1 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 31, 2000 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)
2 ITEM 5. OTHER EVENTS. On October 31, 2000 we issued a press release (attached hereto as Exhibit 99.1) announcing our financial results for the third quarter ended September 30, 2000. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Text of Press Release dated October 31, 2000 2
3 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: November 6, 2000
1 Exhibit 99.1 [AMKOR TECHNOLOGY LOGO] News Release AMKOR TECHNOLOGY REPORTS RECORD THIRD QUARTER RESULTS West Chester, PA. - October 31, 2000 -- Amkor Technology, Inc. (Nasdaq: AMKR) cited continued strength in outsourcing trends in reporting financial results for the third quarter ended September 30, 2000. Total revenues were $649 million, an increase of 29% from $502 million in the third quarter of 1999 and a 19% increase over the second quarter of 2000. Assembly & test revenues rose to $549 million from $430 million in the third quarter of last year. Wafer fab revenues were $100 million compared with $72 million in the third quarter of 1999. Net income before the amortization of goodwill and acquired intangibles was $73 million, or $0.46 per share, compared with $34 million, or $0.27 per share, for the third quarter of 1999. Including amortization of goodwill and acquired intangibles net income was $45 million, or $0.28 per share, compared with $26 million, or $0.21 per share, for the third quarter of 1999. There were 159 million weighted average shares outstanding on a fully diluted basis for the third quarter of 2000 compared with 136 million in the year-ago period. For the first nine months of 2000, revenues rose 28% to $1.75 billion from $1.37 billion in the first nine months of 1999. Net income before the amortization of goodwill and acquired intangibles more than doubled, to $171 million, or $1.13 per share, compared to $69 million, or $0.56 per share, for the first nine months of 1999. Including amortization of goodwill and acquired intangibles net income was $113 million, or $0.75 per share, compared with $57 million, or $0.47 per share, for the third quarter of 1999. "We had an exceptionally strong third quarter, with virtually all markets showing solid demand," said John Boruch, Amkor's President. "We saw especially robust growth in our laminate package products. This strong performance reflects positively on the health of our business." "The trend towards outsourcing of assembly & test, as reflected in the proposed Toshiba J.V., continues to be a key growth driver, and we expect this trend to accelerate during the next several years," said Mr. Boruch. -more-
2 "The gross margin for the third quarter of 2000 rose to 24.5% from 22.7% in Q2 '00 and 19.4% in Q3 '99. The increase in Q3 gross margin reflects a full quarter's ownership of the K1, K2 & K3 factories acquired from Anam Semiconductor on May 1, 2000," said Ken Joyce, Amkor's Chief Financial Officer. Third quarter 2000 gross margin reflects the inclusion of $20.2 million in "cost of goods sold" for amortization of goodwill and acquired intangibles primarily in connection with the K1 - 4 acquisitions. Absent this amortization, our Q3 gross margin would have been 27.6%. For the third quarter of 1999, these figures were $7.8 million and 20.9%, respectively. "We believe that presenting goodwill amortization as a separate line item provides a more appropriate measure of our operating performance, and is also in line with the precedents established by other companies in our industry," said Mr. Joyce. "Therefore commencing with our Q4 financial disclosure, we will be reporting the amortization of goodwill and acquired intangibles previously included in Cost of Revenues as a separate line item, below the gross profit line. Consequently, our gross margin guidance for Q4 and future periods will reflect this treatment." "The pricing environment in semiconductor packaging remained within normal ranges," noted Mr. Joyce. "Overall packaging ASP declines were around 2.1% for the third quarter, compared with 3% in the prior quarter. We remain focused on improving our product mix by incorporating more advanced package technology and design." "We expect consolidated gross margin to be stable in the fourth quarter, or approximately 27% to 28% under the treatment noted above," said Mr. Joyce. Operating income rose to $100 million from $54 million in the third quarter of 1999. Excluding the amortization of goodwill, third quarter operating income was $120 million and $62 million for 2000 and 1999, respectively. Pre-tax profit rose 78% to $62 million from $35 million in Q3 of 1999. Depreciation and amortization expenses were $99 million compared with $52 million in the third quarter of 1999. Third quarter EBITDA rose sharply to $197 million from $103 million in Q3 '99. We have calculated EBITDA as earnings before income taxes; equity in income (loss) of affiliates; foreign currency gain or loss; interest expense, net; depreciation and amortization. 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. -more-
