Amkor Technology Reports Fourth Quarter Results; Business Is Robust; Outlook Remains Strong for 2000.Business Editors/Hi-Tech Writers WEST CHESTER West Chester, borough (1990 pop. 18,041), seat of Chester co., SE Pa., W of Philadelphia; inc. 1799. Primarily residential, West Chester was long the trade and processing center for an agricultural region that is now mainly suburbs. , Pa.--(BUSINESS WIRE)--Feb. 3, 2000 Amkor Technology Amkor Technology, Inc. (NASDAQ: AMKR) is a high-tech semiconductor product manufacturer that includes Intel and IBM among its primary customers. Previously headquartered in West Chester, Pennsylvania, United States, Amkor recently announced that it will move to Chandler, , Inc. (Nasdaq: AMKR AMKR Amkor Technology ), the world's largest provider of contract semiconductor packaging and test services, cited robust demand in reporting financial results for the fourth quarter ended December December: see month. 31, 1999. Total revenues were $538 million, up 27% from $425 million in the fourth quarter of 1998. Assembly &test revenues rose 29% to $457 million from $355 million in the fourth quarter of last year. Wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. fab revenues were $81 million compared with $69 million in the fourth quarter of 1998. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. rose sharply, to $62.8 million compared with $32.3 million in the fourth quarter of 1998. Fourth quarter 1999 net income before an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. , non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $13.9 million for the early conversion of convertible debt was $34.1 million, or $0.26 per share. Including this after-tax charge, fourth quarter 1999 net income was $20.2 million, or $0.16 per share. Net income for the fourth quarter of 1998 was $19.7 million, or $0.16 per share. As previously announced, during the fourth quarter, Amkor exchanged approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $154 million of its 5 3/4% Convertible Subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. Notes for 12.1 million shares of Amkor common stock, resulting in an after-tax, non-cash charge of $13.9 million, or $0.10 per share. For the full year of 1999, revenues rose 22% to $1.91 billion from $1.57 billion in all of 1998. Net income before the after-tax non-cash charge noted above of $13.9 million for the early conversion of convertible debt was $90.6 million, or $0.73 per share. Including this after-tax charge, net income for 1999 was $76.7 million, or $0.63 per share. For 1998, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income was $71.0 million, or $0.66 per share. &uot;We completed 1999 on a excellent note, with strong unit growth, a stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. pricing environment, improving factory efficiency, and the successful introduction of several product families,&uot; said John Boruch, Amkor's president. &uot;More important, we've we've Contraction of we have. we've have entered 2000 with very strong business momentum, which suggests that our growth will continue to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, that of the semiconductor industry during the coming year.&uot; Unit shipments rose 51% over the year-ago quarter and 11% over the third quarter of 1999. High end (advanced leadframe and laminate laminate, n a thin slice of porcelain or plastic fabricated in a dental lab, which is cemented to the front of the teeth to cover gaps, whiten stained teeth, or reshape chipped or broken teeth. ) products were 63% of packaging and test revenues for the fourth quarter, compared to 58% in the fourth quarter of 1998. &uot;We are rapidly expanding capacity in the Philippines Philippines officially Republic of the Philippines Island country, western Pacific Ocean, on an archipelago off the southeast coast of Asia. Area: 122,121 sq mi (316,294 sq km). Population (2005 est.): 84,191,000. and Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. to accommodate strengthening demand across a broad spectrum of our package technology,&uot; continued Mr. Boruch. &uot;We have seen tremendous acceptance of several, recently introduced advanced packaging solutions for a wide variety of leading edge applications. Our Chip Array family is supporting the high growth flash memory and wireless markets. Our MicroLeadframe A MicroLeadFrame (MLF) is a type of chip scale microchip package. Amkor Technology introduced the MicroLeadFrame package in late 1999. The leads are flush with the package body, and the leadframe's metal die-attach paddle is exposed on the bottom of the package, enabling the technology is supporting emerging analog applications and the exciting Bluetooth A wireless personal area network (WPAN) standard for short-range transmission of digital voice and data. Bluetooth is widely used for hands-free cellphone operation, including wireless headsets and connecting to Bluetooth-enabled automobiles that turn the car's audio system into a communication standard for various customer communication chips and modules. Production rates for these two package families are expected to increase significantly during the next several months. &uot;During the quarter, Anam's wafer foundry A semiconductor manufacturer that makes chips for third parties. It may be a large chip maker that sells its excess manufacturing capacity or one that makes chips exclusively for other companies. added several key customers, and is now supplying wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. to 9 companies, including TI, who is still the primary customer,&uot; said Mr. Boruch. &uot;I am delighted to note that the fab has commenced the first phase of an expansion program, which should increase capacity to 22,000 wafers per month by the end of the first quarter. There is very strong customer support for this foundry, and our plan is to find ways to expand this fab to its full design capacity of 30,000 wafers per month by the end of 2000. The foundry is currently producing wafers down to the .18 micron micron: see micrometer. One micrometer, which is one millionth of a meter or approximately 1/25,000 of an inch. The tiny elements that make up a transistor on a chip are measured in micrometers and nanometers. See process technology. level.