Press Releases

First Quarter Highlights

• Net sales $869 million
• Gross margin 14.1%
• Net income and earnings per diluted share at breakeven
• Includes consolidation of J-Devices' operating results for the first time
• Automotive revenues of $220 million in Q1, up 7% sequentially and 6% year-over-year on a combined basis with J-Devices

TEMPE, Ariz.--(BUSINESS WIRE)--Apr. 27, 2016-- Amkor Technology, Inc. (NASDAQ: AMKR), a leading provider of semiconductor packaging and test services, today announced financial results for the first quarter ended March 31, 2016.

"First quarter results were above the high end of our guidance,” said Steve Kelley, Amkor's president and chief executive officer. “We benefited from better than expected performance in Japan and in the high-end Android smartphone market. In addition, our strategic initiatives continued to build momentum with automotive sales of $220 million in the quarter, up 7% sequentially and 6% year-over-year on a combined basis with J-Devices. Our Greater China revenues were also up 21% sequentially. However, overall demand was still relatively low on a historical basis, which led to breakeven financial performance in the quarter."

* Fourth quarter 2015 net income and earnings per diluted share exclude a gain of $16 million related to our previous investments in J-Devices and a non-cash loss of $30 million relating to the release of a foreign currency translation adjustment account, for a net loss of $14 million. The reconciliation to the comparable GAAP measures is included below under "Selected Operating Data."

In December 2015, Amkor increased its ownership in J-Devices Corporation from 66% to 100%. As a result, the accounting for J-Devices changed from the equity method to the consolidation method effective at the time of acquisition. J-Devices' operating results were consolidated with Amkor for the first time beginning in the first quarter of 2016.

“Our first quarter revenues were up 30% sequentially with the consolidation of $217 million of sales from J-Devices,” said Joanne Solomon, Amkor’s executive vice president and chief financial officer. “J-Devices also contributed $0.04 to our earnings per share in the quarter."

Cash and cash equivalents were $413 million, and total debt was $1.5 billion, at March 31, 2016.

Business Outlook

"Looking ahead, we see improved demand across most end markets in Q2," said Kelley. “Unfortunately, we do not expect to realize meaningful revenue growth in Q2 due to temporary disruptions stemming from the recent earthquakes in Japan. Our Kumamoto factory was damaged in the earthquakes and is operating on a limited basis today. Repair work is being expedited, and we expect to ramp to full operational capacity over the next 11 weeks. We now expect Q2 revenues of around $875 million, which reflect roughly $35 million in lower sales due to the impact of the earthquakes. We also expect to incur incremental costs of around $20 million in Q2 for damaged inventory and repairs to buildings and equipment. Taking into account insurance payments anticipated later this year, we expect the net impact on our full year 2016 results to be modest."

Second quarter 2016 outlook (unless otherwise noted):

• Net sales of $850 million to $900 million, down 2% to up 4% from the prior quarter
• Gross margin of 10% to 13%
• Net loss of $11 million to $33 million, or ($0.04) to ($0.14) per share
• Full year 2016 capital expenditures of around $650 million, unchanged from our previous forecast

Conference Call Information

Amkor will conduct a conference call on Wednesday, April 27, 2016, 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 89394810). 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 Technology, Inc.

Amkor Technology, Inc. is one of the world’s largest providers of outsourced semiconductor packaging and test services. Founded in 1968, Amkor pioneered the outsourcing of IC packaging and test, and is now a strategic manufacturing partner for more than 250 of the world’s leading semiconductor companies, foundries and electronics OEMs. Amkor’s operating base includes more than 8 million square feet of floor space, with production facilities, product development centers, and sales and support offices located in key electronics manufacturing regions in Asia, Europe and the U.S. For more information, visit www.amkor.com.

*Advanced products include flip chip and wafer-level processing and related test services
**Mainstream products include wirebond packaging and related test services

In the press release above we provide non-GAAP net income and non-GAAP earnings per diluted share. We present these non-GAAP amounts to demonstrate the impact of the consolidation of J-Devices. 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 U.S. generally accepted accounting principles ("U.S. GAAP"). These measures have limitations, and should be considered in addition to, and not as a substitute for, or superior to, net income and earnings per diluted share prepared in accordance with U.S. GAAP. Below is the reconciliation of non-GAAP net income and non-GAAP earnings per diluted share to U.S. GAAP net income and earnings per diluted share.

