Amkor Technology Reports Strong Third Quarter Results Outlook Remains Bright for Fourth Quarter and 2000.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)--Oct. 26, 1999-- 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 strengthening demand and a strong business outlook in reporting financial results for the third quarter ended September September: see month. 30, 1999. Total revenues were $502 million, up 30% from $387 million in the third quarter of 1998. Assembly & test revenues rose 21% to $430 million from $357 million in the third 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 $72 million compared with $30 million in the third quarter of 1998. Net income was $26.1 million, or $0.21 per share, compared with $20.9 million, or $0.17 per share, for the third quarter of 1998. For the first nine months of 1999, revenues rose 20% to $1.37 billion from $1.14 billion in the first nine months of 1998. Net income was $56.5 million, or $0.47 per share, compared to 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 of $51.3 million, or $0.49 per share, for the first nine months of 1998. "Our first $500 million quarter marks a milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. for Amkor and is a clear indication of the strong and broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased recovery for traditional and advanced semiconductor packaging," said John Boruch, Amkor's President. "By all accounts, the micro-electronics industry is entering into a multi-year upswing Upswing An upward turn in a security's price after a period of falling prices. . Amkor's growth has outpaced that of the semiconductor industry over the past five years, and we expect that trend to continue. Looking to both the fourth quarter and 2000, we anticipate strengthening demand, especially for our advanced package technology supporting an expanding range of communications applications." Unit shipments rose 44% over the year-ago quarter and 14% over the second quarter of 1999. Overall assembly & test capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. rose to 87% from 66% in the year-ago period and 80% in the second 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 60% of packaging and test revenues for the third quarter, compared to 58% in the third quarter of 1998. "We continue to expand capacity, especially for our advanced product lines in both 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. in order to accommodate strong customer demand, which we expect will continue into next year," said Mr. Boruch. "Given the broad diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. of our customers and our package applications, we continue to believe that the recent earthquake earthquake, trembling or shaking movement of the earth's surface. Most earthquakes are minor tremors. Larger earthquakes usually begin with slight tremors but rapidly take the form of one or more violent shocks, and end in vibrations of gradually diminishing force in Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan will have a very minor impact on our business." "Anam's wafer fab continued to operate at full installed capacity of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 17,000 wafer starts per month during the third quarter, reflecting ongoing strong demand from Texas Instruments See TI. (company) Texas Instruments - (TI) A US electronics company. A TI engineer, Jack Kilby invented the integrated circuit in 1958. Three TI employees left the company in 1982 to start Compaq. for digital signal processing See DSP. Digital Signal Processing - (DSP) Computer manipulation of analog signals (commonly sound or image) which have been converted to digital form (sampled). products. We believe that during the third quarter there was a definite perception change regarding fab capacity. Our belief is that leading-edge fab capacity is currently in short supply and will remain in short supply for the next year or two. Consequently, customer interest in Anam's fab capacity has greatly increased. I am pleased to note that in the fourth quarter, Anam's fab expects to supply wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. to four other customers, in addition to TI," said Mr. Boruch. "The pricing environment in semiconductor packaging continued to improve," noted Mr. Boruch. "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 were around 3% for the third quarter, compared with 4% in the prior quarter. This compares very favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with the ASP decline we experienced in the third quarter of last year. We remain focused on improving our product mix by incorporating more advanced package technology and design. Earlier this month we introduced 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 package, which we believe holds exceptional promise for the wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. industry. We are also excited about our recently announced agreement with Sharp Corporation to share stacked-die chip scale packaging (hardware) Chip Scale Packaging - (CSP) A type of surface mount integrated circuit packaging that provides pre-speed-sorted, pre-tested and pre-packaged die without requiring special testing. An example is Motorola's Micro SMT packaging. assembly technologies." 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, "Our gross margin improved substantially, to 19.4% from 14.8% in the second quarter of this year, as we began to realize the benefits of our recent investments in our two newest facilities - P3 and K4. We achieved higher utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be rates and enhanced our product mix. In addition, we are just beginning to see some of the results of a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , broad-based program designed to enhance productivity and reduce costs." Amkor also confirmed that later this month, it will be making the first $41 million installment Regular, partial portion of the same debt, paid at successive periods as agreed by a debtor and creditor. An installment loan is designed to be repaid in certain specified, ordinarily equal amounts over a designated period, such as a year or a number of months. in its previously announced $150 million equity investment in Anam Semiconductor, Inc. Concurrent At the same time. It implies that multiple processes are taking place simultaneously. See concurrent operation. with this investment, Anam's Creditor An individual to whom an obligation is owed because he or she has given something of value in exchange. One who may legally demand and receive money, either through the fulfillment of a contract or due to injury sustained as a result of another's Negligence Banks are converting a portion of their debt into Anam equity. Amkor presently expects to make further installments of the $150 million investment in each of the next three years, concurrent with additional conversions of Bank debt into Anam equity. Pro forma results are presented for 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. The attached financial statements reflect the $625 million long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. raised in connection with the acquisition of K4. The 1999 Balance Sheet and Income Statement data include the asset, liabilities and results of operations for K4 from the acquisition date of May 17, 1999 through June June: see month. 