3 Unit shipments rose 33% over the year-ago quarter and 13% over the second quarter of 2000. Overall assembly capacity utilization rose to 85% from 75% in the second quarter of 2000. Utilization was 87% in the third quarter of 1999. High end (advanced leadframe and laminate) products were 69% of packaging revenues for the third quarter, compared to 63% in the third quarter of 1999. Third quarter test revenue increased 43%, to $31.4 million from $21.9 million in Q3 of 1999. "We have been aggressively building our test capabilities, in terms of both test assets and engineering staff, to support an accelerating demand for outsourcing our customers' testing requirements," said Mr. Boruch. "We are particularly excited about our industry-leading capability in the area of Strip Test, which was co-developed by Amkor and several leading test technology partners. Strip Test allows a higher level of integration between the assembly and test processes and provides such key benefits as shorter cycle time, improved asset utilization and reduced testing costs. We expect to increase our test revenue by 80% in 2001" "Recently, some questions have been raised regarding the state of the semiconductor cycle," continued Mr. Boruch. "It is important to note that throughout our 32-year history, Amkor has typically grown during semiconductor industry downturns. This is a period when integrated device manufacturers tend to focus more on their core competencies of chip design and fabrication, and look more toward outsourcing their assembly and test. In addition, the production - and consumption - of semiconductor units continues to increase, and Amkor is a unit-driven company. Our highly diversified customer base, which covers the entire spectrum of the microelectronics industry, together with our broad array of packaging and test technology and unequalled manufacturing scale, are key factors contributing to Amkor's growth during industry downturns. We are well positioned to maintain this track record." Anam's wafer foundry continued to ramp toward its full design capacity of 30,000 wafer starts per month. During the third quarter, the fab averaged approximately 24,000 monthly wafer starts on behalf of Texas Instruments, Atmel and other foundry customers. The company expects wafer starts to increase to 30,000 per month by the end of Q1 2001. "Looking ahead, we expect strong growth in a broad range of chip scale packages, such as ChipArray, Tape BGA, MicroLeadframe and High-End BGA, that have been designed to support 0.18 micron fab process technology," said Mr. Boruch. "In addition, we expect our Flip Chip business to grow significantly in 2001. We are installing a fully integrated bumping, plating and packaging operation that will allow us to support Flip Chip devices at 0.15 micron and below." -more-
4 "In our developing System-in-Package business, we have established a strong infrastructure to support what we believe will be significant growth opportunities in 2001 and beyond," said Mr. Boruch. "Our growing portfolio of SiP packages is providing a variety of solutions in the wireless, broadband and storage markets." "Our High Density Leadframe program has enabled Amkor to be a very cost competitive producer of leadframe packages. These initiatives position us to further consolidate our market leadership in this highly profitable product family," said Mr. Boruch. "Finally, we plan to be well positioned in the area of packaging optical components," said Mr. Boruch. "We have been exploring a number of opportunities with leading optical device companies in North America and Europe and hope to have more news to announce within the next several months." "Our long-term growth has typically been in the 20% to 25% range, which is generally the rate that the outsourced market has expanded. Our current plans for 2001 are to grow