UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

Date of Report (Date of earliest event reported) February 10, 2010

AMKOR TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		000-29472		23-1722724
(State or Other Jurisdiction of		(Commission File Number)		(IRS Employer
Incorporation)				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))

 

 

Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for Amkor Technology, Inc. for the three months and year ended December 31, 2009 and forward-looking statements relating to the first quarter of 2010 as presented in a press release dated February 10, 2010. 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 three months and year ended December 31, 2009. Free cash flow (which we define as net cash provided by operating activities less purchases of property, plant and equipment) 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 for, 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.

(d) Exhibits.

99.1

Text of Press Release dated February 10, 2010, which is furnished (not filed) herewith.

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.

Date: February 10, 2010

Exhibit		Description
99.1		Text of Press Release dated February 10, 2010

Exhibit 99.1

		News Release

Amkor Reports Fourth Quarter and Full Year 2009 Results

CHANDLER, Ariz. — February 10, 2010 — Amkor Technology, Inc. (NASDAQ: AMKR), a leading provider of semiconductor assembly and test services, today reported its financial results for the quarter and year ended December 31, 2009.

Fourth quarter net sales of $668 million were up 8% sequentially from the third quarter of 2009 and up 22% from the fourth quarter of 2008. Gross margin improved to 26% for the fourth quarter, compared to 25% for the third quarter of 2009 and 18% for the fourth quarter of 2008. Fourth quarter net income was $88 million or $0.33 per diluted share, compared to $81 million or $0.31 per diluted share in the third quarter of 2009 and a net loss of $623 million, or $3.40 loss per share, in the fourth quarter of 2008. Net income for the third quarter of 2009 included income tax benefits of $34 million or $0.12 per diluted share, primarily from the release of a tax valuation allowance at a subsidiary in Korea. The net loss for the fourth quarter of 2008 included a $671 million goodwill impairment charge, or $3.67 per share.

Full year 2009 net sales were $2.2 billion, down 18% from $2.7 billion for 2008. Gross margin was 22% for 2009, compared to 21% for 2008. Net income for the full year 2009 was $156 million or $0.67 per diluted share compared to a net loss of $457 million for 2008 or $2.50 loss per share, which included the goodwill impairment charge noted above.

“Customer demand remained strong in the fourth quarter as we delivered our best quarterly results in 2009. Our net sales of $668 million were better than expected, representing an 8% improvement from the third quarter,” said Ken Joyce, Amkor’s president and chief executive officer. “Our disciplined spending and cost control efforts, together with strong operating leverage in the second half of the year, have driven solid profitability and free cash flow generation during the worst industry downturn in many years,” added Joyce.

“We began the year with an unprecedented drop in sales as the electronics industry significantly cut inventories in response to the global recession. The markets have rebounded more quickly than most people anticipated at the start of the year, and the current outlook is positive as we enter 2010. Looking ahead to the first quarter of 2010, we expect net sales to be down between 2% and 6% from a strong fourth quarter of 2009, with gross margin of 22% to 24%,” said Joyce.

“We are currently operating at or near capacity in many of our product lines,” noted Joyce. “In order to support improved customer demand, we expect to invest at higher levels in 2010 compared with 2009, with spending weighted more towards the first half of the year. Our overall capital intensity is expected to be around 14%.”

“Unit shipments of 2.4 billion during the fourth quarter were up 4% from the third quarter, principally driven by the strength of leadframe wirebond packaging services,” said Joanne Solomon, Amkor’s chief financial officer. “Revenue growth of 8% was more than the unit growth of 4% reflecting strong demand for flip chip and wire bond chip scale and ball grid array packaging services with higher average sales prices. We saw broad demand across our product lines during the fourth quarter, including our services for the communications and consumer end markets, with notable sequential growth in networking.”

“We generated $88 million in free cash flow in the full year 2009, our fourth consecutive year of positive free cash flow, despite paying $148 million to reduce our Korean severance obligations and to resolve a patent license dispute,” noted Solomon. “During the fourth quarter, we repurchased $23 million of our 7.125% senior notes due 2011 and $15 million of our 7.75% senior notes due 2013 and we ended the quarter with a cash balance of $395 million and total debt of $1.4 billion.”

