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 JULY 30, 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 July 30, 2002 we issued a press release (attached hereto as Exhibit 99.1) announcing our financial results for the quarter ended June 30, 2002. On July 31, 2002, we issued a press release (attached hereto as Exhibit 99.2) restating certain supplemental financial information contained in the July 30, 2002 press release. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Text of Press Release dated July 30, 2002 99.2 Text of Press Release dated July 31, 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: August 1, 2002
[LOGO] News Release AMKOR SECOND QUARTER 2002 RESULTS ACHIEVE ORIGINAL GUIDANCE ASSEMBLY & TEST REVENUES RISE 21% OVER FIRST QUARTER CHANDLER, AZ. - July 30, 2002 -- Amkor Technology, Inc. (Nasdaq: AMKR) reported a second quarter 2002 net loss of $384 million, or $2.33 per share, which includes $311 million, or $1.89 per share, in special charges and impairment of Amkor's equity investment in Anam Semiconductor, Inc. ("ASI"). Excluding these charges, Amkor's second quarter net loss was $73 million, or ($.0.44) per share. For the second quarter of 2001, Amkor's net loss, excluding the amortization of goodwill, was $88 million, or ($0.57) per share. Second quarter 2002 revenue and gross margin were in line with guidance. Assembly & test revenue rose 21% to $350 million, from $289 million in the first quarter. Wafer fab revenue was $59 million compared with $61 million in the first quarter. Total revenue was $410 million compared with $350 million in the second quarter of 2001. Second quarter gross margin increased 700 basis points to 3% from negative 4% in the first quarter. "We have taken several important actions to position Amkor for profitable and sustainable growth," said James Kim, Amkor's chairman and chief executive officer. "The sale of 20 million ASI shares to Dongbu is the first step toward monetizing our interest in ASI and de-leveraging our balance sheet. As a result of repaying our bank debt with the proceeds from this transaction, we expect to realize interest savings of approximately $6 million annually. Proceeds from any further transactions related to our investment in ASI will also be used to reduce debt." "We delivered a strong quarter in our core assembly business and are making excellent progress in recovering from the industry downturn," said John Boruch, Amkor's president and chief operating officer. "During the past several months we have undertaken a series of initiatives designed to better align our business operations and reduce costs while remaining focused on growth opportunities. These initiatives should generate annual costs savings of between $17 million and $20 million." SPECIAL CHARGES AND IMPAIRMENT OF AMKOR'S EQUITY INVESTMENT IN ASI - - Significant recovery was noted in the company's core assembly business during the second quarter, however, test assets and several non-core assembly assets remained at low utilization rates during the quarter relative to projected rates, and are no longer expected to reach anticipated utilization levels. As announced previously, the company engaged an independent appraisal firm to assist in the determination of fair value in applying the guidance of FAS 144 and FAS 142. In accordance with the accounting guidelines in FAS 144, the company recognized an impairment charge to reduce the carrying value of the fixed assets to fair value. This resulted in a non-cash impairment charge of $185 million
Amkor Reports Second Quarter 2002 Results associated with underutilized test and assembly assets. In connection with the recent decline in the company's market capitalization and the recognition of significant impairment charges, the company, in accordance with FAS 142, tested goodwill for impairment during the second quarter of 2002. The carrying value of the company's test reporting unit, including allocated goodwill and intangibles, was in excess of fair value, and accordingly the company recognized a $78 million goodwill impairment charge. - - During the quarter, the company consolidated some of its U.S. office locations and closed its San Jose test facility. Test development is now centralized in Amkor's primary test development center in Wichita, Kansas. These