SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 8-K ---------------- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OCTOBER 29, 2002 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) AMKOR TECHNOLOGY, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) 000-29472 23-1722724 COMMISSION FILE NUMBER (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 1345 ENTERPRISE DRIVE WEST CHESTER, PA 19380 (610) 431-9600 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
ITEM 5. OTHER EVENTS. On October 29, 2002 we issued a press release (attached hereto as Exhibit 99.1) announcing our financial results for the quarter ended September 30, 2002. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Text of Press Release dated October 29, 2002
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AMKOR TECHNOLOGY, INC. By: /s/ KENNETH T. JOYCE ---------------------------------- Kenneth T. Joyce Chief Financial Officer Dated: October 30, 2002
Exhibit 99.1 [AMKOR LOGO] News Release AMKOR REPORTS THIRD QUARTER 2002 RESULTS ASSEMBLY & TEST REVENUES RISE 12% OVER SECOND QUARTER, EXCEEDING GUIDANCE CHANDLER, AZ. -- October 29, 2002 -- Amkor Technology, Inc. (Nasdaq: AMKR) reported third quarter assembly and test revenue of $394 million, up 12% from the second quarter of 2002 and exceeding the company's previous expectations. Third quarter wafer fab revenue was $60 million compared with $59 million in the second quarter. Total revenue was $454 million, up 11% sequentially and up 36% over the prior year period. Third quarter gross margin rose to 11.5% from 3% in the second quarter and negative 3.5% in the third quarter of 2001. Amkor's third quarter net loss was $59 million, or ($0.36) per share, and included $11 million in after-tax charges associated with factory consolidation and operating efficiency initiatives. Excluding these charges, Amkor's third quarter net loss was $48 million, or ($0.29) per share. For the third quarter of 2001, Amkor's net loss, excluding the amortization of goodwill, was $100 million, or ($0.62) per share. "During the third quarter we took an important step in our goal of monetizing our investment in Anam Semiconductor with the sale of 20 million ASI shares to Dongbu," said James Kim, Amkor's chairman and chief executive officer. "We received $59 million as the initial payment from the transaction, increasing our cash balance to $235 million. Our ownership interest in ASI has been reduced to 21%, and with additional monetization of this investment we are confident that our cash resources will continue to increase. More significantly, we achieved positive cash flow during the third quarter, which is sooner than we had anticipated." "Our core assembly and test business has increased 36% since the first quarter, which is a testament to the strength of the outsourcing trend and Amkor's leading market position," said John Boruch, Amkor's president and chief operating officer. "During the year we have steadily gained market share, which we attribute to our strong customer relationships, geographically diversified operations and outstanding product & technology portfolio." "We have seen continued strength in our MicroLeadFrame(TM) package, which is becoming widely adopted for a broad range of cellular, wireless LAN and standard logic applications. With more than 50 customers designing into MLF, Amkor is the clear industry leader. Our MLF capacity now exceeds 15 million units per week." "We also expect increased adoption of other advanced packaging solutions such as flip chip, system in package and stacked chips, where Amkor enjoys strong market positions," said Boruch. -more-
Amkor Reports Third Quarter 2002 Results FINANCIAL HIGHLIGHTS "Our third quarter gross margin of 11.5% exceeded expectations and represents a significant improvement over the past several quarters," said Ken Joyce, Amkor's chief financial officer. "Gross margin has increased by more than 1500 basis points from the trough of negative 4% in the first quarter of 2002, reflecting higher revenue levels and ongoing reductions in fixed costs." "Our operating loss, before special charges, improved to $4 million from $49 million in the second quarter, reflecting higher revenue levels and lower depreciation and operating expenses," said Joyce. "During the quarter, we commenced consolidation of our two Taiwan manufacturing operations into a single, scalable facility as part of a planned effort to enhance operational efficiencies. In connection with this and other cost reduction efforts, we recognized $14 million pre-tax (most of which is non-cash) in facility exit expenses," said Joyce. Third quarter EBITDA rose to $71 million from $48 million in the second quarter. We have calculated EBITDA as earnings before income taxes; special charges; equity in income (loss) of affiliates; minority interest; foreign currency gain or loss; interest expense, net; depreciation and amortization; loss on disposal of assets; and loss on impairment of equity investment. EBITDA is a common measure used by investors to evaluate a company's ability to service debt. EBITDA is not defined by generally accepted accounting principles, and our definition of EBITDA may not be comparable to similar companies. Capital expenditures were $31 million for the third quarter. Depreciation and amortization totaled $77 million. "Our capital budget for 