Amkor Technology Reports Financial Results for the First Quarter 2022

TEMPE, Ariz.--(BUSINESS WIRE)--May 2, 2022-- Amkor Technology, Inc. (Nasdaq: AMKR), a leading provider of semiconductor packaging and test services, today announced financial results for the first quarter ended March 31, 2022.

First Quarter 2022 Highlights

  • Net sales $1.6 billion, up 20% year-on-year
  • Gross margin 20.4%, operating income margin 13.2%
  • Net income $171 million, earnings per diluted share $0.69
  • EBITDA $363 million

“Amkor delivered another strong quarter of financial results, driven by continued demand for our Advanced packaging solutions. Advanced packaging grew 26% year-on-year and drove sales to $1.6 billion and EPS to $0.69, both of which are first quarter records,” said Giel Rutten, Amkor’s president and chief executive officer.

Quarterly Financial Results

($ in millions, except per share data)

 

Q1 2022

 

Q4 2021

 

Q1 2021

Net sales

 

$1,597

 

$1,725

 

$1,326

Gross margin

 

20.4%

 

21.0%

 

20.0%

Operating income

 

$210

 

$252

 

$144

Operating income margin

 

13.2%

 

14.6%

 

10.9%

Net income attributable to Amkor

 

$171

 

$217

 

$120

Earnings per diluted share

 

$0.69

 

$0.88

 

$0.49

EBITDA (1)

 

$363

 

$398

 

$280

 

(1) EBITDA is a non-GAAP financial measure. The reconciliation to the most directly comparable GAAP financial measure is included below under “Selected Operating Data.”

At March 31, 2022, total cash and short-term investments was $1.2 billion, and total debt was $1.2 billion.

The company paid a quarterly dividend of $0.05 per share on March 21, 2022. 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

“Our second quarter guidance reflects the estimated impact from a temporary, government mandated COVID-19 lockdown of our Shanghai operations. We anticipate that our Shanghai factory will return to normal production during the second half of the quarter,” said Rutten.

The following information presents Amkor’s guidance for the second quarter 2022 (unless otherwise noted):

  • Net sales of $1.47 billion to $1.57 billion
  • Gross margin of 16.5% to 18.5%
  • Net income of $90 million to $140 million, or $0.37 to $0.57 per diluted share
  • Full year 2022 capital expenditures of approximately $950 million

Conference Call Information

Amkor will conduct a conference call on Monday, May 2, 2022, 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 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 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 amkor.com.

AMKOR TECHNOLOGY, INC.

Selected Operating Data

 

 

Q1 2022

 

Q4 2021

 

Q1 2021

Net Sales Data:

 

 

 

 

 

Net sales (in millions):

 

 

 

 

 

Advanced products (1)

$

1,157

 

 

$

1,273

 

 

$

921

 

Mainstream products (2)

 

440

 

 

 

452

 

 

 

405

 

Total net sales

$

1,597

 

 

$

1,725

 

 

$

1,326

 

 

 

 

 

 

 

Packaging services

 

86

%

 

 

86

%

 

 

85

%

Test services

 

14

%

 

 

14

%

 

 

15

%

 

 

 

 

 

 

Net sales from top ten customers

 

64

%

 

 

66

%

 

 

61

%

 

 

 

 

 

 

End Market Data:

 

 

 

 

 

Communications (smart phones, tablets)

 

41

%

 

 

42

%

 

 

40

%

Automotive, industrial and other (ADAS, electrification, infotainment, safety)

 

21

%

 

 

20

%

 

 

22

%

Consumer (AR & gaming, connected home, home electronics, wearables)

 

19

%

 

 

22

%

 

 

21

%

Computing (data center, infrastructure, PC/laptop, storage)

 

19

%

 

 

16

%

 

 

17

%

Total

 

100

%

 

 

100

%

 

 

100

%

 

 

 

 

 

 

Gross Margin Data:

 

 

 

 

 

Net sales

 

100.0

%

 

 

100.0

%

 

 

100.0

%

Cost of sales:

 

 

 

 

 

Materials

 

46.7

%

 

 

47.4

%

 

 

43.2

%

Labor

 

11.5

%

 

 

11.4

%

 

 

13.8

%

Other manufacturing

 

21.4

%

 

 

20.2

%

 

 

23.0

%

Gross margin

 

20.4

%

 

 

21.0

%

 

 

20.0

%

 

(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.

AMKOR TECHNOLOGY, INC.

