Assembly & test revenue was $289 million, down 47% from Q3 of 2000, and down 7% sequentially. Third quarter wafer fab revenue was $46 million compared with $100 million in Q3 of 2000 and $39 million in the second quarter of 2001.
Excluding amortization of goodwill and acquired intangibles, Amkor’s third quarter net loss was $99 million, or ($0.61) per share, compared to a profit of $73 million, or $0.46 per share, in Q3 of 2000.
Including amortization of goodwill and acquired intangibles, the third quarter 2001 net loss was $129 million, or ($0.80) per share, compared with a profit of $45 million, or $0.28 per share, for Q3 of 2000. There were 161 million weighted average shares outstanding on a fully diluted basis for the third quarter of 2001 compared with 159 million in the year-ago period.
During the third quarter we continued to execute on our strategy of extending our industry leadership despite sluggish economic conditions, said James Kim, Amkor’s Chairman and Chief Executive Officer. We believe that the current downturn will ultimately be a springboard for additional outsourcing as semiconductor companies further rationalize their business models.
Despite the tough environment, there were several bright spots this quarter, said John Boruch, Amkor’s President. We are making excellent progress expanding our business in several areas, most notably Flip Chip, System-in-Package, ChipArray® BGA and MicroLeadFrame(TM). Units and revenues for all of these products rose during the quarter. We are positioning Amkor to not only survive this downturn, but come out of it with a greater market penetration.
Third quarter EBITDA was $20 million compared to $196 million in Q3 of 2000. We have calculated EBITDA as earnings before income taxes; equity in income (loss) of affiliates; foreign currency gain or loss; interest expense, net; depreciation and amortization. EBITDA is a common measure used by investors to evaluate a company’s ability to service debt. EBITDA is not defined by generally accepted accounting principles.
Since earlier in the year, when it became evident that the semiconductor industry was experiencing a significant downturn, we have been focused on reducing operating costs and expenses, and enhancing our financial liquidity, said Ken Joyce, Amkor’s Chief Financial Officer. Since the beginning of 2001 we have undertaken a comprehensive program of cost reductions, including reductions in our worldwide workforce, shortened factory work weeks, improved operating efficiencies and negotiated material cost savings. This cost reduction program is expected to yield annualized savings of more than $200 million.
We are in the fourth quarter of this downturn with a stronger corporate liquidity position than when the downturn started, said Joyce. We have cash balances of more than $300 million, no appreciable debt amortization, a significantly lower level of capital spending, and a reduced operating expense profile. As a result, we believe Amkor has sufficient liquidity to withstand an extended industry downturn.
At the end of the third quarter there was $223 million outstanding under our bank facility. As a result of this unprecedented industry downturn, at quarter-end we fell out of compliance with certain financial covenants under the bank agreement. However we are in active discussions with our banks to amend the financial covenants, said Joyce.
Capital expenditures were limited to $23 million for the third quarter, and totaled $135 million for the first nine months. Our capital budget for 2001 has been reduced to $150 million, from $480 million in 2000. While our budget for 2002 has not been finalized, we expect that 2002 capital expenditures will not exceed $100 million. We are focusing our capital investments on key growth technologies, such as Flip Chip, System-in-Package, and matrix assembly and test, noted Joyce.
Our business initiatives are focused on positioning Amkor for long-term growth through strategic geographical expansion, developing leading-edge assembly technologies, and strengthening key customer relationships, said Boruch.
The unprecedented industry downturn is causing many integrated semiconductor companies to revisit their vertical organization and consider more extended use of strategic outsourcing, continued Boruch. We are actively pursuing opportunities with several of our customers who wish to establish long-term supply agreements in conjunction with shutting down some of their internal capacity.
