SHANGHAI, China, Feb. 6 /Xinhua-PRNewswire/ --
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.
Highlights
-- Sales increased to $333.1 million in 4Q05, up 7.5% from $310.0 million
in 3Q05.
-- Capacity increased to 152,219 8-inch equivalent wafers per month.
-- Utilization rate increased to 93% in 4Q05 from 92% in 3Q05.
-- Gross margins were 12.9% in 4Q05 up from 8.2% in 3Q05.
-- Net loss decreased to $15.0 million in 4Q05 from $26.1 million in 3Q05.
-- Compared to 3Q05, wafer shipments increased 5.8% to 376,227 8-inch
wafers.
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, 2005. Sales increased 7.5% in the fourth quarter of 2005 to $333.1 million from $310.0 million in the prior quarter. The Company reported an increase in capacity to 152,219 8-inch equivalent wafers per month and a utilization rate of 93% in the fourth quarter of 2005. Gross margins were 12.9% in the fourth quarter of 2005 compared to 8.2% in the third quarter of 2005. Net loss decreased to $15.0 million in the fourth quarter of 2005 compared to a net loss of $26.1 million in the third quarter of 2005. Compared to the third quarter of 2005, wafer shipments increased 5.8% to 376,227 8-inch wafers in the fourth quarter of 2005.
"We continue to receive strong orders from our broad customer base across leading edge and mainstream technology nodes," said Dr. Richard Chang, President and Chief Executive Officer of SMIC. "As a result, our revenues and the average selling price of our wafers increased during the fourth quarter.
We continue to generate strong cash flows from operations. We generated $174 million in cash from our operations during the fourth quarter and $648 million in 2005. With almost $600 million of available cash on hand and over $600 million in available credit facilities, including the recently completed $105 million loan facility guaranteed by Atradius Dutch State Business N.V. of Amsterdam, we will continue to expand our capacity at our existing sites. Our 2006 capital expenditure budget will be approximately $1.1 billion, which will be scalable depending on market conditions. In addition, we will pursue alternative opportunities to expand our capacity through the use of strategic alliances.
During the fourth quarter, we commenced commercial production for nine new customers, two of whom are among the top fabless companies in the world. We also taped out nineteen new products, of which over half are products for Mainland China customers. Our Mainland China customers continue to represent an important area of growth. More than 8% of our revenues in December 2005 was generated from Mainland Chinese fabless companies. The new products we manufactured for those companies include the first 3G baseband chips on 0.13 micron process for the TD-SCDMA, WCDMA, and CDMA2000 standards, a digital satellite receiver chip for set-top boxes, and an HDTV video processor chip.
Our joint venture projects continue to progress on schedule. Specifically, our testing and assembly project in Chengdu began pilot production in December 2005 and is ramping up quickly. We anticipate that starting in the first quarter of 2006, we will offer in-house turn-key manufacturing services in China. In addition, our joint venture with Toppan to manufacture on-chip color filters and micro lenses began pilot production in December 2005 and is currently under qualification.
Conference call / Webcast announcement details
Date: February 7, 2006
Time: 8:00 a.m. Shanghai time
Dial-in numbers and pass code: U.S. 1-617-614-2714 or HK 852-3002-1672 (Pass code: SMIC).
A live webcast of the 2005 fourth quarter announcement will be available at http://www.smics.com under the "Investor Relations" section. An archived version of the webcast, along with a soft 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: 0981.HK), headquartered in Shanghai, China, is an international company and one of the leading semiconductor foundries in the world, providing integrated circuit (IC) manufacturing at 0.35um to 90nm and finer line technologies to customers worldwide. Established in 2000, SMIC has four 8- inch wafer fabrication facilities in volume production in Shanghai and Tianjin. In the first quarter of 2005, SMIC commenced commercial production at its 12- inch wafer fabrication facility in Beijing, the first 12-inch fab in China. SMIC also maintains customer service and marketing offices in the U.S., Europe, and Japan, and a representative office in Hong Kong. SMIC's pool of talent includes over 2,500 semiconductor industry experts and technical staff. SMIC has achieved ISO9001, ISO/TS16949, OHSAS18001, TL9000, BS7799 and ISO14001 certifications. For additional information, please visit http://www.smics.com .