our Assembly & Test revenue by 35% and Wafer Fab revenues by 20%. Our proposed transaction with Toshiba should close on or about December 1. This joint venture should bring Amkor $300 million in revenue over the next twelve months and represents the first step in consolidating what we believe is an $8 billion captive semiconductor assembly and test market in Japan," said Mr. Boruch. Amkor will be holding a conference call on October 31 at 5:00 p.m. eastern time to discuss the results of the third quarter in more detail. Participants can access the call at 712-271-0002. The call will also be webcast through our web site, http://www.amkor.com. Amkor Technology, Inc. is the world's largest provider of semiconductor assembly and test services. The company offers a complete set of micro-electronics manufacturing services including deep submicron wafer fabrication, wafer probe testing, IC packaging design, assembly & testing, burn-in, characterization 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 under the symbol AMKR. -more-
5 This news release contains forward-looking statements - such as (1) our belief that the trend towards outsourcing of assembly & test continues to be a key growth driver, which should accelerate during the next several years; (2) our belief that we are well positioned to maintain our track record of growth during industry downturns; (3) our expectation that consolidated gross margin will be stable in the fourth quarter, or approximately 27% to 28% when excluding the amortization of goodwill and acquired intangibles; (4) our expectation that our Flip Chip business will grow significantly in 2001; (5) our expectation that, in the area of optical packaging, we will have news to announce within the next several months; (6) our current plans for 2001 are to grow our Assembly & Test revenue by 35% ,Wafer Fab revenues by 20% and Test revenues by 80%; and (7) our belief that the proposed transaction with Toshiba should close on or about December 1 and should bring Amkor $300 million in revenue over the next twelve months; - 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 for the fiscal quarter ended June 30, 2000. Contact: Jeffrey Luth (Investors) Ken Jensen (Media) 610-431-9600 ext. 5613 480-821-2408 Ext. 5130 jluth@amkor.com kjens@amkor.com (tables to follow)
6 AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA) FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, (UNAUDITED) (UNAUDITED) 2000 1999 2000 1999 ---- ---- ---- ---- Net revenues $648,576 $501,816 $1,750,423 $1,371,698 Cost of revenues -- including purchases from ASI 469,518 396,532 1,316,739 1,132,450 Amortization of goodwill & other acquired intangibles 20,179 7,795 41,633 12,421 -------- -------- ---------- ---------- Total cost of revenues 489,697 404,327 1,358,372 1,144,871 -------- -------- ---------- ---------- Gross profit 158,879 97,489 392,051 226,827 -------- -------- ---------- ---------- Operating expenses: Selling, general and administrative 50,257 40,376 139,386 105,499 Research and development 8,838 2,990 17,081 8,084 -------- -------- ---------- ---------- Total operating expenses 59,095 43,366 156,467 113,583 -------- -------- ---------- ---------- Operating income 99,784 54,123 235,584 113,244 -------- -------- ---------- ---------- Other (income) expense: Interest expense, net 36,787 16,995 81,644 29,429 Foreign currency (gain) loss 2,015 (253) 4,607 151 Other expense(income), net (613) 2,597 1,425 6,225 -------- -------- ---------- ---------- Total other expense 38,189 19,339 87,676 35,805 -------- -------- ---------- ---------- Income before income taxes and equity in loss of investees 61,595 34,784 147,908 77,439 Provision for income taxes 9,239 8,696 24,425 20,906 Equity in loss of investees (7,185) 0 (10,220) 0 -------- -------- ---------- ---------- Net income $45,171 $26,088 $113,263 $56,533 ======== ======== ========== ========== Per Share Data: Basic net income per common share $0.30 $0.22 $0.79 $0.48 ======== ======== ========== ========== Diluted net income per common share $0.28 $0.21 $0.75 $0.47 ======== ======== ========== ========== Shares used in computing basic net income per common share 151,831 118,276 143,744 118,090 ======== ======== ========== ========== Shares used in computing diluted net income per common share 158,833 135,626 151,663 134,079 ======== ======== ========== ==========
