Amkor Reports First Quarter 2009 Results

Conference Call Information

Amkor will conduct a conference call on April 29, 2009 at 5:00 p.m. eastern time. This call is being webcast and can be accessed at Amkor’s web site at www.amkor.com. You may also access the call by dialing 303-262-2175. A replay of the call will be made available at Amkor’s web site or by dialing 303-590-3000 (access passcode # 11128705). 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: expectations regarding net sales, gross margin and free cash flow in the second quarter of 2009; expected gains associated with debt repurchases; our anticipated level of debt repayment; the expected dollar amount of our capital additions; and the statements made under Business Outlook including those regarding sales, gross margin and per share data. 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 additions; 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; the outcome of the pending SEC investigation; worldwide economic effects of terrorist attacks, natural disasters and military conflict; our ability to reduce costs; 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, 2008 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: Q1 2009 Q4 2008 Q1 2008
 
Packaging services:
Wirebond - leadframe 27 % 27 % 29 %
Wirebond - laminate 39 % 41 % 40 %
Flip chip and wafer level processing   21 %   20 %   19 %
Packaging services 87 % 88 % 88 %
Test services   13 %   12 %   12 %
Total sales   100 %   100 %   100 %
 
Packaged units (in millions):
Wirebond - leadframe 887 1,308 1,689
Wirebond - laminate 208 310 336
Flip chip and wafer level processing   85     131     168  
Total packaged units   1,180     1,749     2,193  
 
Net sales from top ten customers 51 % 52 % 50 %
Capacity utilization 45 % 61 % 80 %
 
End Market Distribution Data (an approximation based on a sampling of our largest customers):
Communications 46 % 43 % 41 %
Consumer 29 % 33 % 32 %
Computing 16 % 16 % 17 %
Other   9 %   8 %   10 %
Total   100 %   100 %   100 %
 
 
Earnings per Share Data: Q1 2009 Q4 2008 Q1 2008
(in millions, except per share data)
 
Net (loss) income attributable to Amkor - basic $ (22 ) $ (623 ) $ 72
Adjustment for dilutive securities on net income:
Interest on 2.5% convertible notes due 2011, net of tax - - 1
Interest on 6.25% convertible notes due 2013, net of tax   -     -     2  
Net (loss) income attributable to Amkor - diluted $ (22 ) $ (623 ) $ 75  
 
Weighted average shares outstanding - basic 183 183 182
Effect of dilutive securities:
Stock options - - 1
2.5% convertible notes due 2011 - - 13
6.25% convertible notes due 2013   -     -     13  
Weighted average shares outstanding - diluted   183     183     209  
 
Net (loss) income attributable to Amkor per common share:
Basic $ (0.12 )   $ (3.40 )   $ 0.40  
Diluted $ (0.12 ) $ (3.40 ) $ 0.36  
 
 
Q1 2009 Q4 2008 Q1 2008
(in millions)
 
Capital Investment Data:
Property, plant and equipment additions $ 24 $ 32 $ 95
Net change in related accounts payable and deposits   19     37     (6 )
Purchases of property, plant and equipment $ 43   $ 69   $ 89  
Depreciation and amortization $ 80 $ 80 $ 74
 
Free Cash Flow Data:
Net cash (used in) provided by operating activities $ (63 ) $ 149 $ 181
Less purchases of property, plant and equipment   (43 )   (69 )   (89 )
Free cash flow* $ (106 ) $ 80   $ 92  
 

*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 additions. 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.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
   
For the Three Months

Ended March 31,

2009

2008

(In thousands, except per share data)
 
Net sales $ 388,776 $ 699,483
Cost of sales

 

340,737

 

 

