Amkor Technology Reports Financial Results for the Second Quarter 2013

Second Quarter 2013

  • Net sales $746 million
  • Gross margin 18.5%
  • Net income $30 million
  • Earnings per diluted share $0.14

CHANDLER, Ariz. — (BUSINESS WIRE) — July 29, 2013 — Amkor Technology, Inc. (NASDAQ: AMKR), a leading provider of semiconductor packaging and test services, today announced financial results for the second quarter ended June 30, 2013, with net sales of $746 million, net income of $30 million, and earnings per diluted share of $0.14.

“Driven by strong results in mobile communications, sales for the quarter increased more than 8% sequentially and year over year with a corresponding improvement in our gross margin,” said Steve Kelley, Amkor's president and chief executive officer. “Since joining Amkor in May, I have been working closely with customers and management to assess our business and operations. We are well positioned with solid investments in the right technologies, customers, and end markets, and I am optimistic about our long-term prospects for sales growth and improved profitability.”

Selected financial information for the second quarter 2013 is as follows:

  • Net Sales: $746 million, up 8.5% from $688 million in the prior quarter, and up 8.7% from $687 million in the second quarter of 2012
  • Gross Margin: 18.5%, compared to 16.7% in the prior quarter, and adjusted gross margin of 17.4% in the second quarter of 2012
  • Net Income: $30 million, up from $13 million in the prior quarter, and down from adjusted net income of $33 million in the second quarter of 2012
  • Earnings Per Diluted Share: $0.14, up from $0.07 in the prior quarter, and down from adjusted earnings per diluted share of $0.15 in the second quarter of 2012

Second quarter 2013 results include a $12 million ($0.05 per diluted share) charge on the exchange of $194 million principal amount of our Convertible Senior Subordinated Notes due 2014 for cash and common stock, and a $15 million ($0.06 per diluted share) benefit from two discrete tax items relating to foreign operations.

The adjusted gross margin, adjusted net income, and adjusted earnings per diluted share presented above for the second quarter 2012 exclude a loss contingency of $34 million ($32 million, net of tax) relating to our pending patent license arbitration, and are non-GAAP measures. Selected operating data for the second quarter 2013, and a reconciliation of the second quarter 2012 non-GAAP measures presented above to the comparable GAAP measures, are included in a section below before the financial statements.

“Capital additions were $159 million during the second quarter, primarily in support of customers in mobile communications,” said Joanne Solomon, Amkor's executive vice president and chief financial officer.

“We took advantage of favorable conditions in the capital markets to raise additional funding,” continued Solomon. “The $225 million addition to our Senior Notes due 2022 provides resources for our investment initiatives. We also completed a tender offer for our Convertible Senior Subordinated Notes due 2014 and exchanged approximately $194 million of these Notes for approximately 64 million shares of our common stock and approximately $12 million of cash.”

Cash and cash equivalents were $636 million, and total debt was $1.7 billion, at June 30, 2013.

Business Outlook

“Looking ahead to the third quarter, our sales are expected to be flat as some customers are adjusting their inventory levels in response to the recent slowdown in demand for smartphones,” noted Kelley. “In light of these developments, we are lowering our estimate of 2013 capital additions from around $525 million to around $450 million. Although this slowdown in the smartphone market has reduced our expectations for the third quarter, we remain confident in the strong growth prospects for mobile communications.”

Based upon currently available information, we have the following expectations for the third quarter 2013:

  • Net sales of $715 million to $765 million, down 4% to up 3% from the prior quarter
  • Gross margin of 16% to 19%
  • Net income of $8 million to $30 million, or $0.04 to $0.13 per diluted share
  • Capital additions of around $100 million for the third quarter, and around $450 million for the full year 2013. This excludes spending for the acquisition of land and construction relating to our previously announced new factory and R&D center in South Korea of $40 million in the third quarter and $140 million in the full year 2013.

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