 | 3692.0% | |
Gross margin | 24.5% | 15.6% |
| 0.8% |
| |
- Cost of sales decreased to $309.4 million in 3Q10, down 3.8% QoQ from $321.8 million in 2Q10 primarily due to lower depreciation expenses.
- Gross profit of $100.6 million in 3Q10, compared to a gross profit of $59.4 million in 2Q10 and gross profit of $2.7 million in 3Q09.
- Gross margins improved to 24.5% in 3Q10 from 15.6% in 2Q10 primarily due to an increase in fab utilization and lower depreciation costs.
Operating Expense Analysis | ||||||
Amounts in US$ thousands | 3Q10 | 2Q10 | QoQ | 3Q09 | YoY | |
Total operating expenses | 79,952 | 71,507 | 11.8% | 99,184 | -19.4% | |
Research and development | 47,377 | 43,330 | 9.3% | 50,003 | -5.3% | |
General and administrative | 16,754 | 15,017 | 11.6% | 31,922 | -47.5% | |
Selling and marketing | 7,771 | 7,019 | 10.7% | 7,693 | 1.0% | |
Amortization of intangible assets | 6,742 | 6,686 | 0.8% | 9,535 | -29.3% | |
Loss (gain) from disposal of properties | 1,307 | (545) | - | 29 | 4406.9% | |
- Total operating expenses increased to $80.0 million in 3Q10 from $71.5 million in 2Q10, an increase of 11.8% QoQ driven by an increase in R&D expenses and loss from sale of equipment and fixed assets.
- R&D expenses increased to $47.4 million in 3Q10, up 9.3% QoQ from $43.3 million in 2Q10 due to an increase in R&D experiments.
- G&A expenses increased to $16.8 million in 3Q10 from $15.0 million in 2Q10 due to foreign exchange gains of $5.4 million in 2Q10.
- Selling & marketing expenses increased to $7.8 million in 3Q10, up 10.7% QoQ from $7.0 million in 2Q10 primarily due to an increase in selling activities and related fees.
Other Income (Expenses) | ||||||
Amounts in US$ thousands | 3Q10 | 2Q10 | QoQ | 3Q09 | YoY | |
Other income (expenses), net | 13,358 | 101,812 | -86.9% | (3,943) | - | |
Interest income | 1,030 | 879 | 17.2% | 634 | 62.5% | |
Interest expense | (6,781) | (6,293) | 7.8% | (7,941) | -14.6% | |
Change in the fair value of commitment to issue shares and warrants | 10,793 | 105,952 | -89.8% | - | - | |
Foreign currency exchange gain (loss) | 1,557 | (3,164) | - | 2,441 | -36.2% | |
Other, net | 6,759 | 4,438 | 52.3% | 923 | 632.3% | |
- Combined with the foreign exchange difference arising from operating activities, the Company recorded an overall foreign exchange gain of $1.4 million in 3Q10 as compared to an exchange gain of $2.2 million in 2Q10.
- Other non-operating income in 3Q10 included a change in the fair value of the commitment to grant shares and warrants in connection with the litigation settlement in an amount of $10.8 million.
Depreciation and Amortization
- Total depreciation and amortization decreased to $148.4 million in 3Q10 from $164.9 million in 2Q10 due to depreciated 8-inch production equipment.
Liquidity | |||
Amounts in US$ thousands | 3Q10 | 2Q10 | |
Cash and cash equivalents | 472,247 | 506,547 | |
Restricted cash | 95,958 | 37,099 | |
Accounts receivable | 210,491 | 208,856 | |
Inventories | 225,454 | 203,901 | |
Others | 89,253 | 53,410 | |
Total current assets | 1,093,403 | 1,009,813 | |
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Accounts payable | 407,747 | 254,967 | |
Short-term borrowings | 402,248 | 357,387 | |
Current portion of long-term debt | 215,671 | 275,294 | |
Others | 160,680 | 328,668 | |
Total current liabilities | 1,186,346 | 1,216,316 | |
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Cash Ratio | 0.4x | 0.4x | |
Quick Ratio | 0.5x | 0.6x | |
Current Ratio | 0.9x | 0.8x | |
Capital Structure | |||
Amounts in US$ thousands | 3Q10 | 2Q10 | |
Cash and cash equivalents | 472,247 | 506,547 | |
Restricted cash | 95,958 | 37,099 | |
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Current portion of promissory note | 34,547 | 54,164 | |
Non-current portion of promissory note | 70,414 | 69,921 | |
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Short-term borrowings | 402,248 | 357,387 | |
Current portion of long-term debt | 215,671 | 275,294 | |
Long-term debt | 307,459 | 365,027 | |
Total debt | 925,378 | 997,708 | |
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Equity | 1,995,798 | 1,717,011 | |
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Total debt to equity ratio | 46.4% | 58.1% | |
- Equity in 3Q10 was $2.0 billion compared to $1.7 billion in 2Q10 primarily due to new shares issuance and the reclassification from liability to equity of litigation settlement related expenses.
