SMIC Reports Results for the Three Months Ended March 31, 2010
SHANGHAI, China, May 11 /PRNewswire-Asia/ --
Set out below is a copy of the full text of the press release by the Company on May 11, 2010, in relation to its results for the three months ended March 31, 2010.
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 March 31, 2010.
First Quarter 2010 Highlights:
-- Revenue exceeded our original guidance and was up by 5.6% to $351.7
million in 1Q10 from $333.1 million in 4Q09 and up by 140.1% compared
to 1Q09.
-- Gross margins improved to 14.6% in 1Q10 compared to 7.6% in 4Q09
primarily due to an increase in wafer shipments and higher ASP.
-- Net cash flow from operations has increased to $153.1 million in 1Q10
from $89.3 million in 4Q09.
-- Loss attributable to holders of ordinary shares narrowed to US$181.9
million in 1Q10, compared to loss of US$617.7 million in 4Q09.
-- Fully diluted EPS was ($0.41) per ADS.
Second 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 3% to 5% increase.
-- Operating expenses excluding foreign exchange differences are expected
to range from $80 million to $84 million.
-- Capital expenditures expected to range from $150 million to $200
million.
Commenting on the quarterly results, Dr. David NK Wang, President and Chief Executive Officer of SMIC remarked, "In the first quarter of 2010, our ASP improved due to better product mix, our utilization improved to 92.1%, and our gross margin improved to 14.6%. Regionally, the North America and China continue to account for most our revenues and quarter-over-quarter growth. North America contributed more than half of revenues and 10.2% of growth, and China contributed almost one-fourth of revenues and 17.6% of growth. We saw revenue for our 90-nanometer and below technologies improve by 14.3% and we anticipate steadily improving gross margins."
"The foundry market looks positive. We continue to see uptrend in the second quarter and remain cautiously optimistic about the third and fourth quarters. We will continue our organizational and business enhancements and look forward to updating the investment community regularly. We appreciate your support. Our top priority of sustainable profitability remains unchanged and we will strive to enhance SMIC's fundamentals for further profitable expansion."
Conference Call / Webcast Announcement
Date: Wednesday, May 12, 2010
Time: 8:30 a.m. Shanghai time
Dial-in numbers and pass code:
US 1-617-614-3672 (Pass code: SMIC)
HK 852-3002-1672 (Pass code: SMIC)
A live webcast of the 2010 first 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=3029260 .
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-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 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, the Company continues to see uptrend in the second quarter and remain cautiously optimistic about the second half of 2010; the Company's goal of sustainable profitability and statements under "Second 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," "confident" 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, intense competition, timely wafer acceptance by SMIC's customers, timely introduction of new technologies, SMIC's ability to ramp new products into volume, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, availability of manufacturing capacity, financial stability in end markets, future fluctuations of the share price of SMIC and possible future litigation and claims.
Investors should consider the information contained in SMIC's filings with the U.S. Securities and Exchange Commission (SEC), including its Annual Report on Form 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 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 may be 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
The Company settled all pending litigation with TSMC on November 9, 2009, including the legal action filed in California for which a verdict was returned by the jury against SMIC on November 4, 2009, with a Settlement Agreement (the "2009 Settlement Agreement") which replaced the 2005 Settlement Agreement. The 2009 Settlement Agreement resolved all pending lawsuits between the parties and the parties have since dismissed all pending litigation between them. The terms of the 2009 Settlement Agreement include the following:
1) Entry of judgment and 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);
4) Commitment to 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, at a purchase
price of HK$1.30 per share Both the shares and the warrant would allow
TSMC to obtain total ownership of approximately 10% of SMIC's issued
share capital after giving effect to the share issuances and are
subject to receipt of required government and regulatory approvals; and
5) Certain remedies in the event of breach of this settlement.
Contingent Liability
In 2008, the Company entered into equipment purchase and cooperative manufacturing arrangements (the "Arrangements") with an unrelated semiconductor manufacturer (the "Counterparty"). Such cooperative manufacturing arrangements ended in 2008 as scheduled. In 2009, the Company received notifications from the Counterparty that the Company was responsible for additional equipment relocation expenses and a portion of the losses incurred during the term of the cooperative manufacturing arrangement. The Company has contested the claims and demanded further information supporting the Counterparty's claims. The Counterparty also filed a demand for dispute arbitration in late 2009 for a portion of the claims. The Company plans to continue its investigations and negotiations with the Counterparty. The total amount of the claims is approximately US$45 million. The Company recorded its best estimate of the probable amount of its liability on the claims in the consolidated financial statements as of and during the year ended December 31, 2009.