activities were designed to reduce expenses and enhance operational efficiencies. In connection with these activities the company recognized $4.8 million in lease cancellation costs and other facility exit expenses. - - During the second quarter Amkor recorded an impairment charge of $43 million relating to our equity investment in ASI. As previously announced, Amkor has entered into a purchase agreement to sell 20 million shares of ASI to Dongbu Group at a price of 5700 Korean Won per share. The impairment charge reflects the difference between the carrying value of the investment of $5.64 per share and the per share price of $4.74 based on the Korean Won / US Dollar rate as of June 30, 2002. "Our assembly business strengthened each month during the quarter," said Boruch. "Due to a diversified customer base, our business is somewhat insulated from any sector-specific weakness. We have seen particular strength in our MicroLeadFrame(TM) package, which is becoming widely adopted in cellular and wireless LAN applications. During the past eighteen months, we have increased our MLF capacity from 1 million units per week to more than 12 million units, and we plan on reaching 15 million units per week capacity in the fourth quarter of this year. MLF is a perfect example of how Amkor is increasing market share in the wireless space irrespective of overall end-market demand." "We continue to see increased adoption of other advanced packaging solutions such as flip chip, system in package, stacked chips and high performance BGA," said Boruch. "Our flip chip initiatives are positioning Amkor as an ideal manufacturing partner enabling suppliers of graphics and chipset devices to migrate from wirebond to flip chip solutions." "Our proposed joint venture with Fujitsu is now expected to close in the fourth quarter and should generate an annual revenue stream of $100 million or more. As was the case with our Toshiba venture, the Fujitsu transaction involves a very modest cash outlay and should be accretive to earnings," said Boruch. FINANCIAL HIGHLIGHTS "Our assembly and test revenue and gross profit dollars were at their highest level since the first quarter of 2001 and well above their trough levels," said Ken Joyce, Amkor's chief financial officer. "Our second quarter gross margin of 3% was in line with expectations and a significant 2
Amkor Reports Second Quarter 2002 Results improvement from negative 4% in Q1. We expect gross margin will continue to improve in the second half of the year in connection with increased revenues, ongoing cost efficiency programs and lower depreciation expense as a result of the asset impairment charge we recorded during the second quarter." The effective income tax benefit rate decreased to 7% in Q2 from 20% in Q1. " The change in effective tax benefit rate in the quarter was principally due to impairment charges recorded in jurisdictions for which there is limited offsetting tax benefits as a result of tax holidays" noted Joyce. "We project the effective income benefit tax rate to be approximately 18% for the remainder of 2002." Second quarter EBITDA rose to $48 million from $24 million in the first quarter. "Our EBITDA was the highest since the first quarter of 2001. We expect the growth in customer forecasts, together with improved organizational efficiencies and positive operating leverage, to result in higher levels of operating cash flow and EBITDA through the remainder of 2002," said Joyce. 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 $32 million for the second quarter. Depreciation and amortization totaled $95 million. "Our capital budget for 2002 remains in the neighborhood of $100 million," noted Joyce. BUSINESS OUTLOOK We currently expect third quarter assembly & test revenue to be around 5% higher than the second quarter. Wafer fab revenue should be down modestly. Our gross margin should increase from 3% in the second quarter to around 9% in the third quarter, reflecting the positive operating leverage in our business, reduced operating expenses and lower levels of depreciation. We presently expect to incur approximately $10 million to $15 million of charges during the third quarter in connection with additional consolidation initiatives and cost reductions. Amkor will be holding a conference call on July 30 at 5:00 p.m. eastern time to discuss the results of the second quarter in more detail and to provide additional guidance for the third 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 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 3
