SMIC Reports Results for the Three Months Ended December 31, 2009
SHANGHAI, Feb. 9 /PRNewswire-Asia/ --
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.
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 December 31, 2009.
Fourth Quarter 2009 Highlights:
-- Revenue up by 3.0% to $333.1 million in 4Q09 from $323.4 million in
3Q09 and up by 22.2% compared to 4Q08.
-- Wafer revenue from Greater China region grew to 38.1% of total revenue
in 4Q09.
-- Gross margins improved to 10.6% in 4Q09 compared to 0.8% in 3Q09
primarily due to an increase in wafer shipments and fab utilization.
-- Net cash flow from operations has increased substantially to $89.8
million in 4Q09 from $73.0 million in 3Q09.
-- Charges in 4Q09 totaling $438.8 million recognized under operating and
non-operating expense in 4Q09 of which $299.7 million is related to the
settlement of litigation and $139.1 million is related to long-lived
asset impairment.
-- Loss attributable to holders of ordinary shares grew to US$482.3
million in 4Q09, compared to loss of US$69.3 million in 3Q09.
-- Fully diluted EPS was ($1.0779) per ADS.
First 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 range from flat to 2% increase.
-- Operating expenses excluding foreign exchange differences are expected
to range from $84 million to $88 million.
-- Capital expenditures expected to range from $95 million to $100 million.
Commenting on the quarterly results, Dr. David N.K. Wang, Chief Executive Officer of SMIC remarked, "2010 looks to be a good year for the semiconductor industry. We believe it will also be an important step on our journey toward sustained profitability.
"Overall, revenue growth was in-line with expectations for fourth quarter of 2009, and the percentage of gross margin increased 10 fold over the previous quarter. This was due to an increase in our average selling price per wafer, total wafer shipments, and factory utilization. I am also pleased to announce that our Greater China sales, as a percentage of total revenue, continued to grow, and reached 38% of total revenue for the quarter. Of that, Mainland China sales reached 21% of total revenue, growing 7% quarter-over-quarter, and 23.6% year-over-year. Finally I was glad to see that in Q4 2009, revenue from advanced technology nodes of 0.13 micron and below grew by 12.9% quarter-over-quarter."
Conference Call / Webcast Announcement
Date: February 10, 2010
Time: 8:30 a.m. Shanghai time
Dial-in numbers and pass code: U.S. 1-617-614-3672 / 1-800-260-8140 or HK 852-3002-1672 (Pass code: SMIC).
A live webcast of the 2009 fourth quarter announcement will be available at http://www.smics.com under the "Investor Relations" section. 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 0.35um to 45nm. 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 200mm wafer fab in Chengdu owned by Cension Semiconductor Manufacturing Corporation and a 300mm wafer fab in Wuhan owned by Wuhan Xinxin Semiconductor Manufacturing Corporation.
For more information, please visit http://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 concerning our belief that 2010 will be a good year for the semiconductor industry and an important step on our journey toward sustained profitability, and statements under "First 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 22, 2009, 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.
Material Litigation
Overview of TSMC Litigation:
Beginning in December 2003 through August 2004, the Company became subject to several lawsuits brought by Taiwan Semiconductor Manufacturing Company, Limited ("TSMC") relating to alleged infringement of certain patents and misappropriation of alleged trade secrets relating to methods for conducting semiconductor fab operations and manufacturing integrated circuits.
On January 30, 2005, the Company entered into a settlement agreement, without admission of liability, which provided for the dismissal of all pending legal actions without prejudice between the two companies (the "2005 Settlement Agreement").
On August 25, 2006, TSMC filed a lawsuit against the Company and certain subsidiaries (SMIC (Shanghai), SMIC (Beijing) and SMIC Americas) in the Superior Court of the State of California, County of Alameda, for alleged breach of the 2005 Settlement Agreement, alleged breach of promissory notes related to the 2005 Settlement Agreement and alleged trade secret misappropriation by the Company. The Company filed suit against TSMC in Beijing in November 2006, claiming unfair competition and commercial defamation.
