First Quarter Highlights
- First quarter net sales $1.15 billion, up 29% year-on-year
- Operating income $84 million, operating margin 7.3%
- Net income $64 million, earnings per diluted share $0.26
- EBITDA $210 million
Amkor Technology, Inc. (NASDAQ: AMKR), a leading provider of
semiconductor packaging and test services, today announced
financial results for the first quarter ended March 31, 2020.
“First quarter revenue grew almost 30% year-on-year, driven by
strength in the communications and consumer markets,” said Steve
Kelley, Amkor’s president and chief executive officer. “Our factory
team executed remarkably well in a challenging environment.”
Results
Q1 2020
Q4 2019
Q1 2019
($ in millions, except per share
data)
Net sales
$1,153
$1,178
$895
Gross margin
16.4%
18.9%
13.5%
Operating income
$84
$118
$13
Operating margin
7.3%
10.0%
1.5%
Net income attributable to Amkor (1)
$64
$99
($23)
Earnings per diluted share (1)
$0.26
$0.41
($0.10)
EBITDA (2)
$210
$244
$153
(1) Q4 2019 net income includes a $4
million discrete income tax benefit, or $0.01 per diluted share,
primarily related to changes in the valuation of certain deferred
tax assets. 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.
(2) EBITDA is a non-GAAP measure. The
reconciliation to the comparable GAAP measure is included below
under “Selected Operating Data.”
“Strong year over year revenue growth drove profitability well
above year-ago levels,” said Megan Faust, Amkor’s executive vice
president and chief financial officer. “We will continue to make
strategic investments to support growth in our target markets while
being cautious with discretionary spending.”
At March 31, 2020, total cash and short-term investments was
$1.0 billion, and total debt was $1.5 billion.
Business Outlook
“We continue to be excited about Amkor’s prospects for growth in
the medium- and long-term,” said Kelley. “At the same time, we are
well-prepared to deal with fluctuations in near-term demand due to
recent macroeconomic events.”
Second quarter 2020 outlook (unless otherwise noted):
- Net sales of $1.0 billion to $1.1 billion
- Gross margin of 9.5% to 13.5%
- Net income of ($32) million to $19 million, or ($0.13) to $0.08
per diluted share
- Full year 2020 capital expenditures of approximately $550
million
Conference Call Information
Amkor will conduct a conference call on Monday, April 27, 2020,
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 3086586). 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 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.
AMKOR TECHNOLOGY, INC.
Selected Operating
Data
Q1 2020
Q4 2019
Q1 2019
Net Sales Data:
Net sales (in millions):
Advanced products (1)
$
705
$
667
$
422
Mainstream products (2)
448
511
473
Total net sales
$
1,153
$
1,178
$
895
Packaging services
85
%
84
%
82
%
Test services
15
%
16
%
18
%
Net sales from top ten customers
67
%
65
%
66
%
End Market Data:
Communications (handheld devices,
smartphones, tablets)
38
%
37
%
38
%
Consumer (connected home, set-top boxes,
televisions, visual imaging, wearables)
24
%
24
%
14
%
Automotive, industrial and other (driver
assist, infotainment, performance, safety)
23
%
25
%
28
%
Computing (datacenter, infrastructure,
PC/laptop, storage)
15
%
14
%
20
%
Total
100
%
100
%
100
%
Gross Margin Data:
Net sales
100.0
%
100.0
%
100.0
%
Cost of sales:
Materials
45.3
%
42.6
%
38.0
%
Labor
14.2
%
13.9
%
17.4
%
Other manufacturing
24.1
%
24.6
%
31.1
%
Gross margin
16.4
%
18.9
%
13.5
%
(1) Advanced products include flip chip
and wafer-level processing and related test services
(2) Mainstream products include wirebond
packaging and related test services
AMKOR TECHNOLOGY, INC.
Selected Operating
Data
In this press release, 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.
