Amkor Technology Reports Financial Results for the Second Quarter 2015

*Second quarter 2015 results include a $9 million ($0.04 per diluted share) charge for the early extinguishment of debt related to the redemption of all $345 million aggregate principal amount of Amkor's outstanding 7.375% Senior Notes due 2018. Second quarter 2014 results include a net gain of $18 million ($0.08 per diluted share) related to the sale of Amkor's Japanese subsidiary to J-Devices, its joint venture in Japan.

During the second quarter we completed the redemption of our 7.375% Senior Notes due 2018 using cash on hand and borrowings under our credit facilities which bear interest at floating rates tied to LIBOR. Based on current interest rates, we expect to save approximately $17 million in annual interest expense from the redemption.

Cash and cash equivalents were $442 million, and total debt was $1.5 billion, at June 30, 2015.

Business Outlook

“We expect sluggish mobile device market conditions to persist through most of Q3, with revenues slightly down compared with Q2,” said Kelley. “We are cautiously optimistic that demand will strengthen in the fourth quarter with the anticipated launch of flagship mobile devices. Due to the changed demand outlook, we are reducing our estimate of full year 2015 capital expenditures to around $550 million, including around $150 million of spending for our new K5 facility."

Based upon currently available information, we have the following expectations for the third quarter 2015:

  • Net sales of $700 million to $750 million, down 5% to up 2% from the prior quarter
  • Gross margin of 13% to 16%
  • Net loss of $7 million to net income of $14 million, or ($0.03) to $0.06 per share

Conference Call Information

Amkor will conduct a conference call on Monday, July 27, 2015, at 5:00 p.m. Eastern Time. This call may include material information not included in this press release. This call is being webcast and can be accessed at Amkor's website: www.amkor.com. You may also access the call by dialing 1-877-645-6380 or 1-404-991-3911. A replay of the call will be made available at Amkor's website or by dialing 1-855-859-2056 or 1-404-537-3406 (conference ID 84109040). The webcast is also being distributed over NASDAQ OMX's investor distribution network to both institutional and individual investors. Institutional investors can access the call via NASDAQ OMX's password-protected event management site, Street Events ( www.streetevents.com).

About Amkor

Amkor is a leading provider of semiconductor packaging and test services to semiconductor companies and electronics OEMs. More information about Amkor is available from the company's filings with the Securities and Exchange Commission and at Amkor's website: www.amkor.com.

 

AMKOR TECHNOLOGY, INC.

Selected Operating Data

 
Q2 2015   Q1 2015   Q2 2014
Net Sales Data:
Net sales (in millions):
Advanced products* $ 362 $ 373 $ 364
Mainstream products** 375   370   403  
Total net sales $ 737   $ 743   $ 767  
 
Packaging services

85

% 85 % 86 %
Test services

15

% 15 % 14 %
 
Net sales from top ten customers 62 % 60 % 58 %
 
Packaged units (in millions):
Advanced products*

1,275

1,188 910
Mainstream products** 2,703   2,671   3,379  
Total packaged units

3,978

  3,859   4,289  
 
End Market Distribution Data (an approximation including representative devices and applications based on a sampling of our largest customers) :
Communications (smart phones, tablets, handheld devices, wireless LAN) 56 % 57 % 53 %
Consumer (television, set top boxes, gaming, portable media, digital cameras) 12 % 12 % 15 %
Automotive, industrial and other (infotainment, safety, performance, comfort) 12 % 11 % 12 %
Networking (servers, routers, switches) 11 % 11 % 11 %
Computing (PCs, hard disk drive, printers, peripherals, servers) 9   % 9   % 9   %
Total 100   % 100   % 100   %
 
Gross Margin Data:
Net sales 100.0 % 100.0 % 100.0 %
Cost of sales:
Materials 37.2 % 36.7 % 37.2 %
Labor 15.7 % 14.2 % 14.0 %
Other manufacturing 31.5   % 30.9   % 29.2   %
Gross margin 15.6   % 18.2   % 19.6   %
 
Earnings per Share Data:
 
Net income attributable to Amkor common stockholders - basic and diluted $ 10   $ 29   $ 50  
 
Weighted average shares outstanding - basic 237 237 233
Effect of dilutive securities:
Stock options 1
6.0% convertible notes due 2014     3  
Weighted average shares outstanding - diluted 237   237   237  
 
Net income attributable to Amkor per common share:
Basic $ 0.04   $ 0.12   $ 0.21  
Diluted $ 0.04   $ 0.12   $ 0.21  

 

 

*Advanced products include flip chip and wafer-level processing and related test services

**Mainstream products include wirebond packaging and related test services

 
 

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 
    For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
2015   2014 2015   2014
(In thousands, except per share data)
Net sales $ 736,722 $ 767,459 $ 1,479,597 $ 1,463,503
Cost of sales 621,624   616,745   1,229,552   1,183,969  
Gross profit 115,098   150,714   250,045   279,534  
Selling, general and administrative 56,435 67,674 119,377 130,098
Research and development 20,020   22,079   38,046   43,124  
Total operating expenses 76,455   89,753   157,423   173,222  
Operating income 38,643 60,961 92,622 106,312
Interest expense 22,845 22,537 46,622 46,259
Interest expense, related party 1,242 1,242 2,484 2,484
Other expense (income), net 7,290   (5,699 ) 6,792   (5,663 )
Total other expense, net 31,377   18,080   55,898   43,080  
Income before taxes and equity in earnings of unconsolidated affiliate 7,266 42,881 36,724 63,232
Income tax expense 4,631   12,511   10,630   17,440  
Income before equity in earnings of unconsolidated affiliate 2,635 30,370 26,094 45,792
Equity in earnings of J-Devices 7,566   20,036   13,804   25,797  
Net income 10,201 50,406 39,898 71,589
Net income attributable to noncontrolling interests (623 ) (885 ) (1,539 ) (1,435 )
Net income attributable to Amkor $ 9,578   $ 49,521   $ 38,359   $ 70,154  
 
Net income attributable to Amkor per common share:
Basic $ 0.04   $ 0.21   $ 0.16   $ 0.31  
Diluted $ 0.04   $ 0.21   $ 0.16   $ 0.30  
 
Shares used in computing per common share amounts:
Basic 236,840 232,891 236,774 224,868
Diluted 237,321 236,872 237,366 236,182
 
 

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