DELAWARE | 000-29472 | 23-1722724 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
99.1 | Text of Press Release dated July 27, 2011, which is furnished (not filed) herewith. |
AMKOR TECHNOLOGY, INC. |
||||
By: | /s/ Joanne Solomon | |||
Joanne Solomon | ||||
Executive Vice President and Chief Financial Officer | ||||
Exhibit | Description | |||
99.1 | Text of Press Release dated July 27, 2011 |
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News Release |
| Net sales $688 million | ||
| Gross margin 19% | ||
| Net income $14 million (includes charges of $16 million related to debt refinancings) | ||
| Earnings per diluted share $0.07 (include charges of $0.05 related to debt refinancings) |
| Net Sales: $688 million, up 3% from $665 million in the prior quarter, and down 8% from $749 million in the second quarter 2010 | ||
| Gross Margin: 19%, compared to 19% in the prior quarter and 24% in the second quarter 2010 | ||
| Net Income: $14 million, down from $25 million in the prior quarter, and down from $59 million in the second quarter 2010. Second quarter 2011 net income includes charges of $16 million related to debt refinancings | ||
| Earnings Per Diluted Share: $0.07, down from $0.10 in the prior quarter, and down from $0.23 in the second quarter 2010. Second quarter 2011 earnings per diluted share include charges of $0.05 related to debt refinancings |
| Net sales of $720 million to $770 million, up 5% to up 12% from the prior quarter | ||
| Gross margin between 17% and 20% | ||
| Net income of $27 million to $52 million, or $0.11 to $0.20 per diluted share | ||
| Capital additions of around $125 million for the third quarter, and capital additions of around $425 million for the full year |
| Uncertainties in demand, disruptions in production and the electronic industry supply chain and potential increased costs arising out of the Japan earthquake and tsunami; | ||
| the highly unpredictable nature of the semiconductor industry; | ||
| the effect of the global economy on credit markets, financial institutions, customers, suppliers and consumers; | ||
| timing and volume of orders relative to production capacity and inability to achieve high capacity utilization rates; |
| volatility of consumer demand and weakness in forecasts from our customers for products incorporating our semiconductor packages; | ||
| dependence on key customers; | ||
| customer modification of and follow through with respect to forecasts provided to us; | ||
| changes in tax rates and taxes as a result of changes in tax law, the jurisdictions in which our income is determined to be earned and taxed, the outcome of tax audits and tax ruling requests, our ability to realize deferred tax assets and the expiration of tax holidays; | ||
| 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 or other downturn in the U.S. and other economies worldwide; | ||
| disruptions or deficiencies in our controls resulting from the implementation of our new enterprise resource planning system; | ||
| the highly unpredictable nature and costs of litigation and other legal activities and the risk of adverse results of such matters; | ||
| worldwide economic effects of terrorist attacks, natural disasters and military conflict; | ||
| our ability to control costs; | ||
| competition, competitive pricing and declines in average selling prices; | ||
| fluctuations in manufacturing yields; | ||
| dependence on international operations and sales; | ||
| dependence on raw material and equipment suppliers and changes in raw material and precious metal 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. |