&uot; &uot;With respect to Anam Semiconductor, we believe the proposed transaction to acquire Anam's three remaining packaging plants is in our best interest, and we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our negotiations with the Korean Korean, language of uncertain ancestry. It is thought by some scholars to be akin to Japanese, by others to be a member of the Altaic subfamily of the Ural-Altaic family of languages (see Uralic and Altaic languages), and by still others to be unrelated to any known banks will reach a successful conclusion,&uot; added Mr. Boruch. In October October: see month. 1999, Amkor made a $42 million investment in Anam Semiconductor, Inc. (&uot;ASI&uot;), representing an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 19% ownership stake, in connection with ASI's Workout Workout Informal repayment or loan forgiveness arrangement between a borrower and creditors. workout 1. The process of a debtor's meeting a loan commitment by satisfying altered repayment terms. program. Under the equity method of accounting, Amkor includes its proportionate pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. share of ASI's results in the line item &uot;Equity in Loss of Investees.&uot; Ken Joyce Joyce - A distributed language based on Pascal and CSP, by Per Brinch Hansen. ["Joyce - A Programming Language for Distributed Systems", Per Brinch Hansen, Soft Prac & Exp 17(1):29-50 (Jan 1987)]. , Amkor's Chief Financial Officer, noted, &uot;Gross margins continued to improve during the quarter as increasing unit volumes permitted better absorption absorption [Lat.,=sucking from], taking of molecules of one substance directly into another substance. It is contrasted with adsorption, in which the molecules adhere only to the surface of the second substance. of our factory overhead, resulting in lower costs. In addition, pricing continued to stabilize stabilize See peg. , with overall ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). declines around 3% for the fourth quarter. This compares very favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with the 9% ASP decline we experienced in the fourth quarter of last year. Our balance sheet strengthened considerably during the quarter in connection with the exchange of $154 million of Convertible Subordinated Notes into Amkor common stock. Our effective tax rate for the fourth quarter was 22%, reflecting higher levels of operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. at factories operating under tax holidays.&uot; Pro forma results are presented for the full year 1998 because prior to May 1, 1998 certain of the Company's subsidiaries were taxed as S corporations and as a result, did not recognize any provision for Federal income taxes. Pro forma financial data reflect a pro forma provision to reflect the U.S. Federal and state income taxes, which would have been recorded by the Company if these subsidiaries had been C corporations. Amkor Technology, Inc. is the world's largest provider of contract microelectronics microelectronics, branch of electronic technology devoted to the design and development of extremely small electronic devices that consume very little electric power. manufacturing solutions. Amkor offers semiconductor companies and electronics OEMs a complete set of microelectronic The miniaturization of electronic circuits. See chip. design and manufacturing services, including deep submicron wafer fabrication Wafer Fabrication is a procedure composed of many repeated sequential processes to produce complete electrical or photonic circuits. Examples include production of radio frequency (RF) amplifiers, LEDs, optical computer components, and CPUs for computers. ; wafer probe, characterization A rather long and fancy word for analyzing a system or process and measuring its "characteristics." For example, a Web characterization would yield the number of current sites on the Web, types of sites, annual growth, etc. and reliability testing; IC packaging design and assembly; multi-chip module A Multi-Chip Module or MCM is a specialized electronic package where multiple integrated circuits (ICs), semiconductor dies or other modules are packaged in such a way as to facilitate their use as a single IC. design and assembly; and final testing. More information on Amkor is available from the company's SEC filings and on Amkor's web site: www.amkor.com. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. - such as (1) our belief that demand for our microelectronics manufacturing services will remain robust during the coming year and that our growth will continue to outpace that of the semiconductor industry during the coming year; (2) our plans to rapidly increase capacity to accommodate strong demand; (3) our belief that production rates for our Chip Array and MicroLeadframe package families will increase significantly during the next several months; and (4) our belief that negotiations with the Korean banks will reach a successful conclusion; - that involve risks and uncertainties that could cause actual results to differ from anticipated results. Further information on risk factors that could affect the outcome of the events set forth in these statements and that would affect the company's operating results and financial condition is detailed in the company's filings with the Securities and Exchange Commission, including the Report on Form 10-Q Form 10-Q See 10-Q. for the fiscal quarter ended September September: see month. 30, 1999. (tables to follow)
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the Three Months
Ended December 31,
------------------
1998 1999
---- ----
(unaudited) (unaudited)
NET REVENUES $ 424,808 $ 538,274
COST OF REVENUES-- including
purchases from ASI 358,230 432,355
--------- ---------
GROSS PROFIT 66,578 105,919
--------- ---------
OPERATING EXPENSES:
Selling, general and administrative 32,175 39,734
Research and development 2,147 3,352
----- -----
Total operating expenses 34,322 43,086
------ ------
OPERATING INCOME 32,256 62,833
------ ------
OTHER (INCOME) EXPENSE:
Interest expense, net 1,502 15,935
Foreign currency loss 660 157
Other expense, net (1) 2,411 18,892
----- ------
Total other expense 4,573 34,984
----- ------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 27,683 27,849
PROVISION FOR INCOME TAXES 8,028 5,694
EQUITY IN LOSS OF INVESTEES --- 1,969
-------- -------
NET INCOME $ 19,655 $ 20,186
======== ========
PER SHARE DATA:
Basic net income
per common share $ .17 $ .16
======= =======
Diluted net income
per common share $ .16 $ .16
======= =======
Shares used in computing basic net
income per common share 117,860 123,090
======= =======
Shares used in computing diluted
net income per common share 133,358 136,856
======= =======
(1) Includes a non-cash charge of $17.4 million ($13.9 million
after-tax) for the fourth quarter of 1999 for the early conversion of
convertible debt.