The Company continues to assess contingent liability and maintains its estimate of the probable amount of its liability on the claims in the consolidated financial statements as of the date of this report.
Summary of First Quarter 2010 Operating Results
Amounts in US$ thousands, except for EPS and operating data
1Q10 4Q09 QoQ 1Q09 YoY
Revenue 351,724 333,090 5.6% 146,519 140.1%
Cost of sales 300,270 307,669 -2.4% 275,900 8.8%
Gross profit (loss) 51,454 25,421 102.4% (129,381) --
Operating expenses 79,496 622,244 -87.2% 46,681 70.3%
Loss from operations (28,042) (596,823) -95.3% (176,062) -84.1%
Other expenses, net (155,567) (29,178) 433.2% (4,480) 3372.5%
Income tax benefit 2,374 8,735 -72.8% 3,305 -28.2%
Net loss after income
taxes (181,235) (617,266) -70.6% (177,238) 2.3%
Loss from equity
investment (455) (114) 299.1% (874) -47.9%
Net loss (181,690) (617,380) -70.6% (178,111) 2.0%
Accretion of interest to
noncontrolling interest (259) (274) -5.5% (259) 0.0%
Loss attributable to
Semiconductor
Manufacturing
International
Corporation (181,949) (617,655) -70.5% (178,370) 2.0%
Gross margin 14.6% 7.6% -88.3%
Operating margin -8.0% -179.2% -120.2%
Net loss per ordinary
share
(basic)(1) (0.01) (0.03) (0.01)
Net loss per ADS (basic) (0.41) (1.38) (0.40)
Net loss per ordinary
share
(diluted)(1) (0.01) (0.03) (0.01)
Net loss per ADS
(diluted) (0.41) (1.38) (0.40)
Wafers shipped (in 8"
wafers)(2) 455,010 436,816 4.2% 168,743 169.6%
Capacity utilization 92.1% 91.5% 34.9%
Note:
(1) Based on weighted average ordinary shares of 22,397 million (basic)
and 22,397 million (diluted) in 1Q10, 22,370 million (basic) and
22,370 million (diluted) in 4Q09 and 22,344 million (basic) and
22,344 million (diluted) in 1Q09
(2) Including copper interconnects
-- Revenue increased to $351.7 million in 1Q10, up 5.6% QoQ from $333.1
million in 4Q09 due to a 4.2% increase in wafer shipments.
-- Cost of sales decreased to $300.3 million in 1Q10, down 2.4% QoQ from
$307.7 million in 4Q09.
-- Gross profit of $51.5 million in 1Q10, compared to a gross profit of
$25.4 million in 4Q09 and gross loss of $129.4 million in 1Q09.
-- Gross margins improved to 14.6% in 1Q10 from 7.6% in 4Q09 primarily due
to an increase in wafer shipments and higher ASP.
-- Total operating expenses decreased to $79.5 million in 1Q10 from $622.2
million in 4Q09, a decrease of 87.2% QoQ primarily due to a decrease in
G&A related expenses, larger impairment loss of long-lived assets, and
litigation settlement expenses associated with 4Q09.
-- R&D expenses decreased to $43.6 million in 1Q10, down 0.5% QoQ from
$43.8 million in 4Q09.
-- G&A expenses decreased to $17.6 million in 1Q10 from $151.5 million in
4Q09 due to decreased legal expenses and bad debt expenses.
-- Selling & marketing expenses decreased to $6.0 million in 1Q10, down
22.1% QoQ from $7.8 million in 4Q09.
