Amkor Technology, Inc. (AMKR) Deutsche Bank dbAccess Technology Conference September 13, 2012 02:40 pm ET Executives Greg Johnson - Sr. Director, Corporate Communications Analysts Vishal Shah - Deutsche Bank Presentation Vishal Shah - Deutsche Bank
Previous Statements by AMKR
» Amkor Technology's Management Presents at Citi Technology Conference - Transcript
» Amkor Technology's CEO Discusses Q2 2012 Results - Earnings Call Transcript
» Amkor Technology's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Amkor Technology's Management Presents at Credit Suisse Group Technology Conference (Transcript)
Amkor has been an industry pioneer. We actually pioneered a lot of the technology over the years and we have been driving innovation in the space for over four years. We did go public in 1998, and have been listed NYSE since then.One of our key strengths is that we believe we are in the right markets with the right customers, so we are looking at not just individual customers, but spaces where there is growth and where there is the potential to operate profitably. We have a strong competitive position within the OSAT space, being the number two player, and there's a number of favorable trends from the perspective of the OSATs, where both, the growth of fabless design houses where they don't have any other manufacturing, so kind of by definition their business gets outsourced to the OSAT, as well the IDMs more fab-lite strategy tends to favor us as they outsource more and more of their demand. From the key financial highlights, the information here is, this is the last trailing 12 months through June 30 th. Amkor, although we are in asset-intensive business, so a lot of our growth does need to come from CapEx. We take a very balanced perspective with respect to our profitability. We want to focus on growth, but profitable growth not just every top line dollar, but we do want to balance that with strong cash flow generation. We look to take the right opportunities, but not necessarily every opportunity. We do, obviously, work in a very cyclical industry. Our goal is to manage our profitability through those cycles and be able to take advantage of both, growth cycles as well as be defensive when things are correcting. The balance sheet has gotten much stronger, we paid down about $900 million of net debt in the last six years and debt-to-EBITDA right now is about 2.7, so a very healthy balance sheet and better than it had been in the past.
Our ROIC has been under some pressure in the last couple of quarters, but it's still above our whack. It's about 9%, which is one of the higher ones in the space as well, and we do view that we are well positioned for future growth.Net sales were about $2.8 billion. EBITDA was about $500 million, adjusted for legal settlement that we had in last quarter that goes up to $533 million, and net income also goes up to right about $100 million, when we adjust for that legal settlement. Let's talk about the growth drivers that we see, so there is a couple of different areas that we are looking at. One is the end market, and specifically for us where we've seen a lot of growth is smartphones and tablets in the communication space. It's about 45% of the business now and it's been gaining share relative to some of the other end markets and we see that as continuing to grow. We are deeply penetrated in the key devices in all the spaces that we look at and we do have really strong ties with both, our customers and with their customers, the OEMs where we work very closely with them on developing their roadmaps. There is also drivers with respect to technology, and for us the big driver technology-wise in the space, has been the migration out of build wire bond. There are two avenues for that. One is, migrating into flip chip, which is really our strength. We focus on advanced packaging more so than our other competitors. Right now about 45% of our business has migrated into flip chip and that's been very successful for us and very positive for our gross margins, and we've also developed some leading edge technology called fine pitch copper pillar, which enables much finer pitch and also cost reductions in the space. Three packaging is coming up in the next couple of years, and then there is copper wire bonding, which is the other migration out of gold wire bonding, and we are ramping that very rapidly this year. Read the rest of this transcript for free on seekingalpha.com