Amkor record 2010 financials capital investments in 2011

February 10, 2011 - BUSINESS WIRE — Amkor Technology Inc. (NASDAQ: AMKR), semiconductor assembly and test services provider, announced financial results for the fourth quarter ended December 31, 2010, with net sales of $751 million, net income of $51 million, and earnings per diluted share of $0.20. For the full year 2010, Amkor reported net sales of $2.94 billion, net income of $232 million, and earnings per diluted share of $0.91.

"We delivered record net sales and net income for the full year 2010," said Ken Joyce, Amkor’s president and chief executive officer. "Strong demand across all of our package families and end markets, particularly in our core markets for wireless communications, gaming and other consumer electronics, drove net sales growth of 35% and a 49% increase in net income. We also reduced our net debt by $79 million and delivered a 24% return on invested capital."

Amkor is currently planning capital additions of approximately $500 million for 2011, with spending weighted in the first half of the year to take advantage of the growth opportunities predicted in the second quarter and the balance of the year.

Selected financial information for the full year 2010:

  • Net Sales: $2.94 billion, up 35% from $2.18 billion in 2009
  • Gross Margin: 23%, compared to 22% in 2009
  • Net Income: $232 million, up 49% from $156 million in 2009
  • Earnings Per Diluted Share: $0.91, up from $0.67 in 2009

Selected financial information broken out for the fourth quarter 2010:

  • Net Sales: $751 million, down 5% from $794 million in the prior quarter, and up 12% from $668 million in the fourth quarter of 2009
  • Gross Margin: 21%, compared to 24% in the prior quarter and 26% in the fourth quarter of 2009
  • Net Income: $51 million, down from $78 million in the prior quarter, and down from $88 million in the fourth quarter of 2009
  • Earnings Per Diluted Share: $0.20, down from $0.30 in the prior quarter, and down from $0.33 in the fourth quarter of 2009

The fourth quarter brough solid growth in the communications sector, along with seasonal gaming sector declines. However, going into Q1 2011, Amkor believes its strong position in gaming segments will amplify the seasonal uptick in this area.

Inventory adjustments by some customers in the consumer electronics and networking areas contributed to lower business volumes in Q4, as did "unfavorable foreign currency exchange rate movements," said Joyce, noting that these factors reduced Amkor’s gross margin from the prior quarter. "Our fourth quarter earnings per diluted share were adversely impacted by approximately $0.04 as a result of unfavorable foreign currency exchange rate movements and $0.02 for an unanticipated reserve for foreign taxes," explained Joanne Solomon, Amkor’s executive vice president and chief financial officer.

"Capital additions were $103 million during the fourth quarter, primarily in support of solid demand for wireless communications" noted Solomon. Cash and cash equivalents were $405 million, and net debt was $959 million, at December 31, 2010. In January 2011, the company redeemed all $100 million of its 6.25% Convertible Subordinated Notes due 2013. The Notes were converted into 13.4 million shares of Amkor Common Stock and no cash was used for the redemption. As a consequence of this conversion, net debt would have been $859 million.

"Looking ahead to the first quarter of 2011, we see some carryover of the inventory adjustments that began in the fourth quarter," said Joyce. "The corresponding decline in utilization is expected to compress our gross margin in the first quarter."

Expectations for the first quarter of 2011:

  • Net sales of $660 million to $690 million, down 8% to down 12% from the prior quarter
  • Gross margin between 16% and 19%
  • Net income of $10 million to $35 million, or $0.05 to $0.14 per diluted share
  • Capital additions of approximately $135 million for the first quarter, and capital additions of approximately $500 million for the full year

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:

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