Analysis of Revenues
Sales Analysis
By Application 1Q10 4Q09 1Q09
Computer 4.3 % 6.2 % 4.2 %
Communications 51.5 % 49.0 % 50.9 %
Consumer 37.0 % 38.3 % 32.9 %
Others 7.2 % 6.5 % 12.0 %
By Service Type 1Q10 4Q09 1Q09
Logic(1) 90.3 % 90.2 % 85.3 %
Memory 2.7 % 3.4 % 2.8 %
Mask Making, testing, others 7.0 % 6.4 % 11.9 %
By Customer Type 1Q10 4Q09 1Q09
Fabless semiconductor companies 66.4 % 64.4 % 70.9 %
Integrated device manufacturers (IDM) 17.0 % 17.4 % 11.4 %
System companies and others 16.6 % 18.2 % 17.7 %
By Geography 1Q10 4Q09 1Q09
North America 58.9 % 56.4 % 60.4 %
China(2) 24.4 % 21.9 % 21.4 %
Eurasia(3) 16.7 % 21.7 % 18.2 %
Wafer Revenue Analysis
By Technology (logic, memory & copper
interconnect only) 1Q10 4Q09 1Q09
0.09um and below 20.3 % 18.7 % 8.2 %
0.13um 35.5 % 39.5 % 30.8 %
0.15um 1.5 % 2.7 % 0.8 %
0.18um 24.2 % 22.9 % 31.5 %
0.25um 0.3 % 0.3 % 0.4 %
0.35um 18.2 % 15.9 % 28.3 %
Note:
(1) Including 0.13um copper interconnects
(2) Including Hong Kong
(3) Excluding China
-- Shipment comprising 0.09 m and below made up 20.3% of overall wafer
revenue in 1Q10 as compared to 18.7% in 4Q09.
Capacity*
Fab / (Wafer Size) 1Q10 4Q09
Shanghai Mega Fab (8") 84,000 85,000
Beijing Mega Fab (12") 46,800 42,750
Tianjin Fab (8") 34,300 34,300
Total monthly wafer fabrication capacity 165,100 162,050
Note:
* Wafers per month at the end of the period in 8" equivalent wafers
Shipment and Utilization
8" equivalent wafers 1Q10 4Q09 1Q09
Wafer shipments including copper
interconnects 455,010 436,816 168,743
Utilization rate(1) 92.1% 91.5% 34.9%
Note:
(1) Capacity utilization based on total wafer out divided by estimated
capacity
-- Wafer shipments increased 4.2% QoQ to 455,010 units of 8-inch
equivalent wafers in 1Q10 from 436,816 units of 8-inch equivalent
wafers in 4Q09, and up 169.6% YoY from 168,743 8-inch equivalent wafers
in 1Q09.
Detailed Financial Analysis
Gross Profit Analysis
Amounts in US$ thousands 1Q10 4Q09 QoQ 1Q09 YoY
Cost of sales 300,270 307,669 -2.4 % 275,900 8.8 %
Depreciation 143,919 142,196 1.2 % 158,000 -8.9 %
Other manufacturing
costs 155,119 162,501 -4.5 % 111,166 39.5 %
Deferred cost amortization -- 1,962 -- 5,886 --
Share-based compensation 1,232 1,010 22.0 % 848 45.3 %
Gross profit (loss) 51,454 25,421 102.4 % (129,381) --
Gross margin 14.6% 7.6% -88.3%
-- Cost of sales decreased to $300.3 million in 1Q10, down 2.4% QoQ from
$307.7 million in 4Q09.
-- Gross profit of $51.5 million in 1Q10, compared to a gross profit of
$25.4 million in 4Q09 and gross loss of $129.4 million in 1Q09.
-- Gross margins improved to 14.6% in 1Q10 from 7.6% in 4Q09 primarily due
to an increase in wafer shipments and higher ASP.
Operating Expense Analysis
Amounts in US$ thousands 1Q10 4Q09 QoQ 1Q09 YoY
Total operating expenses 79,496 622,244 -87.2 % 46,681 70.3 %
Research and development 43,592 43,806 -0.5 % 18,494 135.7 %
General and administrative 17,601 151,520 -88.4 % 14,928 17.9 %
Selling and marketing 6,045 7,760 -22.1 % 4,208 43.7 %
Amortization of intangible
assets 6,886 7,641 -9.9 % 9,031 -23.7 %
Loss from disposal of
properties 233 3,585 -93.5 % 20 1065.0 %
Impairment loss of long-lived
assets 5,138 138,295 -96.3 % -- --
Litigation settlement
-- 269,637 -- -- --
-- Total operating expenses decreased to $79.5 million in 1Q10 from $622.2
million in 4Q09, a decrease of 87.2% QoQ primarily due to a decrease in
G&A related expenses, larger impairment loss of long-lived assets, and
litigation settlement expenses associated with 4Q09.