523,331  
Gross profit   48,039     176,152  
 
Operating expenses:
Selling, general and administrative 50,068 65,449
Research and development   10,147     13,856  
Total operating expenses   60,215     79,305  
Operating (loss) income   (12,176 )   96,847  
Other (income) expense:
Interest expense, net 26,145 27,433
Interest expense, related party 1,562 1,563
Foreign currency gain (12,068 ) (9,477 )
Gain on debt retirement, net (8,996 ) -
Other expense (income), net   59     (806 )
Total other expense, net   6,702     18,713  
(Loss) income before income taxes (18,878 ) 78,134
Income tax expense   3,081     5,940  
Net (loss) income (21,959 ) 72,194
Net income attributable to noncontrolling interests   133     198  
Net (loss) income attributable to Amkor $ (22,092 ) $ 71,996  
 
Net (loss) income attributable to Amkor per common share:
Basic $ (0.12 ) $ 0.40  
Diluted $ (0.12 ) $ 0.36  
 
Shares used in computing per common share amounts:
Basic 183,035 182,134
Diluted 183,035 209,396
AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
   

March 31,

December 31,
2009 2008

(In thousands)

ASSETS
Current assets:
Cash and cash equivalents $ 291,479 $ 424,316
Restricted cash 2,677 4,880
Accounts receivable:
Trade, net of allowances 214,475 259,630
Other 17,755 14,183
Inventories 110,377 134,045
Other current assets   30,463     23,862  
Total current assets 667,226 860,916
 
Property, plant and equipment, net 1,415,144 1,473,763
Intangibles, net 14,433 11,546
Restricted cash 1,657 1,696
Other assets   37,593     36,072  
Total assets $ 2,136,053   $ 2,383,993  
 
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt $ 69,364 $ 54,609
Trade accounts payable 176,939 241,684
Accrued expenses   138,790     258,449  
Total current liabilities 385,093 554,742
 
Long-term debt 1,294,656 1,338,751
Long-term debt, related party 100,000 100,000
Pension and severance obligations 116,903 116,789
Other non-current liabilities   29,283     30,548  
Total liabilities   1,925,935     2,140,830  
 
Equity:
Amkor stockholders' equity:
Preferred stock - -

Common stock, $0.001 par value, 500,000 shares authorized, issued

and outstanding of 183,035 in 2009 and 2008

183 183
Additional paid-in capital 1,497,755 1,496,976
Accumulated deficit (1,300,313 ) (1,278,221 )
Accumulated other comprehensive income   6,518     18,201  
Total Amkor stockholders’ equity 204,143 237,139
Noncontrolling interests in subsidiaries   5,975     6,024  
Total equity   210,118     243,163  
Total liabilities and equity $ 2,136,053   $ 2,383,993  
AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
For the Three Months Ended
March 31,
2009 2008
(In thousands)
Cash flows from operating activities:
Net (loss) income $ (21,959 ) $ 72,194
Depreciation and amortization 79,949 73,517
Gain on debt retirement, net (8,996 ) -
Other operating activities and non-cash items 2,943 3,600
Changes in assets and liabilities   (115,131 )   31,905  
Net cash (used in) provided by operating activities   (63,194 )   181,216  
 
Cash flows from investing activities:
Purchases of property, plant and equipment (42,821 ) (88,839 )
Proceeds from the sale of property, plant and equipment 144 339
Other investing activities   (3,635 )   (277 )
Net cash used in investing activities   (46,312 )   (88,777 )
 
Cash flows from financing activities:
Borrowings under revolving credit facilities - 619
Proceeds from issuance of short-term debt 15,000 -
Payments for debt issuance costs (2,572 ) -
Payments of long-term debt, net of discount (34,725 ) (101,086 )
Proceeds from issuance of stock through stock compensation plans   -     6,088  
Net cash used in financing activities   (22,297 )   (94,379 )
 
Effect of exchange rate fluctuations on cash and cash equivalents   (1,034 )   3,583  
 
Net (decrease) increase in cash and cash equivalents (132,837 ) 1,643
Cash and cash equivalents, beginning of period   424,316     410,070  
Cash and cash equivalents, end of period $ 291,479   $ 411,713  




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