Amkor Technology Reports Financial Results for the First Quarter 2019

Amkor Technology, Inc. (NASDAQ: AMKR), a leading provider of
semiconductor packaging and test services, today announced financial
results for the first quarter ended March 31, 2019.

“Our operating results for the first quarter exceeded expectations, with
gross margin above the high end of our guidance,” said Steve Kelley,
Amkor’s president and chief executive officer. “Better than expected
gross profit and EBITDA were largely due to cost control efforts.”

1) Q1 2019 net income includes a $15 million non-cash discrete income
tax charge, or $0.06 per diluted share, to reduce the value of certain
deferred tax assets. Q4 2018 net income includes a $17 million discrete
income tax charge, or $0.07 per diluted share, driven by finalizing the
accounting for U.S. tax reform.
2) EBITDA is a non-GAAP measure.
The reconciliation to the comparable GAAP measure is included below
under “Selected Operating Data.”

“We delivered a solid quarter with operating income well above
expectations,” said Megan Faust, Amkor’s corporate vice president and
chief financial officer. “We also successfully refinanced $525 million
of our senior notes, enabling greater financial flexibility for managing
the business by extending maturities to 2027.”

Net debt was approximately $800 million at March 31, 2019.

Business Outlook

“We expect second quarter 2019 revenue to be flat to the first quarter,
reflecting a more stable market,” said Kelley. “We plan to maintain our
strong focus on cost and CapEx discipline.”

Second quarter 2019 outlook (unless otherwise noted):

• Net sales of $850 million to $930 million
• Gross margin of 9% to 14%
• Net income of ($59) million to ($10) million, or ($0.25) to ($0.04)
  per diluted share
• Full year 2019 capital expenditures of approximately $475 million

Conference Call Information

Amkor will conduct a conference call on Thursday, May 2, 2019, 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
8289834). 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 Technology, Inc.

Amkor Technology, Inc. is one of the world’s largest providers of
outsourced semiconductor packaging and test services. Founded in 1968,
Amkor pioneered the outsourcing of IC packaging and test, and is now a
strategic manufacturing partner for more than 250 of the world’s leading
semiconductor companies, foundries and electronics OEMs. Amkor’s
operational base includes production facilities, product development
centers, and sales and support offices located in key electronics
manufacturing regions in Asia, Europe and the USA. For more information,
visit www.amkor.com.

1) Advanced products include flip chip and wafer-level processing and
related test services
2) Mainstream products include wirebond
packaging and related test services

In the press release above we provide EBITDA, which is not defined by
U.S. GAAP. We define EBITDA as net income before interest expense,
income tax expense and depreciation and amortization. We believe EBITDA
to be relevant and useful information to our investors because it
provides additional information in assessing our financial operating
results. Our management uses EBITDA in evaluating our operating
performance, our ability to service debt and our ability to fund capital
expenditures. However, EBITDA has certain limitations in that it does
not reflect the impact of certain expenses on our consolidated
statements of income, including interest expense, which is a necessary
element of our costs because we have borrowed money in order to finance
our operations, income tax expense, which is a necessary element of our
costs because taxes are imposed by law, and depreciation and
amortization, which is a necessary element of our costs because we use
capital assets to generate income. EBITDA should be considered in
addition to, and not as a substitute for, or superior to, operating
income, net income or other measures of financial performance prepared
in accordance with U.S. GAAP. Furthermore our definition of EBITDA may
not be comparable to similarly titled measures reported by other
companies. Below is our reconciliation of EBITDA to U.S. GAAP net income.

*Effective January 1, 2019, we adopted Accounting Standards Update (ASU)
No. 2016-02, Leases (Topic 842). Upon adoption, we recorded a
right-of-use asset and lease liability on our balance sheet. Prior
period financial statements were not required to be adjusted for the
effects of this new standard.

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
all of the statements made under “Business Outlook” above. 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, cyclicality, and rate of growth of
  the semiconductor industry;
• timing and volume of orders relative to production capacity and the
  inability to achieve high capacity utilization rates, control costs
  and improve profitability;
• laws, rules, regulations and policies imposed by the U.S. or foreign
  governments in areas such as tariffs, customs, duties and other
  restrictive trade barriers, national security, data privacy and
  cybersecurity, antitrust and competition, tax, currency and banking,
  privacy, labor, environmental, health and safety, and in particular
  the recent increase in protectionist measures considered or adopted by
  the U.S. and foreign governments;
• laws, rules, regulations and policies within China and other countries
  that may favor domestic companies over non-domestic companies,
  including customer or government supported efforts to promote the
  development and growth of local competitors;
• volatility of consumer demand, double booking by customers and
  deterioration in forecasts from our customers for products
  incorporating our semiconductor packages, including any slowdown in
  demand or changes in customer forecasts for smartphones or other
  mobile devices and generally soft end market demand for electronic
  devices;
• delays, lower manufacturing yields and supply constraints relating to
  wafers, particularly for advanced nodes and related technologies;
• dependence on key customers, the impact of changes in our market share
  and prices for our services with those customers and the business and
  financial condition of those customers;
• the performance of our business, interest rate fluctuations and other
  economic and market conditions, the cash needs and investment
  opportunities for the business, the need for additional capacity and
  facilities to service customer demand and the availability of cash
  flow from operations or financing;
• the effect of the global economy on credit markets, financial
  institutions, customers, suppliers and consumers, including the
  uncertain macroeconomic environment;
• the highly unpredictable nature and costs of litigation and other
  legal activities and the risk of adverse results of such matters and
  the impact of other legal proceedings;
• changes in tax rates and taxes as a result of changes in U.S. or
  foreign tax law or the interpretations thereof (including the impact
  of recent U.S. tax reform), changes in our organizational structure,
  changes in the jurisdictions in which our income is determined to be
  earned and taxed, the outcome of tax reviews, audits and ruling
  requests, our ability to realize deferred tax assets and the
  expiration of tax holidays;
• curtailment of outsourcing by our customers;
• our substantial indebtedness and restrictive covenants;
• failure to realize sufficient cash flow or access to other sources of
  liquidity to fund capital expenditures;
• the effects of an economic slowdown in major economies worldwide;
• disruptions in our business or deficiencies in our controls resulting
  from the integration of acquired operations, particularly J-Devices,
  or the implementation and security of, and changes to, our enterprise
  resource planning, factory shop floor systems and other management
  information systems;
• there can be no assurance regarding when our new K5 factory and
  research and development center in Korea will be fully utilized, or
  that the actual scope, costs, timeline or benefits of the project will
  be consistent with our expectations;
• economic effects of terrorist attacks, political instability, natural
  disasters and military conflict;
• competition, competitive pricing and declines in average selling
  prices;
• fluctuations in packaging and test manufacturing yields;
• dependence on international operations and sales and fluctuations in
  foreign currency exchange rates, particularly in Japan and Korea;
• dependence on raw material and equipment suppliers and changes in raw
  material and precious metal costs;
• dependence on key personnel;
• enforcement of and compliance with intellectual property rights; 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, 2018 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190502005901/en/