2002 remains in the neighborhood of $100 million," noted Joyce. "We enter the fourth quarter with enhanced financial liquidity," said Joyce. "We have $235 million in cash at September 30, compared with $162 million at June 30. This increase reflects a $60 million initial payment on the sale of 20 million shares of Anam Semiconductor, Inc. to Dongbu, together with the generation of $13 million in positive cash flow during the quarter. As previously announced, during Q3 our bank group agreed to extend the covenants in our credit facility for an additional year, which reflects a strong vote of confidence from our lenders." BUSINESS OUTLOOK Visibility in our industry remains cloudy. On the basis of customers' forecasts, we currently expect fourth quarter assembly & test revenue to be around 5% lower than the third quarter. Wafer fab revenue should be around $50 million. -more- 2
Amkor Reports Third Quarter 2002 Results Effective with the fourth quarter of 2002, Amkor will change the estimated useful lives of certain of its assembly equipment from four years to seven years for depreciation purposes, which is in line with the practice used by other companies in our industry. Amkor will not extend the useful lives of the assembly equipment associated with the second quarter impairment charge. This change is expected to reduce depreciation expense by approximately $18 million per quarter. We expect that as a result of this change, together with ongoing cost efficiency programs, fourth quarter gross margin will improve to around 13%. Amkor will be holding a conference call on October 29 at 5:00 p.m. eastern time to discuss the results of the third quarter in more detail and to provide additional guidance for the fourth quarter of 2002. The call will be webcast and can be accessed through our web site: www.amkor.com, and through CCBN's website, www.companyboardroom.com. Amkor Technology, Inc. is the world's largest provider of contract semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronic design and manufacturing services. More information on Amkor is available from the company's SEC filings and on Amkor's web site: www.amkor.com. The statements by James Kim, John Boruch and Ken Joyce, and the above statements contained in our Business Outlook, are forward-looking statements that involve a number of risks and uncertainties. Factors that could affect future operating results and cause actual results to vary materially from historical and expected results include, but are not limited to: the highly unpredictable nature of the semiconductor industry; volatility of consumer demand for products incorporating our semiconductor packages; worldwide economic effects of the recent terrorist attacks on the United States and the United States military actions in response; competitive pricing and declines in average selling prices; dependence on our relationship with ASI for all of our wafer fabrication output; reliance on a small group of principal customers; timing and volume of orders relative to the production capacity; availability of manufacturing capacity and fluctuations in manufacturing yields; availability of financing; competition; dependence on international operations and sales; dependence on raw material and equipment suppliers; exchange rate fluctuations; dependence on key personnel; difficulties in managing growth; enforcement of intellectual property rights; environmental regulations; and the results of ASI through the equity method of accounting. 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 for the three months ended June 30, 2002. Contact: Jeffrey Luth, VP Corporate Communications 480-821-2408 ext. 5130 jluth@amkor.com (tables to follow) 3
Amkor Reports Third Quarter 2002 Results AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended September 30 (in thousands, except per share data) Pro Forma (1) 2002 2001 2001 ---- ---- ---- Net revenues Assembly and Test $ 393,563 $ 288,529 $ 288,529 Wafer Fab 60,365 46,187 46,187 --------- --------- --------- Total 453,928 334,716 334,716 Cost of revenues -- including purchases from ASI 401,555 346,355 346,355 --------- --------- --------- Gross profit (loss) 52,373 (11,639) (11,639) --------- --------- --------- Operating expenses: Selling, general and administrative 47,103 47,847 47,847 Research and development 7,622 9,784 9,784 (Gain)/Loss on disposal of assets (200) 3,132 3,132 Special charges (2) 13,819 0 0 Amortization of goodwill & other acquired intangibles 2,000 21,214 1,184 --------- --------- --------- Total operating expenses 70,344 81,977 61,947 --------- --------- --------- Operating income (loss) (17,971) (93,616) (73,586) --------- --------- --------- Other (income) expense: Interest expense, net 37,391 37,904 37,904 Foreign currency loss (gain) (813) (1,071) (1,071) Other expense (income), net 991 (1,513) (1,513) --------- --------- --------- Total other expense 37,569 35,320 35,320 --------- --------- --------- Income (loss) before income taxes and equity in income of investees (55,540) (128,936) (108,906) Provision (benefit) for income taxes (10,109) (24,498) (24,498) Equity in (loss) of investees (12,532) (14,732) (14,732) Amortization of equity method goodwill 0 (8,929) 0 Loss on impairment/Sale of equity investment (1,767) 0 0 Minority Interest 423 (645) (645) --------- --------- --------- Net income (loss) $ (59,307) $(128,744) $ (99,785) ========= ========= ========= Per Share Data: Basic net income (loss) per common share $ (0.36) $ (0.80) $ (0.62) ========= ========= ========= Diluted net income (loss) per common share $ (0.36) $ (0.80) $ (0.62) ========= ========= ========= Shares used in computing basic net income (loss) per common share 164,489 160,581 160,581 ========= ========= ========= Shares used in computing diluted net income (loss) per common share 164,489 160,581 160,581 ========= ========= ========= (1) The Pro Forma results exclude the effects of the amortization of goodwill and the amortization of the difference between the cost of our equity investments and our share of the underlying net assets. (2) Special charges include the following: Loss of FAS 142 Impairment $ -- Loss on FAS 144 Impairment -- Loss on facility shutdowns 13,819 --------- 13,819 ========= 4
Amkor Reports Third Quarter 2002 Results AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME For the Nine Months Ended September 30 (in thousands, except per share data) Pro Forma (1) 2002 2001 2001 ---- ---- ---- Net revenues Assembly and Test $ 1,032,989 $ 1,039,365 $ 1,039,365 Wafer Fab 180,464 126,143 126,143 ----------- ----------- ----------- Total 1,213,453 1,165,508 1,165,508 Cost of revenues -- including purchases from ASI 1,162,170 1,087,351 1,087,351 ----------- ----------- ----------- Gross profit (loss) 51,283 78,157 78,157 ----------- ----------- ----------- Operating expenses: Selling, general and administrative 144,397 153,206 153,206 Research and development 24,535 28,421 28,421 Loss on disposal of assets 2,912 4,654 4,654 Special charges (2) 281,985 0 0 Amortization of goodwill & other acquired intangibles 4,995 63,699 3,523 ----------- ----------- ----------- Total operating expenses 458,824 249,980 189,804 ----------- ----------- ----------- Operating income (loss) (407,541) (171,823) (111,647) ----------- ----------- ----------- Other (income) expense: Interest expense, net 111,010 123,110 123,110 Foreign currency loss (gain) 1,892 (6) (6) Other expense (income), net 4 (2,924) (2,924) ----------- ----------- ----------- Total other expense 112,906 120,180 120,180 ----------- ----------- ----------- Income (loss) before income taxes and equity in income of investees (520,447) (292,003) (231,827) Provision (benefit) for income taxes (58,082) (55,481) (55,481) Equity in (loss) of investees (24,737) (49,509) (49,509) Amortization of equity method goodwill 0 (26,745) 0 Loss on impairment/Sale of equity investment (141,303) 0 0 Minority Interest (2,238) (1,473) (1,473) ----------- ----------- ----------- Net income (loss) $ (630,643) $ (314,249) $ (227,328) =========== =========== =========== Per Share Data: Basic net income (loss) per common share $ (3.85) $ (2.02) $ (1.46) =========== =========== =========== Diluted net income (loss) per common share $ (3.85) $ (2.02) $ (1.46) =========== =========== =========== Shares used in computing basic net income (loss) per common share 163,854 155,594 155,594 =========== =========== =========== Shares used in computing diluted net income (loss) per common share 163,854 155,594 155,594 =========== =========== =========== (1) The Pro Forma results exclude the effects of the amortization of goodwill and the amortization of the difference between the cost of our equity investments and our share of the underlying net assets. (2) Special charges include the following: Loss of FAS 142 Impairment $ 73,080 Loss on FAS 144 Impairment 190,266 Loss on facility shutdowns 18,639 ----------- 281,985 =========== 5
Amkor Reports Third Quarter 2002 Results AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2002 2001 ---- ---- (unaudited) Assets Current assets: Cash and cash equivalents $ 235,038 $ 200,057 Accounts receivable -- Trade, net of allowance for doubtful accounts of $6,893 and $6,842 255,135 211,419 Due from affiliates 725 871 Other 9,154 8,953 Inventories 79,275 73,784 Other current assets 74,120 37,106 ----------- ----------- Total current assets 653,447 532,190 ----------- ----------- Property, plant and equipment, net 1,022,454 1,392,274 ----------- ----------- Investments 125,973 382,951 ----------- ----------- Other assets: Due from affiliates 21,348 20,518 Goodwill 623,713 659,130 Acquired Intangibles 46,941 37,050 Other 251,067 199,205 ----------- ----------- Total other assets 943,069 915,903 ----------- ----------- Total assets $ 2,744,943 $ 3,223,318 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Bank overdraft $ 6,252 $ 5,116 Short-term borrowings and current portion of long-term debt 50,849 54,815 Trade accounts payable 174,634 148,923 Due to affiliates 46,337 16,936 Accrued expenses 195,285 145,544 ----------- ----------- Total current liabilities 473,357 371,334 Long-term debt 1,754,809 1,771,453 Other noncurrent liabilities 81,693 64,077 ----------- ----------- Total liabilities 2,309,859 2,206,864 ----------- ----------- Minority Interest 10,158 7,737 Stockholders' equity: Common stock 165 162 Additional paid-in capital 1,168,221 1,123,541 Retained earnings (737,618) (106,975) Receivable from stockholder (2,887) (3,276) Accumulated other comprehensive losses (2,955) (4,735) ----------- ----------- Total stockholders' equity 424,926 1,008,717 ----------- ----------- Total liabilities and stockholders' equity $ 2,744,943 $ 3,223,318 =========== =========== 6