“Capital additions for the fourth quarter of 2009 were $69 million and $198 million for the full year 2009 with full year capital intensity of 9%. We expect capital additions for the first quarter of 2010 to be approximately $100 to $125 million. Our planned capital additions are focused on expanding capacity in support of customer demand for a number of advanced packaging and test areas, including flip chip and wire bond chip scale packaging and wafer bumping,” said Solomon.

Selected operating data for the fourth quarter and full year of 2009 is included in a section before the financial tables.

Business Outlook

Based upon the latest available information, we have the following expectations for the first quarter of 2010:

	•		Net sales down 2% to 6% from the fourth quarter of 2009
	•		Gross margin between 22% and 24%
	•		Net income — in the range of $0.19 to $0.28 per diluted share

Conference Call Information

Amkor will conduct a conference call on February 10, 2010 at 5:00 p.m. eastern time. This call is being webcast and can be accessed at Amkor’s web site at www.amkor.com. You may also access the call by dialing 877-941-2332. A replay of the call will be made available at Amkor’s web site or by dialing 800-406-7325 (access passcode # 4200074). The webcast is also being distributed over Thomson Financial’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through Thomson Financial individual investor center at www.companyboardroom.com or by visiting any of the investor sites in Thomson Financial’s Individual Investor Network. Institutional investors can access the call via Thomson Financial’s password-protected event management site, StreetEvents (www.streetevents.com).

About Amkor

Amkor is a leading provider of semiconductor assembly and test services to semiconductor companies and electronics OEMs. 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, the following: statements regarding the expected dollar amount, focus and timing of our capital additions and the expected level of capital intensity; and the statements made regarding our current outlook as we enter 2010 and our expected net sales, gross margin and net income. 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;
	•		the effect of the global economy on credit markets, financial institutions, customers, suppliers and consumers;
	•		inability to achieve high capacity utilization rates;
	•		volatility of consumer demand for products incorporating our semiconductor packages;
	•		dependence on key customers;
	•		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 additions;

	•		the effects of a recession in the U.S. and other economies worldwide;
	•		the highly unpredictable nature and costs of litigation and other legal activities and the risk of adverse results of such matters;
	•		worldwide economic effects of terrorist attacks, natural disasters and military conflict;
	•		our ability to control costs;
	•		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 and precious metal 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.

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, 2008 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.

Contact:

Amkor Technology, Inc.
Joanne Solomon, 480-821-5000 ext. 5416
Executive Vice President & CFO
joanne.solomon@amkor.com

AMKOR TECHNOLOGY, INC.
Selected Operating Data

		Q4 2009				Q3 2009				Q4 2008				2009				2008
Sales Data:
Packaging services (in millions):
Chip scale package		$	224			$	206			$	151			$	695			$	697
Ball grid array			142				129				152				500				751
Leadframe			184				172				144				587				753
Other packaging			47				42				33				152				144
Packaging services			597				549				480				1,934				2,345
Test services			71				67				69				245				314
Total sales		$	668			$	616			$	549			$	2,179			$	2,659
Packaging services:
Chip scale package			33	%			33	%			27	%			32	%			26	%
Ball grid array			21	%			21	%			28	%			23	%			28	%
Leadframe			28	%			28	%			26	%			27	%			29	%
Other packaging			7	%			7	%			6	%			7	%			5	%
Packaging services			89	%			89	%			87	%			89	%			88	%
Test services			11	%			11	%			13	%			11	%			12	%
Total sales			100	%			100	%			100	%			100	%			100	%
Packaged units (in millions):
Chip scale package			519				481				380				1,652				1,661
Ball grid array			53				57				59				205				298
Leadframe			1,856				1,802				1,307				5,773				6,593
Other packaging			7				7				3				24				14
Total packaged units			2,435				2,347				1,749				7,654				8,566
Net sales from top ten customers			55	%			54	%			52	%			53	%			50	%
Capacity utilization			84	%			82	%			61	%
End Market Distribution Data (an approximation based on a sampling of our largest customers. Prior periods were revised for an expanded sampling methodology and refinement of our classifications):
Communications			39	%			40	%			34	%
Consumer			26	%			28	%			28	%
Computing			13	%			13	%			16	%
Networking			13	%			12	%			15	%
Other			9	%			7	%			7	%
Total			100	%			100	%			100	%

