During the second quarter we completed the redemption of our 7.375% Senior Notes due 2018 using cash on hand and borrowings under our credit facilities which bear interest at floating rates tied to LIBOR. Based on current interest rates, we expect to save approximately $17 million in annual interest expense from the redemption.
Cash and cash equivalents were $442 million, and total debt was $1.5 billion, at June 30, 2015.
Business Outlook
“We expect sluggish mobile device market conditions to persist through most of Q3, with revenues slightly down compared with Q2,” said Kelley. “We are cautiously optimistic that demand will strengthen in the fourth quarter with the anticipated launch of flagship mobile devices. Due to the changed demand outlook, we are reducing our estimate of full year 2015 capital expenditures to around $550 million, including around $150 million of spending for our new K5 facility."
Based upon currently available information, we have the following expectations for the third quarter 2015:
- Net sales of $700 million to $750 million, down 5% to up 2% from the prior quarter
- Gross margin of 13% to 16%
- Net loss of $7 million to net income of $14 million, or ($0.03) to $0.06 per share
Conference Call Information
Amkor will conduct a conference call on Monday, July 27, 2015, at 5:00 p.m. Eastern Time. This call may include material information not included in this press release. This call is being webcast and can be accessed at Amkor's website: www.amkor.com. You may also access the call by dialing 1-877-645-6380 or 1-404-991-3911. A replay of the call will be made available at Amkor's website or by dialing 1-855-859-2056 or 1-404-537-3406 (conference ID 84109040). The webcast is also being distributed over NASDAQ OMX's investor distribution network to both institutional and individual investors. Institutional investors can access the call via NASDAQ OMX's password-protected event management site, Street Events ( www.streetevents.com).
About Amkor
Amkor is a leading provider of semiconductor packaging and test services to semiconductor companies and electronics OEMs. More information about Amkor is available from the company's filings with the Securities and Exchange Commission and at Amkor's website: www.amkor.com.
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AMKOR TECHNOLOGY, INC. |
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Selected Operating Data |
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| Q2 2015 | Q1 2015 | Q2 2014 | ||||||||||||
| Net Sales Data: | ||||||||||||||
| Net sales (in millions): | ||||||||||||||
| Advanced products* | $ | 362 | $ | 373 | $ | 364 | ||||||||
| Mainstream products** | 375 | 370 | 403 | |||||||||||
| Total net sales | $ | 737 | $ | 743 | $ | 767 | ||||||||
| Packaging services |
85 |
% | 85 | % | 86 | % | ||||||||
| Test services |
15 |
% | 15 | % | 14 | % | ||||||||
| Net sales from top ten customers | 62 | % | 60 | % | 58 | % | ||||||||
| Packaged units (in millions): | ||||||||||||||
| Advanced products* |
1,275 |
1,188 | 910 | |||||||||||
| Mainstream products** | 2,703 | 2,671 | 3,379 | |||||||||||
| Total packaged units |
3,978 |
3,859 | 4,289 | |||||||||||
| End Market Distribution Data (an approximation including representative devices and applications based on a sampling of our largest customers) : | ||||||||||||||
| Communications (smart phones, tablets, handheld devices, wireless LAN) | 56 | % | 57 | % | 53 | % | ||||||||
| Consumer (television, set top boxes, gaming, portable media, digital cameras) | 12 | % | 12 | % | 15 | % | ||||||||
| Automotive, industrial and other (infotainment, safety, performance, comfort) | 12 | % | 11 | % | 12 | % | ||||||||
| Networking (servers, routers, switches) | 11 | % | 11 | % | 11 | % | ||||||||