Amkor Reports Second Quarter 2002 Results 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-QK for the fiscal quarter ended December 31, 2001. Contact: Jeffrey Luth VP Corporate Communications 480-821-2408 ext. 5130 jluth@amkor.com (tables to follow) 4
Amkor Reports Second Quarter 2002 Results AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended June 30 (in thousands, except per share data) Pro Forma(1) 2002 2001 2001 (Unaudited) (Unaudited) (Unaudited) Net revenues Assembly and Test $ 350,471 $ 311,423 $ 311,423 Wafer Fab 59,413 38,746 38,746 --------- --------- --------- Total 409,884 350,169 350,169 Cost of revenues-including purchases from ASI 397,503 342,158 342,158 --------- --------- --------- Gross profit 12,381 8,011 8,011 --------- --------- --------- Operating expenses: Selling, general and administrative 49,607 51,365 51,365 Research and development 8,769 8,135 8,135 Loss on disposal of assets 1,438 398 398 Special charges (2) 268,166 0 0 Amortization of goodwill & other acquired intangibles 1,743 20,573 1,181 --------- --------- --------- Total operating expenses 329,723 80,471 61,079 --------- --------- --------- Operating (loss) (317,342) (72,460) (53,068) --------- --------- --------- Other (income) expense: Interest expense, net 37,434 40,411 40,411 Foreign currency loss 702 2,375 2,375 Other (income), net (489) (455) (455) --------- --------- --------- Total other expense 37,647 42,331 42,331 --------- --------- --------- (Loss) before income taxes and equity in income of investees (354,989) (114,791) (95,399) (Benefit) for income taxes (25,440) (25,673) (25,673) Equity in (loss) of investees (10,111) (26,345) (17,392) (Loss) on impairment of equity investment (42,960) 0 0 Minority Interest (908) (828) (828) --------- --------- --------- Net (loss) $(383,528) $(116,291) $ (87,946) ========= ========= ========= Per Share Data: Basic net (loss) per common share $ (2.33) $ (0.76) $ (0.57) ========= ========= ========= Diluted net (loss) per common share $ (2.33) $ (0.76) $ (0.57) ========= ========= ========= Shares used in computing basic net (loss) per common share 164,281 153,950 153,950 ========= ========= ========= Shares used in computing diluted net (loss) per common share 164,281 153,950 153,950 ========= ========= ========= (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 on FAS 142 impairment $ 78,304 Loss on FAS 144 impairment 185,042 Loss on facility shutdowns 4,820 --------- 268,166 ========= 5
Amkor Reports Second Quarter 2002 Results AMKOR TECHNOLOGY, INC CONSOLIDATED STATEMENTS OF INCOME For the Six Months Ended June 30 (in thousands, except per share data) Pro Forma (1) 2002 2001 2001 (Unaudited) (Unaudited) (Unaudited) Net revenues Assembly and Test $ 639,426 $ 750,836 $ 750,836 Wafer Fab 120,099 79,956 79,956 --------- --------- --------- Total 759,525 830,792 830,792 Cost of revenues-including purchases from ASI 760,615 740,996 740,996 --------- --------- --------- Gross profit (loss) (1,090) 89,796 89,796 --------- --------- --------- Operating expenses: Selling, general and administrative 97,294 105,359 105,359 Research and development 16,913 18,637 18,637 Loss on disposal of assets 3,112 1,522 1,522 Special charges (2) 268,166 0 0 Amortization of goodwill & other acquired intangibles 2,995 42,485 2,339 --------- --------- --------- Total operating expenses 388,480 168,003 127,857 --------- --------- --------- Operating (loss) (389,570) (78,207) (38,061) --------- --------- --------- Other (income) expense: Interest expense, net 73,619 85,206 85,206 Foreign currency loss 2,705 1,065 1,065 Other (income), net (987) (1,411) (1,411) --------- --------- --------- Total other expense 75,337 84,860 84,860 --------- --------- --------- (Loss) before income taxes and equity in income of investees (464,907) (163,067) (122,921) (Benefit) for income taxes (47,973) (30,983) (30,983) Equity in (loss) of investees (12,205) (52,593) (34,777) (Loss) on impairment of equity investment (139,536) 0 0 Minority Interest (2,661) (828) (828) --------- --------- --------- Net (loss) $(571,336 $(185,505 $(127,543) ========= ========= ========= Per Share Data: Basic net (loss) per common share $ (3.49) $ (1.21) $ (0.83) ========= ========= ========= Diluted net (loss) per common share $ (3.49) $ (1.21) $ (0.83) ========= ========= ========= Shares used in computing basic net (loss) per common share 163,529 153,068 153,068 ========= ========= ========= Shares used in computing diluted net (loss) per common share 163,529 153,068 153,068 ========= ========= ========= (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 on FAS 142 impairment $ 78,304 Loss on FAS 144 impairment 185,042 Loss on facility shutdowns 4,820 -------- 268,166 ======== 6
Amkor Reports Second Quarter 2002 Results AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (in thousands) June 30, December 31, 2002 2001 (unaudited) Assets Current assets: Cash and cash equivalents $ 161,938 $ 200,057 Accounts receivable- Trade, net of allowance for doubtful accounts of $6,912 and $6,842 253,625 211,419 Due from affiliates 711 871 Other 9,236 8,953 Inventories 80,158 73,784 Other current assets 42,014 37,106 ----------- ----------- Total current assets 547,682 532,190 ----------- ----------- Property, plant and equipment, net 1,082,764 1,392,274 ----------- ----------- Investments 231,336 382,951 ----------- ----------- Other assets: Due from affiliates 21,775 20,518 Goodwill 624,047 659,130 Acquired intangibles 49,121 37,050 Other 238,135 199,205 ----------- ----------- Total other assets 933,078 915,903 ----------- ----------- Total assets $ 2,794,860 $ 3,223,318 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Bank overdraft $ 10,189 $ 5,116 Short-term borrowings and current portion of long-term debt 58,625 54,815 Trade accounts payable 176,198 148,923 Due to affiliates 37,166 16,936 Accrued expenses 171,867 145,544 ----------- ----------- Total current liabilities 454,045 371,334 Long-term debt 1,761,582 1,771,453 Other noncurrent liabilities 78,168 64,077 ----------- ----------- Total liabilities 2,293,795 2,206,864 ----------- ----------- Minority interest 10,576 7,737 Stockholders' equity: Common stock 165 162 Additional paid-in capital 1,168,221 1,123,541 Retained earnings (678,311) (106,975) Receivable from stockholder (3,276) (3,276) Accumulated other comprehensive losses 3,690 (4,735) ----------- ----------- Total stockholders' equity 490,489 1,008,717 ----------- ----------- Total liabilities and stockholders' equity $ 2,794,860 $ 3,223,318 =========== =========== 7
[LOGO] News Release AMKOR CORRECTS 2ND QUARTER PRO FORMA LOSS PER SHARE FROM ($0.44) TO ($0.50) CORRECTING THE PRO FORMA TAX EFFECT FOR SPECIAL CHARGES AND THE CHANGE IN EFFECTIVE TAX RATE CHANDLER, AZ, July 31, 2002 - Amkor Technology, Inc. (Nasdaq: AMKR) has corrected its pro forma loss per share for the second quarter of 2002. In its financial results released on July 30, 2002 for the quarter ending June 30, 2002, Amkor reported a second quarter 2002 net loss of $384 million, or ($2.33) per share. Amkor said the loss included $311 million, or $1.89 per share, in special charges and impairment of Amkor's equity investment in Anam Semiconductor. Excluding these charges, Amkor said its pro forma second quarter loss was $73 million, or ($0.44) per share. Pro forma second quarter loss should have been reported as $82 million or ($0.50) per share. The earnings per share impact of the $311 million of charges should have been reported as $1.81 per share instead of $1.89 per share (difference of $.08 per share) to properly reflect the tax benefit of the special charges. In addition, the second quarter pro forma loss should have excluded $3 million, or $.02 per share, recorded during the quarter to reflect the change in the effective tax rate from 20.5% to 18%. Accordingly, pro forma second quarter loss should have been reported as $82 million or ($0.50) per share to exclude these charges and the impact of the change in the effective tax rate. All other information in the press release including the U.S. GAAP financial statements presented in the supplemental financial statement information did not change. Amkor 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. Contact: Amkor Technology, Inc. VP Corporate Communications Jeffrey Luth, 480/821-2408 ext. 5130 jluth@amkor.com