[October 31, 2016] |
|
Amkor Technology Reports Financial Results for the Third Quarter 2016
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, 2016.
"Third quarter results were at the high end of our guidance," said Steve
Kelley, Amkor's president and chief executive officer. "We saw notable
strength in smartphones across multiple tiers. Sales in Automotive,
Greater China and advanced SiP were all up sequentially reflecting the
continued success of our strategic initiatives in these key areas. Our
18% sequential growth in sales generated substantial cash and profits
for the quarter."
|
Results
|
|
|
|
Q3 2016
|
|
|
Q2 2016
|
|
|
Q3 2015
|
|
|
|
|
($ in millions, except per share data)
|
Net sales
|
|
|
|
$1,086
|
|
|
$917
|
|
|
$734
|
Gross margin
|
|
|
|
19.7%
|
|
|
14.3%
|
|
|
17.2%
|
Net income (loss)
|
|
|
|
$60
|
|
|
$5
|
|
|
$28
|
Earnings per diluted share
|
|
|
|
$0.25
|
|
|
$0.02
|
|
|
$0.12
|
EBITDA*
|
|
|
|
$248
|
|
|
$168
|
|
|
$187
|
|
*EBITDA is a non-GAAP measure. The reconciliation to the comparable GAAP
measure is included below under "Selected Operating Data."
Business Outlook
"Demand is solid in nearly all end markets," said Kelley. "We expect Q4
revenue to be around $1.03 billion. For 2016, we expect total revenue of
about $3.9 billion, a $1 billion increase over 2015."
Fourth quarter and full year 2016 outlook:
Fourth quarter
-
Net sales of $990 million to $1.07 billion, down 1% to 9% from the
prior quarter
-
Gross margin of 19% to 23%
-
Net income of $46 million to $82 million, or $0.19 to $0.34 per share
Full year
-
Net sales of approximately $3.9 billion, up from $2.9 billion in 2015
-
Gross margin of approximately 17.5%, up from 16.6% in 2015
-
Net income of approximately $130 million, or around $0.55 per share,
up from $0.22 in 2015
-
Capital expenditures of approximately $650 million, unchanged from our
previous forecast
Our Q4 and full year guidance includes the anticipated receipt of
approximately $30 million of insurance payments related to the Japan
earthquakes.
Conference Call Information
Amkor will conduct a conference call on Monday, October 31, 2016, 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
94698432). 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
operating base includes more than 8 million square feet of floor space,
with production facilities, product development centers, and sales and
support offices located in key electronics manufacturing regions in
Asia, Europe and the U.S. For more information, visit www.amkor.com.
|
AMKOR TECHNOLOGY, INC.
|
Selected Operating Data
|
|
|
|
|
Q3 2016
|
|
|
Q2 2016
|
|
|
Q3 2015*
|
Net Sales Data:
|
|
|
|
|
|
|
|
|
|
Net sales (in millions):
|
|
|
|
|
|
|
|
|
|
Advanced products**
|
|
|
$
|
480
|
|
|
|
$
|
394
|
|
|
|
$
|
365
|
|
Mainstream products***
|
|
|
606
|
|
|
|
523
|
|
|
|
369
|
|
Total net sales
|
|
|
$
|
1,086
|
|
|
|
$
|
917
|
|
|
|
$
|
734
|
|
|
|
|
|
|
|
|
|
|
|
Packaging services
|
|
|
82
|
%
|
|
|
83
|
%
|
|
|
85
|
%
|
Test services
|
|
|
18
|
%
|
|
|
17
|
%
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
Net sales from top ten customers
|
|
|
68
|
%
|
|
|
67
|
%
|
|
|
61
|
%
|
|
|
|
|
|
|
|
|
|
|
End Market Distribution Data (an approximation including
representative devices and applications based on a sampling of our
largest customers):
|
|
|
|
|
|
|
|
|
|
Communications (smart phones, tablets, handheld devices, wireless
LAN)
|
|
|
47
|
%
|
|
|
44
|
%
|
|
|
55
|
%
|
Automotive and industrial (infotainment, safety, performance,
comfort)
|
|
|
24
|
%
|
|
|
25
|
%
|
|
|
13
|
%
|
Consumer (televisions, set top boxes, gaming, portable media,
digital cameras)
|
|
|
14
|
%
|
|
|
14
|
%
|
|
|
12
|
%
|
Networking (servers, routers, switches)
|
|
|
9
|
%
|
|
|
11
|
%
|
|
|
12
|
%
|
Computing (PCs, hard disk drives, printers, peripherals, servers)
|
|
|
6
|
%
|
|
|
6
|
%
|
|
|
8
|
%
|
Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
Gross Margin Data:
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
Cost of sales:
|
|
|
|
|
|
|
|
|
|
Materials
|
|
|
37.2
|
%
|
|
|
37.7
|
%
|
|
|
36.8
|
%
|
Labor
|
|
|
14.6
|
%
|
|
|
16.0
|
%
|
|
|
14.9
|
%
|
Other manufacturing
|
|
|
28.5
|
%
|
|
|
32.0
|
%
|
|
|
31.1
|
%
|
Gross margin
|
|
|
19.7
|
%
|
|
|
14.3
|
%
|
|
|
17.2
|
%
|
|
*The data for 2015 does not include the results from J-Devices
**Advanced products include flip chip and wafer-level processing and
related test services
***Mainstream products include wirebond packaging and related test
services
AMKOR TECHNOLOGY, INC.
