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 April 27, 2004 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) AMKOR TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) Delaware 000-29472 23-1722724 (State of other (Commission (IRS Employer jurisdiction of Identification Identification Number) incorporation) Number) 1345 ENTERPRISE DRIVE WEST CHESTER, PA 19380 (Address of principal executive offices and zip code) (610) 431-9600 (Registrant's telephone number, including area code) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Text of Press Release dated April 27, 2004. ITEM 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The information provided in this Form 8-K report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended, unless specifically stated so therein. On April 27, 2004, Amkor announced its financial results for the three months ended March 31, 2004 and certain other information. The press release, which has been attached as Exhibit 99.1 and is incorporated herein by reference, discloses certain financial measures, such as free cash flows, which are considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. We believe free cash flow to be relevant and useful information to our investors in assessing our financial operating results as this measure is used by our management in evaluating our liquidity, our ability to service debt and fund capital expenditures. However, this measure should be considered in addition to, and not as a substitute, or superior to, cash flows or other measures of financial performance prepared in accordance with generally accepted accounting principles, and may not be comparable to similarly titled measures reported by other companies. The non-GAAP measures included in our press release have been reconciled to the nearest GAAP measure as is required under SEC rules regarding the use of non-GAAP financial measures. Exhibit Index: 99.1 Text of Press Release dated April 27, 2004. 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: April 27, 2004
Exhibit 99.1 (AMKOR TECHNOLOGY LOGO) News Release AMKOR REPORTS FIRST QUARTER 2004 RESULTS CHANDLER, AZ. - April 27, 2004 -- Amkor Technology, Inc. (Nasdaq: AMKR) reported first quarter sales of $465 million, up 1% sequentially and up 36% over the first quarter of 2003. Amkor's first quarter net income was $12 million, or $0.07 per share, compared with $15 million, or $0.09 per share, in the first quarter of 2003. Amkor's first quarter 2004 net income includes a pre-tax charge of $2.7 million, in connection with the prepayment of Amkor's term loan under its senior secured credit facility. In the first quarter 2003 Amkor's net income included a loss from continuing operations of $40 million, or ($0.24) per share, which was offset by income of $55 million, or $0.33 per share, in connection with its divested wafer fabrication services business. "While first quarter revenue came in slightly below our forecasted range, we nonetheless were pleased to achieve sequential revenue growth, in contrast to what is normally a seasonally down first quarter," said James Kim, Amkor's chairman and chief executive officer. "The increase in Q1 revenue and continued growth in our customers' long range forecasts suggest that we are in the midst of a broad-based industry recovery, and we remain confident of exceeding $2 billion revenue in 2004. This recovery, combined with what we believe is an acceleration in the outsourcing of semiconductor assembly and test, presents compelling opportunities for Amkor to strengthen our operational capabilities and expand our customer penetration." "Due to relative weakness in our cell phone products and production constraints at foundries, first quarter demand for some advanced package products did not materialize as forecast," said Bruce Freyman, Amkor's president and chief operating officer. "During the first quarter we increased capacity in several package products which were on allocation for much of 2003 in order to get ahead of demand, and we are now in a more favorable position to support expected growth of these package products through 2004. We also experienced strong growth in our legacy package products during the quarter, which further suggests that integrated device manufacturers (IDMs) have generally not invested in additional assembly capacity." "First quarter gross margin of 24% was down 1% sequentially due principally to higher material costs," said Ken Joyce, Amkor's chief financial officer. "We anticipate that second quarter gross margin will remain at 24%, despite higher sales volume, due to higher depreciation and labor costs as we continue to expand production space, add equipment and increase factory workforce in advance of what we expect will be a strong second half. These costs include expenses associated with equipping lines and qualifying new business in our newly acquired facility in Taiwan. We currently expect gross margin to improve in the second half of 2004." "First quarter SG&A expenses included $5 million in legal costs in connection with the epoxy mold compound litigation. As previously disclosed, this litigation relates to a certain mold compound used in the assembly of various IC packages which is claimed to have caused a number of package failures on the part of our customers. We expect the current level of legal costs will continue through 2004. We believe we have very good defenses to these claims and have asserted our own claims against the supplier of the compound," said Joyce. "First quarter capital expenditures totaled $171 million, including $41 million associated with our previously announced purchase of a 354,000 square foot assembly and test facility in Taiwan. We continue to invest in key package and test areas where we see long-term growth and are currently budgeting second quarter capital