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, 2024.
First Quarter 2024 Highlights
- Net sales $1.37 billion
- Gross profit $202 million, operating income $73 million
- Net income $59 million, earnings per diluted share $0.24
- EBITDA $233 million
“Amkor delivered first quarter results in line with expectations
with revenue of $1.37 billion dollars and EPS of $0.24. After a
multi-quarter industry downturn, we see the first quarter as the
low point for our revenue and utilization,” said Giel Rutten,
Amkor’s president and chief executive officer. “During the quarter
we continued 2.5D capacity expansion efforts to increase AI device
output, enhanced key partnerships to further strengthen the
European semiconductor supply chain, progressed plans for our
Advanced packaging and test facility in Arizona and focused on
qualification in our Vietnam factory for production ramp in the
second half of the year.”
Quarterly Financial Results
($ in millions, except per share data)
Q1 2024
Q4 2023
Q1 2023
Net sales
$1,366
$1,752
$1,472
Gross margin
14.8%
15.9%
13.2%
Operating income
$73
$159
$69
Operating income margin
5.4%
9.1%
4.7%
Net income attributable to Amkor
$59
$118
$45
Earnings per diluted share
$0.24
$0.48
$0.18
EBITDA (1)
$233
$326
$229
(1)
EBITDA is a non-GAAP measure. The
reconciliation to the comparable GAAP measure is included below
under “Selected Operating Data.”
At March 31, 2024, total cash and short-term investments was
$1.6 billion, and total debt was $1.2 billion.
The company paid a quarterly dividend of $0.07875 per share on
April 1, 2024. The declaration and payment of future dividends, as
well as any record and payment dates, are subject to the approval
of the Board of Directors.
Business Outlook
The following information presents Amkor’s guidance for the
second quarter 2024 (unless otherwise noted):
- Net sales of $1.40 billion to $1.50 billion
- Gross margin of 13.0% to 15.0%
- Net income of $35 million to $75 million, or $0.14 to $0.30 per
diluted share
- Full year 2024 capital expenditures of approximately $750
million
Conference Call Information
Amkor will conduct a conference call on Monday, April 29, 2024,
at 5:00 p.m. Eastern Time. This call may include material
information not included in this press release. To access the live
audio webcast and the accompanying slide presentation, visit the
Investor Relations section of Amkor’s website, located at
ir.amkor.com. The live call can also be accessed by dialing
1-877-407-4019 or 1-201-689-8337.
About Amkor Technology, Inc.
Amkor Technology, Inc. is the world's largest US headquartered
OSAT (outsourced semiconductor assembly and test) service provider.
Since its founding in 1968, Amkor has pioneered the outsourcing of
IC packaging and test services and is a strategic manufacturing
partner for the world's leading semiconductor companies, foundries,
and electronics OEMs. Amkor provides turnkey manufacturing services
for the communication, automotive and industrial, computing, and
consumer industries, including but not limited to smartphones,
electric vehicles, data centers, artificial intelligence and
wearables. Amkor's operational base includes production facilities,
research and development centers and sales and support offices
located in key electronics manufacturing regions in Asia, Europe
and the United States. For more information visit amkor.com.
AMKOR TECHNOLOGY, INC.
Selected Operating
Data
Q1 2024
Q4 2023
Q1 2023
Net Sales Data:
Net sales (in millions):
Advanced products (1)
$
1,070
$
1,430
$
1,068
Mainstream products (2)
296
322
404
Total net sales
$
1,366
$
1,752
$
1,472
Packaging services
87
%
89
%
88
%
Test services
13
%
11
%
12
%
Net sales from top ten customers
70
%
71
%
66
%
End Market Distribution Data:
Communications (smartphones, tablets)
47
%
56
%
45
%
Automotive, industrial and other (ADAS,
electrification, infotainment, safety)
22
%
19
%
26
%
Computing (data center, infrastructure,
PC/laptop, storage)
17
%
13
%
17
%
Consumer (AR & gaming, connected home,
home electronics, wearables)
14
%
12
%
12
%
Total
100
%
100
%
100
%
Gross Margin Data:
Net sales
100.0
%
100.0
%
100.0
%
Cost of sales:
Materials
51.9
%
56.5
%
52.9
%
Labor
11.2
%
9.1
%
11.3
%
Other manufacturing
22.1
%
18.5
%
22.6
%
Gross margin
14.8
%
15.9
%
13.2
%
(1)
Advanced products include flip
chip, memory and wafer-level processing and related test
services.
