Amkor Technology, Inc. (Nasdaq: AMKR), a leading provider of
semiconductor packaging and test services, today announced
financial results for the third quarter ended September 30,
2023.
Third Quarter 2023 Highlights
- Net sales $1.82 billion
- Gross profit $283 million, operating income $167 million
- Net income $133 million, earnings per diluted share $0.54
- EBITDA $333 million
“Amkor delivered third quarter revenue and profitability at the
high end of guidance. Revenue of $1.82 billion was up 25%
sequentially, driven by growth within the Communications end
market, which grew year-on-year to a new record level,” said Giel
Rutten, Amkor’s president and chief executive officer. “Earlier
this month we celebrated the grand opening of our state-of-the-art
factory in Bac Ninh, Vietnam, further expanding our geographic
footprint. With our strategic focus on advanced packaging and our
broad geographic footprint, Amkor remains well positioned to
outperform the industry.”
Quarterly Financial Results
($ in millions, except per share data)
Q3 2023
Q2 2023
Q3 2022
Net sales
$1,822
$1,458
$2,084
Gross margin
15.5%
12.8%
20.2%
Operating income
$167
$76
$319
Operating income margin
9.1%
5.2%
15.3%
Net income attributable to Amkor
$133
$64
$306
Earnings per diluted share
$0.54
$0.26
$1.24
EBITDA (1)
$333
$245
$481
(1) EBITDA is a non-GAAP measure. The reconciliation to the
comparable GAAP measure is included below under “Selected Operating
Data.”
At September 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
September 25, 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
fourth quarter 2023 (unless otherwise noted):
- Net sales of $1.625 billion to $1.725 billion
- Gross margin of 14.0% to 16.0%
- Net income of $80 million to $120 million, or $0.32 to $0.49
per diluted share
- Full year 2023 capital expenditures of approximately $750
million
Conference Call Information
Amkor will conduct a conference call on Monday, October 30,
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 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.
AMKOR TECHNOLOGY, INC.
Selected Operating
Data
Q3 2023
Q2 2023
Q3 2022
Net Sales Data:
Net sales (in millions):
Advanced products (1)
$
1,452
$
1,084
$
1,640
Mainstream products (2)
370
374
444
Total net sales
$
1,822
$
1,458
$
2,084
Packaging services
88
%
88
%
87
%
Test services
12
%
12
%
13
%
Net sales from top ten customers
72
%
66
%
67
%
End Market Distribution Data:
Communications (smartphones, tablets)
55
%
41
%
47
%
Automotive, industrial and other (ADAS,
electrification, infotainment, safety)
19
%
23
%
18
%
Computing (data center, infrastructure,
PC/laptop, storage)
14
%
20
%
15
%
Consumer (AR & gaming, connected home,
home electronics, wearables)
12
%
16
%
20
%
Total
100
%
100
%
100
%
Gross Margin Data:
Net sales
100.0
%
100.0
%
100.0
%
Cost of sales:
Materials
56.8
%
53.6
%
53.3
%
Labor
8.8
%
10.9
%
8.6
%
Other manufacturing
18.9
%
22.7
%
17.9
%
Gross margin
15.5
%
12.8
%
20.2
%
(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.
