[April 26, 2018] |
|
Amkor Technology Reports Financial Results for the First Quarter 2018
Amkor (News - Alert) Technology, Inc. (NASDAQ: AMKR), a leading provider of
semiconductor packaging and test services, today announced financial
results for the first quarter ended March 31, 2018.
"First quarter results were in line with expectations, with sales up 14%
year-on-year," said Steve Kelley, Amkor's president and chief executive
officer. "We benefited from our strategic focus on balanced revenue
growth across end markets and regions. Increased participation in all
major smartphone ecosystems, together with gains in computing and
automotive, were the key growth drivers in Q1 2018."
|
Results
|
|
|
Q1 2018
|
|
Q4 2017
|
|
Q1 2017
|
|
|
|
($ in millions, except per share data)
|
Net sales
|
|
|
$1,025
|
|
$1,150
|
|
$899
|
Gross margin
|
|
|
15.4%
|
|
19.5%
|
|
15.1%
|
Net income (loss) attributable to Amkor1
|
|
|
$10
|
|
$100
|
|
($15)
|
Earnings per diluted share1
|
|
|
$0.04
|
|
$0.42
|
|
($0.06)
|
EBITDA1,2
|
|
|
$175
|
|
$254
|
|
$149
|
|
1) Q4 2017 net income includes an estimated one-time net tax benefit of
$42 million, or $0.17 per diluted share, primarily due to the reversal
of a valuation allowance on certain U.S. deferred tax assets related to
U.S. tax reform. 2) EBITDA is a non-GAAP measure. The
reconciliation to the comparable GAAP measure is included below under
"Selected Operating Data."
"Operating margin, net income and EBITDA all showed solid gains
year-on-year," said Megan Faust, Amkor's corporate vice president and
chief financial officer. "Profitability improved due to healthy sales
growth, despite an unfavorable foreign currency impact of 120 bps on
gross margin compared to Q1 2017."
Cash and cash equivalents were $495 million and total debt was $1.3
billion, at March 31, 2018.
New Accounting Standards
Effective January 1, 2018, we adopted Accounting Standards Update (ASU)
No. 2014-09, Revenue from Contracts with Customers (Topic 606), utilizing
the full retrospective transition method. The prior periods presented
here have been revised to reflect this change.
Business Outlook
"We expect second quarter 2018 revenues to be around $1.03 billion, up
2% year-on-year," said Kelley. "The smartphone market is expected to
remain somewhat muted in Q2, while demand in our other end markets is
solid."
Second quarter 2018 outlook (unless otherwise noted):
-
Net sales of $990 million to $1.07 billion
-
Gross margin of 14% to 16%
-
Net loss of $4 million to net income of $24 million, or ($0.02) to
$0.10 per diluted share
-
Full year capital expenditures of approximately $600 million
Conference Call Information
Amkor will conduct a conference call on Thursday, April 26, 2018, at
5:00 p.m. Eastern Time. This call may include material information not
included in this press release. This call is being webcast and can be
accessed at Amkor's website: www.amkor.com.
You may also access the call by dialing 1-877-645-6380 or
1-404-991-3911. A replay of the call will be made available at Amkor's
website or by dialing 1-855-859-2056 or 1-404-537-3406 (conference ID
2471407). The webcast is also being distributed over NASDAQ OMX's
investor distribution network to both institutional and individual
investors. Institutional investors can access the call via NASDAQ OMX's
password-protected event management site, Street Events (www.streetevents.com).
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 more than 250 of 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 www.amkor.com.
|
AMKOR TECHNOLOGY, INC.