Safe Harbor Statements
(Under the Private Securities Litigation Reform Act of 1995)
This press release and the attachments contain, 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 about SMIC's anticipated product development, product introduction and future performance, statements regarding SMIC's continued expansion of capacity at SMIC's existing sites, statements regarding SMIC's 2006 capital expenditure budget of approximately $1.1 billion, which will be scalable, statements regarding SMIC's pursuit of alternative opportunities to expand capacity through strategic alliances, statements regarding SMIC's anticipated offering of in- house turn-key manufacturing services in China starting in the first quarter of 2006, as well as the statements under "1Q06 Outlook" below, 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, intense competition, timely wafer acceptance by SMIC's customers, timely and successful 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 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 Form 20-F filed with the SEC on June 28, 2005, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections, and its registration statement on Form A-1 as filed with the Stock Exchange of Hong Kong (SEHK) on March 8, 2004, 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 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.
For more information, please contact:
Investor Contacts:
Jimmy Lai
Investor Relations Department
Tel: 86-21-5080-2000, ext. 16088
Fax: 86-21-5080-3619
Mobile: 852-9435-2603
Calvin Lau
Investor Relations Department
Tel: 86-21-5080-2000, ext. 16693
Mobile: 86-13636468590
Fax: 86-21-5080-3619
Summary:
Amounts in US$ thousands, except for EPS and operating data
4Q05 3Q05 QoQ 4Q04 YoY
Sales 333,052 309,959 7.5 % 291,842 14.1 %
Cost of sales 290,094 284,686 1.9 % 231,293 25.4 %
Gross profit 42,958 25,273 70.0 % 60,549 -29.1 %
Operating expenses 51,756 46,219 12.0 % 83,937 -38.3 %
(Loss) from operations (8,798) (20,946) -58.0 % (23,388) -62.4 %
Other income (expenses) (5,852) (5,602) 4.5 % 12,358 --
Income tax 2,433.3
152 6 -- % 186 -18.3 %
Net (loss) after
Income taxes (14,802) (26,554) -44.3 % (11,216) 32.0 %
Minority interest (176) 439 -140.1 % -- --
Deemed dividend on
preference Shares -- -- -- -- --
(Loss) attributable to
holders of ordinary
shares (14,978) (26,115) -42.6 % (11,216) 33.5 %
Gross margin 12.9 % 8.2 % -- 20.7 % --
Operating margin -2.6 % -6.8 % -- -8.0 % --
Basic EPS - per ordinary
share(1) ($0.0008) ($0.0014) ($0.0006)
Basic EPS - per ADS ($0.0410) ($0.0718) ($0.0311)
Diluted EPS - per
ordinary share ($0.0008) ($0.0014) ($0.0006)
Diluted EPS - per ADS ($0.0410) ($0.0718) ($0.0311)
Wafers shipped (in 8"
wafers)(2) 376,227 355,664 5.8 % 303,796 23.8 %
Logic ASP(3) $953 $989 -3.6 % $1,020 -6.6 %
Blended ASP $855 $841 1.7 % $917 -6.8 %
Simplified ASP(4) $885 $871 1.6 % $961 -7.9 %
Capacity utilization 93 % 92 % 95 %
Note:
(1) Based on weighted average ordinary shares of 18,251 million in 4Q05,
18,180 million in 3Q05 and 18,006 million in 4Q04
(2) Including copper interconnects
(3) Excluding copper interconnects
(4) Total sales/total wafers shipped
-- Sales increased to $333.1 million in 4Q05, up 7.5% QoQ from
$310.0 million in 3Q05 and up 14.1% YoY from $291.8 million in 4Q04.
Key factors leading to these increases were the following:
-- increased capacity to 152,219 8-inch equivalent wafers;
-- increased 8-inch equivalent wafer shipments to 376,227, up 5.8%
QoQ from 355,664 in 3Q05;
-- increased blended ASP by 1.7% QoQ; and
-- increased utilization rate to 93%.
-- Cost of sales increased to $290.1 million in 4Q05, up 1.9% QoQ from
$284.7 million in 3Q05, primarily due to an increase in wafer shipments.
-- Gross profit increased to $43.0 million in 4Q05, up 70.0% QoQ from
$25.3 million in 3Q05 and down 29.1% YoY from $60.5 million in 4Q04.
