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Amkor Reports Third Quarter 2008 Results

Amkor Technology, Inc. (NASDAQ: AMKR) today reported its financial results for the third quarter ended September 30, 2008.

Third quarter net sales of $720 million were up 4% sequentially from the second quarter of 2008 and up 4% from the third quarter of 2007. Third quarter net income was $34 million, down 48% from the second quarter of 2008 and down 44% from the third quarter of 2007. Third quarter earnings per diluted share was $0.18, a decrease of $0.15 or 45% compared to the second quarter of 2008 and a decrease of $0.12 or 40% compared to the third quarter of 2007. Third quarter results included a charge of $49 million ($48 million net of tax) or $0.22 per diluted share, relating to an interim order issued by the Arbitration Panel on October 27, 2008 relating to Amkor's license agreement with Tessera. Excluding the Tessera charge, our results for the third quarter were in line with or higher than previous guidance. The final award will be determined by the Panel following a recalculation of damages by the parties' respective experts. Accordingly, Amkor's estimate is subject to change and the amounts ultimately owed may differ from our estimate. The Panel also denied Tessera's request to terminate the license. Amkor remains a licensee under the agreement with the rights and benefits of a licensee along with ongoing obligations to pay royalties for covered products.

"Our business reflects the trends in the worldwide semiconductor industry generally and is affected particularly by levels of consumer spending," said James Kim, chairman and chief executive officer of Amkor. "Third quarter results reflect strong performance in a challenging economic environment. The 4% sequential growth in revenue was below historical seasonal levels, as customers managed their inventories in response to reduced consumer demand. The current uncertainties about global economic conditions make it very difficult for our customers and us to accurately forecast and plan future business activities. Based on current customer forecasts, we expect our fourth quarter revenues to decline 15% to 20% from the third quarter of 2008."

"We will remain focused on cash flow generation and are committed to our strategy, initiated late 2005, of reducing costs and controlling capital spending, prudent investment in technology in close collaboration with our customers, and a disciplined approach to pricing," said Kim. "We continue to focus on improving the efficiency of our factory operations and administrative functions. Through September 30, 2008 we have reduced our headcount by over 700 employees and expect to save $4 million a quarter prospectively."

"Unit shipments were up 18% sequentially to 2.5 billion packaged units while revenues grew by 4%," commented Ken Joyce, president and chief operating officer. "Our revenue growth continues to be driven by our advanced package technologies including 3-D and flip chip packages. Revenues for 3-D and flip chip packaging solutions grew 50% for the third quarter compared to a year ago. During the third quarter we also saw a recovery in our leadframe business, which had the highest level of unit growth among all our businesses. Due to their low material costs, leadframe packages sold at lower unit prices than other packages and, as a result, unit growth outpaced revenue growth during the quarter."

"Gross margin for the third quarter was 19%, down from 23% in the second quarter of 2008 and down from 25% in the third quarter of 2007," said Joanne Solomon, chief financial officer. "Included in our cost of sales for the quarter were $10 million in charges relating to previously announced reductions in workforce as well as an estimate of $45 million for accrued and unpaid royalties owed to Tessera. The $45 million charge for Tessera reduced our gross margin by 6 percentage points. The record volume of unit shipments through our factories and the resulting high capacity utilization rates contributed to our gross margin."

Selling, general and administrative expenses of $60.5 million for the third quarter were down from $67.4 million in the second quarter of 2008 and $64.1 million in the third quarter of 2007 primarily due to lower legal and travel costs during the period.

Third quarter net income included a foreign currency gain of $23 million, principally due to the depreciation of the Korean won and the resulting re-measurement of Amkor's Korean employee benefit plan liability. We also accrued approximately $4 million as an estimate of interest owed to Tessera for unpaid royalties.

"Amkor's effective income tax rate for the third quarter was 32%, which is substantially higher than typical as a result of the accrual for Tessera royalties having little tax benefit. The effective income tax rate also reflects the recording of a valuation allowance of approximately $8 million offsetting certain foreign deferred tax assets. We anticipate the effective tax rate for the full year 2008 will be approximately 13%," said Solomon.