Q2 2011 | Q1 2011 | Q2 2010 | ||||||||||
Sales Data: |
||||||||||||
Packaging services (in millions): |
||||||||||||
Chip scale package |
$ | 211 | $ | 231 | $ | 234 | ||||||
Leadframe |
188 | 170 | 202 | |||||||||
Ball grid array |
167 | 148 | 194 | |||||||||
Other packaging |
46 | 49 | 48 | |||||||||
Packaging services |
612 | 598 | 678 | |||||||||
Test services |
76 | 67 | 71 | |||||||||
Total sales |
$ | 688 | $ | 665 | $ | 749 | ||||||
Packaging services: |
||||||||||||
Chip scale package |
31 | % | 35 | % | 31 | % | ||||||
Leadframe |
27 | % | 26 | % | 27 | % | ||||||
Ball grid array |
24 | % | 22 | % | 26 | % | ||||||
Other packaging |
7 | % | 7 | % | 6 | % | ||||||
Packaging services |
89 | % | 90 | % | 90 | % | ||||||
Test services |
11 | % | 10 | % | 10 | % | ||||||
Total sales |
100 | % | 100 | % | 100 | % | ||||||
Packaged units (in millions): |
||||||||||||
Chip scale package |
440 | 475 | 580 | |||||||||
Leadframe |
1,671 | 1,573 | 2,093 | |||||||||
Ball grid array |
72 | 62 | 61 | |||||||||
Other packaging |
3 | 3 | 7 | |||||||||
Total packaged units |
2,186 | 2,113 | 2,741 | |||||||||
Net sales from top ten customers |
60 | % | 57 | % | 55 | % | ||||||
Capacity Utilization (Packaging and test utilization separately
presented beginning in Q4 2010. Prior periods were recalculated
based on current methodology for comparability): |
||||||||||||
Packaging |
76 | % | 71 | % | 84 | % | ||||||
Test |
78 | % | 71 | % | 83 | % | ||||||
End Market Distribution Data (An approximation including
representative devices and applications based on a sampling of
our largest customers. Prior periods were revised for an expanded sampling
methodology and refinement of our classifications): |
||||||||||||
Communications (cell phones, Ethernet, WiMAX, wireless LAN,
Bluetooth) |
38 | % | 43 | % | 34 | % | ||||||
Consumer (gaming, set top boxes, TV, portable media) |
26 | % | 23 | % | 30 | % | ||||||
Computing (PCs, tablets, servers, displays, hard disk drive, printers) |
12 | % | 12 | % | 14 | % | ||||||
Networking (infrastructure, routers, network servers) |
13 | % | 12 | % | 13 | % | ||||||
Other (auto, industrial) |
11 | % | 10 | % | 9 | % | ||||||
Total |
100 | % | 100 | % | 100 | % | ||||||
Gross Margin Data: |
||||||||||||
Net sales |
100 | % | 100 | % | 100 | % | ||||||
Cost of sales: |
||||||||||||
Materials |
43 | % | 43 | % | 42 | % | ||||||
Labor |
15 | % | 14 | % | 13 | % | ||||||
Other manufacturing |
23 | % | 24 | % | 21 | % | ||||||
Gross margin |
19 | % | 19 | % | 24 | % | ||||||
Q2 2011 | Q1 2011 | Q2 2010 | ||||||||||
(In millions, except per share data) | ||||||||||||
Capital Investment Data: |
||||||||||||
Property, plant and equipment additions |
$ | 97 | $ | 105 | $ | 158 | ||||||
Net change in related accounts payable and deposits |
14 | 9 | (82 | ) | ||||||||
Purchases of property, plant and equipment |
$ | 111 | $ | 114 | $ | 76 | ||||||
Depreciation and amortization |
$ | 83 | $ | 83 | $ | 78 | ||||||
Free Cash Flow Data: |
||||||||||||
Net cash provided by operating activities |
$ | 114 | $ | 120 | $ | 87 | ||||||
Less purchases of property, plant and equipment |
(111 | ) | (114 | ) | (76 | ) | ||||||
Free cash flow* |
$ | 3 | $ | 6 | $ | 11 | ||||||
Earnings per Share Data: |
||||||||||||
Net income attributable to Amkor basic |
$ | 14 | $ | 25 | $ | 59 | ||||||
Adjustment for dilutive securities on net income: |
||||||||||||
Interest on 2.5% convertible notes due 2011, net
of tax |
| | | |||||||||
