Amkor Technology Reports Financial Results for the Second Quarter 2013

In the press release above we provide adjusted gross margin, adjusted net income and adjusted earnings per diluted share for the second quarter 2012. We present these non-GAAP amounts to demonstrate the impact of the loss contingency we recognized related to our pending patent license arbitration. These measures have limitations, including that they exclude the charges for the arbitration panel award, which is an amount that the company may ultimately have to pay in cash. Furthermore, the factors affecting the calculation of the arbitration award are complex and subject to determination by the arbitration panel. Therefore, the final amount of the loss may be more than the amount we have recognized. Accordingly, these measures that exclude the loss contingency accrual should be considered in addition to, and not as a substitute for, or superior to, gross margin, net income and earnings per diluted share prepared in accordance with U.S. GAAP. Below is the reconciliation of adjusted gross margin, adjusted net income and adjusted earnings per diluted share to U.S. GAAP gross margin, net income and earnings per diluted share.

Non-GAAP Financial Measures Reconciliation:            
Q2 2012
Gross margin 13 %
Plus: Loss contingency divided by net sales 4   %
Adjusted gross margin 17   %
 
(In millions)
Net income $ 1
Plus: Loss contingency, net of tax 32  
Adjusted net income $ 33  
 
Earnings per diluted share $
Plus: Loss contingency per diluted share 0.13

Plus: Adjustment for dilutive effect of interest on 6.0% convertible notes due 2014, net of tax

0.02  
Adjusted earnings per diluted share $ 0.15  
 
 
           

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

For the Three Months Ended
June 30,

For the Six Months Ended
June 30,

2013     2012 2013     2012
(In thousands, except per share data)
Net sales $ 746,059 $ 686,527 $ 1,433,588 $ 1,341,537
Cost of sales 607,680   597,207   1,180,256   1,147,236  
Gross profit 138,379 89,320 253,332 194,301
Operating expenses:
Selling, general and administrative 65,618 53,489 125,177 110,744
Research and development 14,308   13,867   28,614   27,292  
Total operating expenses 79,926   67,356   153,791   138,036  
Operating income 58,453   21,964   99,541   56,265  
Other expense (income):
Interest expense 23,739 22,452 45,817 41,038
Interest expense, related party 3,192 3,492 6,684 6,984
Interest income (676 ) (828 ) (1,503 ) (1,717 )
Foreign currency loss, net 2,041 1,277 875 2,067

Loss on debt retirement, net

11,619 11,619
Equity in earnings of unconsolidated affiliate (1,445 ) (892 ) (1,500 ) (2,880 )
Other income, net (108 ) (518 ) (337 ) (1,152 )
Total other expense, net 38,362   24,983   61,655   44,340  

Income (loss) before income taxes

20,091 (3,019 ) 37,886 11,925
Income tax benefit (10,238 ) (3,891 ) (6,209 ) (529 )
Net income 30,329 872 44,095 12,454
Net income attributable to noncontrolling interests (602 ) (291 ) (986 ) (99 )
Net income attributable to Amkor $ 29,727   $ 581   $ 43,109   $ 12,355  
 
Net income attributable to Amkor per common share:
Basic $ 0.18   $   $ 0.27   $ 0.07  
Diluted $ 0.14   $   $ 0.21   $ 0.07  
 
Shares used in computing per common share amounts:
Basic 160,886 165,956 156,672 166,911
Diluted 235,111 166,009 235,099 167,012
 
 
           

AMKOR TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

June 30,
2013

December 31,
2012
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 636,007 $ 413,048
Restricted cash 2,681 2,680
Accounts receivable:
Trade, net of allowances 411,699 389,699
Other 4,463 13,098
Inventories 231,974 227,439
Other current assets 50,331   45,444  
Total current assets 1,337,155 1,091,408
Property, plant and equipment, net 1,885,203 1,819,969
Intangibles, net 5,009 4,766
Investments 103,308 38,690
Restricted cash 2,209 2,308
Other assets 83,449   68,074  
Total assets $ 3,416,333   $ 3,025,215  
 
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt $ 56,350 $
Trade accounts payable 499,508 439,663
Accrued expenses 217,845   212,964  
Total current liabilities 773,703 652,627
Long-term debt 1,519,661 1,320,000
Long-term debt, related party 75,000 225,000
Pension and severance obligations 137,115 139,379
Other non-current liabilities 10,855   21,415  
Total liabilities 2,516,334   2,358,421  
Equity:
Amkor stockholders' equity:
Preferred stock
Common stock 262 198
Additional paid-in capital 1,810,295 1,614,143
Accumulated deficit (713,535 ) (756,644 )
Accumulated other comprehensive income 4,307 11,241
Treasury stock (211,155 ) (210,983 )
Total Amkor stockholders' equity 890,174 657,955
Noncontrolling interests in subsidiaries 9,825   8,839  
Total equity 899,999   666,794  
Total liabilities and equity $ 3,416,333   $ 3,025,215  
 
 
     

AMKOR TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
For the Six Months Ended
June 30,
2013     2012
(In thousands)
Cash flows from operating activities:
Net income $ 44,095 $ 12,454
Depreciation and amortization 195,785 179,182

Loss on debt retirement, net

11,619
Other operating activities and non-cash items (13,947 ) (1,881 )
Changes in assets and liabilities (36,702 ) (47,292 )
Net cash provided by operating activities 200,850   142,463  
 
Cash flows from investing activities:
Purchases of property, plant and equipment (222,674 ) (232,682 )
Proceeds from the sale of property, plant and equipment 25,093 998
Payments from unconsolidated affiliate 8,843 9,688
Investment in unconsolidated affiliate (67,372 )
Other investing activities (2,032 ) 1,533  
Net cash used in investing activities (258,142 ) (220,463 )
 
Cash flows from financing activities:
Borrowings under revolving credit facilities 5,000
Payments under revolving credit facilities (5,000 )
Borrowings under short-term debt 30,000
Payments of short-term debt (20,000 )
Proceeds from issuance of long-term debt 293,000 187,528
Payments of long-term debt, net (165,165 )
Payments for debt issuance costs (3,357 ) (823 )

Payments for the retirement of debt

(11,619 )
Payments for repurchase of common stock (35,652 )
Proceeds from the issuance of stock through share-based compensation plans 162
Payments of tax withholding for restricted shares (172 ) (446 )

Net cash provided by (used in) financing activities

277,852   (4,396 )
 
Effect of exchange rate fluctuations on cash and cash equivalents 2,399 (1,052 )
 
Net increase (decrease) in cash and cash equivalents 222,959 (83,448 )
Cash and cash equivalents, beginning of period 413,048   434,631  
Cash and cash equivalents, end of period $ 636,007   $ 351,183  



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