"Capital additions totaled $92 million, which was less than anticipated for the third quarter. In response to current industry conditions and a weakening outlook for the fourth quarter and 2009, we have reduced the scope of certain capital projects," said Solomon. "While we continue to make capital investments in areas of strategic importance to our company, we constantly make spending adjustments in direct response to customer demand. We expect capital additions to be approximately $45 million in the fourth quarter of 2008, with capital intensity of approximately 13% for the full year 2008. We would expect to manage our business at lower levels of capital intensity during 2009, subject to market conditions and strategic opportunities."

"We generated $47 million of free cash flow in the third quarter," added Solomon. "Our cash balance increased to $444 million, while total debt decreased to just over $1.6 billion at quarter end. Since the beginning of 2006, we have generated over $700 million in free cash flow, reduced total debt by over $500 million, and reduced our debt net of cash by approximately $750 million. Other than an approximate $55 million annually of amortizing debt, we have no significant debt due until 2011. While the near-term outlook for the semiconductor industry has continued to weaken, our financial position and liquidity remain sound."

Selected operating data for the third quarter of 2008 is included in a section before the financial tables.

Business Outlook

On the basis of customers' forecasts, we have the following expectations for the fourth quarter of 2008:

-- Sales - Down 15% to 20% from the third quarter of 2008

-- Gross Margin - between 18% to 21%

-- Net income - in the range of $0.03 to $0.12 per diluted share

Amkor will conduct a conference call on October 29, 2008 at 5:00 p.m. eastern time. This call is being webcast by Thomson Financial and can be accessed at Amkor's web site at www.amkor.com. You may also access the call by dialing 303-205-0033. A replay of the call will be made available at Amkor's web site or by dialing 303-590-3000 (access passcode #11119823).

The webcast is also being distributed over Thomson Financial's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through Thomson Financial individual investor center at www.companyboardroom.com or by visiting any of the investor sites in Thomson Financial's Individual Investor Network. Institutional investors can access the call via Thomson Financial's password-protected event management site, StreetEvents (www.streetevents.com).

About Amkor

Amkor is a leading provider of semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronics design and manufacturing services. More information on Amkor is available from the company's SEC filings and on Amkor's website: www.amkor.com.

Forward Looking Statement Disclaimer

This press release contains forward-looking statements within the meaning of federal securities laws. All statements other than statements of historical fact are considered forward looking statements including, without limitation, statements regarding the following: our estimate of charges relating to the Tessera arbitration; expectations regarding further weakening in demand; our anticipated revenue growth; our anticipated level of debt repayment; our focus on cash flow generation and our strategy regarding reducing costs, controlling spending, prudent investment and pricing discipline; our expectations regarding capital intensity; the expected dollar amount of our capital additions and the focus of our capital spending; expectations regarding our effective tax rate for 2008; our statements regarding the near term outlook for the semiconductor industry and our financial position and liquidity; and the statements regarding sales, gross margin and net income per diluted share contained under Business Outlook. These forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could affect future results and cause actual results and events to differ materially from historical and expected results and those expressed or implied in the forward looking statements, including, but not limited to, the following: the highly unpredictable nature of the semiconductor industry; deteriorating market conditions; the effect of the financial crisis on credit markets, financial institutions, customers, suppliers and consumers; inability to achieve high capacity utilization rates; volatility of consumer demand for products incorporating our semiconductor packages; weakness in the forecasts of Amkor's customers; customer modification of and follow through with respect to forecasts provided to Amkor; curtailment of outsourcing by our customers; our substantial indebtedness and restrictive covenants; failure to realize sufficient cash flow to fund capital expenditures; the effects of a recession in the U.S. and other economies worldwide; the highly unpredictable nature and costs of litigation and other legal activities and the risk of adverse results of such matters, including the amount of the final award in our litigation with Tessera; the outcome of the pending SEC investigation; worldwide economic effects of terrorist attacks, natural disasters and military conflict; our ability to reduce costs, and control capital spending, make prudent investments in technology and maintain pricing discipline; competitive pricing and declines in average selling prices; timing and volume of orders relative to production capacity; fluctuations in manufacturing yields; competition; dependence on international operations and sales; dependence on raw material and equipment suppliers and changes in raw material costs; exchange rate fluctuations; dependence on key personnel; difficulties in managing growth; enforcement of intellectual property rights; environmental and other governmental regulations; and technological challenges.

Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect our operating results and financial condition are discussed in the company's Annual Report on Form 10-K for the year ended December 31, 2007 and in the company's subsequent filings with the Securities and Exchange Commission made prior to or after the date hereof. Amkor undertakes no obligation to review or update any forward looking statements to reflect events or circumstances occurring after the date of this press release.

                        AMKOR TECHNOLOGY, INC.
                       Selected Operating Data


Sales Data:                               Q3 2008    Q2 2008   Q3 2007

Packaging services:
  Wirebond - leadframe                          29%        28%     34%
  Wirebond - laminate                           40%        40%     52%
  Flip chip and wafer level processing          20%        20%      3%
                                         ---------- ---------- -------
Packaging services                              89%        88%     89%
Test services                                   11%        12%     11%
                                         ---------- ---------- -------
Total sales                                    100%       100%    100%
                                         ========== ========== =======

Packaged units (in millions):
  Wirebond - leadframe                       1,957      1,638   1,763
  Wirebond - laminate                          390        339     363
  Flip chip and wafer level processing         157        141     141
                                         ---------- ---------- -------
Total packaged units                         2,504      2,118   2,267
                                         ========== ========== =======

Net sales from top ten customers                49%        49%     48%
Capacity utilization                            86%        73%     83%

End Market Distribution Data (an approximation based on a sampling of
 our largest customers):
Communications                                  42%        42%     40%
Consumer                                        33%        32%     32%
Computing                                       15%        16%     19%
Other                                           10%        10%      9%
                                         ---------- ---------- -------
Total                                          100%       100%    100%
                                         ========== ========== =======


Earnings per Share Data:                  Q3 2008    Q2 2008   Q3 2007
                                           (in millions, except per
                                                  share data)

Net income - basic                          $   34     $   65  $   61
Adjustment for dilutive securities on net
 income:
  Interest on 2.5% convertible notes due
   2011, net of tax                              1          1       1
  Interest on 6.25% convertible notes due
   2013, net of tax                              2          2       2
                                         ---------- ---------- -------
    Net income - diluted                    $   37     $   68  $   64
                                         ========== ========== =======

Weighted average shares outstanding -
 basic                                         183        183     182
Effect of dilutive securities:
  Stock options                                  1          1       2
  2.5% convertible notes due 2011               13         13      13
  6.25% convertible notes due 2013              13         13      13
                                         ---------- ---------- -------
    Weighted average shares outstanding -
     diluted                                   210        210     210
                                         ========== ========== =======

Net income per common share:
  Basic                                     $ 0.19     $ 0.36  $ 0.33
                                         ========== ========== =======
  Diluted                                   $ 0.18     $ 0.33  $ 0.30
                                         ========== ========== =======


                                          Q3 2008    Q2 2008   Q3 2007
                                                 (in millions)
Capital Investment Data:
Property, plant and equipment additions     $   92     $  122  $   78
Net change in related accounts payable
 and deposits                                   34        (20)    (20)
                                         ---------- ---------- -------
Purchases of property, plant and
 equipment                                  $  126     $  102  $   58
                                         ========== ========== =======
Depreciation and amortization               $   79     $   77  $   74

Free Cash Flow Data:
Net cash provided by operating activities   $  173     $  103  $  160
Less purchases of property, plant and
 equipment                                    (126)      (102)    (58)
                                         ---------- ---------- -------
Free cash flow(*)                           $   47     $    1  $  102
                                         ========== ========== =======


