Cash and cash equivalents were $494 million, and total debt was $1.5 billion, at March 31, 2015.
Business Outlook
"We anticipate that second quarter 2015 revenues will be flat sequentially, primarily due to inventory adjustments and other issues at a major customer," said Kelley. "We expect demand will strengthen in the second half of 2015 driven by the launch of flagship mobile devices with high Amkor content. Our full year 2015 capital expenditure estimate of around $600 million, including around $150 million of spending for our new K5 facility, remains unchanged."
Based upon currently available information, we have the following expectations for the second quarter 2015:
- Net sales of $725 million to $775 million, down 2% to up 4% from the prior quarter
- Gross margin of 16% to 19%
- Net income of $12 million to $35 million, or $0.05 to $0.15 per diluted share
Conference Call Information
Amkor will conduct a conference call on Monday, April 27, 2015, 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 23579914). 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
Amkor is a leading provider of semiconductor packaging and test services to semiconductor companies and electronics OEMs. More information about Amkor is available from the company's filings with the Securities and Exchange Commission and at Amkor's website: www.amkor.com.
AMKOR TECHNOLOGY, INC. | |||||||||||||||||
Selected Operating Data | |||||||||||||||||
Q1 2015 | Q4 2014 | Q1 2014 | |||||||||||||||
Net Sales Data: | |||||||||||||||||
Net sales (in millions): | |||||||||||||||||
Advanced products* | $ | 373 | $ | 462 | $ | 302 | |||||||||||
Mainstream products** | 370 | 391 | 394 | ||||||||||||||
Total net sales | $ | 743 | $ | 853 | $ | 696 | |||||||||||
Packaging services | 85 | % | 85 | % | 85 | % | |||||||||||
Test services | 15 | % | 15 | % | 15 | % | |||||||||||
Net sales from top ten customers | 60 | % | 64 | % | 60 | % | |||||||||||
Packaged units (in millions): | |||||||||||||||||
Advanced products* | 1,188 | 1,174 | 650 | ||||||||||||||
Mainstream products** | 2,671 | 3,001 | 3,217 | ||||||||||||||
Total packaged units | 3,859 | 4,175 | 3,867 | ||||||||||||||
End Market Distribution Data (an approximation including representative devices and applications based on a sampling of our largest customers) : | |||||||||||||||||
Communications (smart phones, tablets, handheld devices, wireless LAN) | 57 | % | 60 | % | 53 | % | |||||||||||
Consumer (television, set top boxes, gaming, portable media, digital cameras) | 12 | % | 11 | % | 15 | % | |||||||||||
Automotive, industrial and other (infotainment, safety, performance, comfort) | 11 | % | 10 | % | 12 | % | |||||||||||
Networking (servers, routers, switches) | 11 | % | 10 | % | 10 | % | |||||||||||
Computing (PCs, hard disk drive, printers, peripherals, servers) | 9 | % | 9 | % | 10 | % | |||||||||||
Total | 100 | % | 100 | % | 100 | % | |||||||||||
Gross Margin Data: | |||||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Cost of sales: | |||||||||||||||||
Materials | 36.7 | % | 36.0 | % | 36.8 | % | |||||||||||
Labor | 14.2 | % | 13.2 | % | 14.7 | % | |||||||||||
Other manufacturing | 30.9 | % | 27.9 | % | 30.0 | % | |||||||||||
Litigation settlement | — | % | 8.8 | % | — | % | |||||||||||
Gross margin | 18.2 | % | 14.1 | % | 18.5 | % | |||||||||||
Earnings per Share Data: | |||||||||||||||||
Net income available to Amkor common stockholders - basic | $ | 29 | $ | 13 | $ | 20 | |||||||||||
Adjustment for dilutive securities on net income: | |||||||||||||||||
Interest on 6.0% convertible notes due 2014, net of tax | — | — | 1 | ||||||||||||||
Net income attributable to Amkor - diluted | $ | 29 | $ | 13 | $ | 21 | |||||||||||
