| AMKOR TECHNOLOGY, INC. | |||||||||||||||||||
| Selected Operating Data | |||||||||||||||||||
|
Beginning this quarter, we will report sales data for our packaging services by the following categories: flip chip and wafer-level processing and wirebond. We are also providing quarterly and annual packaging services sales and packaged units for 2011 and 2012 under these revised sales reporting categories at the Investor Relations section of our website at www.amkor.com. |
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| Q1 2013 | Q4 2012 | Q1 2012 | |||||||||||||||||
| Sales Data : | |||||||||||||||||||
| Packaging services (in millions): | |||||||||||||||||||
| Flip chip and wafer-level processing | $ | 320 | $ | 342 | $ | 251 | |||||||||||||
| Wirebond | 274 | 289 | 331 | ||||||||||||||||
| Packaging services | 594 | 631 | 582 | ||||||||||||||||
| Test services | 94 | 92 | 73 | ||||||||||||||||
| Total sales | $ | 688 | $ | 723 | $ | 655 | |||||||||||||
| Packaging services: | |||||||||||||||||||
| Flip chip and wafer-level processing | 46 | % | 47 | % | 38 | % | |||||||||||||
| Wirebond | 40 | % | 40 | % | 51 | % | |||||||||||||
| Packaging services | 86 | % | 87 | % | 89 | % | |||||||||||||
| Test services | 14 | % | 13 | % | 11 | % | |||||||||||||
| Total sales | 100 | % | 100 | % | 100 | % | |||||||||||||
| Packaged units (in millions): | |||||||||||||||||||
| Flip chip and wafer-level processing | 579 | 592 | 230 | ||||||||||||||||
| Wirebond | 1,722 | 1,658 | 1,690 | ||||||||||||||||
| Total packaged units | 2,301 | 2,250 | 1,920 | ||||||||||||||||
| Net sales from top ten customers | 63 | % | 63 | % | 65 | % | |||||||||||||
| Capacity Utilization | |||||||||||||||||||
| Packaging | 76 | % | 77 | % | 73 | % | |||||||||||||
| Test | 83 | % | 80 | % | 78 | % | |||||||||||||
| End Market Distribution Data (an approximation including representative devices and applications based on a sampling of our largest customers): | |||||||||||||||||||
| Communications (handsets, tablets, wireless LAN, handheld devices) | 59 | % | 58 | % | 47 | % | |||||||||||||
| Consumer (gaming, television, set top boxes, portable media, digital cameras) | 14 | % | 17 | % | 20 | % | |||||||||||||
| Computing (desk tops, PCs, hard disk drives, servers, displays, printers, peripherals) | 9 | % | 9 | % | 13 | % | |||||||||||||
| Networking (servers, routers, switches) | 10 | % | 9 | % | 11 | % | |||||||||||||
| Other (automotive, industrial) | 8 | % | 7 | % | 9 | % | |||||||||||||
| Total | 100 | % | 100 | % | 100 | % | |||||||||||||
| Gross Margin Data: | |||||||||||||||||||
| Net sales | 100 | % | 100 | % | 100 | % | |||||||||||||
| Cost of sales: | |||||||||||||||||||
| Materials | 42 | % | 42 | % | 45 | % | |||||||||||||
| Labor | 15 | % | 14 | % | 14 | % | |||||||||||||
| Other manufacturing | 26 |
% |
26 | % | 25 | % | |||||||||||||
| Loss contingency | — |
% |
|
2 |
% |
— |
% |
||||||||||||
| Gross margin | 17 | % | 16 | % | 16 | % | |||||||||||||
| Q1 2013 | Q4 2012 | Q1 2012 | |||||||||||||||
| (In millions, except per share data) | |||||||||||||||||
| Capital Investment Data: | |||||||||||||||||
| Property, plant and equipment additions | $ | 124 | $ | 86 | $ | 124 | |||||||||||
| Net change in related accounts payable and deposits | (11 | ) | 67 | (3 | ) | ||||||||||||
| Purchases of property, plant and equipment | $ | 113 | $ | 153 | $ | 121 | |||||||||||
| Depreciation and amortization | $ | 97 | $ | 97 | $ | 88 | |||||||||||
| Free Cash Flow Data: | |||||||||||||||||
| Net cash provided by operating activities | $ | 99 | $ | 105 | $ | 56 | |||||||||||
| Less purchases of property, plant and equipment | (113 | ) | (153 | ) | (121 | ) | |||||||||||
| Free cash flow (1) | $ | (14 | ) | $ | (48 | ) | $ | (65 | ) | ||||||||
| Earnings per Share Data: | |||||||||||||||||
| Net income attributable to Amkor - basic | $ | 13 | $ | 7 | $ | 12 | |||||||||||
| Adjustment for dilutive securities on net income: | |||||||||||||||||
|
Interest on 6.0% convertible notes due 2014, net of tax (2) |
4 | — | 4 | ||||||||||||||
| Net income attributable to Amkor - diluted | $ | 17 | $ | 7 | $ | 16 | |||||||||||
| Weighted average shares outstanding - basic (3) | 152 | 152 | 168 | ||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||
| 6.0% convertible notes due 2014 (2) | 83 | — | 83 | ||||||||||||||
| Weighted average shares outstanding - diluted | 235 | 152 | 251 | ||||||||||||||
| Net income attributable to Amkor per common share: | |||||||||||||||||