* We define free cash flow as net cash provided by operating
 activities less purchases of property, plant and equipment. Free cash
 flow is not defined by generally accepted accounting principles.
 However, we believe free cash flow to be relevant and useful
 information to our investors because it provides them with additional
 information in assessing our liquidity, capital resources and
 financial operating results. Our management uses free cash flow in
 evaluating our liquidity, our ability to service debt and our ability
 to fund capital expenditures. However, this measure should be
 considered in addition to, and not as a substitute for, or superior
 to, cash flows or other measures of financial performance prepared in
 accordance with generally accepted accounting principles, and our
 definition of free cash flow may not be comparable to similarly
 titled measures reported by other companies.
                        AMKOR TECHNOLOGY, INC.
               CONDENSED CONSOLIDATED INCOME STATEMENTS
                             (Unaudited)


                  For the Three Months Ended For the Nine Months Ended
                           Sept 30,                  Sept 30,
                  -------------------------- -------------------------
                       2008         2007          2008        2007
                  ------------- ------------ ------------- -----------
                         (In thousands, except per share data)

Net sales            $719,731     $689,083     $2,109,890  $1,992,557
Cost of sales         585,700      519,152      1,640,776   1,513,596
                  ------------- ------------ ------------- -----------
Gross profit          134,031      169,931        469,114     478,961
                  ------------- ------------ ------------- -----------

Operating
 expenses:
  Selling,
   general and
   administrative      60,467       64,080        193,357     192,223
  Research and
   development         14,084       10,282         43,035      30,930
  Gain on sale of
   real estate
   and specialty
   test
   operations               -       (1,717)        (9,856)     (4,833)
                  ------------- ------------ ------------- -----------
    Total
     operating
     expenses          74,551       72,645        226,536     218,320
                  ------------- ------------ ------------- -----------
Operating income       59,480       97,286        242,578     260,641
                  ------------- ------------ ------------- -----------
Other (income)
 expense:
  Interest
   expense, net        30,119       29,336         83,866      95,610
  Interest
   expense,
   related party        1,562        1,563          4,687       4,688
  Foreign
   currency
   (gain) loss        (23,026)       3,399        (44,100)      7,946
  Debt retirement
   costs, net               -            -              -      15,875
  Other (income)
   expense, net          (256)         254           (955)       (964)
                  ------------- ------------ ------------- -----------
    Total other
     expense            8,399       34,552         43,498     123,155
                  ------------- ------------ ------------- -----------
Income before
 income taxes and
 minority
 interests             51,081       62,734        199,080     137,486
Income tax
 expense               16,465        1,194         26,703       9,573
                  ------------- ------------ ------------- -----------
Income before
 minority
 interests             34,616       61,540        172,377     127,913
Minority
 interests, net
 of tax                  (613)        (920)        (1,146)     (1,713)
                  ------------- ------------ ------------- -----------
Net income           $ 34,003     $ 60,620     $  171,231  $  126,200
                  ============= ============ ============= ===========

Net income per
 common share:
  Basic              $   0.19     $   0.33     $     0.94  $     0.70
                  ============= ============ ============= ===========
  Diluted            $   0.18     $   0.30     $     0.86  $     0.65
                  ============= ============ ============= ===========

Shares used in
 computing net
 income per
 common share:
  Basic               183,001      181,664        182,633     180,200
  Diluted             209,989      209,868        209,848     208,812

                        AMKOR TECHNOLOGY, INC.
                     CONSOLIDATED BALANCE SHEETS
                             (Unaudited)


                                            September 30, December 31,
                                                 2008         2007
                                            ------------- ------------
                                                  (In thousands)
                  ASSETS
Current assets:
  Cash and cash equivalents                   $  443,838   $  410,070
  Restricted cash                                  2,670        2,609
  Accounts receivable:
    Trade, net of allowances                     390,383      393,493
    Other                                          3,892        4,938
  Inventories                                    156,203      149,014
  Other current assets                            36,474       27,290
                                            ------------- ------------
      Total current assets                     1,033,460      987,414