-- R&D expenses decreased to $43.6 million in 1Q10, down 0.5% QoQ from
$43.8 million in 4Q09.
-- G&A expenses decreased to $17.6 million in 1Q10 from $151.5 million in
4Q09 due to a decrease in legal fees and bad debt expenses.
-- Selling & marketing expenses decreased to $6.0 million in 1Q10, down
22.1% QoQ from $7.8 million in 4Q09.
Other Income (Expenses)
Amounts in US$ thousands 1Q10 4Q09 QoQ 1Q09 YoY
Other income (expenses) (155,567) (29,178) 433.1 % (4,480) 3372.5 %
Interest income 878 886 -0.9 % 436 101.2 %
Interest expense (7,784) (2,874) 170.8 % (5,498) 41.6 %
Change in the fair value
of commitment to issue
shares and warrants (146,561) (30,100) 386.9 % -- --
Foreign currency exchange
gain (loss) (3,241) 1,876 -- (357) 807.8 %
Other, net 1,141 1,033 10.5 % 939 21.5 %
-- Combined with the foreign exchange difference arising from operating
activities, the Company recorded an overall foreign exchange loss of
$1.7 million in 1Q10 as compared to a foreign exchange gain of $3.1
million in 4Q09.
-- Other non-operating expenses in 1Q10 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 $146.6 million.
Depreciation and Amortization
-- Total depreciation and amortization in 1Q10 was $174.7 million compared
to $183.8 million in 4Q09.
Liquidity
Amounts in US$ thousands 1Q10 4Q09
Cash and cash equivalents 523,208 443,463
Restricted cash 29,286 20,360
Accounts receivable 204,983 204,290
Inventories 194,604 193,705
Others 53,687 45,240
Total current assets 1,005,769 907,058
Accounts payable 237,075 228,883
Short-term borrowings 333,795 286,864
Current portion of long-term debt 204,442 205,784
Others 442,538 309,992
Total current liabilities 1,217,850 1,031,523
Cash Ratio 0.4x 0.4x
Quick Ratio 0.6x 0.6x
Current Ratio 0.8x 0.8x
Capital Structure
Amounts in US$ thousands 1Q10 4Q09
Cash and cash equivalents 523,208 443,463
Restricted cash 29,286 20,360
Current portion of promissory note 59,163 78,608
Promissory note 83,913 83,325
Short-term borrowings 333,795 286,864
Current portion of long-term debt 204,442 205,784
Long-term debt 515,876 550,653
Total debt 1,054,113 1,043,301
Shareholders' equity 1,618,038 1,796,240
Total debt to equity ratio 65.1% 58.1%
Cash Flow
Amounts in US$ thousands 1Q10 4Q09
Net cash from operating activities 153,094 89,297
Net cash from investing activities (64,323) (37,804)
Net cash from financing activities (8,762) (60,937)
Net change in cash 79,745 (9,822)
Capex Summary
Capital expenditures for 1Q10 were $64 million.
Recent Highlights and Announcements
-- 2009 Annual Report(2010-04-29)
-- Circular - (1) Notice of AGM (2) Re-Election of Directors (3) Proposed
General Mandates to Issue and Repurchase Shares (4) Proposed Special
Mandate for Increasing The Limit On The Grant Of Equity Awards under
The 2004 Equity Incentive Plan (5) Proposed Amendments To The 2004
Equity Incentive Plan (2010-04-29)
-- Notification Letter and Change Request Form(2010-04-29)
-- Notice of Annual General Meeting(2010-04-29)
-- Notification of Board Meeting(2010-04-28)
-- Announcement of 2009 Annual Results(2010-04-26)
-- SMIC Issues Updates on First Quarter 2010 Financial Results and 2009
Annual Results(2010-04-19)
-- Notification of Approval of the publication of 2009 Annual Results by
the Board(2010-04-13)
-- Price Sensitive Information - SMIC 45LL Technology Has Successfully
Completed Process Qualification and SRAM Product Qualification
(2010-03-30)
-- Grant of Option(2010-02-24)
-- GalaxyCore Announces New Milestone: Shipment Of 100K 8" Wafers Using
SMIC's CMOS Image Sensor Process (2010-02-12)
-- Clarification Announcement(2010-02-09)
-- SMIC Reports Results For The Three Months Ended December 31, 2009
(2010-02-09)
-- Appointment of Chief Business Officer, Chief Operating Officer and
Chief Financial Officer(2010-02-09)
-- SMIC And SHHIC In Commercial Production Of 0.162um Embedded
EEPROM(2010-02-02)
-- Notification of Board Meeting(2010-01-25)
