Amkor Technology Reports Financial Results for the Second Quarter 2023
TEMPE, Ariz. -- July 31, 2023 -- Amkor Technology, Inc. (Nasdaq: AMKR), a leading provider of semiconductor packaging and test services, today announced financial results for the second quarter ended June 30, 2023.
Second Quarter 2023 Highlights
•Net sales $1.46 billion
•Gross profit $187 million, operating income $76 million
•Net income $64 million, earnings per diluted share $0.26
•EBITDA $245 million
“Amkor’s second quarter performance was in line with our expectations, with demand for Advanced packaging solutions driving sequential growth in both the Computing and Consumer end markets,” said Giel Rutten, Amkor’s president and chief executive officer. “With our technology leadership and broad geographic footprint, Amkor is outperforming the industry and is well positioned to capitalize on the industry megatrends that we expect to propel growth beyond the current cycle.”
Quarterly Financial Results
($ in millions, except per share data)
Q2 2023
Q1 2023
Q2 2022
Net sales
$1,458
$1,472
$1,505
Gross margin
12.8%
13.2%
16.6%
Operating income
$76
$69
$143
Operating income margin
5.2%
4.7%
9.5%
Net income attributable to Amkor
$64
$45
$125
Earnings per diluted share
$0.26
$0.18
$0.51
EBITDA (1)
$245
$229
$302
(1) EBITDA is a non-GAAP measure. The reconciliation to the comparable GAAP measure is included below under “Selected Operating Data.”
At June 30, 2023, total cash and short-term investments was $1.2 billion, and total debt was $1.1 billion.
The company paid a quarterly dividend of $0.075 per share on June 26, 2023. 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 third quarter 2023 (unless otherwise noted):
•Net sales of $1.725 billion to $1.825 billion
•Gross margin of 13.5% to 15.5%
•Net income of $90 million to $130 million, or $0.36 to $0.53 per diluted share
•Full year 2023 capital expenditures of approximately $750 million
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Conference Call Information
Amkor will conduct a conference call on Monday, July 31, 2023, 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 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 amkor.com.
Jennifer Jue
Vice President, Investor Relations and Finance
480-786-7594
jennifer.jue@amkor.com
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AMKOR TECHNOLOGY, INC.
Selected Operating Data
Q2 2023
Q1 2023
Q2 2022
Net Sales Data:
Net sales (in millions):
Advanced products (1)
$
1,084
$
1,068
$
1,084
Mainstream products (2)
374
404
421
Total net sales
$
1,458
$
1,472
$
1,505
Packaging services
88
%
88
%
87
%
Test services
12
%
12
%
13
%
Net sales from top ten customers
66
%
66
%
65
%
End Market Distribution Data:
Communications (smartphones, tablets)
41
%
45
%
37
%
Automotive, industrial and other (ADAS, electrification, infotainment, safety)
23
%
26
%
23
%
Computing (data center, infrastructure, PC/laptop, storage)
20
%
17
%
18
%
Consumer (AR & gaming, connected home, home electronics, wearables)
16
%
12
%
22
%
Total
100
%
100
%
100
%
Gross Margin Data:
Net sales
100.0
%
100.0
%
100.0
%
Cost of sales:
Materials
53.6
%
52.9
%
49.2
%
Labor
10.9
%
11.3
%
11.8
%
Other manufacturing
22.7
%
22.6
%
22.4
%
Gross margin
12.8
%
13.2
%
16.6
%
(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.