expenditures of $125 - 150 million," said Joyce. "In March we enhanced the company's liquidity by issuing $250 million in 7 1/8% senior notes due 2011 and using the net proceeds to repay amounts outstanding under our senior secured credit facility and for general corporate purposes," said Joyce. "This provides us with the additional financial flexibility to pursue our growth initiatives." "In April we sold 10.1 million shares of common stock of Anam Semiconductor, Inc. for cash proceeds of approximately $50 million," said Joyce. "This transaction will result in an after-tax gain of approximately $20 million, or $0.11 per share, which will be included in our second quarter results. The incremental cash will be used to fund ongoing capital investments. Following this sale, our investment in ASI has been reduced to 4.6 million shares, or approximately 4% of the company." Selected operating data for the first quarter of 2004 is included on a separate page of this release. BUSINESS OUTLOOK Our customer forecasts continue to rise for both advanced and legacy package products, however, it is possible that some customers will experience capacity constraints at their wafer foundries. On the basis of current forecasts, we have the following expectations for the second quarter of 2004: - - Sequential revenue increase in the range of 5% to 8%. - - Gross margin around 24%. - - Net income in the range of 17 to 22 cents per diluted share, which includes an after-tax gain of $20 million, or $0.11 per share, from the sale of 10.1 million shares of ASI common stock. The tax rate for the second quarter and full year 2004 is expected to be around 11%. At March 31, 2004 our company had U.S. net operating losses totaling $418 million expiring between 2021 and 2024. Additionally, at March 31, 2004 we had $45 million of non-U.S. net operating losses available for carryforward, expiring between 2004 and 2012. Amkor will conduct a conference call on April 27, 2004 at 10:30 a.m. eastern time to discuss the results of the first quarter in more detail. The call can be accessed by dialing 303-205-0044 or by visiting the investor relations page of our web site: www.amkor.com or CCBN's website, www.companyboardroom.com. An archive of the webcast can be accessed through the same links and 2 will be available until our next quarterly earnings conference call. An audio replay of the call will be available for 48 hours following the conference call by dialing 303-590-3000 passcode: 574793#. Amkor is a leading 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. This press release contains forward-looking statements within the meaning of federal securities laws, including, without limitation, statements regarding anticipated growth opportunities, expansion of the semiconductor industry, revenue and revenue growth, capacity expansion, capital expenditures, gross margin, legal costs, net income, tax rates, use of proceeds and the statements contained under Business Outlook. These forward-looking statements are subject to a number of risks and uncertainties that could affect future operating results and cause actual results and events to differ materially from historical and expected results, including, but not limited to, the following: the highly unpredictable nature of the semiconductor industry; volatility of consumer demand for products incorporating our semiconductor packages; deterioration of the U.S. or other economies; worldwide economic effects of terrorist attacks; military conflict in the Middle East and potential military conflict in Asia, Africa and elsewhere; competitive pricing and declines in average selling prices; timing and volume of orders relative to the production capacity; incurrence of significant additional costs and expense necessary for the increase in our 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; changes in tax laws; exchange rate fluctuations; dependence on key personnel; difficulties in managing growth; enforcement of intellectual property rights; and environmental regulations. Further information on risk factors that could affect the outcome of the events set forth in these statements and that could 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-K for the year ended December 31, 2003. Contact: Jeffrey Luth VP Corporate Communications 480-821-5000 ext. 5130 jluth@amkor.com 3 SELECTED OPERATING DATA FOR THE FIRST QUARTER OF 2004 1ST QUARTER - - Capital expenditures: $171 million - - Depreciation and amortization: $52 million - - Free cash flow * ($47 million) * Reconciliation of free cash flow to the most directly comparable GAAP measure: We define free cash flow from continuing operations as net cash provided by continuing operating activities less purchases of property, plant and equipment. Free cash flow is not defined by generally accepted accounting principles, and our definition of free cash flow may not be comparable to similar companies. - - End market distribution (an approximation based on a sampling of programs with our largest customers) Communications 37% Computing 24% Consumer 30% Other 9% - - Capacity utilization, calculated as quarterly revenue divided by revenue generating capacity (RGC) at quarter-end, was approximately 71%. We define RGC as 100% utilization of installed capacity (based on the limiting equipment set on each production line), using quarterly average selling price. - - Assembly average selling price (calculated on a per pin basis) declined approximately 3% from Q4 2003. - - Assembly unit shipments were 1.8 billion, up 9% from Q4 2003. - Percentage of assembly revenue: Advanced packages 79% Traditional packages 21% - - Test revenue as a proportion of total revenue was approximately 9%. (tables to follow) 4