Non-GAAP Financial Measure
Reconciliation:
Q1 2020
Q4 2019
Q1 2019
(in millions)
EBITDA Data:
Net income
$
64
$
100
$
(23
)
Plus: Interest expense
17
17
19
Plus: Income tax expense
5
1
21
Plus: Depreciation & amortization
124
126
136
EBITDA
$
210
$
244
$
153
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(Unaudited)
For the Three Months
Ended
March 31,
2020
2019
(In thousands, except per
share data)
Net sales
$
1,152,616
$
894,964
Cost of sales
963,708
774,203
Gross profit
188,908
120,761
Selling, general and administrative
72,582
71,587
Research and development
32,253
35,754
Total operating expenses
104,835
107,341
Operating income
84,073
13,420
Interest expense
17,045
19,273
Other (income) expense, net
(2,315
)
(4,565
)
Total other expense, net
14,730
14,708
Income (loss) before taxes
69,343
(1,288
)
Income tax expense
4,846
21,380
Net income (loss)
64,497
(22,668
)
Net income attributable to non-controlling
interests
(608
)
(211
)
Net income (loss) attributable to
Amkor
$
63,889
$
(22,879
)
Net income (loss) attributable to Amkor
per common share:
Basic
$
0.27
$
(0.10
)
Diluted
$
0.26
$
(0.10
)
Shares used in computing per common share
amounts:
Basic
240,919
239,414
Diluted
241,333
239,414
AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
March 31,
2020
December 31,
2019
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents
$
941,447
$
894,948
Restricted cash
610
610
Short-term investments
58,263
6,348
Accounts receivable, net of allowances
880,629
850,753
Inventories
238,201
220,602
Other current assets
34,553
28,272
Total current assets
2,153,703
2,001,533
Property, plant and equipment, net
2,367,746
2,404,850
Operating lease right of use assets
147,985
148,549
Goodwill
26,235
25,976
Restricted cash
3,267
2,974
Other assets
112,701
111,733
Total assets
$
4,811,637
$
4,695,615
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion
of long-term debt
$
141,521
$
144,479
Trade accounts payable
562,633
571,054
Capital expenditures payable
107,131
77,044
Accrued expenses
236,464
267,226
Total current liabilities
1,047,749
1,059,803
Long-term debt
1,371,501
1,305,755
Pension and severance obligations
178,084
176,971
Long-term operating lease liabilities
89,733
91,107
Other non-current liabilities
65,945
71,740
Total liabilities
2,753,012
2,705,376
Stockholders’ equity:
Preferred stock
—
—
Common stock
287
287
Additional paid-in capital
1,931,088
1,927,739
Retained earnings
297,966
234,077
Accumulated other comprehensive income
(loss)
19,709
19,115
Treasury stock
(217,533
)
(217,479
)
Total Amkor stockholders’ equity
2,031,517
1,963,739
Non-controlling interests in
subsidiaries
27,108
26,500
Total equity
2,058,625
1,990,239
Total liabilities and equity
$
4,811,637
$
4,695,615
AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended
March 31,
2020
2019
(In thousands)
Cash flows from operating activities:
Net income (loss)
$
64,497
$
(22,668
)
Depreciation and amortization
123,657
135,835
Other operating activities and non-cash
items
8,287
15,928
Changes in assets and liabilities
(99,852
)
(77,038
)
Net cash provided by operating
activities
96,589
52,057
Cash flows from investing activities:
Payments for property, plant and
equipment
(55,888
)
(203,216
)
Proceeds from sale of property, plant and
equipment
1,887
180
Proceeds from insurance recovery for
property, plant and equipment
—
1,538
Payments for short-term investments
(55,754
)
—
Other investing activities
5,163
(569
)
Net cash used in investing activities
(104,592
)
(202,067
)
Cash flows from financing activities:
Proceeds from revolving credit
facilities
201,000
—
Proceeds from short-term debt
14,086
29,781
Payments of short-term debt
(9,409
)
(10,588
)
Proceeds from issuance of long-term
debt
24,000
572,375
Payments of long-term debt
(172,336
)
(63,636
)
Payments of finance lease obligations
(2,355
)
(1,376
)
Other financing activities
109
(2,848
)
Net cash provided by financing
activities
55,095
523,708
Effect of exchange rate fluctuations on
cash, cash equivalents and restricted cash
(300
)
(829
)
Net increase in cash, cash equivalents and
restricted cash
46,792
372,869
Cash, cash equivalents and restricted
cash, beginning of period
898,532
688,051
Cash, cash equivalents and restricted
cash, end of period
$
945,324
$
1,060,920
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 statements regarding the strength of the
communications and consumer markets, statements regarding our
strategic investments and discretionary spending and 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:
- health conditions or pandemics, such as COVID-19, impacting
labor availability and operating capacity, capital availability,
the supply chain and consumer demand for our customers’ products