-- Gross margins increased to 12.9% in 4Q05 from 8.2% in 3Q05, primarily
due to a higher blended ASP and a lower inventory write down.
-- R&D expenses increased to $23.7 million in 4Q05, up 23.5% QoQ from
$19.2 million in 3Q05, primarily due to manufacturing process
technology development costs.
-- G&A expenses decreased to $8.1 million in 4Q05, down 11.0% QoQ from
$9.1 million in 3Q05, primarily due to a decrease in legal fees.
-- Selling & marketing expenses increased to $5.7 million in 4Q05, up
40.0% QoQ from $4.1 million in 3Q05, primarily due to an increase in
engineering material expenses associated with sales activities.
-- Amortization of intangible assets representing amortization expenses
associated with the acquisition of intangible assets, decreased to
$10.6 million in 4Q05, down 0.2% QoQ from $10.7 million in 3Q05.
-- Loss from operations decreased to a loss of $8.8 million in 4Q05, down
58.0% QoQ from a loss of $20.9 million in 3Q05 and down 62.4% YoY from
a loss of $23.4 million in 4Q04.
-- Other non-operating loss of $5.9 million in 4Q05, up 4.5% QoQ from a
loss of $5.6 million in 3Q05.
-- Interest expenses increased to $11.8 million in 4Q05, up 14.1% QoQ from
$10.3 million in 3Q05, primarily due to the increase in cost of
borrowing.
-- Net foreign exchange loss of $0.7 million based on a foreign exchange
loss of $0.6 million in G&A and a foreign exchange loss of $0.1
million relating to a non-operating activities resulting from financing
or investment transactions (i.e. forward contracts) classified as other
income (expenses). The net foreign exchange gain for 2005 was $1.8
million.
-- Net loss decreased to $15.0 million, down 42.6% QoQ from $26.1 million
in 3Q05 and up 33.5% from a net loss of $11.2 million in 4Q04.
1. Analysis of revenues
Sales analysis
By Application 4Q05 3Q05 2Q05 1Q05 4Q04
Computer 34.8 % 33.7 % 39.8 % 36.8 % 26.8 %
Communications 43.8 % 39.8 % 40.4 % 44.5 % 58.1 %
Consumer 16.6 % 22.8 % 15.2 % 13.6 % 10.2 %
Others 4.8 % 3.7 % 4.6 % 5.1 % 4.9 %
By Device 4Q05 3Q05 2Q05 1Q05 4Q04
Logic (including copper
interconnect) 65.3 % 65.5 % 58.9 % 61.9 % 75.1 %
DRAM(1) 31.3 % 31.0 % 36.5 % 33.0 % 20.4 %
Other (mask making & probing,
etc.) 3.4 % 3.5 % 4.6 % 5.1 % 4.5 %
By Customer Type 4Q05 3Q05 2Q05 1Q05 4Q04
Fabless semiconductor companies 43.2 % 43.2 % 42.2 % 48.1 % 50.2 %
Integrated device manufacturers
(IDM) 51.7 % 52.8 % 55.2 % 49.6 % 47.5 %
System companies and others 5.1 % 4.0 % 2.6 % 2.3 % 2.3 %
By Geography 4Q05 3Q05 2Q05 1Q05 4Q04
North America 39.2 % 42.9 % 40.8 % 40.4 % 34.9 %
Asia Pacific (ex. Japan) 28.2 % 25.7 % 26.3 % 26.9 % 43.5 %
Japan 3.6 % 4.5 % 6.0 % 8.0 % 8.8 %
Europe 29.0 % 26.9 % 26.9 % 24.7 % 12.8 %
Wafer revenue analysis
% Revenues by Technology (logic, 4Q05 3Q05 2Q05 1Q05 4Q04
DRAM & copper interconnects only)
of Total Wafer Revenues
0.13um 42.9 % 43.8 % 44.5 % 29.2 % 13.8 %
0.15um 5.2 % 2.7 % 2.5 % 12.5 % 14.9 %
0.18um 42.3 % 45.3 % 40.7 % 40.3 % 33.6 %
0.25um 3.3 % 3.1 % 3.9 % 4.6 % 6.0 %
0.35um 6.3 % 5.1 % 8.4 % 13.4 % 31.7 %
% Revenues by Technology of 4Q05 3Q05 2Q05 1Q05 4Q04
Logic Only Revenues(1)
0.13um(2) 10.9 % 14.7 % 12.6 % 5.4 % 2.4 %
0.15um 8.6 % 5.3 % 4.8 % 2.2 % 5.3 %
0.18um 65.3 % 67.4 % 59.4 % 59.8 % 38.2 %
0.25um 4.8 % 4.0 % 7.1 % 7.1 % 7.8 %
0.35um 10.4 % 8.6 % 16.1 % 25.5 % 46.3 % Note:
(1) Excluding 0.13um copper interconnects
(2) Represents revenues generated from manufacturing full flow wafers
-- Sales from the communications products segment grew faster than other
applications in 4Q05 compared to 3Q05.