30, 1999. Amkor Technology, Inc. is the world's largest provider of contract semiconductor packaging and test services. The company offers a complete set of micro-electronics 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 testing, IC packaging design, assembly & testing, burn-in 1. (hardware) burn-in - screen saver. 2. (hardware, testing) burn-in - burn-in period. , 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. More information on Amkor Technology, Inc. is available from the company's SEC filings and on Amkor's web site, http://www.amkor.com. Amkor is traded on the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol AMKR. 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 expectation of strengthening customer demand, particularly for our advanced packaging technology; (2) our expectation that strong customer demand will continue into 2000; (3) Our belief that the micro-electronics industry is moving into a multi-year upswing; (4) our expectation that Amkor's growth will continue to exceed that of the semiconductor industry; (5) our belief that the Taiwan earthquake will have a minimal impact on our business; and (6) our belief that leading-edge fab capacity is currently in short supply and will remain in short supply for the next year or two; and (7) Our believe that our outlook looks bright for fourth quarter and 2000; - 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 June 30, 1999. (tables to follow) -0-
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the Three Months
Ended September 30,
--------------------
1998 1999
------ ------
(unaudited) (unaudited)
NET REVENUES $ 386,718 $ 501,816
COST OF REVENUES-- including
purchases from ASI 321,758 404,327
--------- ---------
GROSS PROFIT 64,960 97,489
--------- ---------
OPERATING EXPENSES:
Selling, general and administrative 30,017 40,376
Research and development 2,109 2,990
--------- ---------
Total operating expenses 32,126 43,366
--------- ---------
OPERATING INCOME 32,834 54,123
--------- ---------
OTHER (INCOME) EXPENSE:
Interest expense, net 2,106 16,995
Foreign currency (gain) loss 130 (253)
Other expense, net 1,195 2,597
--------- ---------
Total other expense 3,431 19,339
--------- ---------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 29,403 34,784
PROVISION FOR INCOME TAXES 8,529 8,696
MINORITY INTEREST -- --
---------- ---------
NET INCOME $ 20,874 $ 26,088
========== =========
PER SHARE DATA:
Basic net income
per common share $ .18 $ .22
========= =========
Diluted net income
per common share $ .17 $ .21
========= =========
Shares used in computing basic net
income per common share 117,860 118,276
========= =========
Shares used in computing diluted net
income per common share 133,193 135,626
========= =========
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the Nine Months
Ended September 30,
-------------------
1998 1999
---- ----
(unaudited) (unaudited)
NET REVENUES $1,143,175 $1,371,698
COST OF REVENUES-- including
purchases from ASI 948,920 1,144,871
---------- ----------
GROSS PROFIT 194,255 226,827
---------- ----------
OPERATING EXPENSES:
Selling, general and administrative 87,671 105,499
Research and development 6,104 8,084
---------- ----------
Total operating expenses 93,775 113,583
---------- ----------
OPERATING INCOME 100,480 113,244
---------- ----------
OTHER (INCOME) EXPENSE:
Interest expense, net 16,503 29,429
Foreign currency (gain) loss 3,833 151
Other expense, net 7,092 6,225
---------- ----------
Total other expense 27,428 35,805
---------- ----------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 73,052 77,439
PROVISION FOR INCOME TAXES 16,688 20,906
MINORITY INTEREST 559 --
---------- ----------
NET INCOME $ 55,805 $ 56,533
========== ==========
PRO FORMA DATA (UNAUDITED):
Historical income before income taxes
and minority interest $ 73,052
Pro forma provision for income taxes 21,188
----------
Pro forma income before minority
Interest 51,864
Historical minority interest 559
----------
Pro forma net income $ 51,305
==========
PER SHARE DATA:
Basic net income
per common share $ .55 $ .48
========== ==========
Diluted net income
per common share $ .53 $ .47
========== ==========
Basic pro forma net income
per common share $ .50
==========
Diluted pro forma net income
per common share $ .49
==========
Shares used in computing basic net
income per common share 102,284 118,090
========== ==========
Shares used in computing diluted net
income per common share 110,933 134,079
========== ==========
AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, September 30,
1998 1999
----------- -----------
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 227,587 $81,921
Short-term investments 1,000 205,871
Accounts receivable --
Trade, net of allowance for
doubtful accounts of $5,952 109,243 162,405
Due from affiliates 25,990 3,692
Other 5,900 3,933
Inventories 85,628 78,651
Other current assets 16,687 16,642
--------- ---------
Total current assets 472,035 553,115
--------- ---------
PROPERTY, PLANT AND EQUIPMENT, net 416,111 781,410
--------- ---------
INVESTMENTS 25,476 23,741
------ ------
OTHER ASSETS:
Due from affiliates 28,885 29,967
Intangible assets 26,158 298,334
Other 34,932 61,561
---------- ----------
Total other assets 89,975 389,862
---------- ----------
Total assets $1,003,597 $1,748,128
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank overdraft $ 13,429 $ 15,658
Short-term borrowings and current
portion of long-term debt 38,657 26,139
Trade accounts payable 96,948 124,188
Due to affiliates 15,722 38,974
Accrued expenses 77,004 97,078
Accrued income taxes 38,892 36,127
------ ---------
Total current liabilities 280,652 338,164
------- ---------
LONG-TERM DEBT 14,846 10,325
------ ---------
SENIOR AND SENIOR SUBORDINATED NOTES - 625,000
------ ---------
CONVERTIBLE DEBT 207,000 206,900
------- -------
OTHER NONCURRENT LIABILITIES 10,738 19,422
------ ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock 118 118
Additional paid-in capital 381,061 382,782
Retained earnings 109,738 166,271
Accumulated other comprehensive income (556) (854)
--------- ----------
Total stockholders' equity 490,361 548,317
--------- ----------
Total liabilities and
stockholders' equity $1,003,597 $1,748,128
=========== ===========
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