UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

AMKOR TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		000-29472		23-1722724
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

1900 SOUTH PRICE ROAD
CHANDLER, AZ 85286
(Address of Principal Executive Offices, including Zip Code)

(480) 821-5000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02 Results of Operations and Financial Condition

Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for Amkor Technology, Inc. for the quarter ended June 30, 2007 as presented in a press release of July 31, 2007. The information in this Form 8-K and the exhibit attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Exhibit 99.1 discloses free cash flow for the six months ended June 30, 2007. Free cash flow is 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 required under SEC rules regarding the use of non-GAAP financial measures.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibit is furnished (not filed) herewith.

99.1 Text of Press Release dated July 31, 2007

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 31, 2007

EXHIBIT INDEX:

99.1

Text of Press Release dated July 31, 2007

		News Release

Amkor Reports Second Quarter 2007 Results

Chandler, Ariz., July 31, 2007 — Amkor Technology, Inc. (NASDAQ: AMKR) today reported its financial results for the second quarter ended June 30, 2007. Net sales of $652 million for the second quarter of 2007 were flat from the first quarter of 2007 and down 5% from $687 million for the second quarter of 2006. Second quarter net income was $31 million, or $0.16 per diluted share, compared with net income of $24 million, or $0.13 per diluted share, in the second quarter of 2006. During the second quarter of 2007, Amkor recorded charges, with no tax effect, of $16 million, or $0.08 per diluted share, in connection with refinancing a $300 million second lien term loan and the redemption of its 10.5% senior subordinated notes. Net income for the second quarter of 2006 reflected charges, with no tax effect, of $28 million, or $0.14 per diluted share, for debt retirement costs incurred in connection with a series of refinancing transactions completed during that quarter.

“During the second quarter of 2007, sales of our wirebond packages were strong, in support of a broad array of wireless, consumer, networking, and gaming applications.” said James Kim, chairman and chief executive officer of Amkor. “This was not enough, however, to offset reduced levels of modules business and lower than expected sales of our flip chip assembly and test services to certain customers in the computing and gaming sectors who experienced inventory corrections during the quarter.” said Kim. “Although second quarter 2007 sales were lower than anticipated, gross margin was higher than expected because packages with less material content accounted for a larger portion of our sales resulting in lower overall material costs.”

“With first quarter seasonal weakness behind us and our belief that our customers have largely worked off excess inventories in the first six months of 2007, I expect modest growth to resume in the third quarter,” said Kim. “Our business is increasingly influenced by growth in the world economy and levels of consumer spending. As standards of living rise globally, the demand for consumer goods should increase, requiring IC assembly and test services in support of a wide range of devices and end- market applications. We expect to benefit from this growth by maintaining our technology and product leadership in key market segments, and by exercising financial discipline so that we are positioned to achieve our goals of consistent profitability and free cash flow.”

“During the second quarter, unit shipments of wirebond packages increased 7% sequentially, which helped to offset the decline in the flip chip and modules businesses,” said Ken Joyce, chief financial officer of Amkor. “The change of sales mix in the second quarter resulted in lower overall material costs and improved gross margin of 24.8%, up from 22.6% in the first quarter of 2007 and up slightly from 24.7% in the second quarter of 2006,” added Joyce.

“Capital additions totaled $60 million in the second quarter 2007 and $115 million for the first six months. In the second quarter, we expanded capacity for our wirebond packages in response to strong demand in that area,” said Joyce. “Second quarter capital additions also include approximately $10 million in IT solutions as we continue to build and enhance our Information Systems. We are currently targeting third quarter 2007 capital additions of approximately $90 million and full year additions in the range of $275 — $300 million. We are prepared to adjust these figures depending on business conditions.”

“We have achieved positive free cash flow for the past seven quarters, and given our current view of business conditions, we anticipate this trend will continue throughout 2007,” said Joyce.

“We have continued to address our capital structure by extending our debt maturities and reducing our ongoing interest expense through the repayment of outstanding debt and selective refinancing of high cost debt. As previously announced, in April we refinanced a $300 million second lien term loan due October 2010 (accruing interest at LIBOR + 450 bp) with a new loan from Woori Bank in Korea bearing interest at the bank’s base rate plus 50 bp (currently 6.6% or approximately LIBOR + 125 bp) which amortizes in 28 equal quarterly payments through April 2014. In May 2007, we redeemed all of our outstanding 10.50% senior subordinated notes due 2009 at a price equal to 100% of the principal amount of $21.9 million plus accrued interest.

In connection with the April 2007 refinancing and the May 2007 redemption, Amkor recorded a charge with no tax effect of approximately $16 million, or $0.08 per diluted share, in the second quarter of 2007, consisting of $9 million in early prepayment fees and $7 million to write-off unamortized deferred debt issuance costs.”

