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 26, 1999 --------------------------------------- Date of Report (Date of earliest event reported) AMKOR TECHNOLOGY, INC. --------------------------------------- (Exact name of Registrant as specified in its charter) Delaware --------------------------------------- (State or other jurisdiction of incorporation) 0-29472 23-1722724 -------------------- ------------------------------------ (Commission File No.) (IRS Employer Identification Number) 1345 Enterprise Drive West Chester, PA 19380 (610) 431-9600 --------------------------------------- (Address of Principal Executive Offices) --------------------------------------- (Former name or former address, if changed since last report)
2 Item 2. ACQUISITION OR DISPOSITION OF ASSETS On October 28, 1999 we completed a $41.6 million investment (the "Investment") in Anam Semiconductor, Inc. ("ASI"), purchasing shares of ASI common stock at a per share price equal to 5,000 Korean won (par value). The Investment fulfills the first installment of our commitment to make equity investments in ASI as part of ASI's participation in a Korean financial restructuring program known as the "Workout" program. Our Letter of Commitment relating to the Investment is attached as exhibit 2.1 to this report. The terms of ASI's workout program with its creditor financial institutions are described in the Translation of Principal Terms of the ASI Workout, dated February 23, 1999 (the "Workout Plan"), attached hereto as exhibit 2.2. As set forth in the Letter of Commitment and the Workout Plan, we have committed to make an equity investment in installments of approximately $41 million in each of 1999, 2000 and 2001 and $27 million in 2002. Concurrent with this Investment and subsequent installments, ASI's creditor financial institutions are converting a portion of their debt into ASI equity (the "Conversion"). Following the Investment and Conversion, we will own approximately 19% of ASI's equity securities. We have a long-standing relationship with ASI and engage in many transactions with ASI that are material to our operations. Moreover, our founder, chairman and chief executive officer has significant family ties to ASI. We hereby incorporate by reference to our Annual Report on Form 10-K filed on March 31, 1999 Part I, Item 1, "Business - Relationship with ASI," and Part III, Item 13, "Certain Relationships and Related Transactions," into this Report. Item 5. OTHER EVENTS. On October 26, 1999, we issued a press release (attached hereto as Exhibit 99.1) announcing our financial results for the third quarter ended September 30, 1999. Item 7. FINANCIAL STATEMENTS AND EXHIBITS. The following financial statements and exhibits are filed as part of this Report: (a) Financial statements of ASI, prepared pursuant to Rule 3-05 of Regulation S-X (to be filed within 60 days by amendment). (b) Pro forma financial information required pursuant to Article 11 of Regulation S-X (to be filed within 60 days by amendment).
3 (c) Exhibits in accordance with Item 601 of Regulation S-K: EXHIBIT NUMBER DESCRIPTION ------ ----------- 2.1 Letter of Commitment by and between Amkor Technology, Inc. and Anam Semiconductor, Inc., dated April 9, 1999 2.2 Translation of Principal Terms of the ASI Workout, dated February 23, 1999.* 99.1 Press release dated October 26, 1999. - ---------------------------------------------------------------------------- * Incorporated by reference to the Company's Annual Report on Form 10-K filed March 31, 1999.
4 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 12, 1999
5 INDEX TO EXHIBITS EXHIBIT NUMBER DESCRIPTION ------ ----------- 2.1 Letter of Commitment by and between Amkor Technology, Inc. and Anam Semiconductor, Inc., dated April 9, 1999 2.2 Translation of Principal Terms of the ASI Workout, dated February 23, 1999.* 99.1 Press release dated October 26, 1999. - -------------------------------------------------------------------------- * Incorporated by reference to the Company's Annual Report on Form 10-K filed March 31, 1999.