In the press release above we provide EBITDA and Adjusted EBITDA, which are not defined by U.S. GAAP. We define EBITDA as net income before interest expense, income tax expense and depreciation and amortization. We believe EBITDA and Adjusted EBITDA to be relevant and useful information to our investors because they provide additional information in assessing our financial operating results. Our management uses EBITDA and Adjusted EBITDA in evaluating our operating performance, our ability to service debt and our ability to fund capital expenditures. However, EBITDA and Adjusted EBITDA have certain limitations in that they do not reflect the impact of certain expenses on our consolidated statements of income, including interest expense, which is a necessary element of our costs because we have borrowed money in order to finance our operations, income tax expense, which is a necessary element of our costs because taxes are imposed by law, and depreciation and amortization, which is a necessary element of our costs because we use capital assets to generate income. EBITDA and Adjusted EBITDA should be considered in addition to, and not as a substitute for, or superior to, operating income, net income or other measures of financial performance prepared in accordance with U.S. GAAP. Furthermore our definition of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Below is our reconciliation of EBITDA and Adjusted EBITDA to U.S. GAAP net income.

Forward-Looking Statement Disclaimer

This press release contains forward-looking statements within the meaning of federal securities laws. All statements other than statements of historical fact are considered forward-looking statements, including, without limitation, statements regarding the impact and recovery from the recent earthquakes in Japan and all of the other statements made under "Business Outlook" above. These forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could affect future results and cause actual results and events to differ materially from historical and expected results and those expressed or implied in the forward-looking statements, including, but not limited to, the following:

• there can be no assurance that our recovery from the recent earthquakes in Japan will occur as quickly as expected, or that the actual costs and financial impact will be consistent with our current expectations, for example due to additional earthquakes, shortages in labor or supplies for repairs or operations, increased inventory or repair costs, shortages in customer materials, changes in customer preferences, demand or loadings, or delays or shortfalls in insurance payments;
• there can be no assurance regarding when our new K5 facility in Korea will be fully utilized, or that the actual scope, costs, timeline or benefits of the project will be consistent with our current expectations;
• the highly unpredictable nature and cyclicality of the semiconductor industry;
• timing and volume of orders relative to production capacity and the inability to achieve high capacity utilization rates, control costs and improve profitability;
• volatility of consumer demand, double booking by customers and deterioration in forecasts from our customers for products incorporating our semiconductor packages, including any slowdown in demand or changes in customer forecasts for smartphones or other mobile devices and generally soft end market demand for electronic devices;
• delays, lower manufacturing yields and supply constraints relating to wafers, particularly for advanced nodes and related technologies;
• dependence on key customers and the impact of changes in our market share and prices for our services with those customers;
• the performance of our business, economic and market conditions, the cash needs and investment opportunities for the business, the need for additional capacity and facilities to service customer demand and the availability of cash flow from operations or financing;
• the effect of the global economy on credit markets, financial institutions, customers, suppliers and consumers, including the uncertain macroeconomic environment;
• the highly unpredictable nature and costs of litigation and other legal activities and the risk of adverse results of such matters and the impact of other legal proceedings;
• changes in tax rates and taxes as a result of changes in U.S. or foreign tax law, the jurisdictions in which our income is determined to be earned and taxed, the outcome of tax audits and tax ruling requests, our ability to realize deferred tax assets and the expiration of tax holidays;
• curtailment of outsourcing by our customers;
• our substantial indebtedness and restrictive covenants;
• failure to realize sufficient cash flow or access to other sources of liquidity to fund capital expenditures;
• the effects of an economic slowdown in major economies worldwide, particularly the recent slowdown in China;
• disruptions in our business or deficiencies in our controls resulting from the integration of newly acquired operations, particularly J-Devices, or the implementation and security of, and changes to, our enterprise resource planning, factory shop floor systems and other management information systems;
• economic effects of terrorist attacks, military conflict and natural disasters such as the recent earthquakes in Japan;
• competition, competitive pricing and declines in average selling prices;
• fluctuations in manufacturing yields;
• dependence on international operations and sales and exchange rate fluctuations;
• dependence on raw material and equipment suppliers and changes in raw material and precious metal costs, including any disruptions in the supply chain resulting from the recent earthquakes in Japan;
• dependence on key personnel;
• enforcement of and compliance with intellectual property rights;
• environmental and other governmental regulations; and
• technological challenges.

Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect our operating results and financial condition are discussed in the company's Annual Report on Form 10-K for the year ended December 31, 2015 and in the company's subsequent filings with the Securities and Exchange Commission made prior to or after the date hereof. Amkor undertakes no obligation to review or update any forward-looking statements to reflect events or circumstances occurring after the date of this press release.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160427006697/en/

Source: Amkor Technology, Inc.

Amkor Technology, Inc.
Joanne Solomon
Executive Vice President & Chief Financial Officer
480-786-7878
joanne.solomon@amkor.com
or
Greg Johnson
Senior Director, Finance and Investor Relations
480-786-7594
greg.johnson@amkor.com