3
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)
Q2 2023
Q1 2023
Q2 2022
EBITDA Data:
Net income
$
64
$
45
$
125
Plus: Interest expense
14
16
15
Plus: Income tax expense
9
11
11
Plus: Depreciation & amortization
158
157
151
EBITDA
$
245
$
229
$
302
4
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended June 30,
For the Six Months Ended June 30,
2023
2022
2023
2022
Net sales
$
1,457,922
$
1,504,868
$
2,929,461
$
3,101,684
Cost of sales
1,271,052
1,255,713
2,548,170
2,527,199
Gross profit
186,870
249,155
381,291
574,485
Selling, general and administrative
64,860
68,868
143,531
145,827
Research and development
45,688
37,478
92,735
75,841
Total operating expenses
110,548
106,346
236,266
221,668
Operating income
76,322
142,809
145,025
352,817
Interest expense
14,354
14,593
30,521
28,741
Other (income) expense, net
(11,883)
(8,041)
(15,435)
(13,137)
Total other expense, net
2,471
6,552
15,086
15,604
Income before taxes
73,851
136,257
129,939
337,213
Income tax expense
9,407
10,788
20,271
40,516
Net income
64,444
125,469
109,668
296,697
Net income attributable to non-controlling interests
(158)
(691)
(31)
(1,256)
Net income attributable to Amkor
$
64,286
$
124,778
$
109,637
$
295,441
Net income attributable to Amkor per common share:
Basic
$
0.26
$
0.51
$
0.45
$
1.21
Diluted
$
0.26
$
0.51
$
0.44
$
1.20
Shares used in computing per common share amounts:
Basic
245,637
244,592
245,485
244,498
Diluted
246,964
245,855
247,046
245,938
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AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
804,834
$
959,072
Short-term investments
399,233
281,964
Accounts receivable, net of allowances
1,198,612
1,365,504
Inventories
534,477
629,576
Other current assets
61,890
65,123
Total current assets
2,999,046
3,301,239
Property, plant and equipment, net
3,309,592
3,135,614
Operating lease right of use assets
146,080
171,163
Goodwill
19,550
21,517
Restricted cash
3,428
3,334
Other assets
160,484
188,890
Total assets
$
6,638,180
$
6,821,757
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt
$
155,978
$
143,813
Trade accounts payable
701,610
899,164
Capital expenditures payable
310,387
146,602
Short-term operating lease liability
53,991
70,991
Accrued expenses
354,522
401,841
Total current liabilities
1,576,488
1,662,411
Long-term debt
975,535
1,088,521
Pension and severance obligations
88,249
93,540
Long-term operating lease liabilities
66,030
75,745
Other non-current liabilities
169,019
201,839
Total liabilities
2,875,321
3,122,056
Stockholders’ equity:
Preferred stock
—
—
Common stock
292
291
Additional paid-in capital
2,005,055
1,996,344
Retained earnings
1,947,420
1,874,644
Accumulated other comprehensive income (loss)
1,432
16,699
Treasury stock
(222,049)
(219,226)
Total Amkor stockholders’ equity
3,732,150
3,668,752
Non-controlling interests in subsidiaries
30,709
30,949
Total equity
3,762,859
3,699,701
Total liabilities and equity
$
6,638,180
$
6,821,757
6
AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Six Months Ended June 30,
2023
2022
Cash flows from operating activities:
Net income
$
109,668
$
296,697
Depreciation and amortization
314,647
299,341
Other operating activities and non-cash items
4,784
(10,041)
Changes in assets and liabilities
(6,521)
(123,728)
Net cash provided by operating activities
422,578
462,269
Cash flows from investing activities:
Payments for property, plant and equipment
(282,309)
(340,208)
Proceeds from sale of property, plant and equipment
1,107
773
Payments for short-term investments
(355,135)
(298,351)
Proceeds from sale of short-term investments
47,000
14,120
Proceeds from maturities of short-term investments
193,315
155,910
Other investing activities
(22,850)
(58,916)
Net cash used in investing activities
(418,872)
(526,672)
Cash flows from financing activities:
Proceeds from revolving credit facilities
370,000
—
Payments of revolving credit facilities
(370,000)
—
Proceeds from short-term debt
11,043
18,112
Payments of short-term debt
(11,149)
(12,048)
Proceeds from issuance of long-term debt
—
190,000
Payments of long-term debt
(72,061)
(155,284)
Payments of finance lease obligations
(31,129)
(15,943)
Payments of dividends
(36,874)
(24,473)
Other financing activities
(1,589)
(5,089)
Net cash used in financing activities
(141,759)
(4,725)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
(16,091)
(25,020)
Net decrease in cash, cash equivalents and restricted cash
(154,144)
(94,148)
Cash, cash equivalents and restricted cash, beginning of period
962,406
831,521
Cash, cash equivalents and restricted cash, end of period
$
808,262
$
737,373
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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 the COVID-19 pandemic, 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;
•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;
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•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, 2022 (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.