(2)
Mainstream products include all
other wirebond packaging and related test services.
AMKOR TECHNOLOGY, INC. Selected
Operating Data
In this press release, we refer to 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, and our ability to service
debt, and our ability to fund capital expenditures and pay
dividends. 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:
(in millions)
Q1 2024
Q4 2023
Q1 2023
EBITDA Data:
Net income
$
60
$
119
$
45
Plus: Interest expense
16
15
16
Plus: Income tax expense
12
33
11
Plus: Depreciation & amortization
145
159
157
EBITDA
$
233
$
326
$
229
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per
share data)
(Unaudited)
For the Three Months Ended
March 31,
2024*
2023
Net sales
$
1,365,511
$
1,471,539
Cost of sales
1,163,868
1,277,118
Gross profit
201,643
194,421
Selling, general and administrative
90,346
78,671
Research and development
38,171
47,047
Total operating expenses
128,517
125,718
Operating income
73,126
68,703
Interest expense
16,439
16,167
Other (income) expense, net
(15,295
)
(3,552
)
Total other expense, net
1,144
12,615
Income before taxes
71,982
56,088
Income tax expense
12,196
10,864
Net income
59,786
45,224
Net (income) loss attributable to
non-controlling interests
(889
)
127
Net income attributable to Amkor
$
58,897
$
45,351
Net income attributable to Amkor per
common share:
Basic
$
0.24
$
0.18
Diluted
$
0.24
$
0.18
Shares used in computing per common share
amounts:
Basic
246,008
245,330
Diluted
247,614
247,087
*We periodically assess the estimated
useful lives of our property, plant and equipment. Based on our
assessment of test equipment and its increased interchangeability
enabling broader and longer use, we extended the estimated useful
lives of test equipment from five years to seven years as of
January 1, 2024. As a result, the reduction in depreciation expense
of approximately $15 million benefited net income and diluted
earnings per share by approximately $13 million and $0.05 for the
first quarter of 2024, respectively.
AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
March 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
1,118,004
$
1,119,818
Short-term investments
454,669
474,869
Accounts receivable, net of allowances
1,093,960
1,149,493
Inventories
331,070
393,128
Other current assets
47,312
58,502
Total current assets
3,045,015
3,195,810
Property, plant and equipment, net
3,367,434
3,299,445
Operating lease right of use assets
106,873
117,006
Goodwill
18,641
20,003
Restricted cash
781
799
Other assets
146,322
138,062
Total assets
$
6,685,066
$
6,771,125
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion
of long-term debt
$
112,968
$
131,624
Trade accounts payable
618,378
754,453
Capital expenditures payable
234,762
106,368
Short-term operating lease liability
27,112
33,616
Accrued expenses
309,976
358,414
Total current liabilities
1,303,196
1,384,475
Long-term debt
1,038,346
1,071,832
Pension and severance obligations
79,647
87,133
Long-term operating lease liabilities
52,924
56,837
Other non-current liabilities
180,345
175,813
Total liabilities
2,654,458
2,776,090
Stockholders’ equity:
Preferred stock
—
—
Common stock
292
292
Additional paid-in capital
2,014,782
2,008,170
Retained earnings
2,199,300
2,159,831
Accumulated other comprehensive income
(loss)
6,910
16,350
Treasury stock
(224,157
)
(222,335
)
Total Amkor stockholders’ equity
3,997,127
3,962,308
Non-controlling interests in
subsidiaries
33,481
32,727
Total equity
4,030,608
3,995,035
Total liabilities and equity
$
6,685,066
$
6,771,125
AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three Months Ended
March 31,
2024
2023
Cash flows from operating activities:
Net income
$
59,786
$
45,224
Depreciation and amortization
144,925
156,762
Other operating activities and non-cash
items
14,100
(2,821
)
Changes in assets and liabilities
(56,499
)
(23,419
)
Net cash provided by operating
activities
162,312
175,746
Cash flows from investing activities:
Payments for property, plant and
equipment
(96,169
)
(98,224
)
Proceeds from sale of property, plant and
equipment
3,439
652
Payments for short-term investments
(111,760
)
(172,409
)
Proceeds from sale of short-term
investments
16,014
21,549
Proceeds from maturities of short-term
investments
121,684
92,655
Other investing activities
(19,311
)
73
Net cash used in investing activities
(86,103
)
(155,704
)
Cash flows from financing activities:
Proceeds from revolving credit
facilities
—
370,000
Payments of revolving credit
facilities
—
(370,000
)
Proceeds from short-term debt
5,012
11,042
Payments of short-term debt
(5,669
)
(5,840
)
Payments of long-term debt
(29,100
)
(35,980
)
Payments of finance lease obligations
(19,684
)
(15,148
)
Payments of dividends
(19,383
)
(18,430
)
Other financing activities
(1,053
)
(1,850
)
Net cash used in financing activities
(69,877
)
(66,206
)