| Basic | $ | 0.09 | $ | 0.05 | $ | 0.07 | |||||||||||
| Diluted | $ | 0.07 | $ | 0.05 | $ | 0.06 | |||||||||||
| (1) | 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 U.S. generally accepted accounting principles ("U.S. GAAP"). 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. However, free cash flow has certain limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other, non-discretionary expenditures, such as mandatory debt service, are not deducted from the measure. The amount of mandatory versus discretionary expenditures can vary significantly between periods. This measure should be considered in addition to, and not as a substitute for, or superior to, other measures of liquidity or financial performance prepared in accordance with U.S. GAAP, such as net cash provided by operating activities. Furthermore, our definition of free cash flow may not be comparable to similarly titled measures reported by other companies. | ||
| (2) | The potential shares of common stock and interest related to the 6.0% convertible notes due 2014 were excluded from earnings per diluted share for the three months ended December 31, 2012, because the effect of including these potential shares was antidilutive. | ||
| (3) | Amkor's Board of Directors previously authorized $300 million for the repurchase of our common stock. During the first quarter 2013, we did not repurchase any shares; however, during 2012, we repurchased 16.5 million shares under the stock repurchase program for a purchase price of $79.5 million. |
|
In the press release above we provide adjusted gross margin, adjusted net income and adjusted earnings per diluted share for the fourth quarter 2012. We present these non-GAAP amounts to demonstrate the impact of the loss contingency we recognized related to our pending patent license arbitration with Tessera, Inc. These measures have limitations, including that they exclude the charges for the Tessera arbitration panel award, which is an amount that the company may ultimately have to pay in cash. Furthermore, the factors affecting the calculation of the arbitration award are complex and subject to determination by the arbitration panel. Therefore, the final amount of the loss may be more than the amount we have recognized. Accordingly, these measures that exclude the loss contingency accrual should be considered in addition to, and not as a substitute for, or superior to, gross margin, net income and earnings per diluted share prepared in accordance with U.S. GAAP. Below is the reconciliation of adjusted gross margin, adjusted net income and adjusted earnings per diluted share to U.S. GAAP gross margin, net income and earnings per diluted share. |
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| Non-GAAP Financial Measures Reconciliation: | ||||||
| Q4 2012 | ||||||
| Gross margin | 16 | % | ||||
| Plus: Loss contingency divided by net sales | 2 | % | ||||
| Adjusted gross margin | 18 | % | ||||
| (In millions) | ||||||
| Net income | $ | 7 | ||||
| Plus: Loss contingency, net of tax | 20 | |||||
| Adjusted net income | $ | 27 | ||||
| Earnings per diluted share | $ | 0.05 | ||||
| Plus: Loss contingency per diluted share | 0.08 | |||||
| Adjusted earnings per diluted share | $ | 0.13 | ||||
| AMKOR TECHNOLOGY, INC. | ||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
| (Unaudited) | ||||||||||
| For the Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2013 | 2012 | |||||||||
| (In thousands, except per share data) | ||||||||||
| Net sales | $ | 687,529 | $ | 655,010 | ||||||
| Cost of sales | 572,576 | 550,029 | ||||||||
| Gross profit | 114,953 | 104,981 | ||||||||
| Operating expenses: | ||||||||||
| Selling, general and administrative | 59,559 | 57,255 | ||||||||
| Research and development | 14,306 | 13,425 | ||||||||
| Total operating expenses | 73,865 | 70,680 | ||||||||
| Operating income | 41,088 | 34,301 | ||||||||
| Other expense (income): | ||||||||||
| Interest expense | 22,078 | 18,586 | ||||||||
| Interest expense, related party | 3,492 | 3,492 | ||||||||
| Interest income | (827 | ) | (889 | ) | ||||||
| Foreign currency (gain) loss, net | (1,166 | ) | 790 | |||||||
| Equity in earnings of unconsolidated affiliate | (55 | ) | (1,988 | ) | ||||||
| Other income, net | (229 | ) | (634 | ) | ||||||
| Total other expense, net | 23,293 | 19,357 | ||||||||
| Income before income taxes | 17,795 | 14,944 | ||||||||
| Income tax expense | 4,029 | 3,362 | ||||||||
| Net income | 13,766 | 11,582 | ||||||||