1 EXHIBIT 2.1 April 9, 1999 Anam Semiconductor, Inc. Seoul, Korea Attention: Mr. K.H. Kim RE: COMMITMENT TO PURCHASE ANAM SEMICONDUCTOR, INC. COMMON SHARES Dear Sirs: We are writing this letter in regard to making a potential equity investment in Anam Semiconductor, Inc. ("Anam") pursuant to the terms of its workout program with Cho Hung Bank and the other creditor banks. Along with this request, Anam has provided to us a document captioned the "7th Meeting of the Council of Creditor Financial Institutions", dated February 23, 1999 (see copy of "Workout Plan" attached hereto as Exhibit A). It is our understanding that this Workout Plan provides the essential terms of agreement between Anam and its creditor banks for the restructuring of Anam's financial obligations to the banks and includes or reflects the elements of Anam's Self-Rescue Plan. Based on our review of the Workout Plan and on the request made to us by you, Amkor hereby issues this Letter of Commitment to make such an equity investment upon the conditions set forth in this Letter and under the Workout Plan. Amkor is committed to making an equity investment in Anam of up to one hundred and fifty million U.S. dollars ($150,000,000) over a four year period. Such investment shall begin in 1999 in the amount of forty-one million U.S. dollars (US $41,000,000), and shall continue annually thereafter in tranches of forty-one million U.S. dollars ($41,000,000) (2000), forty-one million U.S. dollars ($41,000,000) (2001) and twenty-seven million U.S. dollars ($27,000,000) (2002). Each tranche of the Anam shares shall be purchased at a per share price equal to 5,000 won (par value) (after giving effect to the capital reduction described in the Workout Plan), provided that if any of the creditor banks makes any of its required debt to equity conversions under the Workout Plan at a lower price, Amkor shall have the benefit of such lower price for its corresponding tranche of Anam common stock to be purchased pursuant to this commitment and the Share Subscription Agreement referred to below. The purchase of each tranche pursuant to the above commitment shall be dependent upon the fulfillment of the following conditions to Amkor's reasonable satisfaction:
2 1) Amkor and Anam shall have entered into a Share Subscription Agreement incorporating the terms herein prior to Amkor's initial equity investment; 2) The Creditor Banks shall make their required debt to equity conversions under the Workout Plan including the conversions to convertible bonds and non-interest bearing debt simultaneously with Amkor's corresponding tranche of equity investment; and 3) The terms and conditions of the Workout Plan set forth in Exhibit A hereto continue to be in full force and effect. Anam and the creditor banks also understand that the aforementioned equity investment shall occur only if Amkor and Anam shall have consummated the sale of the K-4 facility in accordance with the terms of the Asset Purchase Agreement dated December 30, 1998 (and any amendments thereto). Further, Anam covenants that it will assure that the Supply Agreements between Amkor and Anam for the provision of packaging and test services and wafer foundry services remain in full force and effect. If Anam fails to perform this covenant, Amkor reserves the right in its sole discretion not to make any remaining equity investment. In the event any tranche of investment by Amkor would, in the opinion of Amkor's independent public accountants, cause Amkor to consolidate the results of Anam in Amkor's US GAAP financial statements, Amkor and Anam will restructure the tranche (and/or prior tranches) in a manner that would not require Amkor to consolidate such results. Please indicate your agreement with this Letter of Commitment by signing where indicated below and returning this Letter of Commitment to us. Your prompt attention and response to this letter would be greatly appreciated. Very truly yours, AMKOR TECHNOLOGY, Inc. /s/ John N. Boruch - ------------------------ John N. Boruch Chief Operating Officer and President Accepted and agreed: ANAM SEMICONDUCTOR, INC. - ------------------------ /s/ K.H. Kim K.H. Kim President
3 Exhibit A* - -------------------------------------------------------------------------------- * Incorporated by reference to the Company's Annual Report on Form 10-K filed March 31, 1999.
1 Exhibit 99.1 [AMKOR LOGO] News Release AMKOR TECHNOLOGY REPORTS STRONG THIRD QUARTER RESULTS OUTLOOK REMAINS BRIGHT FOR FOURTH QUARTER AND 2000 West Chester, PA. - October, 26 1999 -- Amkor Technology, Inc. (Nasdaq: AMKR), the world's largest provider of contract semiconductor packaging and test services, cited strengthening demand and a strong business outlook in reporting financial results for the third quarter ended September 30, 1999. Total revenues were $502 million, up 30% from $387 million in the third quarter of 1998. Assembly & test revenues rose 21% to $430 million from $357 million in the third quarter of last year. Wafer fab revenues were $72 million compared with $30 million in the third quarter of 1998. Net income was $26.1 million, or $0.21 per share, compared with $20.9 million, or $0.17 per share, for the third quarter of 1998. For the first nine months of 1999, revenues rose 20% to $1.37 billion from $1.14 billion in the first nine months of 1998. Net income was $56.5 million, or $0.47 per share, compared to pro forma net income of $51.3 million, or $0.49 per share, for the first nine months of 1998. "Our first $500 million quarter marks a milestone for Amkor and is a clear indication of the