Note: EBITDA (earnings before interest, taxes, depreciation ,
amortization, foreign exchange gains and losses, and non-cash income
and expenses) was $114.5 million for the fourth quarter of 1999,
compared with $61.6 million for the fourth quarter of 1998.
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the Year
Ended December 31,
------------------
1998 1999
---- ----
(unaudited)
NET REVENUES $1,567,983 $1,909,972
COST OF REVENUES-- including
purchases from ASI 1,307,150 1,577,226
--------- -----------
GROSS PROFIT 260,833 332,746
--------- -----------
OPERATING EXPENSES:
Selling, general and administrative 119,846 145,233
Research and development
8,251 11,436
--------- -----------
Total operating expenses 128,097 156,669
---------- -----------
OPERATING INCOME 132,736 176,077
---------- -----------
OTHER (INCOME) EXPENSE:
Interest expense, net 18,005 45,364
Foreign currency loss 4,493 308
Other expense, net (1) 9,503 25,117
----- ------
Total other expense 32,001 70,789
------ ------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 100,735 105,288
PROVISION FOR INCOME TAXES 24,716 26,600
EQUITY IN LOSS OF INVESTEES - 1,969
MINORITY INTEREST 559 -
---------- --------
NET INCOME $ 75,460 $ 76,719
======== ========
PRO FORMA DATA (UNAUDITED):
Historical income before income taxes
and minority interest $ 100,735
Pro forma provision for income taxes 29,216
Pro forma income before minority
Interest 71,519
Historical minority interest 559
--------
Pro forma net income $ 70,960
========
PER SHARE DATA:
Basic net income
per common share $ .71 $ .64
======= =======
Diluted net income
per common share $ .70 $ .63
======= =======
Basic pro forma net income
per common share $ .67
=======
Diluted pro forma net income
per common share $ .66
=======
Shares used in computing basic (pro forma
for 1998) net income per common
shares 106,221 119,341
======= =======
Shares used in computing diluted (pro forma
for 1998) net income per common
share. 116,596 135,067
======= =======
(1) Includes a non-cash charge of $17.3 million ($13.9 million
after-tax) for the fourth quarter of 1999 for the early conversion of
convertible debt.
AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
1998 1999
------------ ------------
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 227,587 $98,045
Short-term investments 1,000 136,595
Accounts receivable --
Trade, net of allowance for doubtful
accounts of $5,952 and $2,443 109,243 157,281
Due from affiliates 25,990 6,278
Other 5,900 6,469
Inventories 85,628 91,465
Other current assets 16,687 11,117
-------- --------
Total current assets 472,035 507,250
-------- --------
PROPERTY, PLANT AND EQUIPMENT, net 416,111 859,768
-------- --------
INVESTMENTS 25,476 63,672
-------- --------
OTHER ASSETS:
Due from affiliates 28,885 27,858
Intangible assets 26,158 233,532
Other 34,932 63,009
-------- --------
Total other assets 89,975 324,399
-------- --------
Total assets $1,003,597 $1,755,089
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank overdraft $13,429 $16,209
Short-term borrowings and current
portion of
long-term debt 38,657 6,465
Trade accounts payable 96,948 122,147
Due to affiliates 15,722 37,913
Accrued expenses 77,004 88,577
Accrued income taxes 38,892 41,587
------ ------
Total current liabilities 280,652 312,898
------- -------
LONG-TERM DEBT 14,846 9,021
------ -----
SENIOR AND SENIOR SUBORDINATED NOTES - 625,000
-------- -------
CONVERTIBLE DEBT 207,000 53,435
-------- -----------
OTHER NONCURRENT LIABILITIES 10,738 16,994
------ ------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock 118 131
Additional paid-in capital 381,061 555,240
Retained earnings 109,738 186,457
Receivable from Stockholder - (3,276)
Accumulated other comprehensive income (556) (811)
-------- ------
Total stockholders' equity 490,361 737,741
-------- -------
Total liabilities and
stockholders' equity. $1,003,597 $1,755,089
========== ==========
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