The Company settled all pending litigation with TSMC on November 9, 2009, with the 2009 Settlement Agreement (the "2009 Settlement Agreement") which replaced the 2005 Settlement Agreement as of November 9, 2009. The 2009 Settlement Agreement resolved all pending claims between the parties and the parties have since dismissed all pending litigation between them, including the California Case, claims and defenses of SMIC yet to be decided in that case, and the Company's appeal in the Beijing Case. The terms of the 2009 Settlement Agreement to include the following:
-- 1) Mutual release of all claims that were or could have been brought in
the pending lawsuits;
-- 2) Termination of SMIC's obligation to make remaining payments under
the 2005 Settlement Agreement between the parties (approximately US$40
million);
-- 3) Payment to TSMC of an aggregate of US$200 million (with US$15
million paid upon execution, funded from SMIC's existing cash balances,
and the remainder to be paid in installments over a period of four
years - US$15 million payable by 31 December, 2009, US$80 million
payable by
-- 31 December, 2010, US$30 million payable by 31 December, 2011, US$30
million payable by 31 December, 2012 and US$30 million payable by 31
December, 2013);
-- 4) Grant to TSMC of 1,789,493,218 shares of SMIC (representing
approximately 8% of SMIC's issued share capital as of October 31, 2009)
and a warrant (exercisable within three years of issuance) to subscribe
for 695,914,030 shares of SMIC, subject to adjustment, at a purchase
price of HK$1.30 per share (which would allow TSMC to obtain total
ownership of approximately 10% of SMIC's issued share capital after
giving effect to the share issuances), subject to receipt of required
government and regulatory approvals; and
-- 5) Certain remedies in the event of breach of this settlement.
Accounting Treatment For The 2009 Settlement Agreement:
In accounting for the 2009 Settlement Agreement, the Company determined that there were three components of the 2009 Settlement Agreement -- termination of obligation, settlement of litigation, and covenant not to sue.
The Company does not believe that any of the aforementioned items can be recognized for accounting purposes, as none qualify as assets under US GAAP. Accordingly, all such items were expensed as of the settlement date. Further, all previously recorded assets associated with the 2005 Settlement Agreement were immediately impaired. The commitment to grant shares and warrants were initially measured at fair value and are being accounted for as derivatives with all subsequent changes in fair value being reflected in the income statement. In summary, the Company recorded $269.6 million under operating expenses in the fourth quarter of fiscal 2009, and $30.1 million as interest expense to reflect the change in fair value of the derivative instruments. Interest associated with the promissory notes, also recorded as interest expense, of $0.7 million was also recorded in the fourth quarter of fiscal 2009.
Summary of Fourth Quarter 2009 Operating Results
Amounts in US$ thousands, except for EPS and operating data
4Q09 3Q09 QoQ 4Q08 YoY
Revenue 333,090 323,356 3.0% 272,479 22.2%
Cost of sales 297,810 320,702 -7.1% 347,114 -14.2%
Gross profit (loss) 35,280 2,654 1229.3% (74,635) --
Operating expenses 496,823 99,184 400.9% 46,445 969.7%
Loss from operations (461,543) (96,530) 378.1% (121,080) 281.2%
Other expenses, net (29,072) (3,943) 637.3% (4,146) 601.2%
Income tax (expenses) credit 8,735 31,704 -72.4% (745) --
Net loss after income taxes (481,880) (68,769) 600.7% (125,972) 282.5%
Loss from equity investment (114) (313) -63.6% (92) 23.9%
Net loss (481,994) (69,081) 597.7% (126,064) 282.3%
Accretion of interest to
noncontrolling interest (274) (265) 3.4% (13,394) -98.0%
Loss attributable to
Semiconductor Manufacturing
International Corporation (482,268) (69,346) 595.5% (139,458) 245.8%
Gross margin 10.6% 0.8% -27.4%
Operating margin -138.6% -29.9% -44.4%
Net loss per ordinary share
(basic)(1) (0.02) 0.00 (0.01)
Net loss per ADS (basic) (1.08) (0.16) (0.37)
Net loss per ordinary share
(diluted)(1) (0.02) 0.00 (0.01)
Net loss per ADS (diluted) (1.08) (0.16) (0.37)
Wafers shipped (in 8"
wafers)(2) 436,816 429,843 1.60% 323,175 35.2%
Capacity utilization 91.5% 87.3% 67.7%
Note:
-- (1) Based on weighted average ordinary shares of 22,370 million (basic)
and 22,370 million (diluted) in 4Q09, 22,368 million (basic) and 22,368
million (diluted) in 3Q09 and 18,948 million (basic) and 18,948 million
(diluted) in 4Q08
-- (2) Including copper interconnects
-- Revenue increased to $333.1 million in 4Q09, up 3.0% QoQ from $323.4
million in 3Q09 due to a 1.6% increase in wafer shipments.