Selected Operating Data
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2016
|
|
|
Q2 2016
|
|
|
Q3 2015
|
|
|
|
|
(in millions)
|
EBITDA Data:
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Amkor
|
|
|
|
$
|
60
|
|
|
|
$
|
5
|
|
|
|
$
|
28
|
Plus: Interest expense
|
|
|
|
23
|
|
|
|
22
|
|
|
|
19
|
Plus: Income tax expense
|
|
|
|
24
|
|
|
|
3
|
|
|
|
17
|
Plus: Depreciation & amortization
|
|
|
|
141
|
|
|
|
138
|
|
|
|
123
|
EBITDA
|
|
|
|
$
|
248
|
|
|
|
$
|
168
|
|
|
|
$
|
187
|
|
|
AMKOR TECHNOLOGY, INC.
|
CONSOLIDATED STATEMENTS OF INCOME
|
(Unaudited)
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
(In thousands, except per share data)
|
Net sales
|
|
|
|
$
|
1,086,014
|
|
|
|
$
|
734,362
|
|
|
|
$
|
2,872,022
|
|
|
|
$
|
2,213,959
|
|
Cost of sales
|
|
|
|
872,214
|
|
|
|
607,762
|
|
|
|
2,403,732
|
|
|
|
1,837,314
|
|
Gross profit
|
|
|
|
213,800
|
|
|
|
126,600
|
|
|
|
468,290
|
|
|
|
376,645
|
|
Selling, general and administrative
|
|
|
|
72,363
|
|
|
|
54,232
|
|
|
|
216,894
|
|
|
|
173,609
|
|
Research and development
|
|
|
|
26,822
|
|
|
|
21,073
|
|
|
|
84,145
|
|
|
|
59,119
|
|
Total operating expenses
|
|
|
|
99,185
|
|
|
|
75,305
|
|
|
|
301,039
|
|
|
|
232,728
|
|
Operating income
|
|
|
|
114,615
|
|
|
|
51,295
|
|
|
|
167,251
|
|
|
|
143,917
|
|
Interest expense
|
|
|
|
21,488
|
|
|
|
17,695
|
|
|
|
58,496
|
|
|
|
64,317
|
|
Interest expense, related party
|
|
|
|
1,243
|
|
|
|
1,243
|
|
|
|
3,727
|
|
|
|
3,727
|
|
Other (income) expense, net
|
|
|
|
6,657
|
|
|
|
(11,576
|
)
|
|
|
9,607
|
|
|
|
(4,784
|
)
|
Total other expense, net
|
|
|
|
29,388
|
|
|
|
7,362
|
|
|
|
71,830
|
|
|
|
63,260
|
|
Income before taxes and equity in earnings of unconsolidated
affiliate
|
|
|
|
85,227
|
|
|
|
43,933
|
|
|
|
95,421
|
|
|
|
80,657
|
|
Income tax expense
|
|
|
|
24,086
|
|
|
|
16,568
|
|
|
|
29,319
|
|
|
|
27,198
|
|
Income before equity in earnings of unconsolidated affiliate
|
|
|
|
61,141
|
|
|
|
27,365
|
|
|
|
66,102
|
|
|
|
53,459
|
|
Equity in earnings of J-Devices
|
|
|
|
-
|
|
|
|
1,217
|
|
|
|
-
|
|
|
|
10,587
|
|
Net income
|
|
|
|
61,141
|
|
|
|
28,582
|
|
|
|
66,102
|
|
|
|
64,046
|
|
Net income attributable to non-controlling interests
|
|
|
|
(1,052
|
)
|
|
|
(847
|
)
|
|
|
(2,175
|
)
|
|
|
(2,386
|
)
|
Net income attributable to Amkor
|
|
|
|
$
|
60,089
|
|
|
|
$
|
27,735
|
|
|
|
$
|
63,927
|
|
|
|
$
|
61,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Amkor per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.25
|
|
|
|
$
|
0.12
|
|
|
|
$
|
0.27
|
|
|
|
$
|
0.26
|
|
Diluted
|
|
|
|
$
|
0.25
|
|
|
|
$
|
0.12
|
|
|
|
$
|
0.27
|
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing per common share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
237,353
|
|
|
|
236,888
|
|
|
|
237,157
|
|
|
|
236,813
|
|
Diluted
|
|
|
|
238,192
|
|
|
|
236,974
|
|
|
|
237,586
|
|
|
|
237,168
|
|
|
|
AMKOR TECHNOLOGY, INC.
