ChipMOS TECHNOLOGIES (Bermuda) LTD. ("ChipMOS" or the "Company") (Nasdaq: IMOS), an industry leading provider of outsourced semiconductor assembly and test services ("OSAT"), today reported unaudited consolidated financial results for the fourth quarter and full year ended December 31, 2013. All U.S. dollar figures in this release are based on the exchange rate of NT$29.83 against US$1.00 as of December 31, 2013.
Net revenue for the fourth quarter of 2013 was NT$4,890.1 million or US$163.9 million, a decrease of 4.3% from NT$5,111.9 million or US$171.4 million in the third quarter of 2013 and an increase of 0.5% from NT$4,867.4 million or US$163.2 million for the same period in 2012. Net revenue for the fourth quarter of 2013 came in at the high end of guidance, which called for revenue to be approximately 4% to 8% lower than the third quarter of 2013.
Net income for the fourth quarter of 2013 was NT$170.8 million or US$5.7 million, and NT$5.77 or US$0.19 per basic common share and NT$5.63 or US$0.19 per diluted common share, as compared to net income for the third quarter of 2013 of NT$442.5 million or US$14.8 million, and NT$14.97 or US$0.50 per basic common share and NT$14.60 or US$0.49 per diluted common share, and compared to net income in the fourth quarter of 2012 of NT$133.4 million or US$4.5 million, and NT$4.72 or US$0.16 per basic common share and NT$4.60 or US$0.15 per diluted common share. Net income for the fourth quarter of 2013 was negatively impacted by the Company's reduced ownership of ChipMOS Taiwan from 83.5% in early Q3 to 62.1% in Q4. The decrease in shareholding is part of the Company's efforts to enable ChipMOS TECHNOLOGIES INC. ("ChipMOS Taiwan") to meet the eligibility requirement for listing its shares on the Taiwan Stock Exchange ("TSE"). The decrease in net income in the fourth quarter of 2013 also reflects the negative impact of higher tax accruals for gains on the share sales by ThaiLin Semiconductor Corp. ("ThaiLin"). The Company estimates that the impact of the reduced ownership was about US$3.4 million or US$0.12 per basic share in the fourth quarter of 2013. The impact of the higher tax accruals is estimated to be approximately US$1.5 million or US$0.05 per basic share in 4Q13. In addition, net income for the fourth quarter of 2013 reflects the impact of a US$0.8 million increase in R&D, a US$1.6 million increase in general, administrative and other operating expenses and a US$7.2 million increase in income tax expense, as compared to the third quarter of 2013.
Net revenue for the fiscal year ended December 31, 2013 was NT$19,361.9 million or US$649.1 million, an increase of 0.7% from NT$19,220.5 million or US$644.3 million for the fiscal year ended December 31, 2012. Net income for the fiscal year ended December 31, 2013 was NT$1,335.3 million or US$44.8 million, and NT$45.55 or US$1.53 per basic and NT$44.27 or US$1.48 per diluted common share, compared to net income for the fiscal year ended December 31, 2012 was NT$629.8 million or US$21.1 million, and NT$22.92 or US$0.77 per basic and NT$22.25 or US$0.75 per diluted common share. Net income for the full year 2013 was negatively impacted by the above noted items that impacted net income for the fourth quarter of 2013.
The unaudited consolidated financial results of ChipMOS for the year ended December 31, 2013 included the financial results of ChipMOS Taiwan, ChipMOS U.S.A., Inc., ThaiLin and MODERN MIND TECHNOLOGY LIMITED and its wholly-owned subsidiary ChipMOS TECHNOLOGIES (Shanghai) LTD.
S.J. Cheng, Chairman and Chief Executive Officer of ChipMOS, said, "2013 was a year of impressive improvements in our revenue mix, gross margin and overall profitability. Our efforts have led to the strong free cash flow and balance sheet needed to support continued growth opportunities. We remain very positive on our higher margin LCD driver and assembly business, and have added confidence based on the stability in the other segments we serve. We are well positioned to take advantage of further growth and will support our customers through a conservative CapEx strategy, with the expected backdrop of stable pricing and higher utilization levels. We are also excited about some proprietary technology process improvements that should help reduce the cost of materials, while maintaining the high yield levels that ChipMOS is known for. From a structural standpoint, we achieved numerous key milestones, including the listing of our subsidiary, ChipMOS Taiwan, on the Taiwan Emerging Board on April 19, 2013. ChipMOS Taiwan subsequently submitted its listing application to the TSE in November, and in order for ChipMOS Taiwan to meet listing eligibility requirements, we eliminated the previous cross-holding structure by repurchasing shares of the Company held in ThaiLin. We are pleased with our continued progress and expect to build on our business momentum in 2014 to the benefit of the Company, and our shareholders as they benefit from our improved performance, streamlined organizational structure, expected TSE listing, our share repurchase program and dividends we have distributed."
S.K. Chen, Chief Financial Officer of ChipMOS, said, "The fourth quarter developed as expected, with revenue and our gross margin coming in at the high end of the guidance range. Net income for the fourth quarter was negatively impacted by higher income tax expenses and non-controlling interests compared to the prior quarter. The increase in consolidated income taxes is due to the higher amount paid by ThaiLin for the gain recognized on the share sales related to the Company's efforts in enabling ChipMOS Taiwan to meet the listing eligibility requirements for TSE. We expect the higher consolidated income taxes will continue for the gain of share sale in ThaiLin in the first quarter of 2014 and our consolidated income tax rate will revert to a normalized level in the second quarter of 2014. Our overall utilization level was 76% in the fourth quarter compared to 81% in the third quarter. This reflects the absorption of our increased CapEx in support of growth opportunities we previously outlined in our higher margin LCD driver business as we continue to support and mutually work to growth with leaders in the LCDD segment. Based on our current market view, we would expect our blended utilization level to be higher in the first quarter of 2014, even with seasonality, as we completed the planned pull-in of CapEx in the fourth quarter. We expect CapEx for the full year 2014 will be less than US$80 million compared to US$121.5 million for 2013. For the full year 2013, gross profit increased to US$115.3 million compared to US$82.2 million in 2012, resulting in an expansion of our 2013 earnings, on a diluted common share basis, to US$1.48 per share from US$0.75 per share in 2012. We ended 2013 with US$448.3 million in cash and cash equivalents, after generating US$208.6 million in cash from operations. As a result, we improved our net debt to equity ratio to -42.9% as of December 31, 2013 compared to 4.1% at the end of 2012, with a net cash balance of US$195.1 million on our balance sheet as of December 31, 2013."