Special Charges Inflate Amkor Q4, 2002 Losses Online Staff -- 1/29/2003
Electronic News
Amkor Technology Inc. reported Q4 2002 sales of $426 million and a net loss of $196 million, or $1.19 per share, thanks to $172 million in one-time charges.
Excluding these charges, Amkor's net loss for the quarter was $24 million, or 15 cents per share, an improvement year over year. In Q4 of 2001, the company's net loss, excluding goodwill amortization, was $108 million, or 67 cents per share.
For the full year, Amkor saw revenue of $1.6 billion, an 8 percent increase over 2001. Amkor's net loss was $827 million for 2002, or $5.04 per share, compared to a net loss, excluding goodwill amortization, of $335 million, or $2.13 per share in 2001.
While Amkor saw revenues rise year over year, sequentially Q4 saw declines from Q3. Q4 assembly and test revenue was $373 million, up 26 percent over Q4 2001, but down 5 percent from Q3. Wafer fab revenue was $53 million down $60 million from Q3.
Total revenue was $426 million, up 21 year over year but down from Q3 by 6 percent.
"During 2002 our business recovered nicely from the trough level reached in late 2001, and our core assembly and test revenue growth rate outpaced the semiconductor industry, reflecting the strength of the outsourcing trend," John Boruch, Amkor's president and COO, said in a statement. "The global economy remains sluggish, and we believe the semiconductor industry is in the midst of a pause that should last through at least the first quarter of 2003," he said.
On the basis of customers' forecasts, Amkor expect first quarter 2003 assembly and test revenue to be down 10 percent in Q1 from Q4.
Among the special charges Amkor absorbed in Q4 was a non cash charge of $128 million recorded to establish a valuation allowance against its deferred tax asset consisting primarily of U.S. net operating loss carry-forwards, as part of its income tax provision. In light of the company's three years of cumulative losses, an unprecedented industry downturn and continued poor visibility of customer demand, Amkor determined in Q4 that a valuation allowance representing substantially all of its deferred tax assets was appropriate.
The company also saw a non-cash impairment charge of $33 million to reduce the carrying value of Amkor's investment in Anam Semiconductor Inc. (ASI) to ASI's market value of $2.90 per share based on ASI's closing share price on December 31, 2002.
"For the past two and a half years we've undertaken a lengthy process of restructuring our interest in ASI," James Kim, Amkor's chairman and CEO, said in a statement. "We achieved important progress this year by selling 20 million ASI shares for $95 million; we also negotiated the sale of our wafer fabrication services business for $62 million. This divestiture will allow Amkor to focus totally on our core competency of assembly and test," he said.
Amkor also took yet another non-cash special charge of $10 million in connection with a consolidation of two Korean factories as part of an ongoing program designed to increase operational efficiency and reduce costs, the company said. It will transfer most of the assembly operations at its 271,000 sq. ft. K2 site in Bucheon, South Korea into its one million square foot K4 factory in Kwangju, South Korea. Amkor expects to complete the closing of the K2 facility during Q2 of this year. |