Interest on 6.25% convertible notes due 2013,
net of tax |
| | 2 | |||||||||
Interest on 6.0% convertible notes due 2014, net
of tax |
5 | 4 | 4 | |||||||||
Net income attributable to Amkor diluted |
$ | 19 | $ | 29 | $ | 65 | ||||||
Weighted average shares outstanding basic |
197 | 194 | 183 | |||||||||
Effect of dilutive securities: |
||||||||||||
Stock options and unvested restricted shares |
| 1 | 1 | |||||||||
2.5% convertible notes due 2011 |
| | 3 | |||||||||
6.25% convertible notes due 2013 |
| | 13 | |||||||||
6.0% convertible notes due 2014 |
83 | 83 | 83 | |||||||||
Weighted average shares outstanding diluted |
280 | 278 | 283 | |||||||||
Net income attributable to Amkor per common share: |
||||||||||||
Basic |
$ | 0.07 | $ | 0.13 | $ | 0.32 | ||||||
Diluted |
$ | 0.07 | $ | 0.10 | $ | 0.23 | ||||||
* | 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 GAAP. 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. |
For the Three Months | For the Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Net sales |
$ | 687,633 | $ | 749,165 | $ | 1,352,583 | $ | 1,394,903 | ||||||||
Cost of sales |
557,816 | 569,966 | 1,096,080 | 1,078,748 | ||||||||||||
Gross profit |
129,817 | 179,199 | 256,503 | 316,155 | ||||||||||||
Operating expenses: |
||||||||||||||||
Selling, general and administrative |
61,284 | 66,356 | 125,842 | 122,652 | ||||||||||||
Research and development |
12,559 | 12,095 | 24,688 | 23,768 | ||||||||||||
Total operating expenses |
73,843 | 78,451 | 150,530 | 146,420 | ||||||||||||
Operating income |
55,974 | 100,748 | 105,973 | 169,735 | ||||||||||||
Other (income) expense |
||||||||||||||||
Interest expense |
19,609 | 24,410 | 38,398 | 46,779 | ||||||||||||
Interest expense, related party |
2,830 | 3,813 | 5,410 | 7,625 | ||||||||||||
Interest income |
(553 | ) | (847 | ) | (1,140 | ) | (1,580 | ) | ||||||||
Foreign currency loss (gain) |
2,932 | (421 | ) | 4,663 | 554 | |||||||||||
Loss on debt retirement, net |
15,531 | 17,807 | 15,531 | 17,807 | ||||||||||||
Equity in earnings of unconsolidated affiliate |
(2,089 | ) | (1,608 | ) | (3,607 | ) | (2,709 | ) | ||||||||
Other income, net |
(325 | ) | (149 | ) | (469 | ) | (390 | ) | ||||||||
Total other expense, net |
37,935 | 43,005 | 58,786 | 68,086 | ||||||||||||
Income before income taxes |
18,039 | 57,743 | 47,187 | 101,649 | ||||||||||||
Income tax expense (benefit) |
3,594 | (1,200 | ) | 6,976 | (1,367 | ) | ||||||||||
Net income |
14,445 | 58,943 | 40,211 | 103,016 | ||||||||||||
Net loss (income) attributable to noncontrolling interests |
43 | 107 | (620 | ) | 331 | |||||||||||
Net income attributable to Amkor |
$ | 14,488 | $ | 59,050 | $ | 39,591 | $ | 103,347 | ||||||||
Net income attributable to Amkor per common share: |
||||||||||||||||
Basic |
$ | 0.07 | $ | 0.32 | $ | 0.20 | $ | 0.56 | ||||||||
Diluted |
$ | 0.07 | $ | 0.23 | $ | 0.17 | $ | 0.41 | ||||||||
Shares used in computing per common share amounts: |
||||||||||||||||
Basic |
197,084 | 183,274 | 195,584 | 183,250 | ||||||||||||
Diluted |
280,009 | 282,644 | 278,810 | 282,551 |
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(In thousands, except per share data) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 475,471 | $ | 404,998 | ||||
Restricted cash |
19,715 | 17,782 | ||||||
Accounts receivable: |
||||||||
Trade, net of allowances |
348,127 | 392,327 | ||||||
Other |
16,950 | 17,970 | ||||||
Inventories |
217,735 | 191,072 | ||||||
Other current assets |
32,917 | 37,918 | ||||||
Total current assets |
1,110,915 | 1,062,067 | ||||||
Property, plant and equipment, net |