-- Percentage of sales generated from Asia Pacific (ex. Japan) and
European customers in 4Q05 increased to 28.2% and 29.0%, as compared to
25.7% and 26.9% in 3Q05, respectively.
-- Percentage of wafer revenues from 0.18um and below technologies
decreased to 90.4% of sales in 4Q05, as compared with 91.8% in 3Q05,
and increased from 62.3% in 4Q04.
-- Percentage of logic only wafer revenues from 0.18um and below
technologies decreased to 84.8% of sales in 4Q05, as compared with
87.4% in 3Q05 and 45.9% in 4Q04.
Capacity:
Fab / (Wafer Size) 4Q05(1) 3Q05(1)
Fab 1 (8") 43,441 43,000
Fab 2 (8") 46,451 44,378
Fab 4 (12") 27,368 21,605
Fab 7 (8") 15,000 15,000
Total monthly wafer fabrication capacity 132,260 123,983
Copper Interconnects:
Fab 3 (8") 19,959 19,205
Total monthly copper interconnect capacity 19,959 19,205
Note:
(1) Wafers per month at the end of the period in 8" wafers
-- As of the end of 4Q05, monthly capacity increased to 152,219 8-inch
equivalent wafers.
Shipment and utilization:
8" wafers 4Q05 3Q05 2Q05 1Q05 4Q04
Wafer shipments including
Copper interconnects 376,227 355,664 330,499 284,912 303,796
Utilization rate(1) 93 % 92 % 87 % 85 % 95 %
Note:
(1) Capacity utilization based on total wafer out divided by estimated
capacity
-- Wafer shipments increased to 376,227 units of 8-inch equivalent wafers
in 4Q05, up 5.8% QoQ from 355,664 units of 8-inch equivalent wafers in
3Q05, and 23.8% YoY from 303,796 8-inch equivalent wafers in 4Q04.
-- Utilization rate increased to 93%.
2. Detailed financial analysis
Gross profit analysis
Amounts in US$ thousands 4Q05 3Q05 QoQ 4Q04 YoY
Cost of sales 290,094 284,686 1.9 % 231,293 25.4 %
Depreciation 176,545 167,919 5.1 % 130,839 34.9 %
Other manufacturing costs 113,549 116,767 -2.8 % 100,454 13.0 %
Gross Profit 42,958 25,273 70.0 % 60,549 -29.1 %
Gross Margin 12.9 % 8.2 % 20.7 %
-- Cost of sales increased to $290.1 million in 4Q05, up 1.9% QoQ from
$284.7 million in 3Q05, primarily due to an increase in wafer shipments.
-- Gross profit increased to $43.0 million in 4Q05, up 70.0% QoQ from
$25.3 million in 3Q05 and down 29.1% YoY from $60.5 million in 4Q04.
-- Gross margins increased to 12.9% in 4Q05 from 8.2% in 3Q05, primarily
due to a higher blended ASP and a lower inventory write down.
Operating expense analysis
Amounts in US$ thousands 4Q05 3Q05 QoQ 4Q04 YoY
Total operating expenses 51,756 46,219 12.0 %83,937 -38.3 %
Research and development 23,747 19,230 23.5 %24,747 -4.0 %
General and administrative 8,122 9,122 -11.0 %25,476 -68.1 %
Selling and marketing 5,699 4,072 40.0 % 2,544 124.1 %
Litigation settlement -- -- -- 23,153 --
Amortization of intangible assets 10,640 10,660 -0.2 % 4,092 160.0 %
Amortization of deferred stock
compensation 3,548 3,135 13.2 % 3,925 -9.6 %
-- Total operating expenses were $51.8 million in 4Q05, an increase of
12.0% QoQ from $46.2 million in 3Q05.