-- Cost of sales decreased to $297.8 million in 4Q09, down 7.1% QoQ
from $320.7 million in 3Q09 primarily due to lower depreciation
expenses.
-- Gross profit of $35.3 million in 4Q09, compared to a gross profit of
$2.7 million in 3Q09 and gross loss of $74.6 million in 4Q08.
-- Gross margins improved to 10.6% in 4Q09 from 0.8% in 3Q09 primarily
due to an increase in wafer shipments and fab utilization.
-- Total operating expenses increased to $496.8 million in 4Q09 from
$99.2 million in 3Q09, an increase of 400.9% QoQ primarily due to
charges related to settlement of litigation and impairment of
certain of the company's long-lived assets.
-- R&D expenses decreased to $43.8 million in 4Q09, down 12.4% QoQ from
$50.0 million in 3Q09 primarily due to the receipt of subsidies for
R&D related activities.
-- G&A expenses decreased to $25.3 million in 4Q09 from $31.9 million
in 3Q09 due to foreign exchange gains and a decrease in legal fees.
-- Selling & marketing expenses increased to $7.8 million in 4Q09, up
0.9% QoQ from $7.7 million in 3Q09.
-- Charges recognized under operating expense in 4Q09 of which $269.6
million is related to the settlement of litigation and $139.1
million is related to long-lived asset impairment. The total amount
of the settlement litigation charge including the portion classified
under non-operating expense was $299.7 million.
Analysis of Revenues
Sales Analysis
By Application 4Q09 3Q09 4Q08
Computer 6.2% 5.3% 4.5%
Communications 49.0% 46.7% 45.9%
Consumer 38.3% 41.9% 37.5%
Others 6.5% 6.1% 12.1%
By Service Type 4Q09 3Q09 4Q08
Logic(1) 90.2% 90.1% 85.6%
DRAM 3.4% 4.0% 2.6%
Mask Making, testing, others 6.4% 5.9% 11.8%
By Customer Type 4Q09 3Q09 4Q08
Fabless semiconductor companies 64.4% 67.3% 65.0%
Integrated device manufacturers (IDM) 17.4% 16.1% 15.2%
System companies and others 18.2% 16.6% 19.8%
By Geography 4Q09 3Q09 4Q08
North America 56.4% 59.2% 59.9%
Greater China(2) 38.1% 36.6% 33.6%
Asia Pacific(3) 2.6% 2.9% 4.1%
Europe 2.9% 1.3% 2.4%
Wafer Revenue Analysis
By Technology (logic, DRAM & copper
interconnect only) 4Q09 3Q09 4Q08
0.065um 2.5% 0.5% 0.0%
0.09um 16.2% 15.8% 11.1%
0.13um 39.5% 36.5% 34.4%
0.15um 2.7% 2.6% 2.2%
0.18um 22.9% 27.8% 32.5%
0.25um 0.3% 0.6% 0.6%
0.35um 15.9% 16.2% 19.2%
Note:
(1) Including 0.13um copper interconnects
(2) Including Hong Kong and Taiwan
(3) Excluding Greater China
-- Wafer revenue from Greater China region grew to 38.1% in 4Q09.