“We have reduced our total outstanding debt by $193 million in the past two quarters. As a result of the repayment of $142 million of 5% convertible notes in the first quarter, the $300 million refinancing in April and the $21.9 million redemption in May, we expect to realize approximately $14 million in interest savings in 2007 as compared with 2006,” said Joyce. “When these savings are combined with the interest savings from our 2006 capital structure improvements, we expect to realize approximately $28 million in aggregate interest savings in 2007 as compared with 2006.”

The income tax rate was 12% for the second quarter of 2007, and we anticipate an effective tax rate of 9% for the year. This reflects the utilization of foreign net operating loss carry-forwards and tax holidays in certain of our foreign jurisdictions. At June 30, 2007, Amkor had U.S. net operating losses available for carry-forward totaling $401 million expiring through 2027 and $47 million of non-U.S. operating losses available for carry-forward, expiring through 2012.

Selected operating data for the second quarter 2007 is included in a section before the financial tables.

Business Outlook

On the basis of customers’ forecasts, we have the following expectations for the third quarter of 2007:

	•		Sales up 4% to 7% from the second quarter of 2007
	•		Gross Margin in the range of 24% to 25%
	•		Net income in the range of $0.23 to $0.28 per diluted share

Amkor will conduct a conference call on July 31, 2007 at 5:00 p.m. eastern time. The call can be accessed by dialing 303-262-2175, or by visiting the investor relations page of our website: www.amkor.com or CCBN’s website: www.companyboardroom.com. An archive of the webcast can be accessed through the same links, and 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: 11087561#.

About Amkor

Amkor is a leading provider of advanced semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronics design and manufacturing services. More information on Amkor is available from the company’s SEC filings and on Amkor’s website: www.amkor.com.

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 following: modest growth in the third quarter and the remainder of 2007; the influence of the world economy and consumer spending levels on our business and expectations regarding increasing demand for consumer goods requiring IC assembly and test services; our intention to maintain technology and product leadership in key market segments and the expected benefit to our business; our plans to exercise financial discipline in support of our profitability and free cash flow goals; plans regarding capital expenditures for the third quarter and the remainder of 2007; expectations regarding achievement of positive free cash flow for the remainder of 2007; expectations regarding interest savings and our effective tax rate during 2007; and the statements regarding sales, gross margin and net income per diluted share contained under Business Outlook. 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: the highly unpredictable nature of the semiconductor industry; inability to achieve high capacity utilization rates; volatility of consumer demand for products incorporating our semiconductor packages; weakness in the forecasts of Amkor’s customers; customer modification of and follow through with respect to forecasts provided to Amkor; curtailment of outsourcing by our customers; our substantial indebtedness and restrictive covenants; failure to realize sufficient cash flow to fund capital expenditures; deterioration of the U.S. or other economies; the highly

unpredictable nature and costs of litigation and other legal activities and the risk of adverse results of such matters; the outcome of the pending SEC investigation; worldwide economic effects of terrorist attacks, natural disasters and military conflict; competitive pricing and declines in average selling prices; timing and volume of orders relative to production capacity; fluctuations in manufacturing yields; competition; dependence on international operations and sales; dependence on raw material and equipment suppliers and changes in raw material costs; exchange rate fluctuations; dependence on key personnel; difficulties in managing growth; enforcement of intellectual property rights; environmental and other governmental regulations; and technological challenges.

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 Form 10-Q for the quarter ended March 31, 2007. 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.

Contact:
Kenneth Joyce
Executive Vice President & CFO
480-821-5000 ext. 5725
kjoyc@amkor.com

     Selected operating data for the second quarter and six month 2007

		2nd Quarter				Six Months
Capital additions		$60 million				$115 million
Net increase in related accounts payable and deposits		($9 million		)		($13 million		)
Payments for property, plant & equipment		$51 million				$102 million
Depreciation and amortization		$71 million				$142 million
Free cash flow *		$80 million				$152 million

Net cash provided by operating activities		$131 million				$254 million
Less payments for property, plant and equipment		($51 million		)		($102 million		)
Free cash flow from continuing operations		$ 80 million				$ 152 million

We define free cash flow as net cash provided by operating activities less payments for property, plant and equipment. Free cash flow is not defined by generally accepted accounting principles. However, we believe free cash flow to be relevant and useful information to our investors because it provides them with additional information in assessing our liquidity, capital resources and financial operating results. Our management uses free cash flow in evaluating our liquidity, our ability to service debt and our ability to 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 our definition of free cash flow may not be comparable to similarly titled measures reported by other companies.