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)
Q3 2023
Q2 2023
Q3 2022
EBITDA Data:
Net income
$
133
$
64
$
306
Plus: Interest expense
13
14
15
Plus: Income tax expense
29
9
4
Plus: Depreciation & amortization
158
158
156
EBITDA
$
333
$
245
$
481
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per
share data)
(Unaudited)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Net sales
$
1,821,793
$
2,083,691
$
4,751,254
$
5,185,375
Cost of sales
1,539,040
1,662,463
4,087,210
4,189,662
Gross profit
282,753
421,228
664,044
995,713
Selling, general and administrative
73,020
67,947
216,551
213,774
Research and development
43,135
33,994
135,870
109,835
Total operating expenses
116,155
101,941
352,421
323,609
Operating income
166,598
319,287
311,623
672,104
Interest expense
13,001
14,879
43,522
43,620
Other (income) expense, net
(8,777
)
(5,692
)
(24,212
)
(18,829
)
Total other expense, net
4,224
9,187
19,310
24,791
Income before taxes
162,374
310,100
292,313
647,313
Income tax expense
28,923
3,643
49,194
44,159
Net income
133,451
306,457
243,119
603,154
Net income attributable to non-controlling
interests
(837
)
(376
)
(868
)
(1,632
)
Net income attributable to Amkor
$
132,614
$
306,081
$
242,251
$
601,522
Net income attributable to Amkor per
common share:
Basic
$
0.54
$
1.25
$
0.99
$
2.46
Diluted
$
0.54
$
1.24
$
0.98
$
2.45
Shares used in computing per common share
amounts:
Basic
245,740
244,744
245,571
244,581
Diluted
247,129
246,094
247,080
246,015
AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
September 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
735,733
$
959,072
Short-term investments
439,002
281,964
Accounts receivable, net of allowances
1,411,393
1,365,504
Inventories
477,935
629,576
Other current assets
61,579
65,123
Total current assets
3,125,642
3,301,239
Property, plant and equipment, net
3,321,467
3,135,614
Operating lease right of use assets
129,515
171,163
Goodwill
18,888
21,517
Restricted cash
3,950
3,334
Other assets
135,387
188,890
Total assets
$
6,734,849
$
6,821,757
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion
of long-term debt
$
149,890
$
143,813
Trade accounts payable
827,854
899,164
Capital expenditures payable
233,603
146,602
Short-term operating lease liability
43,830
70,991
Accrued expenses
346,913
401,841
Total current liabilities
1,602,090
1,662,411
Long-term debt
947,227
1,088,521
Pension and severance obligations
88,326
93,540
Long-term operating lease liabilities
59,004
75,745
Other non-current liabilities
160,103
201,839
Total liabilities
2,856,750
3,122,056
Stockholders’ equity:
Preferred stock
—
—
Common stock
292
291
Additional paid-in capital
2,005,026
1,996,344
Retained earnings
2,061,596
1,874,644
Accumulated other comprehensive income
(loss)
1,839
16,699
Treasury stock
(222,065
)
(219,226
)
Total Amkor stockholders’ equity
3,846,688
3,668,752
Non-controlling interests in
subsidiaries
31,411
30,949
Total equity
3,878,099
3,699,701
Total liabilities and equity
$
6,734,849
$
6,821,757
AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Nine Months Ended
September 30,
2023
2022
Cash flows from operating activities:
Net income
$
243,119
$
603,154
Depreciation and amortization
472,396
455,679
Other operating activities and non-cash
items
30,717
(20,396
)
Changes in assets and liabilities
(50,045
)
(492,673
)
Net cash provided by operating
activities
696,187
545,764
Cash flows from investing activities:
Payments for property, plant and
equipment
(511,654
)
(575,502
)
Proceeds from sale of property, plant and
equipment
1,580
2,691
Payments for short-term investments
(491,056
)
(364,274
)
Proceeds from sale of short-term
investments
71,159
26,202
Proceeds from maturities of short-term
investments
267,393
274,452
Other investing activities
(34,319
)
(86,785
)
Net cash used in investing activities
(696,897
)
(723,216
)
Cash flows from financing activities:
Proceeds from revolving credit
facilities
370,000
80,000
Payments of revolving credit
facilities
(370,000
)
(80,000
)
Proceeds from short-term debt
20,712
29,711
Payments of short-term debt
(14,632
)
(21,662
)
Proceeds from issuance of long-term
debt
—
250,000
Payments of long-term debt
(104,952
)
(183,493
)
Payments of finance lease obligations
(48,409
)
(26,938
)
Payments of dividends
(55,328
)
(36,725
)
Other financing activities
(1,801
)
(4,152
)
Net cash (used in) provided by financing
activities
(204,410
)
6,741
Effect of exchange rate fluctuations on
cash, cash equivalents and restricted cash
(17,603
)
(33,491
)
Net decrease in cash, cash equivalents and
restricted cash
(222,723
)
(204,202
)
Cash, cash equivalents and restricted
cash, beginning of period
962,406
831,521
Cash, cash equivalents and restricted
cash, end of period
$
739,683
$
627,319
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;
- 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231030931374/en/
Jennifer Jue Vice President, Investor Relations and Finance
480-786-7594 jennifer.jue@amkor.com
Amkor Technology (NASDAQ:AMKR)
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