Amkor Technology Reports Financial Results for the First Quarter 2020

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

 





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