7 AMKOR TECHNOLOGY, INC. SUPPLEMENTAL CONSOLIDATED STATEMENTS OF INCOME EXCLUDING AMORTIZATION OF GOODWILL AND OTHER ACQUISITION-RELATED INTANGIBLES (IN THOUSANDS, EXCEPT PER SHARE DATA) FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, (UNAUDITED) (UNAUDITED) 2000 1999 2000 1999 ---- ---- ---- ---- Net revenues $648,576 $501,816 $1,750,423 $1,371,698 Cost of revenues-including purchases from ASI 469,518 396,532 1,316,739 1,132,450 -------- -------- ---------- ---------- Gross profit 179,058 105,284 433,684 239,248 -------- -------- ---------- ---------- Operating expenses: Selling, general and administrative 50,257 40,376 139,386 105,499 Research and development 8,838 2,990 17,081 8,084 -------- -------- ---------- ---------- Total operating expenses 59,095 43,366 156,467 113,583 -------- -------- ---------- ---------- Operating income 119,963 61,918 277,217 125,665 -------- -------- ---------- ---------- Other (income) expense: Interest expense, net 36,787 16,995 81,644 29,429 Foreign currency loss 2,015 (253) 4,607 151 Other expense(income), net (613) 2,597 1,425 6,225 -------- -------- ---------- ---------- Total other expense 38,189 19,339 87,676 35,805 -------- -------- ---------- ---------- Income before income taxes and equity in loss of investees 81,774 42,579 189,541 89,860 Provision for income taxes 9,239 8,696 24,425 20,906 Equity in income of investees 344 0 5,839 0 -------- -------- ---------- ---------- Net income $72,879 $33,883 $170,955 $68,954 ======== ======== ========== ========== Per Share Data: Basic net income per common share $0.48 $0.29 $1.19 $0.58 ======== ======== ========== ========== Diluted net income per common share $0.46 $0.27 $1.13 $0.56 ======== ======== ========== ========== Shares used in computing basic 151,831 118,276 143,744 118,090 net income per common share ======== ======== ========== ========== Shares used in computing 158,833 135,626 151,663 134,079 diluted net income per common share ======== ======== ========== ========== The above supplemental consolidated statements of income exclude the effects of the following: During the three months and nine months ended September 30, 2000, the amortization of goodwill and other acquired intangibles excluded from cost of revenues was $20.2 million and $41.6 million, respectively. During the three months and nine months ended September 30, 1999, the amortization of goodwill excluded from cost of revenues was $7.8 million and $12.4 million, respectively. During the three months and nine months ended September 30, 2000, the amortization of the difference between the cost of our equity investments and our share of the underlying net assets of ASI excluded from equity in income of investees was $7.5 million and $16.1 million, respectively.
8 AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) SEPTEMBER 30, DECEMBER 31, 2000 1999 (UNAUDITED) Assets Current assets: Cash and cash equivalents $108,865 $98,045 Short-term investments 0 136,595 Accounts receivable -- Trade, net of allowance for doubtful accounts of $2,443 311,612 157,281 Due from affiliates 1,540 6,278 Other 8,208 6,469 Inventories 103,695 91,465 Other current assets 29,185 11,117 ---------- ---------- Total current assets 563,105 507,250 ---------- ---------- Property, plant and equipment, net 1,481,196 859,768 ---------- ---------- Investments 452,022 63,672 ---------- ---------- Other assets: Due from affiliates 25,657 27,858 Goodwill and acquired intangibles 747,186 232,350 Other 165,169 64,191 ---------- ---------- Total other assets 938,012 324,399 ---------- ---------- Total assets $3,434,335 $1,755,089 ========== ========== Liabilities and Stockholders' Equity Current liabilities: Bank overdraft $25,049 $16,209 Short-term borrowings and current portion of long-term debt 73,669 6,465 Trade accounts payable 166,050 122,147 Due to affiliates 37,014 37,913 Accrued expenses 142,206 88,577 Accrued income taxes 44,267 41,587 ---------- ---------- Total current liabilities 488,255 312,898 Long-term debt 1,623,933 687,456 Other noncurrent liabilities 52,350 16,994 ---------- ---------- Total liabilities 2,164,538 1,017,348 ---------- ---------- Commitments and contingencies Stockholders' equity: Common stock 152 131 Additional paid-in capital 970,880 551,964 Retained earnings 302,996 189,733 Receivable from stockholder (3,276) (3,276) Accumulated other comprehensive income (955) (811) ---------- ---------- Total stockholders' equity 1,269,797 737,741 ---------- ---------- Total liabilities and stockholders' equity $3,434,335 $1,755,089 ========== ==========