Net cash provided by continuing operating activities $124 million Less purchases of property, plant and equipment ($171 million) -------------- Free cash flow from continuing operations ($47 million) ============== AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) 5
FOR THE THREE MONTHS ENDED MARCH 31, ------------------------ 2004 2003 --------- --------- (UNAUDITED) Net revenues $ 464,646 $ 343,131 Cost of revenues 352,798 296,562 --------- --------- Gross profit 111,848 46,569 --------- --------- Operating expenses: (1) Selling, general and administrative 52,178 41,423 Research and development 8,977 7,609 Loss on disposal of fixed assets, net 8 69 Amortization of acquired intangibles 1,328 2,030 --------- --------- Total operating expenses 62,491 51,131 --------- --------- Operating income (loss) 49,357 (4,562) --------- --------- Other (income) expense: Interest expense, net 33,290 35,862 Foreign currency loss (gain) 75 (925) Other (income) expense, net (931) 1,229 Debt retirement costs (2) 2,720 -- --------- --------- Total other expense 35,154 36,166 --------- --------- Income (loss) before income taxes, equity investment loss, minority interest and discontinued operations 14,203 (40,728) Equity investment loss -- (3,628) Minority interest (358) 149 --------- --------- Income (loss) from continuing operations before income taxes 13,845 (44,207) --------- --------- Provision for income taxes (benefit) 1,604 (4,177) --------- --------- Income (loss) from continuing operations 12,241 (40,030) --------- --------- Discontinued operations: Income from wafer fabrication services business, net of tax of $419 in 2003 -- 3,047 Gain on sale of wafer fabrication services business, net of tax of $7,081 in 2003 -- 51,519 --------- --------- Net income $ 12,241 $ 14,536 ========= ========= Per Share Data: Basic and diluted income (loss) per common share from continuing operations $ 0.07 $ (0.24) Basic and diluted income per common share from discontinued operations -- 0.33 --------- --------- Basic and diluted income per common share $ 0.07 $ 0.09 ========= ========= Shares used in computing basic income (loss) per common share 174,622 165,156 ========= ========= Shares used in computing diluted income (loss) per common share 180,202 165,156 ========= ========= (1) Certain previously reported amounts have been reclassified to conform with the current presentation (2) Debt retirement costs include the following: Call premium $ 1,687 $ -- Unamortized deferred debt acquisition costs 1,033 -- --------- --------- $ 2,720 $ -- ========= ========= AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (In thousands) 6
MARCH 31, DECEMBER 31, 2004 2003 ----------- ----------- (UNAUDITED) Assets Current assets: Cash and cash equivalents $ 345,496 $ 313,259 Accounts receivable: Trade, net of allowance of $5,298 in 2004 and $6,514 in 2003 284,825 310,096 Other 5,636 4,413 Inventories 112,406 92,439 Other current assets 38,445 49,606 ----------- ----------- Total current assets 786,808 769,813 ----------- ----------- Property, plant and equipment, net 1,131,503 1,007,648 ----------- ----------- Investments 55,860 51,181 ----------- ----------- Other assets: Goodwill 626,596 629,850 Acquired intangibles 39,877 37,730 Other 74,357 67,601 Assets of discontinued operations -- 96 ----------- ----------- 740,830 735,277 ----------- ----------- Total assets $ 2,715,001 $ 2,563,919 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Bank overdraft $ 535 $ 2,690 Short-term borrowings and current portion of long-term debt 22,488 28,665 Trade accounts payable 280,401 230,396 Accrued expenses 165,479 170,145 ----------- ----------- Total current liabilities 468,903 431,896 Long-term debt 1,734,407 1,650,707 Other noncurrent liabilities 87,296 78,974 ----------- ----------- Total liabilities 2,290,606 2,161,577 ----------- ----------- Minority interest 1,564 1,338 Stockholders' equity: Common stock 175 175 Additional paid-in capital 1,319,010 1,317,164 Accumulated deficit (919,295) (931,536) Accumulated other comprehensive gains 22,941 15,201 ----------- ----------- Total stockholders' equity 422,831 401,004 ----------- ----------- Total liabilities and stockholders' equity $ 2,715,001 $ 2,563,919 =========== =========== AMKOR TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) 7
FOR THE THREE MONTHS ENDED MARCH 31, ------------------------ 2004 2003 --------- --------- (UNAUDITED) Cash flows from continuing operating activities: Income (loss) from continuing operations $ 12,241 $ (40,030) Depreciation and amortization 52,397 57,793 Equity investment loss -- 3,628 Other adjustments to reconcile income (loss) to net cash provided by operating activities 5,262 4,186 Changes in assets and liabilities excluding effects of acquisition 54,329 3,887 --------- --------- Net cash provided by operating activities 124,229 29,464 --------- --------- Cash flows from continuing investing activities: Purchases of property, plant and equipment (170,838) (16,571) Other investing activities 6,454 13,278 --------- --------- Net cash used in investing activities (164,384) (3,293) --------- --------- Cash flows from continuing financing activities Net proceeds from issuance of long-term debt 249,007 -- Payments of long-term debt (171,551) (5,899) Other financing activity (5,704) (1,968) --------- --------- Net cash provided by (used in) financing activities 71,752 (7,867) --------- --------- Effect of exchange rate fluctuations on cash and cash equivalents related to continuing operations 544 (207) --------- --------- Cash flows provided by discontinued operations 96 22,139 --------- --------- Net increase in cash and cash equivalents 32,237 40,236 Cash and cash equivalents, beginning of period 313,259 311,249 --------- --------- Cash and cash equivalents, end of period $ 345,496 $ 351,485 ========= ========= Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 27,519 $ 31,390 Income taxes $ 11,781 $ 4,028