Cash Flow | |||
Amounts in US$ thousands | 3Q10 | 2Q10 | |
Net cash from operating activities | 125,170 | 167,495 | |
Net cash from investing activities | (164,825) | (107,885) | |
Net cash from financing activities | 5,550 | (75,757) | |
Effect of exchange rate changes | (195) | (514) | |
Net change in cash | (34,300) | (16,661) | |
Capex Summary
- Capital expenditures for 3Q10 were $297 million.
Recent Highlights and Announcements
- SMIC to Invest in Wuhan Xinxin, Writing a New Chapter in Scientific Development (2010-10-29)
- Notification of Board Meeting (2010-10-20)
- ARM and SMIC Extend Comprehensive Product Portfolio of Free Libraries of Physical IP to 65NM and 40NM ll Process Technology (2010-10-11)
- Extraordinary General Meeting Held on 21 September, 2010 Poll Results (2010-09-21)
- SMIC 2010 Technology Symposium kicks off in Shanghai (2010-09-16)
- SMIC Adopts Cadence Silicon Realization End-to-End Product Line for 65-40nm Design (2010-09-16)
- Grant of Options (2010-09-08)
- Form of Proxy for Use at The Extraordinary General Meeting To Be Held On 21 September 2010 (2010-09-03)
- Notice of Extraordinary General Meeting (2010-09-03)
- Circular - Non-Exempt Connected Transaction (1) Subscription Of New Shares Under Special Mandate By Datang Telecom Technology & Industry Holdings Co., Ltd. And (2) Release Of Datang Telecom Technology & Industry Holdings Co., Ltd. From Lock-Up Restriction (2010-09-03)
- Reply Form (2010-09-03)
- Notification Letter and Change Request Form to registered shareholders (2010-09-03)
- Notification Letter and Request Form to Non - Registered Shareholders (2010-09-03)
- 2010 Interim Report (2010-09-03)
- Closure of Register of Members (2010-09-01)
- Announcement of Unaudited Interim Results for the Six Months Ended June 30, 2010 (2010-08-27)
- Non-Exempt Connected Transaction (1) Subscription f New Shares Under Special Mandate By Datang Telecom Technology & Industry Holdings Co., Ltd. And (2) Release Of Datang Telecom Technology & Industry Holdings Co., Ltd. From Lock-Up Restriction (2010-08-16)
- Notification of Board Meeting (2010-08-16)
- SMIC Reports Results for the Three Months Ended June 30, 2010 (2010-08-10)
- SMIC 65-nm Technology Successfully Moves to Volume Production (2010-08-03)
- SMIC Schedules Second Quarter 2010 Webcast Conference Call (2010-07-30)
- Notification of Board Meeting (2010-07-29)
- SMIC and Virage Logic Extend Partnership to 40nm LL Process Technology (2010-07-22)
- Overseas Regulatory Announcement (2010-07-21)
- Completion of Placing of New Shares under General Mandate (2010-07-15)
- Placing of New Shares under General Mandate (1) Potential Subscription of New Shares under Special Mandate by Datang Telecom Technology & Industry Holdings Co., Ltd. And (2) Release of Datang from Lock-up Restriction; Non-exempt Connected Transactions; Pre-emptive Right of TSMC (2010-07-08)
- Potential Non-exempt Connected Transactions (1) Potential Exercise of Pre-emptive Right and Further Subscription by Datang and (2) Release of Datang from Lock-up Restriction; Pre-emptive Right of TSMC (2010-07-07)
Please visit SMIC's website at http://www.smics.com/website/enVersion/Press_Center/newsRelease.ftl for further details regarding the recent announcements.