Effect of exchange rate fluctuations on
cash, cash equivalents and restricted cash
(8,164
)
(2,943
)
Net decrease in cash, cash equivalents and
restricted cash
(1,832
)
(49,107
)
Cash, cash equivalents and restricted
cash, beginning of period
1,120,617
962,406
Cash, cash equivalents and restricted
cash, end of period
$
1,118,785
$
913,299
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements within
the meaning of the federal securities laws. You are cautioned not
to place undue reliance on forward-looking statements, which are
often characterized by terminology such as “may,” “will,” “should,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential,” “continue” or “intend,” by the negative of
these terms or other comparable terminology or by discussions of
strategy, plans or intentions. All forward-looking statements in
this press release are made based on our current expectations,
forecasts, estimates and assumptions. Because such statements
include risks and uncertainties, actual results may differ
materially from those anticipated in such forward-looking
statements as a result of various factors, including, but not
limited to, the following:
- dependence on the cyclical and volatile semiconductor industry
and vulnerability to industry downturns and declines in global
economic and financial conditions;
- dependence on key customers or concentration of customers in
certain end markets, such as mobile communications and
automotive;
- changes in costs, quality, availability and delivery times of
raw materials, components and equipment;
- 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;
- fluctuations in operating results and cash flows;
- our substantial indebtedness;
- dependence on international factories and operations and risks
relating to trade restrictions and regional conflict;
- the effects of business, economic, political, legal and
regulatory impacts or conflicts upon our global operations;
- fluctuations in interest rates and changes in credit risk;
- competition with established competitors in the packaging and
test business, the internal capabilities of integrated device
manufacturers and new competitors, including foundries;
- difficulty funding our liquidity needs, including as a result
of disruptions to the banking system and capital markets;
- our substantial investments in equipment and facilities to
support the demand of our customers;
- difficulty attracting, retaining or replacing qualified
personnel;
- difficulty achieving the relatively high-capacity utilization
rates necessary to realize satisfactory gross margins given our
high percentage of fixed costs;
- maintaining an effective system of internal controls;
- the absence of backlog and the short-term nature of our
customers’ commitments;
- our continuing development and implementation of changes to,
and maintenance and security of, our information technology
systems;
- the historical downward pressure on the prices of our packaging
and test services;
- challenges with integrating diverse operations;
- fluctuations in our manufacturing yields;
- any changes in tax laws, taxing authorities not agreeing with
our interpretation of applicable tax laws, including whether we
continue to qualify for conditional reduced tax rates, 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;
- environmental, health and safety liabilities and
expenditures;
- 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;
- natural disasters and other calamities, political instability,
hostilities or other disruptions;
- restrictive covenants in the indentures and agreements
governing our current and future indebtedness;
- the possibility that we may decrease or suspend our quarterly
dividend;
- significant severance plan obligations associated with our
manufacturing operations in Korea; 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, 2023 (the “Form 10-K”) and from time to time in our other
reports filed with or furnished to the Securities and Exchange
Commission (“SEC”). You should carefully consider the trends, risks
and uncertainties described in this press release, the Form 10-K
and other reports filed with or furnished to the SEC before making
any investment decision with respect to our securities. If any of
these trends, risks or uncertainties continues or occurs, our
business, financial condition or operating results could be
materially and adversely affected, the trading prices of our
securities could decline, and you could lose part or all of your
investment. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by this cautionary statement. We assume 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 applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240429660353/en/
Jennifer Jue Vice President, Investor Relations and Finance
480-786-7594 jennifer.jue@amkor.com
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