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
September 30, 2016
|
|
|
December 31, 2015
|
|
|
|
|
(In thousands)
|
ASSETS
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
549,836
|
|
|
|
$
|
523,172
|
|
Restricted cash
|
|
|
|
2,000
|
|
|
|
2,000
|
|
Accounts receivable, net of allowances
|
|
|
|
630,984
|
|
|
|
526,143
|
|
Inventories
|
|
|
|
272,589
|
|
|
|
238,205
|
|
Other current assets
|
|
|
|
31,637
|
|
|
|
27,960
|
|
Total current assets
|
|
|
|
1,487,046
|
|
|
|
1,317,480
|
|
Property, plant and equipment, net
|
|
|
|
2,619,469
|
|
|
|
2,579,017
|
|
Goodwill
|
|
|
|
27,908
|
|
|
|
23,409
|
|
Restricted cash
|
|
|
|
4,209
|
|
|
|
2,176
|
|
Other assets
|
|
|
|
102,482
|
|
|
|
104,346
|
|
Total assets
|
|
|
|
$
|
4,241,114
|
|
|
|
$
|
4,026,428
|
|
|
LIABILITIES AND EQUITY
|
Current liabilities:
|
|
|
|
|
|
|
|
Short-term borrowings and current portion of long-term debt
|
|
|
|
$
|
30,834
|
|
|
|
$
|
76,770
|
|
Trade accounts payable
|
|
|
|
517,745
|
|
|
|
434,222
|
|
Capital expenditures payable
|
|
|
|
179,768
|
|
|
|
242,980
|
|
Accrued expenses
|
|
|
|
346,613
|
|
|
|
264,212
|
|
Total current liabilities
|
|
|
|
1,074,960
|
|
|
|
1,018,184
|
|
Long-term debt
|
|
|
|
1,473,214
|
|
|
|
1,435,269
|
|
Long-term debt, related party
|
|
|
|
75,000
|
|
|
|
75,000
|
|
Pension and severance obligations
|
|
|
|
191,615
|
|
|
|
167,197
|
|
Other non-current liabilities
|
|
|
|
86,265
|
|
|
|
113,242
|
|
Total liabilities
|
|
|
|
2,901,054
|
|
|
|
2,808,892
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
|
-
|
|
|
|
-
|
|
Common stock
|
|
|
|
283
|
|
|
|
283
|
|
Additional paid-in capital
|
|
|
|
1,888,641
|
|
|
|
1,883,592
|
|
Accumulated deficit
|
|
|
|
(403,820
|
)
|
|
|
(467,747
|
)
|
Accumulated other comprehensive income (loss)
|
|
|
|
50,148
|
|
|
|
(2,084
|
)
|
Treasury stock
|
|
|
|
(214,204
|
)
|
|
|
(213,758
|
)
|
Total Amkor stockholders' equity
|
|
|
|
1,321,048
|
|
|
|
1,200,286
|
|
Non-controlling interests in subsidiaries
|
|
|
|
19,012
|
|
|
|
17,250
|
|
Total equity
|
|
|
|
1,340,060
|
|
|
|
1,217,536
|
|
Total liabilities and equity
|
|
|
|
$
|
4,241,114
|
|
|
|
$
|
4,026,428
|
|
|
|
AMKOR TECHNOLOGY, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
(In thousands)
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
66,102
|
|
|
|
$
|
64,046
|
|
Depreciation and amortization
|
|
|
|
416,517
|
|
|
|
371,968
|
|
Loss on debt retirement
|
|
|
|
-
|
|
|
|
9,560
|
|
Other operating activities and non-cash items
|
|
|
|
(4,382
|
)
|
|
|
(9,879
|
)
|
Changes in assets and liabilities
|
|
|
|
13,379
|
|
|
|
(5,299
|
)
|
Net cash provided by operating activities
|
|
|
|
491,616
|
|
|
|
430,396
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Payments for property, plant and equipment
|
|
|
|
(481,670
|
)
|
|
|
(352,644
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
|
13,687
|
|
|
|
5,212
|
|
Cash received on sale of subsidiary to J-Devices, net
|
|
|
|
-
|
|
|
|
8,355
|
|
Investment in J-Devices
|
|
|
|
-
|
|
|
|
(12,908
|
)
|
Other investing activities
|
|
|
|
(2,176
|
)
|
|
|
(869
|
)
|
Net cash used in investing activities
|
|
|
|
(470,159
|
)
|
|
|
(352,854
|
)
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Borrowings under revolving credit facilities
|
|
|
|
115,000
|
|
|
|
180,000
|
|
Payments under revolving credit facilities
|
|
|
|
(155,000
|
)
|
|
|
(100,000
|
)
|
Borrowings under short-term debt
|
|
|
|
27,594
|
|
|
|
-
|
|
Payments of short-term debt
|
|
|
|
(36,211
|
)
|
|
|
-
|
|
Proceeds from issuance of long-term debt
|
|
|
|
45,000
|
|
|
|
360,000
|
|
Payments of long-term debt
|
|
|
|
(12,955
|
)
|
|
|
(530,000
|
)
|
Payments for debt issuance costs
|
|
|
|
(156
|
)
|
|
|
-
|
|
Payments for the retirement of debt
|
|