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 share data)
As of
March 31, December 31,
2010 2009
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents 523,207,927 443,462,514
Restricted cash 29,286,422 20,360,185
Accounts receivable, net of
allowances of $96,111,136 and
$96,144,543 at March 31, 2010 and
December 31, 2009, respectively 204,982,678 204,290,545
Inventories 194,604,324 193,705,195
Prepaid expense and other current
assets 32,269,099 28,881,867
Assets held for sale 13,244,958 8,184,462
Current portion of deferred tax
assets 8,173,216 8,173,216
Total current assets 1,005,768,624 907,057,984
Prepaid land use rights 77,550,315 78,111,788
Plant and equipment, net 2,129,575,807 2,251,614,217
Acquired intangible assets, net 177,109,741 182,694,105
Equity investment 9,392,886 9,848,148
Other long-term prepayments 214,588 391,741
Deferred tax assets 98,651,547 94,358,635
TOTAL ASSETS 3,498,263,508 3,524,076,618
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 237,075,087 228,882,804
Accrued expenses and other current
liabilities 116,494,349 111,086,991
Short-term borrowings 333,794,887 286,864,063
Current portion of promissory notes 59,163,022 78,608,288
Current portion of long-term debt 204,442,433 205,784,080
Commitment to issue shares and
warrants relating to litigation
settlement 266,798,990 120,237,773
Income tax payable 81,310 58,573
Total current liabilities 1,217,850,078 1,031,522,572
Long-term liabilities:
Non-current portion of promissory
notes 83,912,660 83,324,641
Long-term debt 515,875,782 550,653,099
Long-term payables relating to
license agreements 4,837,526 4,779,562
Other long-term liabilities 21,647,675 21,679,690
Deferred tax liabilities 1,001,293 1,035,164
Total long-term liabilities 627,274,936 661,472,156
Total liabilities 1,845,125,014 1,692,994,728
Noncontrolling interest 35,100,411 34,841,507
Stockholders' equity:
Ordinary shares, $0.0004 par value,
50,000,000,000 shares authorized,
22,420,895,812 and 22,375,886,604
shares issued and outstanding at
March 31, 2010 and December 31,
2009, respectively 8,968,359 8,950,355
Additional paid-in capital 3,503,714,048 3,499,723,153
Accumulated other comprehensive loss (648,316) (386,163)
Accumulated deficit (1,893,996,008) (1,712,046,962)
Total stockholders' equity 1,618,038,083 1,796,240,383
TOTAL LIABILITIES, NONCONTROLLING
INTEREST AND STOCKHOLDERS' EQUITY 3,498,263,508 3,524,076,618
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF OPERATIONS
(In US dollars, except share data)
For the three months ended
March 31, December 31,
2010 2009
(Unaudited) (Unaudited)
Sales 351,724,012 333,089,885
Cost of sales 300,270,177 307,668,812
Gross profit 51,453,835 25,421,073
Operating expenses:
Research and development 43,592,355 43,805,597
General and administrative 17,601,140 151,519,965
Selling and marketing 6,045,489 7,759,965
Amortization of acquired
intangible assets 6,885,746 7,640,689
Impairment loss of long-lived
assets 5,137,925 138,294,783
Loss from sale of equipment and
other fixed assets 233,053 3,585,371
Litigation settlement -- 269,637,431
Total operating expenses, net 79,495,708 622,243,801
Loss from operations (28,041,873) (596,822,728)
Other income (expense):
Interest income 877,711 886,374
Interest expense (7,783,555) (2,873,955)
Change in the fair value of
commitment to issue shares and
warrants (146,561,217) (30,100,793)
Foreign currency exchange gain
(loss) (3,241,001) 1,876,327
Other, net 1,140,502 1,033,481
Total other expense, net (155,567,560) (29,178,566)
Loss before income tax (183,609,433) (626,001,294)
Income tax benefit 2,374,552 8,735,242
Loss from equity investment (455,261) (114,272)
Net loss (181,690,142) (617,380,324)
Accretion of interest to
noncontrolling interest (258,904) (274,320)
Loss attributable to Semiconductor
Manufacturing International
Corporation (181,949,046) (617,654,644)
Net loss per share attributable to
Semiconductor Manufacturing
International Corporation ordinary