Selected Operating Data
|
|
|
|
|
Q1 2018
|
|
Q4 2017
|
|
Q1 2017
|
Net Sales Data:
|
|
|
|
|
|
|
|
Net sales (in millions):
|
|
|
|
|
|
|
|
Advanced products*
|
|
|
$
|
476
|
|
|
$
|
582
|
|
|
$
|
376
|
|
Mainstream products**
|
|
|
549
|
|
|
568
|
|
|
523
|
|
Total net sales
|
|
|
$
|
1,025
|
|
|
$
|
1,150
|
|
|
$
|
899
|
|
|
|
|
|
|
|
|
|
Packaging services
|
|
|
81
|
%
|
|
82
|
%
|
|
82
|
%
|
Test services
|
|
|
19
|
%
|
|
18
|
%
|
|
18
|
%
|
|
|
|
|
|
|
|
|
Net sales from top ten customers
|
|
|
69
|
%
|
|
67
|
%
|
|
66
|
%
|
|
|
|
|
|
|
|
|
End Market Data:
|
|
|
|
|
|
|
|
Communications (smartphones, tablets, handheld devices)
|
|
|
42
|
%
|
|
48
|
%
|
|
37
|
%
|
Automotive, industrial and other (driver assist, infotainment,
safety, performance)
|
|
|
26
|
%
|
|
23
|
%
|
|
29
|
%
|
Computing (datacenter, infrastructure, PC/laptop, storage)
|
|
|
19
|
%
|
|
17
|
%
|
|
20
|
%
|
Consumer (set-top boxes, televisions, connected home, personal
electronics, visual imaging)
|
|
|
13
|
%
|
|
12
|
%
|
|
14
|
%
|
Total
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Gross Margin Data:
|
|
|
|
|
|
|
|
Net sales
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales:
|
|
|
|
|
|
|
|
Materials
|
|
|
36.9
|
%
|
|
37.5
|
%
|
|
35.6
|
%
|
Labor
|
|
|
17.5
|
%
|
|
14.6
|
%
|
|
16.6
|
%
|
Other manufacturing
|
|
|
30.2
|
%
|
|
28.4
|
%
|
|
32.7
|
%
|
Gross margin
|
|
|
15.4
|
%
|
|
19.5
|
%
|
|
15.1
|
%
|
|
* Advanced products include flip chip and wafer-level processing and
related test services ** Mainstream products include wirebond
packaging and related test services
In the press release above we provide 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, our ability to service debt and our ability to fund capital
expenditures. 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:
|
|
|
|
|
|
|
|
|
|
|
Q1 2018
|
|
Q4 2017
|
|
Q1 2017
|
|
|
|
(in millions)
|
EBITDA Data:
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
10
|
|
|
$
|
101
|
|
|
$
|
(14
|
)
|
Plus: Interest expense
|
|
|
20
|
|
|
20
|
|
|
22
|
|
Plus: Income tax expense (benefit)
|
|
|
2
|
|
|
(14
|
)
|
|
(1
|
)
|
Plus: Depreciation & amortization
|
|
|
143
|
|
|
147
|
|
|
142
|
|
EBITDA
|
|
|
$
|
175
|
|
|
$
|
254
|
|
|
$
|
149
|
|
|
|
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
2018
|
|
2017
|
|
|
|
(In thousands, except per share data)
|
Net sales
|
|
|
$
|
1,025,319
|
|
|
$
|
899,284
|
|
Cost of sales
|
|
|
867,548
|
|
|
763,050
|
|
Gross profit
|
|
|
157,771
|
|
|
136,234
|
|
Selling, general and administrative
|
|
|
80,723
|
|
|
76,282
|
|
Research and development
|
|
|
40,929
|
|
|
41,568
|
|
Total operating expenses
|
|
|
121,652
|
|
|
117,850
|
|
Operating income
|
|
|
36,119
|
|
|
18,384
|
|
Interest expense
|
|
|
20,011
|
|
|
21,254
|
|
Interest expense, related party
|
|
|
-
|
|
|
1,242
|
|
Other (income) expense, net
|
|
|
3,432
|
|
|
11,181
|
|
Total other expense, net
|
|
|
23,443
|
|
|
33,677
|
|
Income (loss) before taxes
|
|
|
12,676
|
|
|
(15,293
|
)
|
Income tax expense (benefit)
|
|
|
2,481
|
|
|
(1,325
|
)
|
Net income (loss)
|
|
|
10,195
|
|
|
(13,968
|
)
|
Net income attributable to non-controlling interests
|
|
|
(651
|
)
|
|
(818
|
)
|
Net income (loss) attributable to Amkor
|
|
|
$
|
9,544
|
|
|
$
|
(14,786
|
)
|
|
|
|
|
|
|
Net income (loss) attributable to Amkor per common share:
|
|
|
|
|
|
Basic
|
|
|
$
|
0.04
|
|
|
$
|
(0.06
|
)
|
Diluted
|
|
|
$
|
0.04
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
Shares used in computing per common share amounts:
|
|
|
|
|
|
Basic
|
|
|
239,214
|
|
|
238,685
|
|
Diluted
|
|
|
239,816
|
|
|
238,685
|
|
|
|
AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
|
|
(In thousands)
|
ASSETS
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
495,183
|
|
|
$
|
596,364
|
|
Restricted cash
|
|
|
2,000
|
|
|
2,000
|
|
Accounts receivable, net of allowances
|
|
|
734,953
|
|
|
798,264
|
|
Inventories
|
|
|
228,611
|
|
|
213,649
|
|
Other current assets
|
|
|
30,837
|
|
|
33,727
|
|
Total current assets
|
|
|
1,491,584
|
|
|
1,644,004
|
|
Property, plant and equipment, net
|
|
|
2,727,878
|
|
|
2,695,065
|
|
