Amkor Technology Reports Financial Results for the Third Quarter 2023

Published

TEMPE, Ariz.--(BUSINESS WIRE)-- 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.

Jennifer Jue Vice President, Investor Relations and Finance 480-786-7594 jennifer.jue@amkor.com

Source: Amkor Technology, Inc.

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