-- Advanced technology shipment comprising 0.13um and below made up
58.2% of overall wafer revenue in 4Q09 as compared to 52.8% in 3Q09.
Capacity*
Fab / (Wafer Size) 4Q09 3Q09
Shanghai Mega Fab (8") 85,000 88,000
Beijing Mega Fab (12) 42,750 42,750
Tianjin Fab (8) 34,300 34,300
Total monthly wafer fabrication
capacity 162,050 165,050
Note:
* Wafers per month at the end of the period in 8" wafers
Shipment and Utilization
8" equivalent wafers 4Q09 3Q09 4Q08
Wafer shipments including
copper interconnects 436,816 429,843 323,175
Utilization rate(1) 91.5% 87.3% 67.7%
Note:
(1) Capacity utilization based on total wafer out divided by estimated
capacity
-- Wafer shipments increased 1.6% QoQ to 436,816 units of 8-inch
equivalent wafers in 4Q09 from 429,843 units of 8-inch equivalent
wafers in 3Q09, and up 35.2% YoY from 323,175 8-inch equivalent
wafers in 4Q08.
Detailed Financial Analysis
Gross Profit Analysis
Amounts in US$ thousands 4Q09 3Q09 QoQ 4Q08 YoY
Cost of sales 297,810 320,702 -7.1% 347,114 -14.2%
Depreciation 142,023 155,949 -8.9% 183,916 -22.8%
Other manufacturing costs 152,815 157,843 -3.2% 156,446 -2.3%
Deferred cost amortization 1,962 5,886 -66.7% 5,886 -66.7%
Share-based compensation 1,010 1,024 -1.4% 866 16.6%
Gross profit (loss) 35,280 2,654 1229.3% (74,636) --
Gross margin 10.6% 0.8% -27.4%
-- Cost of sales decreased to $297.8 million in 4Q09, down 7.1% QoQ
from $320.7 million in 3Q09 primarily due to lower depreciation
expenses.
-- Gross profit of $35.3 million in 4Q09, compared to a gross profit of
$2.7 million in 3Q09 and gross loss of $74.6 million in 4Q08.
-- Gross margins improved to 10.6% in 4Q09 from 0.8% in 3Q09 primarily
due to an increase in wafer shipments and fab utilization.
Operating Expense Analysis
Amounts in US$ thousands 4Q09 3Q09 QoQ 4Q08 YoY
Total operating expenses 496,823 99,184 400.9% 46,445 969.7%
Research and development 43,806 50,003 -12.4% 12,524 249.8%
General and administrative 25,297 31,922 -20.8% 16,146 56.7%
Selling and marketing 7,760 7,693 0.9% 5,843 32.8%
Amortization of intangible
assets 7,641 9,535 -19.9% 11,564 -33.9%
Loss (income) from disposal
of properties 3,585 29 12262.1% (599) --
Impairment loss of long-
lived assets 139,097 -- -- 967 14284.4%
Litigation settlement 269,637 -- -- -- --
-- Total operating expenses increased to $496.8 million in 4Q09 from
$99.2 million in 3Q09, an increase of 400.9% QoQ primarily due to
charges related to settlement of litigation and impairment of
certain of the company's long-lived assets.
-- R&D expenses decreased to $43.8 million in 4Q09, down 12.4% QoQ from
$50.0 million in 3Q09 primarily due to the receipt of subsidies for
R&D related activities.
-- G&A expenses decreased to $25.3 million in 4Q09 from $31.9 million
in 3Q09 due to foreign exchange gains and a decrease in legal fees.
-- Selling & marketing expenses increased to $7.8 million in 4Q09, up
0.9% QoQ from $7.7 million in 3Q09.