Goodwill
|
|
|
26,546
|
|
|
25,036
|
|
Restricted cash
|
|
|
3,661
|
|
|
4,487
|
|
Other assets
|
|
|
142,041
|
|
|
139,796
|
|
Total assets
|
|
|
$
|
4,391,710
|
|
|
$
|
4,508,388
|
|
LIABILITIES AND EQUITY
|
Current liabilities:
|
|
|
|
|
|
Short-term borrowings and current portion of long-term debt
|
|
|
$
|
105,451
|
|
|
$
|
123,848
|
|
Trade accounts payable
|
|
|
527,910
|
|
|
569,085
|
|
Capital expenditures payable
|
|
|
223,312
|
|
|
294,258
|
|
Accrued expenses
|
|
|
311,408
|
|
|
330,868
|
|
Total current liabilities
|
|
|
1,168,081
|
|
|
1,318,059
|
|
Long-term debt
|
|
|
1,240,141
|
|
|
1,240,581
|
|
Pension and severance obligations
|
|
|
191,180
|
|
|
182,216
|
|
Other non-current liabilities
|
|
|
45,234
|
|
|
47,823
|
|
Total liabilities
|
|
|
2,644,636
|
|
|
2,788,679
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
Preferred stock
|
|
|
-
|
|
|
-
|
|
Common stock
|
|
|
285
|
|
|
285
|
|
Additional paid-in capital
|
|
|
1,905,666
|
|
|
1,903,357
|
|
Accumulated deficit
|
|
|
(4,359
|
)
|
|
(13,903
|
)
|
Accumulated other comprehensive income (loss)
|
|
|
37,571
|
|
|
22,519
|
|
Treasury stock
|
|
|
(216,038
|
)
|
|
(215,982
|
)
|
Total Amkor stockholders' equity
|
|
|
1,723,125
|
|
|
1,696,276
|
|
Non-controlling interests in subsidiaries
|
|
|
23,949
|
|
|
23,433
|
|
Total equity
|
|
|
1,747,074
|
|
|
1,719,709
|
|
Total liabilities and equity
|
|
|
$
|
4,391,710
|
|
|
$
|
4,508,388
|
|
|
|
AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
2018
|
|
2017
|
|
|
|
(In thousands)
|
Cash flows from operating activities:
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
10,195
|
|
|
$
|
(13,968
|
)
|
Depreciation and amortization
|
|
|
142,509
|
|
|
141,816
|
|
Other operating activities and non-cash items
|
|
|
(4,734
|
)
|
|
(9,653
|
)
|
Changes in assets and liabilities
|
|
|
(339
|
)
|
|
(15,518
|
)
|
Net cash provided by operating activities
|
|
|
147,631
|
|
|
102,677
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Payments for property, plant and equipment
|
|
|
(230,603
|
)
|
|
(88,285
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
342
|
|
|
1,835
|
|
Other investing activities
|
|
|
656
|
|
|
(2,492
|
)
|
Net cash used in investing activities
|
|
|
(229,605
|
)
|
|
(88,942
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
Proceeds from short-term debt
|
|
|
-
|
|
|
13,275
|
|
Payments of short-term debt
|
|
|
(17,352
|
)
|
|
(14,073
|
)
|
Proceeds from issuance of long-term debt
|
|
|
-
|
|
|
50,000
|
|
Payments of long-term debt
|
|
|
(6,220
|
)
|
|
(3,295
|
)
|
Payment of deferred consideration for purchase of facility
|
|
|
-
|
|
|
(3,890
|
)
|
Payments of capital lease obligations
|
|
|
(808
|
)
|
|
(913
|
)
|
Other financing activities
|
|
|
455
|
|
|
(356
|
)
|
Net cash provided by (used in) financing activities
|
|
|
(23,925
|
)
|
|
40,748
|
|
Effect of exchange rate fluctuations on cash, cash equivalents and
restricted cash
|
|
|
3,892
|
|
|
10,259
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
|
(102,007
|
)
|
|
64,742
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
|
|
602,851
|
|
|
555,495
|
|
Cash, cash equivalents and restricted cash, end of period
|
|
|
$
|
500,844
|
|
|
$
|
620,237
|
|
|
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements within the
meaning of federal securities laws. All statements other than statements
of historical fact are considered forward-looking statements including
all of the statements made under "Business Outlook" above. These
forward-looking statements involve a number of risks, uncertainties,
assumptions and other factors that could affect future results and cause
actual results and events to differ materially from historical and
expected results and those expressed or implied in the forward-looking
statements, including, but not limited to, the following:
-
the highly unpredictable nature, cyclicality, and rate of growth of
the semiconductor industry;
-
timing and volume of orders relative to production capacity and the
inability to achieve high capacity utilization rates, control costs
and improve profitability;
-
