CHANDLER, Ariz.---Amkor Technology, Inc. (NASDAQ: AMKR ), a leading provider of semiconductor assembly and test services, today announced financial results for the first quarter ended March 31, 2011, with net sales of $665 million, net income of $25 million, and earnings per diluted share of $0.10.
“First quarter results were consistent with our expectations even though sales were reduced by approximately $6 million due to the impact of the Japan earthquake on our Kitakami operations,” said Ken Joyce, Amkor's president and chief executive officer. “Gross margin of 19% was at the top of our expected range. We saw typical seasonal softness during the quarter, and our strong position in gaming amplified these seasonal patterns. We also saw weakness in networking and certain consumer electronics due to inventory adjustments by some of our customers.”
Selected financial information for the first quarter 2011 is as follows:
“We delivered a solid gross margin of 19% despite the challenging demand environment, continued pressure from unfavorable foreign currency exchange rate movements, higher gold prices and the events in Japan,” said Joanne Solomon, Amkor’s executive vice president and chief financial officer. “We kept a tight focus on labor and other manufacturing costs during this seasonally slower time of the year.”
“Capital additions were $105 million during the first quarter, primarily in support of the communications area. We also delivered positive free cash flow results,” continued Solomon.
Cash and cash equivalents were $393 million, and net debt was $851 million, at March 31, 2011. In January 2011, all $100 million of our 6.25% Convertible Notes due 2013 were converted into 13.4 million shares of Amkor Common Stock.
Selected operating data for the first quarter 2011 are included in a section before the financial statements.
“We remain optimistic about solid growth in the second half 2011, although there is less visibility due to the situation in Japan,” said Joyce. “Because of the current uncertainties in the electronics industry supply chain, we have reduced our sales expectations for the second quarter 2011 by $50 million,” added Joyce. “Our guidance for the second quarter is also negatively impacted by unexpected weakness in demand for wireless baseband chips by a single OEM.”
Based upon the currently available information, we have the following expectations for the second quarter 2011:
Conference Call Information
Amkor will conduct a conference call on April 28, 2011, at 5:00 p.m. Eastern Daylight Time. This call is being webcast and can be accessed at Amkor’s web site: www.amkor.com. You may also access the call by dialing 877-941-1465. A replay of the call will be made available at Amkor’s web site or by dialing 800-406-7325 (access pass code #4435872). The webcast is also being distributed over Thomson Reuters’ Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through Thomson Reuters’ individual investor center at www.companyboardroom.com or by visiting any of the investor sites in Thomson Reuters’ Individual Investor Network. Institutional investors can access the call via Thomson Reuters’ password-protected event management site, Street Events (www.streetevents.com).
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, statements made regarding: visibility and uncertainties in the electronics industry supply chain and reductions in our sales expectations due to the situation in Japan, weakness in demand for wireless baseband chips, the amount and timing of our capital additions in 2011, growth in the second half of the year, and our current business outlook for the second quarter 2011, including our expected net sales, gross margin, net income, earnings per diluted share and capital additions. 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:
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, 2010 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.
Amkor Technology, Inc., Chandler
Executive Vice President & Chief Financial Officer