|
|
-
|
|
|
|
(7,030
|
)
|
Payments for capital lease obligations
|
|
|
|
(1,691
|
)
|
|
|
-
|
|
Proceeds from the issuance of stock through share-based compensation
plans
|
|
|
|
2,600
|
|
|
|
657
|
|
Payments of tax withholding for restricted shares
|
|
|
|
(446
|
)
|
|
|
(548
|
)
|
Payments of subsidiary dividends to non-controlling interests
|
|
|
|
(413
|
)
|
|
|
(123
|
)
|
Net cash used in financing activities
|
|
|
|
(16,678
|
)
|
|
|
(97,044
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
|
|
21,885
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
26,664
|
|
|
|
(19,502
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
|
523,172
|
|
|
|
449,946
|
|
Cash and cash equivalents, end of period
|
|
|
|
$
|
549,836
|
|
|
|
$
|
430,444
|
|
|
Revision to Previously Reported Financial Information
In the second quarter of 2016, we identified an error in the provision
for income taxes in the financial statements for J-Devices for the
periods beginning in 2012 through the fourth quarter of 2015. We believe
that the error is not material to Amkor for the periods impacted and
have elected to revise our previously issued consolidated financial
statements. Periods presented herein are based on the revised financial
results. Please refer to the supplementary slides posted on our Investor
Relations website for revised historical financial information.
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,
without limitation, statements regarding the success of our initiatives
in key areas, demand in end markets and the possible receipt of
insurance payments related to the earthquakes in Japan, and all of the
other 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:
-
there can be no assurance that the actual costs and financial impact
from the earthquakes in Japan will be consistent with our current
expectations, for example due to delays or shortfalls in insurance
payments;
-
there can be no assurance that we will achieve our major growth
objectives, including transitioning second wave customers to advanced
packages, expanding our sales to customers in Greater China and
increasing our share of the automotive market;
-
there can be no assurance regarding when our new K5 facility 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;
-
the highly unpredictable nature and cyclicality 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;
-
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 and the impact of changes in our market
share and prices for our services with 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 interpretation thereof, 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,
particularly the recent slowdown in China;
-
disruptions in our business or deficiencies in our controls resulting
from the integration of newly 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;
-
economic effects of terrorist attacks, political instability, military
conflict and natural disasters such as the earthquakes in Japan;
-
competition, competitive pricing and declines in average selling
prices;
-
fluctuations in manufacturing yields;
-
dependence on international operations and sales and exchange rate
fluctuations;
-
dependence on raw material and equipment suppliers and changes in raw
material and precious metal costs, including any disruptions in the
supply chain resulting from the earthquakes in Japan;
-
dependence on key personnel;
-
enforcement of and compliance with intellectual property rights;
-
environmental and other governmental regulations; 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, 2015 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: http://www.businesswire.com/news/home/20161031006173/en/
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