-- R&D expenses increased to $23.7 million in 4Q05, up 23.5% QoQ from
$19.2 million in 3Q05, primarily due to manufacturing process
technology development costs.
-- G&A expenses including foreign exchange decreased to $8.1 million in
4Q05, down 11.0% QoQ from $9.1 million in 3Q05, primarily due to a
decrease in legal fees.
-- Selling & marketing expenses increased to $5.7 million in 4Q05, up
40.0% QoQ from $4.1 million in 3Q05, primarily due to an increase in
engineering material expenses associated with sales activities.
-- Amortization of acquired intangible assets representing amortization
expenses associated with the acquisition of intangible assets,
decreased to $10.6 million in 4Q05, down 0.2% QoQ from $10.7 million in
3Q05.
Other income (expenses)
Amounts in US$ thousands 4Q05 3Q05 QoQ 4Q04 YoY
Other income (expenses) (5,852) (5,602) 4.5 % 12,358 -
Interest income 4,120 3,278 25.7 % 3,264 26.2 %
Interest expense (11,792) (10,334) 14.1 % (4,581) 157.4 %
Other, net 1,820 1,454 25.2 % 13,675 -86.7 %
-- Other non-operating loss of $5.9 million in 4Q05 up 4.5% QoQ from a
loss of $5.6 million in 3Q05.
-- Interest expenses increased to $11.8 million in 4Q05, up 14.1% QoQ from
$10.3 million in 3Q05, primarily due to the increase in cost of
borrowing.
3. Liquidity
Amounts in US$ thousands 4Q05 3Q05
Cash and cash equivalents 585,797 576,767
Short term investments 13,796 5,582
Accounts receivable 241,334 212,823
Inventory 191,238 182,851
Others 15,300 12,582
Total current assets 1,047,465 990,605
Accounts payable 262,318 259,797
Short-term borrowings 265,481 266,589
Current portion of long-term debt 246,081 246,081
Others 122,158 113,154
Total current liabilities 896,038 885,621
Cash Ratio 0.7x 0.7x
Quick Ratio 0.9x 0.9x
Current Ratio 1.2x 1.1x
Capital Structure
Amounts in US$ thousands 4Q05 3Q05
Cash and cash equivalents 585,797 576,767
Short-term investment 13,796 5,582
Current portion of promissory note 29,242 19,578
Promissory note 103,254 116,749
Short-term borrowings 265,481 266,589
Current portion of long-term debt 246,081 246,081
Long-term debt 494,556 444,566
Total debt 1,006,118 957,236
Net cash (539,021) (511,214)
Shareholders' equity 3,026,099 3,034,237
Total debt to equity ratio 33.2 % 31.5 %
4. Cashflow & Capex
Amounts in US$ thousands 4Q05 3Q05
Net loss (14,978) (26,115)
Depreciation & amortization 201,358 192,347
Amortization of acquired intangible assets 10,640 10,661
Net change in cash 9,030 474
Capex plans
-- Capital expenditures for 4Q05 was $229.8 million.
-- Planned capital expenditures for 2006 will be approximately
$1.1 billion and will be adjusted based on market conditions.
5. 1Q06 outlook
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" above.
-- Wafer shipments expected to increase between 2% to 4%.
-- Utilization is expected to be approximately 92% to 94%.
-- Blended ASP QoQ expected to be approximately flat.
-- Gross margins expected to be roughly at the same level as 4Q05.
-- Operating expense as a percentage of sales expected to be in the 16% to
18% range.
-- Non-operating interest expense expected to be approximately $14.0
million due to the additional draw down of existing credit facilities.
-- Capital expenditures of approximately $250 million to $300 million.
-- Depreciation and amortization of approximately $225 million.
-- With the adoption of FASB 123R beginning in January 2006, stock based
compensation charge of approximately $7.2 million, of which
approximately $4.2 million will be charged to operating expenses and
$3.0 million to cost of sales.