  Property, plant and equipment, net           1,526,180    1,455,111
  Goodwill                                       674,312      673,385
  Intangibles, net                                13,636       20,321
  Restricted cash                                  1,745        1,725
  Other assets                                    41,539       54,650
                                            ------------- ------------
      Total assets                            $3,290,872   $3,192,606
                                            ============= ============

   LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short-term borrowings and current portion
   of long-term debt                          $   55,764   $  152,489
  Trade accounts payable                         364,269      359,313
  Accrued expenses                               228,550      165,271
                                            ------------- ------------
      Total current liabilities                  648,583      677,073

  Long-term debt                               1,473,774    1,511,570
  Long-term debt, related party                  100,000      100,000
  Pension and severance obligations              175,801      208,387
  Other non-current liabilities                   29,156       33,935
                                            ------------- ------------
      Total liabilities                        2,427,314    2,530,965
                                            ------------- ------------

Minority interests                                 8,265        7,022
                                            ------------- ------------

Stockholders' equity:
  Preferred stock                                      -            -
  Common stock, $0.001 par value, 500,000
   shares authorized, issued and
   outstanding of 183,035 in 2008 and
   181,799 in 2007                                   183          182
  Additional paid-in capital                   1,496,071    1,482,186
  Accumulated deficit                           (650,295)    (821,526)
  Accumulated other comprehensive income
   (loss)                                          9,334       (6,223)
                                            ------------- ------------
    Total stockholders' equity                   855,293      654,619
                                            ------------- ------------
    Total liabilities and stockholders'
     equity                                   $3,290,872   $3,192,606
                                            ============= ============

                        AMKOR TECHNOLOGY, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Unaudited)


                                             For the Nine Months Ended
                                                   September 30,
                                             -------------------------
                                                    2008       2007
                                             -------------- ----------
                                                  (In thousands)
Cash flows from operating activities:
  Net income                                     $ 171,231  $ 126,200
  Depreciation and amortization                    229,501    215,679
  Debt retirement costs                                  -      6,875
  Other operating activities and non-cash
   items                                            22,093     (1,081)
  Changes in assets and liabilities                 34,566     66,795
                                             -------------- ----------
    Net cash provided by operating
     activities                                    457,391    414,468
                                             -------------- ----------

Cash flows from investing activities:
  Payments for property, plant and equipment      (317,109)  (159,942)
  Proceeds from the sale of property, plant
   and equipment                                    15,257      5,130
  Proceeds from sale of investment                   2,460          -
  Other investing activities                          (702)    (1,778)
                                             -------------- ----------
    Net cash used in investing activities         (300,094)  (156,590)
                                             -------------- ----------

Cash flows from financing activities:
  Borrowings under revolving credit
   facilities                                          619     80,340
  Payments under revolving credit facilities          (633)   (95,398)
  Proceeds from issuance of long-term debt               -    300,000
  Payments for debt issuance costs                       -     (3,441)
  Payments of long-term debt, including
   redemption premium payment                     (135,913)  (486,888)
  Proceeds from issuance of stock through
   stock compensation plans                         10,201     36,380
                                             -------------- ----------
    Net cash used in financing activities         (125,726)  (169,007)
                                             -------------- ----------

Effect of exchange rate fluctuations on cash
 and cash equivalents                                2,197      1,390
                                             -------------- ----------

Net decrease in cash and cash equivalents           33,768     90,261
Cash and cash equivalents, beginning of
 period                                            410,070    244,694
                                             -------------- ----------
Cash and cash equivalents, end of period         $ 443,838  $ 334,955
                                             ============== ==========

Contacts:

Amkor Technology, Inc.
Company Contact:
Joanne Solomon
Corporate Vice President & CFO
480-821-5000 ext. 5416
jsolo@amkor.com

Investor Relations Contact:
Claire McAdams
Investor Relations
530-274-0551
cmcad@amkor.com

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