laws, rules, regulations and policies imposed by U.S. or foreign
governments in areas such as tariffs, customs, duties and other
restrictive trade barriers, national security, data privacy and
cybersecurity, antitrust and competition, tax, currency and banking,
privacy, labor, environmental, health and safety;
-
laws, rules, regulations and policies within China and other countries
that may favor domestic companies over non-domestic companies,
including customer or government supported efforts to promote the
development and growth of local competitors;
-
volatility of consumer demand, double booking by customers and
deterioration in forecasts from our customers for products
incorporating our semiconductor packages, including any slowdown in
demand or changes in customer forecasts for smartphones or other
mobile devices and generally soft end market demand for electronic
devices;
-
delays, lower manufacturing yields and supply constraints relating to
wafers, particularly for advanced nodes and related technologies;
-
dependence on key customers, the impact of changes in our market share
and prices for our services with those customers and the business and
financial condition of those customers;
-
the performance of our business, economic and market conditions, the
cash needs and investment opportunities for the business, the need for
additional capacity and facilities to service customer demand and the
availability of cash flow from operations or financing;
-
the effect of the global economy on credit markets, financial
institutions, customers, suppliers and consumers, including the
uncertain macroeconomic environment;
-
the highly unpredictable nature and costs of litigation and other
legal activities and the risk of adverse results of such matters and
the impact of other legal proceedings;
-
changes in tax rates and taxes as a result of changes in U.S. or
foreign tax law or the interpretations thereof (including the impact
of recent U.S. tax reform), changes in our organizational structure,
changes in the jurisdictions in which our income is determined to be
earned and taxed, the outcome of tax reviews, audits and ruling
requests, our ability to realize deferred tax assets and the
expiration of tax holidays;
-
curtailment of outsourcing by our customers;
-
our substantial indebtedness and restrictive covenants;
-
failure to realize sufficient cash flow or access to other sources of
liquidity to fund capital expenditures;
-
the effects of an economic slowdown in major economies worldwide;
-
disruptions in our business or deficiencies in our controls resulting
from the integration of acquired operations, particularly J-Devices,
or the implementation and security of, and changes to, our enterprise
resource planning, factory shop floor systems and other management
information systems;
-
there can be no assurance regarding when our new K5 factory and
research and development center in Korea will be fully utilized, or
that the actual scope, costs, timeline or benefits of the project will
be consistent with our current expectations;
-
economic effects of terrorist attacks, political instability, natural
disasters and military conflict;
-
competition, competitive pricing and declines in average selling
prices;
-
fluctuations in packaging and test manufacturing yields;
-
dependence on international operations and sales and fluctuations in
foreign currency exchange rates, particularly in Japan and Korea;
-
dependence on raw material and equipment suppliers and changes in raw
material and precious metal costs;
-
dependence on key personnel;
-
enforcement of and compliance with intellectual property rights; and
-
technological challenges.
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, 2017 and in the
company's subsequent filings with the Securities and Exchange Commission
made prior to or after the date hereof. Amkor undertakes no obligation
to review or update any forward-looking statements to reflect events or
circumstances occurring after the date of this press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180426006774/en/
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