Weighted average shares outstanding - basic | 237 | 237 | 216 | ||||||||||||||
Effect of dilutive securities: | |||||||||||||||||
6.0% convertible notes due 2014 | — | — | 19 | ||||||||||||||
Weighted average shares outstanding - diluted | 237 | 237 | 235 | ||||||||||||||
Net income attributable to Amkor per common share: | |||||||||||||||||
Basic | $ | 0.12 | $ | 0.06 | $ | 0.09 | |||||||||||
Diluted | $ | 0.12 | $ | 0.06 | $ | 0.09 | |||||||||||
*Advanced products include flip chip and wafer-level processing and related test services |
**Mainstream products include wirebond packaging and related test services |
AMKOR TECHNOLOGY, INC. |
Selected Operating Data |
In the press release above we provide non-GAAP gross margin, non-GAAP net income and non-GAAP earnings per diluted share for the fourth quarter 2014. We present these non-GAAP amounts to demonstrate the impact of the charges we recognized related to the settlement of our litigation with Tessera. 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, including that they exclude the charges for the settlement payments, which are amounts that the company will ultimately have to pay in cash, and should be considered in addition to, and not as a substitute for, or superior to, gross margin, net income and earnings per diluted share prepared in accordance with U.S. GAAP. Below is the reconciliation of non-GAAP gross margin, non-GAAP net income and non-GAAP earnings per diluted share to U.S. GAAP gross margin, net income and earnings per diluted share. |
Non-GAAP Financial Measures Reconciliation: | |||||
Q4 2014 | |||||
Gross margin | 14.1 | % | |||
Plus: Litigation settlement charges divided by net sales | 8.8 | % | |||
Non-GAAP gross margin | 22.9 | % | |||
Net income (in millions) | $ | 13 | |||
Plus: Litigation settlement charges, net of tax (in millions) | 77 | ||||
Non-GAAP net income (in millions) | $ | 90 | |||
Earnings per diluted share | $ | 0.06 | |||
Plus: Litigation settlement charges per diluted share | 0.32 | ||||
Non-GAAP earnings per diluted share | $ | 0.38 | |||
AMKOR TECHNOLOGY, INC. | ||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
(Unaudited) | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
(In thousands, except per share data) | ||||||||
Net sales | $ | 742,875 | $ | 696,044 | ||||
Cost of sales | 607,928 | 567,224 | ||||||
Gross profit | 134,947 | 128,820 | ||||||
Selling, general and administrative | 62,942 | 62,424 | ||||||
Research and development | 18,026 | 21,045 | ||||||
Total operating expenses | 80,968 | 83,469 | ||||||
Operating income | 53,979 | 45,351 | ||||||
Interest expense | 23,777 | 23,722 | ||||||
Interest expense, related party | 1,242 | 1,242 | ||||||
Other (income) expense, net | (498 | ) | 36 | |||||
Total other expense, net | 24,521 | 25,000 | ||||||
Income before taxes and equity in earnings of unconsolidated affiliate | 29,458 | 20,351 | ||||||
Income tax expense | 5,999 | 4,929 | ||||||
Income before equity in earnings of unconsolidated affiliate | 23,459 | 15,422 | ||||||
Equity in earnings of J-Devices | 6,238 | 5,761 | ||||||
Net income | 29,697 | 21,183 | ||||||
Net income attributable to noncontrolling interests | (916 | ) | (550 | ) | ||||
Net income attributable to Amkor | $ | 28,781 | $ | 20,633 | ||||
Net income attributable to Amkor per common share: | ||||||||
Basic | $ | 0.12 | $ | 0.09 | ||||
Diluted | $ | 0.12 | $ | 0.09 | ||||
Shares used in computing per common share amounts: | ||||||||
Basic | 236,708 | 216,757 | ||||||
Diluted | 237,424 | 235,497 | ||||||
AMKOR TECHNOLOGY, INC. | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(Unaudited) | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 494,189 | $ | 449,946 | |||||
