CHANDLER, Ariz. — (BUSINESS WIRE) — February 10, 2010 — Amkor Technology, Inc. (NASDAQ: AMKR), a leading provider of semiconductor assembly and test services, today reported its financial results for the quarter and year ended December 31, 2009.
Fourth quarter net sales of $668 million were up 8% sequentially from the third quarter of 2009 and up 22% from the fourth quarter of 2008. Gross margin improved to 26% for the fourth quarter, compared to 25% for the third quarter of 2009 and 18% for the fourth quarter of 2008. Fourth quarter net income was $88 million or $0.33 per diluted share, compared to $81 million or $0.31 per diluted share in the third quarter of 2009 and a net loss of $623 million, or $3.40 loss per share, in the fourth quarter of 2008. Net income for the third quarter of 2009 included income tax benefits of $34 million or $0.12 per diluted share, primarily from the release of a tax valuation allowance at a subsidiary in Korea. The net loss for the fourth quarter of 2008 included a $671 million goodwill impairment charge, or $3.67 per share.
Full year 2009 net sales were $2.2 billion, down 18% from $2.7 billion for 2008. Gross margin was 22% for 2009, compared to 21% for 2008. Net income for the full year 2009 was $156 million or $0.67 per diluted share compared to a net loss of $457 million for 2008 or $2.50 loss per share, which included the goodwill impairment charge noted above.
“Customer demand remained strong in the fourth quarter as we delivered our best quarterly results in 2009. Our net sales of $668 million were better than expected, representing an 8% improvement from the third quarter,” said Ken Joyce, Amkor’s president and chief executive officer. “Our disciplined spending and cost control efforts, together with strong operating leverage in the second half of the year, have driven solid profitability and free cash flow generation during the worst industry downturn in many years,” added Joyce.
“We began the year with an unprecedented drop in sales as the electronics industry significantly cut inventories in response to the global recession. The markets have rebounded more quickly than most people anticipated at the start of the year, and the current outlook is positive as we enter 2010. Looking ahead to the first quarter of 2010, we expect net sales to be down between 2% and 6% from a strong fourth quarter of 2009, with gross margin of 22% to 24%,” said Joyce.
“We are currently operating at or near capacity in many of our product lines,” noted Joyce. “In order to support improved customer demand, we expect to invest at higher levels in 2010 compared with 2009, with spending weighted more towards the first half of the year. Our overall capital intensity is expected to be around 14%.”
“Unit shipments of 2.4 billion during the fourth quarter were up 4% from the third quarter, principally driven by the strength of leadframe wire bond packaging services,” said Joanne Solomon, Amkor’s chief financial officer. “Revenue growth of 8% was more than the unit growth of 4% reflecting strong demand for flip chip and wire bond chip scale and ball grid array packaging services with higher average sales prices. We saw broad demand across our product lines during the fourth quarter, including our services for the communications and consumer end markets, with notable sequential growth in networking.”
“We generated $88 million in free cash flow in the full year 2009, our fourth consecutive year of positive free cash flow, despite paying $148 million to reduce our Korean severance obligations and to resolve a patent license dispute,” noted Solomon. “During the fourth quarter, we repurchased $23 million of our 7.125% senior notes due 2011 and $15 million of our 7.75% senior notes due 2013 and we ended the quarter with a cash balance of $395 million and total debt of $1.4 billion.”
“Capital additions for the fourth quarter of 2009 were $69 million and $198 million for the full year 2009 with full year capital intensity of 9%. We expect capital additions for the first quarter of 2010 to be approximately $100 to $125 million. Our planned capital additions are focused on expanding capacity in support of customer demand for a number of advanced packaging and test areas, including flip chip and wire bond chip scale packaging and wafer bumping,” said Solomon.
Selected operating data for the fourth quarter and full year of 2009 is included in a section before the financial tables.
Based upon the latest available information, we have the following expectations for the first quarter of 2010:
Conference Call Information
Amkor will conduct a conference call on February 10, 2010 at 5:00 p.m.
eastern time. This call is being webcast and can be accessed at Amkor’s
web site at
You may also access the call by dialing 877-941-2332. A replay of the
call will be made available at Amkor’s web site or by dialing
800-406-7325 (access passcode # 4200074). 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
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,