Selected Operating Data

 

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)

Q1 2022

 

Q4 2021

 

Q1 2021

EBITDA Data:

 

 

 

 

 

Net income

$

171

 

$

217

 

$

120

Plus: Interest expense

 

14

 

 

 

13

 

 

 

13

 

Plus: Income tax expense

 

30

 

 

 

25

 

 

 

12

 

Plus: Depreciation & amortization

 

148

 

 

 

143

 

 

 

135

 

EBITDA

$

363

 

 

$

398

 

 

$

280

 

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

For the Three Months

Ended March 31,

(In thousands, except per share data)

2022

 

2021

Net sales

$

1,596,816

 

 

$

1,326,150

 

Cost of sales

 

1,271,486

 

 

 

1,060,616

 

Gross profit

 

325,330

 

 

 

265,534

 

Selling, general and administrative

 

76,959

 

 

 

76,768

 

Research and development

 

38,363

 

 

 

44,318

 

Total operating expenses

 

115,322

 

 

 

121,086

 

Operating income

 

210,008

 

 

 

144,448

 

Interest expense

 

14,148

 

 

 

12,673

 

Other (income) expense, net

 

(5,096

)

 

 

89

 

Total other expense, net

 

9,052

 

 

 

12,762

 

Income before taxes

 

200,956

 

 

 

131,686

 

Income tax expense

 

29,728

 

 

 

11,667

 

Net income

 

171,228

 

 

 

120,019

 

Net income attributable to non-controlling interests

 

(565

)

 

 

(210

)

Net income attributable to Amkor

$

170,663

 

 

$

119,809

 

 

 

 

 

Net income attributable to Amkor per common share:

 

 

 

Basic

$

0.70

 

 

$

0.49

 

Diluted

$

0.69

 

 

$

0.49

 

 

 

 

 

Shares used in computing per common share amounts:

 

 

 

Basic

 

244,403

 

 

 

243,267

 

Diluted

 

246,000

 

 

 

245,129

 

AMKOR TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(In thousands)

March 31,

2022

 

December 31,

2021

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

854,802

 

 

$

826,744

 

Restricted cash

 

637

 

 

 

962

 

Short-term investments

 

307,016

 

 

 

251,530

 

Accounts receivable, net of allowances

 

1,201,007

 

 

 

1,258,767

 

Inventories

 

516,437

 

 

 

484,959

 

Other current assets

 

59,656

 

 

 

33,601

 

Total current assets

 

2,939,555

 

 

 

2,856,563

 

Property, plant and equipment, net

 

2,938,742

 

 

 

2,871,058

 

Operating lease right of use assets

 

180,883

 

 

 

159,742

 

Goodwill

 

23,182

 

 

 

24,516

 

Restricted cash

 

3,692

 

 

 

3,815

 

Other assets

 

139,733

 

 

 

122,860

 

Total assets

$

6,225,787

 

 

$

6,038,554

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

Short-term borrowings and current portion of long-term debt

$

156,692

 

 

$

153,008

 

Trade accounts payable

 

753,279

 

 

 

828,727

 

Capital expenditures payable

 

267,598

 

 

 

210,875

 

Short-term operating lease liability

 

71,229

 

 

 

64,233

 

Accrued expenses

 

374,319

 

 

 

422,892

 

Total current liabilities

 

1,623,117

 

 

 

1,679,735

 

Long-term debt

 

1,087,408

 

 

 

984,988

 

Pension and severance obligations

 

116,138

 

 

 

120,472

 

Long-term operating lease liabilities

 

86,300

 

 

 

83,937

 

Other non-current liabilities

 

186,002

 

 

 

196,876

 

Total liabilities

 

3,098,965

 

 

 

3,066,008

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock

 

 

 

 

 

Common stock

 

291

 

 

 

290

 

Additional paid-in capital

 

1,982,113

 

 

 

1,977,134

 

Retained earnings

 

1,322,370

 

 

 

1,163,939

 

Accumulated other comprehensive income (loss)

 

10,496

 

 

 

19,978

 

Treasury stock

 

(219,147

)

 

 

(219,065

)

Total Amkor stockholders’ equity

 

3,096,123

 

 

 

2,942,276

 

Non-controlling interests in subsidiaries

 

30,699

 

 

 

30,270

 

Total equity

 

3,126,822

 

 

 

2,972,546

 

Total liabilities and equity

$

6,225,787

 

 

$

6,038,554

 

AMKOR TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

For the Three Months Ended

March 31,

(In thousands)

2022

 

2021

Cash flows from operating activities:

 

 

 

Net income

$

171,228

 

 

$

120,019

 

Depreciation and amortization

 

148,192

 

 

 

135,390

 

Other operating activities and non-cash items

 

11,061

 

 

 

2,370

 

Changes in assets and liabilities

 

(164,303

)

 

 

(80,991

)

Net cash provided by operating activities

 

166,178

 

 

 

176,788

 

Cash flows from investing activities:

 

 

 

Payments for property, plant and equipment

 