Restricted cash | 2,681 | 2,681 | |||||||
Accounts receivable, net of allowances | 433,092 | 469,683 | |||||||
Inventories | 227,605 | 223,379 | |||||||
Other current assets | 48,383 | 52,259 | |||||||
Total current assets | 1,205,950 | 1,197,948 | |||||||
Property, plant and equipment, net | 2,167,790 | 2,206,476 | |||||||
Investments | 138,218 | 117,733 | |||||||
Restricted cash | 2,151 | 2,123 | |||||||
Other assets | 119,767 | 111,125 | |||||||
Total assets | $ | 3,633,876 | $ | 3,635,405 | |||||
LIABILITIES AND EQUITY | |||||||||
Current liabilities: | |||||||||
Short-term borrowings and current portion of long-term debt | $ | 30,000 | $ | 5,000 | |||||
Trade accounts payable | 287,129 | 309,025 | |||||||
Capital expenditures payable | 111,646 | 127,568 | |||||||
Accrued expenses | 272,620 | 258,997 | |||||||
Total current liabilities | 701,395 | 700,590 | |||||||
Long-term debt | 1,420,677 | 1,450,824 | |||||||
Long-term debt, related party | 75,000 | 75,000 | |||||||
Pension and severance obligations | 153,027 | 152,673 | |||||||
Other non-current liabilities | 120,193 | 125,382 | |||||||
Total liabilities | 2,470,292 | 2,504,469 | |||||||
Amkor stockholders’ equity: | |||||||||
Preferred stock | — | — | |||||||
Common stock | 282 | 282 | |||||||
Additional paid-in capital | 1,880,753 | 1,878,810 | |||||||
Accumulated deficit | (488,181 | ) | (516,962 | ) | |||||
Accumulated other comprehensive loss | (31,629 | ) | (32,867 | ) | |||||
Treasury stock | (213,258 | ) | (213,028 | ) | |||||
Total Amkor stockholders’ equity | 1,147,967 | 1,116,235 | |||||||
Noncontrolling interests in subsidiaries | 15,617 | 14,701 | |||||||
Total equity | 1,163,584 | 1,130,936 | |||||||
Total liabilities and equity | $ | 3,633,876 | $ | 3,635,405 | |||||
AMKOR TECHNOLOGY, INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(Unaudited) | |||||||||
For the Three Months Ended | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
(In thousands) | |||||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 29,697 | $ | 21,183 | |||||
Depreciation and amortization | 124,387 | 108,338 | |||||||
Other operating activities and non-cash items | (9,525 | ) | (4,274 | ) | |||||
Changes in assets and liabilities | 20,465 | 6,699 | |||||||
Net cash provided by operating activities | 165,024 | 131,946 | |||||||
Cash flows from investing activities: | |||||||||
Payments for property, plant and equipment | (106,149 | ) | (95,999 | ) | |||||
Proceeds from sale of property, plant and equipment | 3,254 | 726 | |||||||
Investment in J-Devices | (12,908 | ) | — | ||||||
Other investing activities | (322 | ) | (266 | ) | |||||
Net cash used in investing activities | (116,125 | ) | (95,539 | ) | |||||
Cash flows from financing activities: | |||||||||
Borrowings under revolving credit facilities | 30,000 | — | |||||||
Proceeds from issuance of long-term debt | — | 80,000 | |||||||
Payments of long-term debt | (35,000 | ) | (80,000 | ) | |||||
Payment of deferred consideration for an acquisition | — | (18,763 | ) | ||||||
Proceeds from the issuance of stock through share-based compensation plans | 574 | 438 | |||||||
Payments of tax withholding for restricted shares | (230 | ) | (122 | ) | |||||
Net cash used in financing activities | (4,656 | ) | (18,447 | ) | |||||
Effect of exchange rate fluctuations on cash and cash equivalents | — | 183 | |||||||
Net increase in cash and cash equivalents | 44,243 | 18,143 | |||||||
Cash and cash equivalents, beginning of period | 449,946 | 610,442 | |||||||
Cash and cash equivalents, end of period | $ | 494,189 | $ | 628,585 | |||||