AMKOR TECHNOLOGY, INC.
Selected Operating Data (continued)

		Q4 2009				Q3 2009				Q4 2008				2009				2008
		(in millions, except per share data)
Earnings per Share Data:
Net income (loss) attributable to Amkor — basic		$	88			$	81			$	(623	)		$	156			$	(457	)
Adjustment for dilutive securities on net income (loss):
Interest on 2.5% convertible notes due 2011, net of tax			—				—				—				2				—
Interest on 6.25% convertible notes due 2013, net of tax			2				2				—				7				—
Interest on 6.0% convertible notes due 2014, net of tax			4				4				—				12				—
Net income (loss) attributable to Amkor — diluted		$	94			$	87			$	(623	)		$	177			$	(457	)
Weighted average shares outstanding — basic			183				183				183				183				183
Effect of dilutive securities:
Stock options			—				—				—				—				—
2.5% convertible notes due 2011			3				3				—				5				—
6.25% convertible notes due 2013			13				13				—				13				—
6.0% convertible notes due 2014			83				83				—				62				—
Weighted average shares outstanding — diluted			282				282				183				263				183
Net income (loss) attributable to Amkor per common share:
Basic		$	0.48			$	0.44			$	(3.40	)		$	0.85			$	(2.50	)
Diluted		$	0.33			$	0.31			$	(3.40	)		$	0.67			$	(2.50	)
Capital Investment Data:
Property, plant and equipment additions		$	69			$	78			$	32			$	198			$	342
Net change in related accounts payable and deposits			(7	)			(36	)			37				(24	)			44
Purchases of property, plant and equipment		$	62			$	42			$	69			$	174			$	386
Depreciation and amortization		$	75			$	74			$	80			$	306			$	310
Free Cash Flow Data:
Net cash provided by operating activities		$	106			$	123			$	149			$	262			$	606
Less purchases of property, plant and equipment			(62	)			(42	)			(69	)			(174	)			(386	)
Free cash flow*		$	44			$	81			$	80			$	88			$	220

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

		For the Three Months								For the Twelve Months
		Ended December 31,								Ended December 31,
		2009				2008				2009				2008
			(In thousands, except per share data)
Net sales		$	667,612			$	548,712			$	2,179,109			$	2,658,602
Cost of sales			492,258				451,088				1,698,713				2,096,864
Gross profit			175,354				97,624				480,396				561,738
Operating expenses:
Selling, general and administrative			54,775				58,399				210,907				251,756
Research and development			10,907				13,192				44,453				56,227
Goodwill impairment			—				671,117				—				671,117
Gain on sale of real estate			(135	)			—				(281	)			(9,856	)
Total operating expenses			65,547				742,708				255,079				969,244
Operating income (loss)			109,807				(645,084	)			225,317				(407,506	)
Other (income) expense:
Interest expense, net			22,593				26,114				100,029				109,980
Interest expense, related party			3,813				1,563				13,000				6,250
Foreign currency loss (gain)			1,178				(16,957	)			3,339				(61,057	)
Loss (gain) on debt retirement, net			570				(35,987	)			(15,088	)			(35,987	)
Equity in earnings of unconsolidated affiliate			(2,373	)			—				(2,373	)			—
Other income, net			(36	)			(49	)			(113	)			(1,004	)
Total other expense (income), net			25,745				(25,316	)			98,794				18,182
Income (loss) before income taxes			84,062				(619,768	)			126,523				(425,688	)
Income tax (benefit) expense			(3,820	)			5,237				(29,760	)			31,788
Net income (loss)			87,882				(625,005	)			156,283				(457,476	)
Net loss (income) attributable to noncontrolling interests			104				1,927				(303	)			781
Net income (loss) attributable to Amkor		$	87,986			$	(623,078	)		$	155,980			$	(456,695	)
Net income (loss) attributable to Amkor per common share:
Basic		$	0.48			$	(3.40	)		$	0.85			$	(2.50	)
Diluted		$	0.33			$	(3.40	)		$	0.67			$	(2.50	)
Shares used in computing per common share amounts:
Basic			183,134				183,035				183,067				182,734
Diluted			282,495				183,035				263,379				182,734

AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

		December 31,				December 31,
		2009				2008
		(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	395,406			$	424,316
Restricted cash			2,679				4,880
Accounts receivable:
Trade, net of allowances			328,252				259,630
Other			18,666				14,183
Inventories			155,185				134,045
Other current assets			32,737				23,862
Total current assets			932,925				860,916
Property, plant and equipment, net			1,364,630				1,473,763
Intangibles, net			9,975				11,546
Investments			19,108				—
Restricted cash			6,795				1,696
Other assets			99,476				36,072
Total assets		$	2,432,909			$	2,383,993
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt		$	88,944			$	54,609
Trade accounts payable			361,263				241,684
Accrued expenses			155,630				258,449
Total current liabilities			605,837				554,742
Long-term debt			1,095,241				1,338,751
Long-term debt, related party			250,000				100,000
Pension and severance obligations			83,067				116,789
Other non-current liabilities			9,063				30,548
Total liabilities			2,043,208				2,140,830
Equity:
Amkor stockholders’ equity:
Preferred stock			—				—
Common stock, $0.001 par value, 500,000 shares authorized, issued and outstanding of 183,171 in 2009 and 183,035 in 2008			183				183
Additional paid-in capital			1,500,246				1,496,976
Accumulated deficit			(1,122,241	)			(1,278,221	)
Accumulated other comprehensive income			5,021				18,201
Total Amkor stockholders’ equity			383,209				237,139
Noncontrolling interests in subsidiaries			6,492				6,024
Total equity			389,701				243,163
Total liabilities and equity		$	2,432,909			$	2,383,993

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

		For the Twelve Months Ended
		December 31,
		2009				2008
		(In thousands)
Cash flows from operating activities:
Net income (loss)		$	156,283			$	(457,476	)
Impairment of goodwill			—				671,117
Depreciation and amortization			305,510				309,920
Gain on debt retirement, net			(15,088	)			(35,987	)
Other operating activities and non-cash items			(17,595	)			22,511
Changes in assets and liabilities			(167,385	)			95,733
Net cash provided by operating activities			261,725				605,818
Cash flows from investing activities:
Purchases of property, plant and equipment			(173,496	)			(386,239	)
Proceeds from the sale of property, plant and equipment			3,116				15,480
Purchase of equipment leased to unconsolidated affiliate			(44,681	)			—
Investment in unconsolidated affiliate			(16,736	)			—
Proceeds from sale of securities			—				2,460
Other investing activities			(9,081	)			(3,081	)
Net cash used in investing activities			(240,878	)			(371,380	)
Cash flows from financing activities:
Borrowings under revolving credit facilities			41,410				619
Payments under revolving credit facilities			(10,171	)			(633	)
Proceeds from issuance of short-term debt			15,000				—
Proceeds from issuance of long-term debt			100,000				—
Proceeds from issuance of related party debt			150,000				—
Payments of long-term debt			(338,104	)			(233,814	)
Payments for debt issuance costs			(8,479	)			—
Proceeds from issuance of stock through stock compensation plans			693				10,203
Net cash used in financing activities			(49,651	)			(223,625	)
Effect of exchange rate fluctuations on cash and cash equivalents			(106	)			3,433
Net (decrease) increase in cash and cash equivalents			(28,910	)			14,246
Cash and cash equivalents, beginning of period			424,316				410,070
Cash and cash equivalents, end of period		$	395,406			$	424,316