and services;
- dependence on the highly cyclical, volatile semiconductor
industry;
- industry downturns and declines in global economic and
financial conditions;
- fluctuation in demand for semiconductors and conditions in the
semiconductor industry generally, as well as by specific customers,
such as inventory reductions by our customers impacting demand in
key markets;
- changes in our capacity and capacity utilization rates and
fluctuations in our manufacturing yields;
- the development, transition and ramp to high volume manufacture
of more advanced silicon nodes and evolving wafer, packaging and
test technologies, may cause production delays, lower manufacturing
yields and supply constraints for new wafers and other
materials;
- absence of backlog, the short-term nature of our customers’
commitments, double bookings by customers and deterioration in
customer forecasts and the impact of these factors, including the
possible delay, rescheduling and cancellation of large orders, or
the timing and volume of orders relative to our production
capacity;
- changes in costs, quality, availability and delivery times of
raw materials, components and equipment, including any disruption
in the supply of certain materials due to regulations and customer
requirements, as well as wage inflation and fluctuations in
commodity prices;
- dependence on key customers or concentration of customers in
certain end markets, such as mobile communications and
automotive;
- dependence on international factories and operations, and risks
relating to our customers’ and vendors’ international
operations;
- laws, rules, regulations and policies imposed by U.S. or
foreign governments, such as tariffs, customs, duties and other
restrictive trade barriers, national security, data privacy and
cybersecurity, antitrust and competition, tax, currency and
banking, labor, environmental, health and safety, and in particular
the recent increase in tariffs, customs, duties and other
restrictive trade barriers considered or adopted by 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;
- fluctuations in currency exchange rates, particularly the
dollar/yen exchange rate for our operations in Japan;
- competition with established competitors in the packaging and
test business, the internal capabilities of integrated device
manufacturers, and new competitors, including foundries;
- decisions by our integrated device manufacturer and foundry
customers to curtail outsourcing;
- difficulty achieving high capacity utilization rates due to
high percentage of fixed costs;
- our substantial investments in equipment and facilities to
support the demand of our customers;
- there can be no assurance regarding when our 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;
- the historical downward pressure on the prices of our packaging
and test services;
- any warranty claims, product return and liability risks, and
the risk of negative publicity if our products fail, as well as the
risk of litigation incident to our business;
- our substantial indebtedness and restrictive covenants in the
indentures and agreements governing our current and future
indebtedness;
- difficulty funding our liquidity needs;
- our significant severance plan obligations associated with our
manufacturing operations in Korea;
- maintaining an effective system of internal controls;
- difficulty attracting, retaining or replacing qualified
personnel;
- our continuing development and implementation of changes to,
and maintenance and security of, our information technology
systems;
- challenges with integrating diverse operations;
- any changes in tax laws (including the recent enactment of U.S.
tax reform), taxing authorities not agreeing with our
interpretation of applicable tax laws, including whether we
continue to qualify for tax holidays, or any requirements to
establish or adjust valuation allowances on deferred tax
assets;
- our ability to develop new proprietary technology, protect our
proprietary technology, operate without infringing the proprietary
rights of others, and implement new technologies;
- natural disasters and other calamities, health conditions or
pandemics, political instability, hostilities or other disruptions;
and
- the ability of certain of our stockholders to effectively
determine or substantially influence the outcome of matters
requiring stockholder approval.
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, 2019 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 except as may be
required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200427005812/en/
Vincent Keenan Vice President, Investor Relations 480-786-7594
vincent.keenan@amkor.com
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