| Computing (PCs, hard disk drive, printers, peripherals, servers) | 9 | % | 9 | % | 9 | % | ||||||||
| Total | 100 | % | 100 | % | 100 | % | ||||||||
| Gross Margin Data: | ||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
| Cost of sales: | ||||||||||||||
| Materials | 37.2 | % | 36.7 | % | 37.2 | % | ||||||||
| Labor | 15.7 | % | 14.2 | % | 14.0 | % | ||||||||
| Other manufacturing | 31.5 | % | 30.9 | % | 29.2 | % | ||||||||
| Gross margin | 15.6 | % | 18.2 | % | 19.6 | % | ||||||||
| Earnings per Share Data: | ||||||||||||||
| Net income attributable to Amkor common stockholders - basic and diluted | $ | 10 | $ | 29 | $ | 50 | ||||||||
| Weighted average shares outstanding - basic | 237 | 237 | 233 | |||||||||||
| Effect of dilutive securities: | ||||||||||||||
| Stock options | — | — | 1 | |||||||||||
| 6.0% convertible notes due 2014 | — | — | 3 | |||||||||||
| Weighted average shares outstanding - diluted | 237 | 237 | 237 | |||||||||||
| Net income attributable to Amkor per common share: | ||||||||||||||
| Basic | $ | 0.04 | $ | 0.12 | $ | 0.21 | ||||||||
| Diluted | $ | 0.04 | $ | 0.12 | $ | 0.21 | ||||||||
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*Advanced products include flip chip and wafer-level processing and related test services |
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**Mainstream products include wirebond packaging and related test services |
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AMKOR TECHNOLOGY, INC. |
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CONSOLIDATED STATEMENTS OF INCOME |
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|
(Unaudited) |
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|
For the Three Months Ended
June 30, |
For the Six Months Ended
June 30, |
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| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| Net sales | $ | 736,722 | $ | 767,459 | $ | 1,479,597 | $ | 1,463,503 | |||||||||
| Cost of sales | 621,624 | 616,745 | 1,229,552 | 1,183,969 | |||||||||||||
| Gross profit | 115,098 | 150,714 | 250,045 | 279,534 | |||||||||||||
| Selling, general and administrative | 56,435 | 67,674 | 119,377 | 130,098 | |||||||||||||
| Research and development | 20,020 | 22,079 | 38,046 | 43,124 | |||||||||||||
| Total operating expenses | 76,455 | 89,753 | 157,423 | 173,222 | |||||||||||||
| Operating income | 38,643 | 60,961 | 92,622 | 106,312 | |||||||||||||
| Interest expense | 22,845 | 22,537 | 46,622 | 46,259 | |||||||||||||
| Interest expense, related party | 1,242 | 1,242 | 2,484 | 2,484 | |||||||||||||
| Other expense (income), net | 7,290 | (5,699 | ) | 6,792 | (5,663 | ) | |||||||||||
| Total other expense, net | 31,377 | 18,080 | 55,898 | 43,080 | |||||||||||||
| Income before taxes and equity in earnings of unconsolidated affiliate | 7,266 | 42,881 | 36,724 | 63,232 | |||||||||||||
| Income tax expense | 4,631 | 12,511 | 10,630 | 17,440 | |||||||||||||
| Income before equity in earnings of unconsolidated affiliate | 2,635 | 30,370 | 26,094 | 45,792 | |||||||||||||
| Equity in earnings of J-Devices | 7,566 | 20,036 | 13,804 | 25,797 | |||||||||||||
| Net income | 10,201 | 50,406 | 39,898 | 71,589 | |||||||||||||
| Net income attributable to noncontrolling interests | (623 | ) | (885 | ) | (1,539 | ) | (1,435 | ) | |||||||||
| Net income attributable to Amkor | $ | 9,578 | $ | 49,521 | $ | 38,359 | $ | 70,154 | |||||||||
| Net income attributable to Amkor per common share: | |||||||||||||||||
| Basic | $ | 0.04 | $ | 0.21 | $ | 0.16 | $ | 0.31 | |||||||||
| Diluted | $ | 0.04 | $ | 0.21 | $ | 0.16 | $ | 0.30 | |||||||||
| Shares used in computing per common share amounts: | |||||||||||||||||
| Basic | 236,840 | 232,891 | 236,774 | 224,868 | |||||||||||||
| Diluted | 237,321 | 236,872 | 237,366 | 236,182 | |||||||||||||