strong and broad-based recovery for traditional and advanced semiconductor packaging," said John Boruch, Amkor's President. "By all accounts, the micro-electronics industry is entering into a multi-year upswing. Amkor's growth has outpaced that of the semiconductor industry over the past five years, and we expect that trend to continue. Looking to both the fourth quarter and 2000, we anticipate strengthening demand, especially for our advanced package technology supporting an expanding range of communications applications." Unit shipments rose 44% over the year-ago quarter and 14% over the second quarter of 1999. Overall assembly & test capacity utilization rose to 87% from 66% in the year-ago period and 80% in the second quarter of 1999. High end (advanced leadframe and laminate) products were 60% of packaging and test revenues for the third quarter, compared to 58% in the third quarter of 1998. "We continue to expand capacity, especially for our advanced product lines in both the Philippines and Korea in order to accommodate strong customer demand, which we expect will continue into next year," said Mr. Boruch. "Given the broad diversification of our customers and our package applications, we continue to believe that the recent earthquake in Taiwan will have a very minor impact on our business." -more-
2 "Anam's wafer fab continued to operate at full installed capacity of approximately 17,000 wafer starts per month during the third quarter, reflecting ongoing strong demand from Texas Instruments for digital signal processing products. We believe that during the third quarter there was a definite perception change regarding fab capacity. Our belief is that leading-edge fab capacity is currently in short supply and will remain in short supply for the next year or two. Consequently, customer interest in Anam's fab capacity has greatly increased. I am pleased to note that in the fourth quarter, Anam's fab expects to supply wafers to four other customers, in addition to TI," said Mr. Boruch. "The pricing environment in semiconductor packaging continued to improve," noted Mr. Boruch. "Overall ASP declines were around 3% for the third quarter, compared with 4% in the prior quarter. This compares very favorably with the ASP decline we experienced in the third quarter of last year. We remain focused on improving our product mix by incorporating more advanced package technology and design. Earlier this month we introduced our MicroLeadFrame package, which we believe holds exceptional promise for the wireless communications industry. We are also excited about our recently announced agreement with Sharp Corporation to share stacked-die chip scale packaging assembly technologies." Ken Joyce, Amkor's Chief Financial Officer, noted, "Our gross margin improved substantially, to 19.4% from 14.8% in the second quarter of this year, as we began to realize the benefits of our recent investments in our two newest facilities - P3 and K4. We achieved higher utilization rates and enhanced our product mix. In addition, we are just beginning to see some of the results of a long-term, broad-based program designed to enhance productivity and reduce costs." Amkor also confirmed that later this month, it will be making the first $41 million installment in its previously announced $150 million equity investment in Anam Semiconductor, Inc. Concurrent with this investment, Anam's Creditor Banks are converting a portion of their debt into Anam equity. Amkor presently expects to make further installments of the $150 million investment in each of the next three years, concurrent with additional conversions of Bank debt into Anam equity. Pro forma results are presented for 1998 because prior to May 1, 1998 certain of the Company's subsidiaries were taxed as S corporations and as a result, did not recognize any provision for Federal income taxes. Pro forma financial data reflect a pro forma provision to reflect the U.S. Federal and state income taxes, which would have been recorded by the Company if these subsidiaries had been C corporations. -more-
3 The attached financial statements reflect the $625 million long-term debt raised in connection with the acquisition of K4. The 1999 Balance Sheet and Income Statement data include the asset, liabilities and results of operations for K4 from the acquisition date of May 17, 1999 through June 30, 1999. Amkor Technology, Inc. is the world's largest provider of contract semiconductor packaging 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. This news release contains forward-looking statements - such as (1) our expectation of strengthening customer demand, particularly for our advanced packaging technology; (2) our expectation that strong customer demand will continue into 2000; (3) Our belief that the micro-electronics industry is moving into a multi-year upswing; (4) our expectation that Amkor's growth will continue to exceed that of the semiconductor industry; (5) our belief that the Taiwan earthquake will have a minimal impact on our business; and (6) our belief that leading-edge fab capacity is currently in short supply and will remain in short supply for the next year or two; and (7) Our believe that our outlook looks bright for fourth quarter and 2000; - 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, 1999. Contact: Jeffrey Luth (Investors) Peter Brown (Media) 610-431-9600 ext. 5613 480-821-5000 jluth@amkor.com pbrow@amkor.com (tables to follow)