-- Charges recognized under operating expense in 4Q09 of which $269.6
million is related to the settlement of litigation and $139.1
million is related to long-lived asset impairment. The total amount
of the settlement litigation charge including the portion classified
under non-operating expense was $299.7 million.
Other Income (Expenses)
Amounts in US$ thousands 4Q09 3Q09 QoQ 4Q08 YoY
Other income (expenses) (29,072) (3,943) 637.3% (4,146) 601.2%
Interest income 886 634 39.7% 1,184 -25.2%
Interest expense (32,974) (7,941) 315.2% (7,133) 362.3%
Foreign currency exchange
gain (loss) 1,876 2,441 -23.1% (2,543) --
Other, net 1,140 923 23.5% 4,346 -73.8%
-- Combined with the foreign exchange difference arising from operating
activities, the Company recorded an overall foreign exchange gain of
$3.1 million in 4Q09 as compared to a foreign exchange loss of $0.5
million in 3Q09.
-- Interest expense increased in 4Q09 due to a change in the fair value
of the commitment to grant shares and warrants in connection with
the litigation settlement in an amount of $30.1 million.
Depreciation and Amortization
-- Total depreciation and amortization in 4Q09 was $183.6 million
compared to $198.9 million in 3Q09.
-- The total depreciation and amortization for 2009 is $793.2 million
as compared to $805.6 million for 2008.
Liquidity
Amounts in US$ thousands 4Q09 3Q09
Cash and cash equivalents 443,463 453,285
Restricted cash 20,360 20,071
Short-term investments -- 6,110
Accounts receivable 193,994 194,202
Inventories 193,705 186,839
Others 38,530 25,896
Total current assets 890,052 886,403
Accounts payable 228,883 175,170
Short-term borrowings 286,864 281,243
Current portion of long-term debt 249,014 249,395
Others 309,573 142,596
Total current liabilities 1,074,334 848,404
Cash Ratio 0.4x 0.5x
Quick Ratio 0.6x 0.7x
Current Ratio 0.8x 1.0x
Capital Structure
Amounts in US$ thousands 4Q09 3Q09
Cash and cash equivalents 443,463 453,285
Restricted cash 20,360 20,071
Short-term investments -- 6,110
Current portion of promissory note 78,608 29,493
Promissory note 83,325 9,582
Short-term borrowings 286,864 281,243
Current portion of long-term debt 249,014 249,395
Long-term debt 507,423 573,697
Total debt 1,043,301 1,104,335
Shareholders' equity 1,931,627 2,411,556
Total debt to equity ratio 54.0% 45.8%
Cash Flow
Amounts in US$ thousands 4Q09 3Q09
Net cash from operating activities 89,767 72,954
Net cash from investing activities (38,274) (64,555)
Net cash from financing activities (60,941) 9,380
Net change in cash (9,822) 17,672
Capex Summary
-- Capital expenditures for 4Q09 were $92 million. Total capital
expenditures for 2009 was approximately $189.9 million as compared
to earlier market guidance of $190 million.
