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, 2024.
Second Quarter 2024 Highlights
- Net sales $1.46 billion
- Gross profit $212 million, operating income $82 million
- Net income $67 million, earnings per diluted share $0.27
- EBITDA $247 million
“Amkor delivered second quarter results in line with
expectations. Revenue of $1.46 billion was up 7% sequentially,
driven by Advanced packaging supporting premium tier smartphones
and AI solutions utilizing 2.5D technology,” said Giel Rutten,
Amkor’s president and chief executive officer. “Strength in the
Communications and Computing end markets was partially offset by
soft demand and ongoing inventory corrections in the Automotive
& Industrial and Consumer end markets.”
Quarterly Financial Results
($ in millions, except per share data)
Q2 2024
Q1 2024
Q2 2023
Net sales
$
1,461
$
1,366
$
1,458
Gross margin
14.5
%
14.8
%
12.8
%
Operating income
$
82
$
73
$
76
Operating income margin
5.6
%
5.4
%
5.2
%
Net income attributable to Amkor
$
67
$
59
$
64
Earnings per diluted share
$
0.27
$
0.24
$
0.26
EBITDA (1)
$
247
$
233
$
245
(1) EBITDA is a non-GAAP measure. The
reconciliation to the comparable GAAP measure is included below
under “Selected Operating Data.”
At June 30, 2024, total cash and short-term investments was $1.5
billion, and total debt was $1.1 billion.
The company paid a quarterly dividend of $0.07875 per share on
June 24, 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
third quarter 2024 (unless otherwise noted):
- Net sales of $1.785 billion to $1.885 billion
- Gross margin of 14.0% to 16.0%
- Net income of $105 million to $140 million, or $0.42 to $0.56
per diluted share
- Full year 2024 capital expenditures of approximately $750
million
Conference Call Information
Amkor will conduct a conference call on Monday, July 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
Q2 2024
Q1 2024
Q2 2023
Net Sales Data:
Net sales (in millions):
Advanced products (1)
$
1,180
$
1,070
$
1,084
Mainstream products (2)
281
296
374
Total net sales
$
1,461
$
1,366
$
1,458
Packaging services
88
%
87
%
88
%
Test services
12
%
13
%
12
%
Net sales from top ten customers
72
%
70
%
66
%
End Market Distribution Data:
Communications (smartphones, tablets)
48
%
47
%
41
%
Automotive, industrial and other (ADAS,
electrification, infotainment, safety)
20
%
22
%
23
%
Computing (data center, infrastructure,
PC/laptop, storage)
20
%
17
%
20
%
Consumer (AR & gaming, connected home,
home electronics, wearables)
12
%
14
%
16
%
Total
100
%
100
%
100
%
Gross Margin Data:
Net sales
100.0
%
100.0
%
100.0
%
Cost of sales:
Materials
54.0
%
51.9
%
53.6
%
Labor
10.4
%
11.2
%
10.9
%
Other manufacturing
21.1
%
22.1
%
22.7
%
Gross margin
14.5
%
14.8
%
12.8
%
(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.
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, 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 2024
Q1 2024
Q2 2023
EBITDA Data:
Net income
$
67
$
60
$
64
Plus: Interest expense
16
16
14
Plus: Income tax expense
14
12
9
Plus: Depreciation & amortization
150
145
158
EBITDA
$
247
$
233
$
245
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,
2024*
2023
2024*
2023
Net sales
$
1,461,474
$
1,457,922
$
2,826,985
$
2,929,461
Cost of sales
1,249,099
1,271,052
2,412,967
2,548,170
Gross profit
212,375
186,870
414,018
381,291
Selling, general and administrative
91,280
64,860
181,626
143,531
Research and development
39,568
45,688
77,739
92,735
Total operating expenses
130,848
110,548
259,365
236,266
Operating income
81,527
76,322
154,653
145,025
Interest expense
15,805
14,354
32,244
30,521
Other (income) expense, net
(15,848
)
(11,883
)
(31,143
)
(15,435
)
Total other (income) expense, net
(43
)
2,471
1,101
15,086
Income before taxes
81,570
73,851
153,552
129,939
Income tax expense
14,312
9,407
26,508
20,271
Net income
67,258
64,444
127,044
109,668
Net income attributable to non-controlling
interests
(361
)
(158
)
(1,250
)
(31
)
Net income attributable to Amkor
$
66,897
$
64,286
$
125,794
$
109,637
Net income attributable to Amkor per
common share:
Basic
$
0.27
$
0.26
$
0.51
$
0.45
Diluted
$
0.27
$
0.26
$
0.51
$
0.44
Shares used in computing per common share
amounts:
Basic
246,228
245,637
246,118
245,485
Diluted
247,860
246,964
247,790
247,046
*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, depreciation expense was reduced by
approximately $15 million and $31 million for the three and six
months ended June 30, 2024, respectively. This benefited net income
by approximately $13 million and $25 million and diluted earnings
per share by $0.05 and $0.10 for each period, respectively.
AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
June 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
1,079,663
$
1,119,818
Short-term investments
465,804
474,869
Accounts receivable, net of allowances
1,147,940
1,149,493
Inventories
379,259
393,128
Other current assets
64,175
58,502
Total current assets
3,136,841
3,195,810
Property, plant and equipment, net
3,480,996
3,299,445
Operating lease right of use assets
105,527
117,006
Goodwill
17,536
20,003
Restricted cash
762
799
Other assets
123,888
138,062
Total assets
$
6,865,550
$
6,771,125
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion
of long-term debt
$
154,403
$
131,624
Trade accounts payable
734,755
754,453
Capital expenditures payable
274,702
106,368
Short-term operating lease liability
23,987
33,616
Accrued expenses
318,753
358,414
Total current liabilities
1,506,600
1,384,475
Long-term debt
949,320
1,071,832
Pension and severance obligations
78,423
87,133
Long-term operating lease liabilities
54,550
56,837
Other non-current liabilities
193,323
175,813
Total liabilities
2,782,216
2,776,090
Stockholders’ equity:
Preferred stock
—
—
Common stock
293
292
Additional paid-in capital
2,022,512
2,008,170
Retained earnings
2,246,795
2,159,831
Accumulated other comprehensive income
(loss)
4,214
16,350
Treasury stock
(224,157
)
(222,335
)
Total Amkor stockholders’ equity
4,049,657
3,962,308
Non-controlling interests in
subsidiaries
33,677
32,727
Total equity
4,083,334
3,995,035
Total liabilities and equity
$
6,865,550
$
6,771,125
AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Six Months Ended June
30,
2024
2023
Cash flows from operating activities:
Net income
$
127,044
$
109,668
Depreciation and amortization
294,874
314,647
Other operating activities and non-cash
items
17,966
4,784
Changes in assets and liabilities
(52,816
)
(6,521
)
Net cash provided by operating
activities
387,068
422,578
Cash flows from investing activities:
Payments for property, plant and
equipment
(262,543
)
(282,309
)
Proceeds from sale of property, plant and
equipment
4,813
1,107
Proceeds from foreign exchange forward
contracts
5,088
22,451
Payments for foreign exchange forward
contracts
(43,091
)
(50,170
)
Payments for short-term investments
(279,526
)
(355,135
)
Proceeds from sale of short-term
investments
30,914
47,000
Proceeds from maturities of short-term
investments
263,932
193,315
Other investing activities
5,354
4,869
Net cash used in investing activities
(275,059
)
(418,872
)
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
11,043
Payments of short-term debt
(8,055
)
(11,149
)
Proceeds from long-term debt
58,727
—
Payments of long-term debt
(116,921
)
(72,061
)
Payments of finance lease obligations
(38,678
)
(31,129
)
Payments of dividends
(38,778
)
(36,874
)
Other financing activities
216
(1,589
)
Net cash used in financing activities
(138,477
)
(141,759
)
Effect of exchange rate fluctuations on
cash, cash equivalents and restricted cash
(13,724
)
(16,091
)
Net decrease in cash, cash equivalents and
restricted cash
(40,192
)
(154,144
)
Cash, cash equivalents and restricted
cash, beginning of period
1,120,617
962,406
Cash, cash equivalents and restricted
cash, end of period
$
1,080,425
$
808,262
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 and contract
manufacturers;
- 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/20240729580620/en/
Jennifer Jue Vice President, Investor Relations and Finance
480-786-7594 jennifer.jue@amkor.com
Amkor Technology (NASDAQ:AMKR)
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