4 AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA) FOR THE THREE MONTHS ENDED SEPTEMBER 30, ----------------------- 1998 1999 --------- --------- (unaudited) (unaudited) NET REVENUES................... $386,718 $501,816 COST OF REVENUES -- including purchases from ASI.......... 321,758 404,327 -------- -------- GROSS PROFIT................... 64,960 97,489 -------- -------- OPERATING EXPENSES: Selling, general and administrative.............. 30,017 40,376 Research and development..... 2,109 2,990 -------- -------- Total operating expenses.. 32,126 43,366 -------- -------- OPERATING INCOME............... 32,834 54,123 -------- -------- OTHER (INCOME) EXPENSE: Interest expense, net........ 2,106 16,995 Foreign currency (gain) loss. 130 (253) Other expense, net........... 1,195 2,597 -------- -------- Total other expense....... 3,431 19,339 -------- -------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST........ 29,403 34,784 PROVISION FOR INCOME TAXES..... 8,529 8,696 MINORITY INTEREST.............. -- -- -- -- ------- ------- NET INCOME..................... $20,874 $26,088 ======= ======= PER SHARE DATA: Basic net income per common share.......... $.18 $.22 ==== ==== Diluted net income per common share.......... $.17 $.21 ==== ==== Shares used in computing basic net income per common share............... 117,860 118,276 ======= ======= Shares used in computing diluted net income per common share 133,193 135,626 ======= =======
5 AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA) FOR THE NINE MONTHS ENDED SEPTEMBER 30, ----------------------- 1998 1999 ---------- ---------- (unaudited) (unaudited) NET REVENUES................... $1,143,175 $1,371,698 COST OF REVENUES -- including purchases from ASI.......... 948,920 1,144,871 ---------- ---------- GROSS PROFIT................... 194,255 226,827 ---------- ---------- OPERATING EXPENSES: Selling, general and administrative 87,671 105,499 Research and development..... 6,104 8,084 ---------- ---------- Total operating expenses.. 93,775 113,583 ---------- ---------- OPERATING INCOME............... 100,480 113,244 ---------- ---------- OTHER (INCOME) EXPENSE: Interest expense, net........ 16,503 29,429 Foreign currency (gain) loss. 3,833 151 Other expense, net........... 7,092 6,225 ---------- ---------- Total other expense....... 27,428 35,805 ---------- ---------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST........ 73,052 77,439 PROVISION FOR INCOME TAXES..... 16,688 20,906 MINORITY INTEREST.............. 559 -- ---------- ---------- NET INCOME..................... $55,805 $56,533 ========== ========== PRO FORMA DATA (UNAUDITED): Historical income before income taxes and minority interest.................. $73,052 Pro forma provision for income taxes.............. 21,188 ---------- Pro forma income before minority Interest.................. 51,864 Historical minority interest. 559 ---------- Pro forma net income........ $51,305 ========== PER SHARE DATA: Basic net income per common share.......... $.55 $.48 ==== ==== Diluted net income per common share.......... $.53 $.47 ==== ==== Basic pro forma net income per common share.......... $.50 ==== Diluted pro forma net income per common share.......... $.49 ==== Shares used in computing basic net income per common share........ 102,284 118,090 ======= ======= Shares used in computing diluted net income per common share 110,933 134,079 ======= =======
6 AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) DECEMBER 31, SEPTEMBER 30, 1998 1999 ------------ ------------ (UNAUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents.......... $227,587 $81,921 Short-term investments............. 1,000 205,871 Accounts receivable -- Trade, net of allowance for doubtful accounts of $5,952 ... 109,243 162,405 Due from affiliates............. 25,990 3,692 Other........................... 5,900 3,933 Inventories........................ 85,628 78,651 Other current assets............... 16,687 16,642 --------- --------- Total current assets....... 472,035 553,115 --------- --------- PROPERTY, PLANT AND EQUIPMENT, net... 416,111 781,410 --------- --------- INVESTMENTS.......................... 25,476 23,741 --------- --------- OTHER ASSETS: Due from affiliates................ 28,885 29,967 Intangible assets.................. 26,158 298,334 Other.............................. 34,932 61,561 --------- --------- Total other assets......... 89,975 389,862 --------- --------- Total assets...............$1,003,597 $1,748,128 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Bank overdraft..................... $13,429 $15,658 Short-term borrowings and current portion of long-term debt....... 38,657 26,139 Trade accounts payable............. 96,948 124,188 Due to affiliates.................. 15,722 38,974 Accrued expenses................... 77,004 97,078 Accrued income taxes............... 38,892 36,127 ---------- ---------- Total current liabilities.. 280,652 338,164 ---------- ---------- LONG-TERM DEBT....................... 14,846 10,325 ---------- ---------- SENIOR AND SENIOR SUBORDINATED NOTES. - 625,000 --------- --------- CONVERTIBLE DEBT..................... 207,000 206,900 ---------- ---------- OTHER NONCURRENT LIABILITIES......... 10,738 19,422 ---------- ---------- COMMITMENTS AND CONTINGENCIES........ STOCKHOLDERS' EQUITY: Common stock....................... 118 118 Additional paid-in capital......... 381,061 382,782 Retained earnings.................. 109,738 166,271 Accumulated other comprehensive income.......................... (556) (854) ---------- ---------- Total stockholders' equity. 490,361 548,317 ---------- ---------- Total liabilities and stockholders' equity... $1,003,597 $1,748,128 ========== ==========