(158,154

)

 

 

(110,351

)

Proceeds from sale of property, plant and equipment

 

416

 

 

 

547

 

Payments for short-term investments

 

(125,693

)

 

 

(92,879

)

Proceeds from sale of short-term investments

 

4,246

 

 

 

19,838

 

Proceeds from maturities of short-term investments

 

66,694

 

 

 

43,790

 

Other investing activities

 

(27,518

)

 

 

(25,317

)

Net cash used in investing activities

 

(240,009

)

 

 

(164,372

)

Cash flows from financing activities:

 

 

 

Proceeds from short-term debt

 

18,112

 

 

 

3,679

 

Payments of short-term debt

 

(3,790

)

 

 

(7,803

)

Proceeds from issuance of long-term debt

 

150,000

 

 

 

50,000

 

Payments of long-term debt

 

(35,973

)

 

 

(79,684

)

Payments of finance lease obligations

 

(7,538

)

 

 

(3,216

)

Payments of dividends

 

(12,228

)

 

 

(19,457

)

Other financing activities

 

653

 

 

 

7,037

 

Net cash provided by (used in) financing activities

 

109,236

 

 

 

(49,444

)

Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash

 

(7,795

)

 

 

(10,397

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

27,610

 

 

 

(47,425

)

Cash, cash equivalents and restricted cash, beginning of period

 

831,521

 

 

 

702,197

 

Cash, cash equivalents and restricted cash, end of period

$

859,131

 

 

$

654,772

 

Forward-Looking Statement Disclaimer

This press release contains forward-looking statements within the meaning of 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:

  • 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;
  • dependence on the highly cyclical, volatile semiconductor industry;
  • industry downturns and declines in global economic and financial conditions;
  • changes in costs, quality, availability and delivery times of raw materials, components and equipment, including any disruption in the supply of certain materials due to regulations and customer requirements, as well as supply constraints, production delays, fluctuations in commodity prices and wage inflation;
  • our substantial indebtedness and restrictive covenants in the indentures and agreements governing our current and future indebtedness;
  • dependence on international factories and operations and risks relating to our customers’ and vendors’ international operations;
  • fluctuations in interest rates and changes in credit risk;
  • difficulty funding our liquidity needs;
  • dependence on key customers or concentration of customers in certain end markets, such as Communications and Automotive and Industrial;
  • fluctuation in demand for semiconductors and conditions in the semiconductor industry generally, as well as by specific customers, such as inventory reductions by our customers impacting demand in key markets;
  • our substantial investments in equipment and facilities to support the demand of our customers;
  • difficulty attracting, retaining or replacing qualified personnel;
  • difficulty achieving high capacity utilization rates due to high percentage of fixed costs;
  • changes in our capacity and capacity utilization rates and fluctuations in our manufacturing yields;
  • competition with established competitors in the packaging and test business, the internal capabilities of integrated device manufacturers and new competitors, including foundries;
  • decisions by our integrated device manufacturer and foundry customers to curtail outsourcing;
  • maintaining an effective system of internal controls;
  • the absence of backlog, the short-term nature of our customers’ commitments, double bookings by customers and deterioration in customer forecasts and the impact of these factors, including the possible delay, rescheduling and cancellation of large orders, or the timing and volume of orders relative to our production capacity;
  • the development, transition and ramp to high volume manufacture of more advanced silicon nodes and evolving wafer, packaging and test services technologies, which may cause production delays, lower manufacturing yields and supply constraints for new wafers and other materials;
  • the historical downward pressure on the prices of our packaging and test services;
  • laws, rules, regulations and policies imposed by U.S. or other governments, such as tariffs, customs, duties and other restrictive trade barriers and national security, data privacy and cybersecurity, antitrust and competition, tax, currency and banking, labor, environmental, health and safety laws;
  • 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;
  • fluctuations in currency exchange rates, particularly the dollar/yen exchange rate for our operations in Japan;
  • any 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;
  • the possibility that we may decrease or suspend our quarterly dividend;
  • our continuing development and implementation of changes to, and maintenance and security of, our information technology systems;
  • challenges with integrating diverse operations;
  • any changes in tax laws, taxing authorities not agreeing with our interpretation of applicable tax laws, including whether we continue to qualify for tax holidays, 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;
  • our significant severance plan obligations associated with our manufacturing operations in Korea;
  • natural disasters and other calamities, political instability, hostilities or other disruptions; 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, 2021 (the “Form 10-K”) and from time to time in our other reports filed with or furnished to the Securities and Exchange Commission (“SEC”). 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 those set forth in the Form 10-K and from time to time in our other reports filed with or furnished to the 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 the following trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially 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. 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 except as may be required by law.

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

Source: Amkor Technology, Inc.