6. Recent announcements
-- SMIC-Manufactured, Guoxin-Designed Chip Wins Technology Innovation
Award [2006-01-18]
-- SMIC and ARC International To Jointly Bring Configurable Processors to
China [2006-01-09]
-- SMIC Adopts Mentor Graphics' Eldo Simulator for Analog Circuits for its
0.13-micron and Below Process Nodes [2006-01-06]
-- Infineon and SMIC Extend Agreement into 90nm Manufacturing [2006-01-06]
-- SMIC Extends NROM Technology License Agreement With SAIFUN [2006-01-04]
-- SMIC Announces LDO Linear Voltage Regulator IP Series [2005-12-21]
-- SMIC Obtains Euro 85 Million Long Term Credit Facility [2005-12-14]
-- SMIC starts volume production of 0.18um Color-VGA CMOS Image Sensor
(CIS) wafers [2005-12-07]
-- SMIC Announces Availability of 0.18um EEPROM Process Technology and
EEPROM IP Design Platform [2005-12-02]
-- Change of Address of Principal Place of Business [2005-12-01]
-- SMIC and Magma Announce RTL-to-GDSII Reference Design Flow for 0.13-
Micron SoCs [2005-11-15]
-- SMIC starts volume production of LCOS backplane wafers for 1080P Rear
Projection HDTV market [2005-11-11]
-- SMIC reports 2005 third quarter results [2005-10-28]
-- VeriSilicon and SMIC Jointly Announce Standard Design Platform for
SMIC's Advanced 0.13-micron CMOS Process Technology [2005-10-28]
-- SMIC Holds 2005 Technology Symposium in Shenzhen [2005-10-13]
-- SMIC and CYIT Successfully Manufacture 0.13um 3G Handset Chips [2005-
10-12]
-- SMIC Enters into Joint Development Effort with Luminescent for its 65nm
and Below Process Nodes [2005-10-06]
Please visit SMIC's website at
http://www.smics.com/website/enVersion/Press_Center/pressRelease.jsp
for further details regarding the recent announcements.
Consolidated Balance Sheets
(In US dollars)
As of the date of
December 31, 2005 September 30, 2005
(unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents $585,796,887 $576,766,591
Short term investments 13,795,859 5,581,511
Accounts receivable, net of
allowances of $1,091,340 and
$284,091 respectively 241,333,914 212,822,764
Inventories 191,237,636 182,850,604
Prepaid expense and other
current assets 15,300,591 12,583,729
Assets held for sale -- --
Total current assets 1,047,464,887 990,605,199
Land use rights, net 34,767,518 38,136,980
Plant and equipment, net 3,285,631,131 3,284,892,971
Aquired intangible assets, net 195,178,898 202,843,555
Long-term investment 17,820,890 18,340,174
Other Non-current assets 2,552,407 --
TOTAL ASSETS $4,583,415,731 $4,534,818,879
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $62,318,432 $259,796,976
Accrued expenses and other
current liabilities 92,916,030 93,576,700
Short-term borrowings 265,481,082 266,589,185
Current portion of promissory
note 29,242,001 19,577,936
Current portion of long-term
debt 246,080,580 246,080,580
Total current liabilities 896,038,125 885,621,377
Long-term liabilities:
Promissory note 103,254,436 116,748,925
Long-term debt 494,556,385 444,566,420
Other long-term payable 24,686,398 15,039,304
Total long-term liabilities 622,497,219 576,354,649
Total liabilities 1,518,535,344 1,461,976,026
Commitments
Minority interest 38,781,863 38,605,893
Stockholders' equity:
Ordinary shares.$0.0004 par
value, 50,000,000,000
shares authorized, shares
issued and outstanding
18,301,680,867 and
18,282,217,408, respectively 7,320,674 7,312,888
Warrants 32,387 32,387
Additional paid-in capital 3,291,407,447 3,290,310,978
Notes receivable from
stockholders -- (247,137)
Accumulated other
comprehensive income 138,978 794,214
Deferred stock compensation (24,881,919) (31,025,668)
Accumulated deficit (247,919,043) (232,940,702)
Total stockholders' equity 3,026,098,524 3,034,236,960
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,583,415,731 $4,534,818,879
Consolidated Statement of Operations
(In US dollars)
For the three months ended
December 31, 2005 September 30, 2005
(unaudited) (unaudited)
Sales $333,051,413 $309,959,083
Cost of sales 287,156,674 281,908,983
Cost of sales - Amortization of