•		Second quarter capacity utilization was approximately 80%.
•		Assembly unit shipments for Q2 2007 were 2.1 billion, up 7% from Q1 2007.
•		For Q2 2007, our top ten customers accounted for 48% of net sales.
•		Q2 2007 end market distribution (an approximation based on a sampling of programs with some of our largest customers):

Communications			35	%
Consumer			30	%
Computing			25	%
Other			10	%

•

Q2 2007 percentage of net sales:

Laminate packages			51	%
Leadframe packages			35	%
Test			11	%
Other			3	%

(tables to follow)

AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2007				2006				2007				2006
		(In thousands, except per share data)
Net sales		$	652,486			$	686,631			$	1,303,474			$	1,331,720
Cost of sales			490,794				517,307				994,444				1,007,659
Gross profit			161,692				169,324				309,030				324,061
Operating expenses:
Selling, general and administrative			62,360				58,967				125,027				120,171
Research and development			11,023				10,315				20,648				19,745
Total operating expenses			73,383				69,282				145,675				139,916
Operating income			88,309				100,042				163,355				184,145
Other (income) expense:
Interest expense, net			31,114				40,600				66,274				81,757
Interest expense, related party			1,562				1,563				3,125				3,351
Foreign currency loss, net			4,562				1,079				4,547				5,007
Debt retirement costs, net			15,875				27,860				15,875				27,389
Other (income) expense, net			(532	)			2,840				(1,218	)			2,375
Total other expense, net			52,581				73,942				88,603				119,879
Income before income taxes and minority interests			35,728				26,100				74,752				64,266
Income tax expense			4,272				1,972				8,379				5,584
Income before minority interests			31,456				24,128				66,373				58,682
Minority interests, net of tax			(466	)			(340	)			(793	)			(455	)
Net income		$	30,990			$	23,788			$	65,580			$	58,227
Net income per common share:
Basic		$	0.17			$	0.13			$	0.37			$	0.33
Diluted		$	0.16			$	0.13			$	0.34			$	0.32
Shares used in computing net income per common share:
Basic			180,392				177,689				179,456				177,245
Diluted			209,868				196,869				208,282				193,946

AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

		June 30,				December 31,
		2007				2006
		(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	238,407			$	244,694
Restricted cash			2,542				2,478
Accounts receivable:
Trade, net of allowances			362,621				380,888
Other			3,882				5,969
Inventories, net			141,010				164,178
Other current assets			35,071				39,650
Total current assets			783,533				837,857
Property, plant and equipment, net			1,418,093				1,443,603
Goodwill			672,370				671,900
Intangibles, net			24,441				29,694
Investments			5,683				6,675
Restricted cash			1,699				1,688
Other assets			47,496				49,847
Total assets		$	2,953,315			$	3,041,264
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt		$	159,297			$	185,414
Trade accounts payable			280,741				291,847
Accrued expenses			133,044				145,501
Total current liabilities			573,082				622,762
Long-term debt			1,553,412				1,719,901
Long-term debt, related party			100,000				100,000
Pension and severance obligations			195,060				170,070
Other non-current liabilities			32,992				30,008
Total liabilities			2,454,546				2,642,741
Commitments and contingencies
Minority interests			5,389				4,603
Stockholders’ equity:
Preferred stock			—				—
Common stock			181				178
Additional paid-in capital			1,477,489				1,441,194
Accumulated deficit			(975,810	)			(1,041,390	)
Accumulated other comprehensive loss			(8,480	)			(6,062	)
Total stockholders’ equity			493,380				393,920
Total liabilities and stockholders’ equity		$	2,953,315			$	3,041,264

AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		For the Six Months Ended
		June 30,
		2007				2006
		(In thousands)
Cash flows from operating activities:
Net income		$	65,580			$	58,227
Depreciation and amortization			141,504				133,525
Debt retirement costs			6,875				27,389
Other operating activities and non-cash items			9,342				23,363
Changes in assets and liabilities			30,682				(2,698	)
Net cash provided by operating activities			253,983				239,806
Cash flows from investing activities:
Payments for property, plant and equipment			(102,212	)			(169,469	)
Proceeds from the sale of property, plant and equipment			4,566				1,333
Other investing activities			(1,469	)			—
Net cash used in investing activities			(99,115	)			(168,136	)
Cash flows from financing activities:
Borrowings under revolving credit facilities			61,836				111,185
Payments under revolving credit facilities			(79,448	)			(95,462	)
Proceeds from issuance of long-term debt			300,000				590,000
Payments for debt issuance costs			(3,437	)			(14,852	)
Payments on long-term debt			(474,746	)			(731,634	)
Proceeds from issuance of stock through stock compensation plans			34,466				4,959
Net cash used in financing activities			(161,329	)			(135,804	)
Effect of exchange rate fluctuations on cash and cash equivalents			174				1,066
Net decrease in cash and cash equivalents			(6,287	)			(63,068	)
Cash and cash equivalents, beginning of period			244,694				206,575
Cash and cash equivalents, end of period		$	238,407			$	143,507