shareholders, basic and diluted (0.01) (0.03)
Net loss per ADS attributable to
Semiconductor Manufacturing
International Corporation ordinary
shareholders, basic and diluted (0.41) (1.38)
Shares used in calculating basic
and diluted loss per share 22,396,835,456 22,370,036,361
Semiconductor Manufacturing International Corporation
CONSOLIDATED STATEMENT OF CASH FLOWS
(In US dollars)
For the three months ended
March 31, December 31,
2010 2009
(Unaudited) (Unaudited)
Operating activities
Net loss (181,690,142) (617,380,324)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Deferred tax (4,326,783) (8,786,497)
Loss from sale of equipment and other
fixed assets 233,053 3,585,371
Depreciation and amortization 164,246,614 173,502,837
Amortization of acquired intangible
assets 6,885,746 7,640,689
Share-based compensation 3,583,507 2,620,497
Non-cash interest expense on
promissory note and long-term
payable relating to license
agreements 1,129,497 1,068,177
Loss from equity investment 455,261 114,272
Impairment loss of long-lived assets 5,137,925 138,294,783
Litigation settlement (noncash
portion) -- 239,637,431
Change in the fair value of
commitment to issue shares
and warrants 146,561,217 30,100,793
Allowance for doubtful accounts (33,407) 110,755,616
Changes in operating assets and
liabilities:
Accounts receivable, net (658,725) (22,556,104)
Inventories (899,129) (6,865,736)
Prepaid expense and other current
assets (3,210,079) 29,771,367
Accounts payable 8,714,410 4,697,376
Accrued expenses and other current
liabilities 6,973,898 (8,654,694)
Income tax payable 22,737 (3,928,422)
Other long term liabilities (32,015) 15,679,690
Net cash provided by operating
activities 153,093,585 89,297,122
Investing activities:
Purchase of plant and equipment and
land use right (72,950,296) (49,052,074)
Proceeds from government subsidy to
purchase plant and equipment 23,884,935 13,450,232
Proceeds from sale of equipment 5,045,012 1,427,816
Proceeds received from sale of assets
held for sale 1,286,854 737,986
Purchases of acquired intangible
assets (12,663,539) (10,189,252)
Purchase of short-term investments (2,668,692) (6,802,116)
Sale of short-term investments 2,668,692 12,912,347
Changes in restricted cash (8,926,238) (289,409)
Net cash used in investing
activities (64,323,272) (37,804,470)
Financing activities:
Proceeds from short-term borrowing 171,264,418 175,741,829
Repayment of short-term borrowings (124,333,593) (170,120,268)
Proceeds from long-term debt 10,000,000 49,195,984
Repayment of long-term debt (46,118,964) (115,850,696)
Repayment of promissory notes (20,000,000) --
Proceeds from exercise of employee
stock options 425,392 96,012
Net cash used in financing
activities (8,762,747) (60,937,139)
Effect of exchange rate changes (262,153) (377,869)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 79,745,413 (9,822,356)
CASH AND CASH EQUIVALENTS, beginning
of period 443,462,514 453,284,870
CASH AND CASH EQUIVALENTS, end of
period 523,207,927 443,462,514
As at the date of this announcement, the directors of the Company are Jiang Shang Zhou as Chairman of the Board of Directors and Independent Non- Executive Director of the Company; Dr. David N. K. Wang as President, Chief Executive Officer and Executive Director; Chen Shanzhi, Gao Yonggang and Zhou Jie (Wang Zheng Gang as alternate director to Zhou Jie) as Non-Executive Directors of the Company; and Tsuyoshi Kawanishi and Lip-Bu Tan as the other Independent Non-Executive Directors of the Company.
By order of the Board
Semiconductor Manufacturing International Corporation*
Dr. David N. K. Wang
President, Chief Executive Officer
Executive Director
Shanghai, PRC
May 11, 2010
* For identification only
For more information, please contact:
Investor Relations
Tel: +86-21-3861-0000 x12804
Email: [email protected]
SOURCE Semiconductor Manufacturing International Corporation
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