1,573,478 | 1,537,226 | ||||||
Intangibles, net |
10,957 | 13,524 | ||||||
Investments |
32,027 | 28,215 | ||||||
Restricted cash |
1,976 | 1,945 | ||||||
Other assets |
88,342 | 93,845 | ||||||
Total assets |
$ | 2,817,695 | $ | 2,736,822 | ||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Short-term borrowings and current portion of long-term debt |
$ | 99,275 | $ | 150,081 | ||||
Trade accounts payable |
420,361 | 443,333 | ||||||
Accrued expenses |
160,662 | 178,794 | ||||||
Total current liabilities |
680,298 | 772,208 | ||||||
Long-term debt |
999,078 | 964,219 | ||||||
Long-term debt, related party |
225,000 | 250,000 | ||||||
Pension and severance obligations |
118,927 | 103,543 | ||||||
Other non-current liabilities |
13,008 | 10,171 | ||||||
Total liabilities |
2,036,311 | 2,100,141 | ||||||
Equity: |
||||||||
Amkor stockholders equity: |
||||||||
Preferred stock |
| | ||||||
Common stock |
197 | 183 | ||||||
Additional paid-in capital |
1,609,219 | 1,504,927 | ||||||
Accumulated deficit |
(850,679 | ) | (890,270 | ) | ||||
Accumulated other comprehensive income |
16,269 | 15,457 | ||||||
Treasury stock |
(910 | ) | (284 | ) | ||||
Total Amkor stockholders equity |
774,096 | 630,013 | ||||||
Noncontrolling interests in subsidiaries |
7,288 | 6,668 | ||||||
Total equity |
781,384 | 636,681 | ||||||
Total liabilities and equity |
$ | 2,817,695 | $ | 2,736,822 | ||||
For the Six Months Ended | ||||||||
June 30, | ||||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 40,211 | $ | 103,016 | ||||
Depreciation and amortization |
166,468 | 154,406 | ||||||
Loss on debt retirement, net |
10,557 | 10,562 | ||||||
Other operating activities and non-cash items |
3,648 | (4,697 | ) | |||||
Changes in assets and liabilities |
13,013 | (72,779 | ) | |||||
Net cash provided by operating activities |
233,897 | 190,508 | ||||||
Cash flows from investing activities: |
||||||||
Purchases of property, plant and equipment |
(224,629 | ) | (142,928 | ) | ||||
Proceeds from the sale of property, plant and equipment |
14,643 | 1,062 | ||||||
Financing lease payment from unconsolidated affiliate |
5,991 | 7,767 | ||||||
Other investing activities |
(4,014 | ) | (9,782 | ) | ||||
Net cash used in investing activities |
(208,009 | ) | (143,881 | ) | ||||
Cash flows from financing activities: |
||||||||
Borrowings under revolving credit facilities |
| 3,261 | ||||||
Payments under revolving credit facilities |
| (34,253 | ) | |||||
Proceeds from issuance of short-term working capital facility |
20,000 | 15,000 | ||||||
Payments of short-term working capital facility |
(15,000 | ) | (15,000 | ) | ||||
Proceeds from issuance of long-term debt |
325,000 | 611,007 | ||||||
Proceeds from issuance of long-term debt, related party |
75,000 | | ||||||
Payments of long-term debt, net of redemption premiums and discounts |
(354,693 | ) | (577,259 | ) | ||||
Payments for debt issuance costs |
(5,875 | ) | (7,579 | ) | ||||
Proceeds from the issuance of stock through share-based compensation plans |
907 | 587 | ||||||
Payments of tax withholding for restricted shares |
(744 | ) | | |||||
Net cash provided by (used in) financing activities |
44,595 | (4,236 | ) | |||||
Effect of exchange rate fluctuations on cash and cash equivalents |
(10 | ) | 6 | |||||
Net increase in cash and cash equivalents |
70,473 | 42,397 | ||||||
Cash and cash equivalents, beginning of period |
404,998 | 395,406 | ||||||
Cash and cash equivalents, end of period |
$ | 475,471 | $ | 437,803 | ||||
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