Second quarter net sales of $507 million were up 30% sequentially from the first quarter of 2009 and down 27% from the second quarter of 2008. Second quarter net income was $9 million or $0.05 per diluted share, compared to a net loss of $22 million or $0.12 per share in the first quarter. Net income for the second quarter of 2008 was $65 million, or $0.33 per diluted share.
"I am pleased with our second quarter performance in a very difficult economic environment,” commented James Kim, Amkor’s chairman and chief executive officer. “Our strategy of managing and aligning costs with customer demand is working. We achieved gross margin of 20% for the quarter, up sequentially from 12% in the first quarter of 2009, despite a $7 million charge to exit our manufacturing operations in Singapore. At the same time, we continued our disciplined approach in making capital spending decisions, which allowed us to generate free cash flow and strengthen our cash position.”
“We are seeing improvement in customer demand for the second half of 2009. Based on current customer forecasts, we expect third quarter 2009 net sales to increase 17% to 21% from the second quarter of 2009, reflecting higher than typical seasonal growth, and gross margin of 23% to 25%,” added Kim.
“Overall unit shipments were up 43% sequentially with advanced laminate and flip chip packages up nearly 60%,” said Ken Joyce, Amkor’s president and chief operating officer. “Net sales grew 30% driven by inventory adjustments by customers from historically low levels in the first quarter, strength of 3D packaging principally in support of wireless applications and improved demand for our leadframe packages.”
“We generated $69 million in free cash flow in the second quarter and ended the quarter with a cash balance of $455 million and total debt of just under $1.6 billion,” said Joanne Solomon, Amkor’s chief financial officer. “We used $135 million of the proceeds from our recent $250 million convertible note offering to repurchase $144 million principal amount of debt due in 2011 and recorded a related $8 million net gain. We have an aggregate of $97 million of debt coming due through the end of 2010, and the remaining $144 million of 7.125% notes and 2.5% convertible notes mature in 2011.”
“Second quarter 2009 capital additions were $27 million. We expect capital additions for the third quarter to be approximately $70 million and we are increasing our estimated capital additions for the full year 2009 to approximately $150 million. Our planned capital additions are primarily related to expanding our wafer bumping capacity in support of advanced interconnect technologies in response to increased level of customer demand,” said Solomon.
Selected operating data for the second quarter of 2009 is included in a section before the financial tables.
Based upon the latest available information, we have the following expectations for the third quarter of 2009:
Conference Call Information
Amkor will conduct a conference call on July 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 877-941-9205. A replay of the call will be made available at Amkor’s web site or by dialing 800-406-7325 (access passcode # 4108562). 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).
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 and gross margin in the third quarter of 2009;
customer demand for the second half of 2009; plans to exit our
manufacturing operations in Singapore; the expected dollar amount of our
capital additions; and the statements made under Business Outlook
including those regarding net sales, gross margin and net income. 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; the effect of the
global economy 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.