Recent Highlights and Announcements
-- Further Information on Changes in Directorate (2009-12-16)
-- Changes in Directorate and Authorised Representatives (2009-11-10)
-- Settlement Agreement Issue of Shares, Warrant and Warrant Shares
under the General Mandate Resumption of Trading (2009-11-10)
-- Suspension of Trading (2009-11-04)
-- SMIC and Cadence Announce the Availability of 65-Nanometer Low power
Reference Flow 4.0 (2009-10-29)
-- SMIC Reports Results for the Three Months Ended September 30, 2009
(2009-10-28)
-- SMIC Announces Successful Qualification of a MEMS Chip for Microstaq
(2009-10-26)
-- SMIC 2009 Technology Symposium held in Shanghai (2009-10-23)
-- SMIC Adopts Cadence DFM Solutions for 65- and 45-Nanometer
IP/Library Development and Full Chip Production (2009-10-19)
-- SMIC Extends 45nm Offerings to 40nm and 55nm (2009-10-14)
-- Notification of Board Meeting (2009-10-13)
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 SHEET
(In US dollars, except per share data)
As of
December 31, September 30,
2009 2009
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents 443,462,514 453,284,870
Restricted cash 20,360,185 20,070,776
Short-term investments -- 6,110,231
Accounts receivable, net of
allowances of $2,678,615 and
$6,509,798 on December 31 and
September 30, 2009, respectively 193,993,648 194,202,163
Inventories 193,705,195 186,839,459
Prepaid expense and other current
assets 28,881,867 25,895,689
Assets held for sale 9,649,029 --
Total current assets 890,052,438 886,403,188
Prepaid land use rights 78,111,788 78,486,074
Plant and equipment, net 2,249,560,703 2,478,950,867
Acquired intangible assets, net 182,694,105 192,778,696
Deferred cost, net -- 29,432,198
Equity investment 9,848,148 9,962,419
Other long-term prepayments 391,741 551,535
Long-term receivable 133,883,696 131,205,267
Deferred tax assets 102,531,851 93,163,395
TOTAL ASSETS 3,647,074,470 3,900,933,639
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 228,882,804 175,169,952
Accrued expenses and other current
liabilities 110,668,121 109,116,249
Short-term borrowings 286,864,063 281,242,502
Current portion of promissory notes 78,608,288 29,492,873
Current portion of long-term debt 249,014,080 249,395,373
Commitment to issue shares and
warrants relating to litigation
settlement 120,237,773 --
Income tax payable 58,573 3,986,995
Total current liabilities 1,074,333,702 848,403,944
Long-term liabilities:
Promissory notes 83,324,641 9,581,864
Long-term debt 507,423,099 573,696,518
Long-term payables relating to
license agreements 4,779,562 16,674,534
Other long-term liabilities 9,709,690 6,000,000
Deferred tax liabilities 1,035,164 453,205
Total long-term liabilities 606,272,156 606,406,121
Total liabilities 1,680,605,858 1,454,810,065
Noncontrolling interest 34,841,507 34,567,186
Stockholders' equity:
Ordinary shares, $0.0004 par value,
50,000,000,000 shares authorized,
22,375,886,604 and 22,366,133,058
shares issued and outstanding on
December 31 and September 30, 2009,
respectively 8,950,355 8,946,454
Additional paid-in capital 3,499,723,153 3,497,010,545
Accumulated other comprehensive loss (386,164) (8,293)
Accumulated deficit (1,576,660,239) (1,094,392,318)
Total stockholders' equity 1,931,627,105 2,411,556,388
TOTAL LIABILITIES, NONCONTROLLING
INTEREST AND STOCKHOLDERS' EQUITY 3,647,074,470 3,900,933,639
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF OPERATIONS
(In US dollars, except per share data)
For the three months ended
December 31, 2009 September 30, 2009
(Unaudited) (Unaudited)
Sales 333,089,885 323,355,915
Cost of sales 297,809,940 320,702,261
Gross profit 35,279,945 2,653,654
Operating expenses:
Research and development 43,805,597 50,003,000
General and administrative 25,297,079 31,922,632
Selling and marketing 7,759,965 7,693,241
Amortization of acquired intangible
assets 7,640,689 9,535,274
Impairment loss of long-lived assets 139,096,602 --
Loss from sale of equipment and
other fixed assets 3,585,371 29,475
Litigation settlement 269,637,431 --
Total operating expenses 496,822,734 99,183,622
Loss from operations (461,542,789) (96,529,968)
Other income (expense):
Interest income 886,374 633,879