Semiconductor Manufacturing International Corporation CONSOLIDATED BALANCE SHEETS (In US dollars, except per share data) | |||||
As of | |||||
September 30, 2010 | June 30, 2010 | ||||
(Unaudited) | (Unaudited) | ||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 472,247,166 | 506,547,279 | |||
Restricted cash | 95,957,555 | 37,098,779 | |||
Short-term investments | 2,002,889 | - | |||
Accounts receivable, net of allowances of $77,543,500 and $77,464,910 at September 30 and June 30, 2010, respectively | 210,491,164 | 208,856,202 | |||
Inventories | 225,453,953 | 203,900,692 | |||
Prepaid expense and other current assets | 73,065,420 | 38,703,151 | |||
Assets held for sale | 8,746,412 | 9,167,973 | |||
Current portion of deferred tax assets | 5,438,685 | 5,538,552 | |||
Total current assets | 1,093,403,244 | 1,009,812,628 | |||
Prepaid land use rights | 79,234,001 | 79,537,003 | |||
Plant and equipment, net | 2,205,572,342 | 2,053,713,421 | |||
Acquired intangible assets, net | 176,426,548 | 181,805,429 | |||
Equity investment | 9,539,040 | 9,244,259 | |||
Other long-term prepayments | 202,062 | 143,033 | |||
Deferred tax assets | 106,957,439 | 109,849,717 | |||
TOTAL ASSETS | 3,671,334,676 |
| 3,444,105,490 | ||
LIABILITIES AND EQUITY | |||||
Current liabilities: | |||||
Accounts payable | 407,747,222 | 254,967,307 | |||
Accrued expenses and other current liabilities | 124,199,482 | 113,563,072 | |||
Short-term borrowings | 402,248,072 | 357,387,090 | |||
Current portion of promissory notes | 34,546,719 | 54,164,481 | |||
Current portion of long-term debt | 215,671,297 | 275,293,978 | |||
Commitment to issue shares and warrants relating to litigation settlement | - | 160,846,576 | |||
Income tax payable | 1,933,010 | 93,799 | |||
Total current liabilities | 1,186,345,802 |
| 1,216,316,303 | ||
Long-term liabilities: | |||||
Non-current portion of promissory notes | 70,414,305 | 69,920,879 | |||
Long-term debt | 307,459,182 | 365,027,154 | |||
Long-term payables relating to license agreements | 2,447,919 | 2,418,587 | |||
Other long-term liabilities | 72,191,325 | 36,952,392 | |||
Deferred tax liabilities | 1,051,692 | 1,096,532 | |||
Total long-term liabilities | 453,564,423 |
| 475,415,544 | ||
Total liabilities | 1,639,910,225 |
| 1,691,731,847 | ||
Noncontrolling interest | 35,626,849 | 35,362,192 | |||
Equity: | |||||
Ordinary shares, $0.0004 par value, 50,000,000,000 shares authorized, 25,793,035,903 and 22,480,259,472 shares issued and outstanding at September 30 and June 30, 2010, respectively | 10,317,215 | 8,992,104 | |||
Additional paid-in capital | 3,754,361,545 | 3,507,140,466 | |||
Accumulated other comprehensive loss | (1,364,352) | (1,161,906) | |||
Accumulated deficit | (1,767,516,806) | (1,797,959,213) | |||
Total equity | 1,995,797,602 |
| 1,717,011,451 | ||
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND EQUITY | 3,671,334,676 |
| 3,444,105,490 | ||
Semiconductor Manufacturing International Corporation CONSOLIDATED STATEMENT OF INCOME (In US dollars, except share data) | |||||
For the three months ended | |||||
September 30, 2010 | June 30, 2010 | ||||
(Unaudited) | (Unaudited) | ||||
Sales | 410,080,265 | 381,142,152 | |||
Cost of sales | 309,440,112 | 321,755,444 | |||
Gross profit | 100,640,153 | 59,386,708 | |||
Operating expenses: | |||||
Research and development | 47,376,950 | 43,329,679 | |||
General and administrative | 16,754,372 | 15,017,028 | |||
Selling and marketing | 7,771,330 | 7,019,386 | |||
Amortization of acquired intangible assets | 6,742,249 | 6,685,822 | |||
Loss (gain) from sale of equipment and other fixed assets | 1,307,497 | (545,040) | |||
Total operating expenses, net | 79,952,398 |
| 71,506,875 | ||
Income (loss) from operations | 20,687,755 | (12,120,167) | |||
Other income (expense): | |||||
Interest income | 1,029,621 | 879,279 | |||
Interest expense | (6,781,385) | (6,293,613) | |||
Change in the fair value of commitment to issue shares and warrants | 10,793,350 | 105,952,415 | |||
Foreign currency exchange gain (loss) | 1,557,170 | (3,164,049) | |||
Other, net | 6,759,639 | 4,437,675 | |||
Total other income, net | 13,358,395 |
| 101,811,707 | ||
Income before income tax (expense) | 34,046,150 | 89,691,540 | |||
Income tax benefit (expense) | (3,633,865) | 6,466,243 | |||