| Net (income) loss attributable to noncontrolling interests | (384 | ) | 192 | |||||||
| Net income attributable to Amkor | $ | 13,382 | $ | 11,774 | ||||||
| Net income attributable to Amkor per common share: | ||||||||||
| Basic | $ | 0.09 | $ | 0.07 | ||||||
| Diluted | $ | 0.07 | $ | 0.06 | ||||||
| Shares used in computing per common share amounts: | ||||||||||
| Basic | 152,411 | 167,866 | ||||||||
| Diluted | 235,087 | 250,688 | ||||||||
| AMKOR TECHNOLOGY, INC. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| March 31, | December 31, | |||||||||
| 2013 | 2012 | |||||||||
| (In thousands) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 466,702 | $ | 413,048 | ||||||
| Restricted cash | 2,680 | 2,680 | ||||||||
| Accounts receivable: | ||||||||||
| Trade, net of allowances | 379,370 | 389,699 | ||||||||
| Other | 2,853 | 13,098 | ||||||||
| Inventories | 235,330 | 227,439 | ||||||||
| Other current assets | 45,778 | 45,444 | ||||||||
| Total current assets | 1,132,713 | 1,091,408 | ||||||||
| Property, plant and equipment, net | 1,825,161 | 1,819,969 | ||||||||
| Intangibles, net | 4,226 | 4,766 | ||||||||
| Investments | 35,560 | 38,690 | ||||||||
| Restricted cash | 2,248 | 2,308 | ||||||||
| Other assets | 74,823 | 68,074 | ||||||||
| Total assets | $ | 3,074,731 | $ | 3,025,215 | ||||||
| LIABILITIES AND EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Short-term borrowings and current portion of long-term debt | $ | — | $ | — | ||||||
| Trade accounts payable | 432,599 | 439,663 | ||||||||
| Accrued expenses | 232,185 | 212,964 | ||||||||
| Total current liabilities | 664,784 | 652,627 | ||||||||
| Long-term debt | 1,353,000 | 1,320,000 | ||||||||
| Long-term debt, related party | 225,000 | 225,000 | ||||||||
| Pension and severance obligations | 135,578 | 139,379 | ||||||||
| Other non-current liabilities | 19,475 | 21,415 | ||||||||
| Total liabilities | 2,397,837 | 2,358,421 | ||||||||
| Equity: | ||||||||||
| Amkor stockholders' equity: | ||||||||||
| Preferred stock | — | — | ||||||||
| Common stock | 198 | 198 | ||||||||
| Additional paid-in capital | 1,614,677 | 1,614,143 | ||||||||
| Accumulated deficit | (743,262 | ) | (756,644 | ) | ||||||
| Accumulated other comprehensive income | 7,131 | 11,241 | ||||||||
| Treasury stock | (211,073 | ) | (210,983 | ) | ||||||
| Total Amkor stockholders' equity | 667,671 | 657,955 | ||||||||
| Noncontrolling interests in subsidiaries | 9,223 | 8,839 | ||||||||
| Total equity | 676,894 | 666,794 | ||||||||
| Total liabilities and equity | $ | 3,074,731 | $ | 3,025,215 | ||||||
| AMKOR TECHNOLOGY, INC. | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (Unaudited) | ||||||||||
| For the Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2013 | 2012 | |||||||||
| (In thousands) | ||||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 13,766 | $ | 11,582 | ||||||
| Depreciation and amortization | 97,148 | 88,446 | ||||||||
| Other operating activities and non-cash items | (840 | ) | (1,772 | ) | ||||||
| Changes in assets and liabilities | (11,400 | ) | (42,150 | ) | ||||||
| Net cash provided by operating activities | 98,674 | 56,106 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Purchases of property, plant and equipment | (112,543 | ) | (121,087 | ) | ||||||
| Proceeds from the sale of property, plant and equipment | 24,614 | 621 | ||||||||
| Payments from unconsolidated affiliate | 8,843 | 7,914 | ||||||||
| Other investing activities | (249 | ) | 1,683 | |||||||
| Net cash used in investing activities | (79,335 | ) | (110,869 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Borrowings under short-term debt | — | 20,000 | ||||||||
| Payments of short-term debt | — | (15,000 | ) | |||||||
| Proceeds from issuance of long-term debt | 33,000 | 158,742 | ||||||||
| Payments of long-term debt | — | (156,357 | ) | |||||||
| Payments for repurchase of common stock | — | (4,505 | ) | |||||||
| Proceeds from the issuance of stock through share-based compensation plans | — | 69 | ||||||||
| Payments of tax withholding for restricted shares | (90 | ) | (353 | ) | ||||||
| Net cash provided by financing activities | 32,910 | 2,596 | ||||||||
| Effect of exchange rate fluctuations on cash and cash equivalents | 1,405 | (1,332 | ) | |||||||
| Net increase (decrease) in cash and cash equivalents | 53,654 | (53,499 | ) | |||||||
| Cash and cash equivalents, beginning of period | 413,048 | 434,631 | ||||||||
| Cash and cash equivalents, end of period | $ | 466,702 | $ | 381,132 | ||||||