Interest expense (2,873,955) (7,941,202)
Interest expense - litigation
settlement related (30,100,793) --
Foreign currency exchange gain 1,876,327 2,441,374
Other, net 1,140,265 923,152
Total other expense, net (29,071,782) (3,942,797)
Loss before income tax (490,614,571) (100,472,765)
Income tax benefit 8,735,242 31,704,196
Loss from equity investment (114,272) (312,752)
Net loss (481,993,601) (69,081,321)
Accretion of interest to
noncontrolling interest (274,320) (264,658)
Loss attributable to Semiconductor
Manufacturing International
Corporation (482,267,921) (69,345,979)
Net loss per share attributable to
Semiconductor Manufacturing
International Corporation ordinary
shareholders, basic and diluted (0.0216) (0.0031)
Net loss per ADS attributable to
Semiconductor Manufacturing
International Corporation ordinary
shareholders, basic and diluted (1.0779) (0.1550)
Shares used in calculating basic and
diluted loss per share 22,370,036,361 22,368,419,207
Amount attributable to Semiconductor
Manufacturing International
Corporation ordinary shareholders (482,267,921) (69,345,979)
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF CASH FLOWS
(In US dollars, except per share data)
For the three months ended
December 31, 2009 September 30, 2009
(Unaudited) (Unaudited)
Operating activities
Net loss (481,993,601) (69,081,321)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Deferred tax (8,786,497) (35,795,067)
Loss from sale of equipment and
other fixed assets 3,585,371 29,475
Depreciation and amortization 173,289,965 186,777,756
Amortization of acquired intangible
assets 7,640,689 9,535,274
Share-based compensation 2,620,497 2,622,067
Non-cash interest expense on
promissory note and long-term
payable relating to license
agreements 1,068,177 736,747
Loss from equity investment 114,272 312,752
Impairment loss of long-lived assets 139,096,602 --
Litigation settlement 239,637,431 --
Interest expense - litigation
settlement 30,100,793 --
Changes in operating assets and
liabilities:
Accounts receivable, net 208,515 (33,020,992)
Long-term receivable (2,678,429) (133,214)
Inventories (6,865,736) (3,827,691)
Prepaid expense and other current
assets (2,826,384) (6,745,362)
Accounts payable 4,697,376 (1,498,671)
Accrued expenses and other current
liabilities (8,923,223) 16,907,154
Other long-term liabilities 3,709,690 3,000,000
Income tax payable (3,928,422) 3,135,456
Net cash provided by operating
activities 89,767,086 72,954,363
Investing activities:
Purchase of plant and equipment and
land use right (47,502,152) (51,439,333)
Proceeds from government grant to
purchase plant and equipment 11,749,969 19,692,334
Proceeds from sale of equipment 1,108,193 779,075
Proceeds received from sale of
assets held for sale 737,986 --
Purchases of acquired intangible
assets (10,189,252) (33,298,688)
Purchase of short-term investments (6,802,116) (6,027,164)
Sale of short-term investments 12,912,347 3,229,525
Changes in restricted cash (289,409) 2,508,855
Net cash used in investing
activities (38,274,434) (64,555,396)
Financing activities:
Proceeds from short-term borrowing 175,741,829 153,106,179
Repayment of short-term borrowings (170,120,268) (145,541,751)
Proceeds from long-term debt 49,195,984 51,749,585
Repayment of long-term debt (115,850,696) (50,000,000)
Proceeds from exercise of employee
stock options 92,079 65,832
Net cash provided (used) by
financing activities (60,941,072) 9,379,845
Effect of exchange rate changes (373,936) (107,239)
NET INCREASE (DECREASE) IN CASH AND
CASH
EQUIVALENTS (9,822,356) 17,671,573
CASH AND CASH EQUIVALENTS, beginning
of period 453,284,870 435,613,297
CASH AND CASH EQUIVALENTS, end of
period 443,462,514 453,284,870
For more information, please contact:
Enling Feng
Investor Relations
Tel: +86-21-3861-0000 x16275
Email: [email protected]
Stephanie Cheung
Investor Relations
Tel: +86-21-3861-0000 x16113
Email: [email protected]
Anne Wong Chen
Investor Relations
Tel: +86-21-3861-0000 x12804
Email: [email protected]
Edith Kwan
Investor Relations
Tel: +852-2116-2624
Email: [email protected]
SOURCE Semiconductor Manufacturing International Corporation
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