deferred stock compensation 2,937,243 2,777,550
Gross profit 42,957,496 25,272,550
Operating expenses:
Research and development 23,746,620 19,229,715
General and administrative 8,121,786 9,121,980
Selling and marketing 5,699,526 4,071,957
Amortization of acquired
intangible assets 10,639,905 10,660,670
Amortization of deferred
stock compensation* 3,548,051 3,134,817
Total operating expenses 51,755,888 46,219,139
Loss from operations (8,798,392) (20,946,589)
Other income (expenses):
Interest income 4,119,974 3,277,964
Interest expense (11,791,740) (10,333,503)
Other.net 2,214,436 1,453,794
Total other income (expenses),
net (5,457,330) (5,601,745)
Share of loss of affiliate
company (395,013) --
Net loss before income taxes (14,650,735) (26,548,334)
Income tax 151,636 6,068
Minority interest (175,970) 438,934
Net loss (14,978,341) (26,115,468)
Deemed devidends on preference
shares -- --
Loss atrributable to holders of
ordinary shares $(14,978,341) $(26,115,468)
Loss per share, basic (0.0008) (0.0014)
Loss per ADS, basic (0.0410) (0.0718)
Loss per share, diluted (0.0008) (0.0014)
Loss per ADS, Diluted (0.0410) (0.0718)
Ordinary shares used in
calculating basic loss per
ordinary share (in millions) 18,251 18,180
Ordinary shares used in
calculating diluted loss per
ordinary share (in millions) 18,251 18,180
*Amortization of deferred stock
compensation related to:
Research and development 1,217,349 1,125,943
General and administrative 1,681,284 1,403,732
Selling and marketing 649,418 605,142
Total 3,548,051 3,134,817
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In US dollars)
For the three months ended
December 31, 2005 September 30, 2005
(Unaudited) (Unaudited)
Operating activities
Loss attributable to holders of
ordinary shares $(14,978,341) $(26,115,468)
Deemed dividends on preference
shares -- --
Net loss (14,978,341) (26,115,468)
Adjustments to reconcile net income
to net cash providedby (used in )
operating activities:
Minority interest 175,970 (438,934)
Gain on disposal of plant and
equipment (1,776,513) (1,245,543)
(Reversal of ) Bad debt expense 807,249 174,729
Depreciation and amortization 201,358,428 192,347,054
Amortization of acquired intangible
assets 10,639,905 10,660,671
Amortization of deferred stock
compensation 6,485,294 5,912,367
Non-cash interest expense on
promissory notes 2,037,607 1,033,022
Loss on long-term investment 519,284 784,556
Changes in operating assets and
liabilities:
Accounts receivable (29,318,399) (16,865,479)
Inventories (8,387,032) (6,348,289)
Prepaid expense and other current
assets (5,937,696) 2,864,683
Accounts payable (5,242,931) 24,244,703
Accrued expenses and other current
liabilities 17,817,242 12,330,949
Net cash provided by operating
activities 174,200,067 199,339,021
Investing activities:
Purchases of plant and equipment (208,688,953) (188,180,850)
Purchases of aquired intangible
assets (3,749,999) (2,663,628)
Purchase of short-term investments (12,183,063) (5,217,982)
Proceeds paid for long-term
investment -- (9,600,000)
Sale of short-term investments 3,983,468 2,412,898
Proceeds received from living
quarter sales 7,948,629 4,614,394
Proceeds from disposal of fixed
assets 2,630,000 --
Net cash used in investing
activities (210,059,918) (198,635,168)
Financing activities:
Proceeds from short-term borrowings 64,320,752 91,918,751
Proceeds from long-term debt 49,909,022 74,985,000
Repayment of promissory notes (5,000,000) --
Repayment of short-term borrowings (65,347,912) (49,330,000)
Repayment of long-term debt -- (124,769,718)
Proceeds from exercise of employee
stock options 762,710 561,806
Collection of notes receivables from
employees 247,137 40,492
Preceeds from government grant -- 6,456,486
Net cash provided by financing
activities 44,891,709 (137,183)
Effect of exchange rate changes (1,562) (92,258)
NET INCREASE (DECREASE) IN CASH AND
CASH
EQUIVALENTS 9,030,296 474,412
CASH AND CASH EQUIVALENTS, beginning
of period 576,766,591 576,292,179
CASH AND CASH EQUIVALENTS, end of
period $585,796,887 $576,766,591