Gain from equity investment | 294,780 | 140,793 | |||
Net income | 30,707,065 |
| 96,298,576 | ||
Accretion of interest to noncontrolling interest | (264,658) | (261,781) | |||
Income attributable to Semiconductor Manufacturing International Corporation | 30,442,407 |
| 96,036,795 | ||
Earnings per share attributable to Semiconductor Manufacturing International Corporation ordinary shareholders, basic | 0.00 | 0.00 | |||
Earnings per share attributable to Semiconductor Manufacturing International Corporation ordinary shareholders, diluted | 0.00 | 0.00 | |||
Earnings per ADS attributable to Semiconductor Manufacturing International Corporation ordinary shareholders, basic | 0.06 | 0.21 | |||
Earnings per ADS attributable to Semiconductor Manufacturing International Corporation ordinary shareholders, diluted | 0.06 | 0.20 | |||
Shares used in calculating basic income per share | 25,566,696,208 | 22,480,222,740 | |||
Shares used in calculating diluted income per share | 25,747,346,720 | 24,533,730,903 | |||
Semiconductor Manufacturing International Corporation CONSOLIDATED STATEMENT OF CASH FLOWS (In US dollars, except per share data) | |||||
For the three months ended | |||||
September 30,2010 | June 30,2010 | ||||
(Unaudited) | (Unaudited) | ||||
Operating activities | |||||
Net income | 30,707,065 | 96,298,576 | |||
Adjustments to reconcile net gain to net cash provided by operating activities: | |||||
Deferred tax | 2,947,304 | (8,468,268) | |||
Loss (gain) from sale of equipment and other fixed assets | 1,307,497 | (545,040) | |||
Depreciation and amortization | 141,501,326 | 155,371,401 | |||
Amortization of acquired intangible assets | 6,742,249 | 6,685,823 | |||
Share-based compensation | 194,180 | 2,802,616 | |||
Non-cash interest expense on promissory note and long-term payable relating to license agreements | 961,088 | 1,120,440 | |||
Gain from equity investment | (294,780) | (140,793) | |||
Change in the fair value of commitment to issue shares and warrants | (10,793,350) | (105,952,415) | |||
Allowance for doubtful accounts | 78,590 | 315,823 | |||
Other | 411,324 | - | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable, net | (2,017,155) | (4,189,347) | |||
Inventories | (21,553,261) | (9,296,368) | |||
Prepaid expense and other current assets | (34,421,298) | (6,362,497) | |||
Prepaid land use right | (82,190) | (2,359,437) | |||
Accounts payable | 11,685,232 | 19,833,793 | |||
Accrued expenses and other current liabilities | 12,697,175 | 7,063,135 | |||
Income tax payable | 1,839,211 | 12,489 | |||
Other long term liabilities | 35,238,933 | 15,304,717 | |||
Changes in restricted cash relating to operating activities | (51,979,109) | - | |||
Net cash provided by operating activities | 125,170,031 | 167,494,648 | |||
Investing activities: | |||||
Purchase of plant and equipment | (157,530,750) | (87,494,465) | |||
Proceeds from sale of equipment | 2,221,027 | 352,200 | |||
Proceeds received from sale of assets held for sale | 793,973 | 4,382,259 | |||
Purchase of intangible assets | (1,437,828) | (17,309,010) | |||
Purchase of short-term investments | (18,000,000) | (3,000,000) | |||
Sale of short-term investments | 16,007,758 | 2,997,000 | |||
Changes in restricted cash relating to investing activities | (6,879,667) | (7,812,357) | |||
Net cash used in investing activities | (164,825,487) | (107,884,373) | |||
Financing activities: | |||||
Proceeds from short-term borrowing | 261,120,000 | 128,442,986 | |||
Repayment of short-term borrowings | (216,259,018) | (104,850,783) | |||
Repayment of long-term debt | (117,190,654) | (79,997,083) | |||
Repayment of promissory notes | (20,000,000) | (20,000,000) | |||
Proceeds from issuance of ordinary shares | 97,122,212 | - | |||
Proceeds from exercise of employee stock options | 757,387 | 647,547 | |||
Net cash provided by (used in) financing activities | 5,549,927 | (75,757,333) | |||
Effect of exchange rate changes | (194,584) | (513,590) | |||
NET INCREASE (DECREASE) IN CASH AND CASH | |||||
EQUIVALENTS | (34,300,113) | (16,660,648) | |||
CASH AND CASH EQUIVALENTS, beginning of period | 506,547,279 | 523,207,927 | |||
CASH AND CASH EQUIVALENTS, end of period | 472,247,166 | 506,547,279 | |||
SOURCE Semiconductor Manufacturing International Corporation
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