DELAWARE | 000-29472 | 23-1722724 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
99.1 | Text of Press Release dated July 31, 2017, which is furnished (not filed) herewith. |
AMKOR TECHNOLOGY, INC. | ||||
By: | /s/ Megan Faust | |||
Megan Faust | ||||
Corporate Vice President and Chief Financial Officer | ||||
Exhibit | Description | |
99.1 | Text of Press Release dated July 31, 2017, which is furnished (not filed) herewith. |
News Release |
• | Net sales $989 million, sequential and year-on-year growth 8% |
• | Net income $116 million and earnings per diluted share $0.48 (includes after-tax gain of $82 million, or $0.34 per diluted share, from sale of K1 factory) |
• | EBITDA $316 million |
• | Completed Nanium acquisition |
Results | Q2 2017 | Q1 2017 | Q2 2016 | ||
($ in millions, except per share data) | |||||
Net sales | $989 | $914 | $917 | ||
Gross margin | 17.4% | 15.6% | 14.3% | ||
Net income (loss) | $116 | ($10) | $5 | ||
Earnings per diluted share | $0.48 | ($0.04) | $0.02 | ||
EBITDA** | $316 | $154 | $168 | ||
Net cash provided by operating activities | $97 | $103 | $135 | ||
Free cash flow** | $43 | $17 | ($22) |
• | Net sales of $1.04 billion to $1.12 billion, up 5% to 13% from the prior quarter |
• | Gross margin of 17% to 20% |
• | Net income of $24 million to $64 million, or $0.10 to $0.27 per share |
• | Full year capital expenditures of around $525 million, up $25 million from our previous forecast |
Q2 2017 | Q1 2017 | Q2 2016 | |||||||||
Net Sales Data: | |||||||||||
Net sales (in millions): | |||||||||||
Advanced products* | $ | 431 | $ | 383 | $ | 394 | |||||
Mainstream products** | 558 | 531 | 523 | ||||||||
Total net sales | $ | 989 | $ | 914 | $ | 917 | |||||
Packaging services | 81 | % | 81 | % | 83 | % | |||||
Test services | 19 | % | 19 | % | 17 | % | |||||
Net sales from top ten customers | 67 | % | 67 | % | 67 | % | |||||
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) | 42 | % | 41 | % | 44 | % | |||||
Automotive and industrial (infotainment, safety, performance, comfort) | 26 | % | 26 | % | 25 | % | |||||
Consumer (televisions, set top boxes, gaming, portable media, digital cameras) | 14 | % | 14 | % | 14 | % | |||||
Networking (servers, routers, switches) | 10 | % | 11 | % | 11 | % | |||||
Computing (PCs, hard disk drives, printers, peripherals, servers) | 8 | % | 8 | % | 6 | % | |||||
Total | 100 | % | 100 | % | 100 | % | |||||
Gross Margin Data: | |||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | |||||
Cost of sales: | |||||||||||
Materials | 35.3 | % | 35.4 | % | 37.7 | % | |||||
Labor | 16.4 | % | 16.5 | % | 16.0 | % | |||||
Other manufacturing | 30.9 | % | 32.5 | % | 32.0 | % | |||||
Gross margin | 17.4 | % | 15.6 | % | 14.3 | % |
Non-GAAP Financial Measure Reconciliation: | |||||||||||
Q2 2017 | Q1 2017 | Q2 2016 | |||||||||
(in millions) | |||||||||||
EBITDA Data: | |||||||||||
Net income attributable to Amkor | $ | 116 | $ | (10 | ) | $ | 5 | ||||
Plus: Interest expense | 22 | 22 | 22 | ||||||||
Plus: Income tax expense | 33 | — | 3 | ||||||||
Plus: Depreciation & amortization | 145 | 142 | 138 | ||||||||
EBITDA | $ | 316 | $ | 154 | $ | 168 |
Non-GAAP Financial Measures Reconciliation: | |||||||||||
Q2 2017 | Q1 2017 | Q2 2016 | |||||||||
(in millions) | |||||||||||
Free Cash Flow Data: | |||||||||||
Net cash provided by operating activities | $ | 97 | $ | 103 | $ | 135 | |||||
Less: Purchases of property, plant and equipment | (183 | ) | (88 | ) | (157 | ) | |||||
Plus: Proceeds from sale of property, plant and equipment | 129 | 2 | — | ||||||||
Free cash flow | $ | 43 | $ | 17 | $ | (22 | ) |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net sales | $ | 989,447 | $ | 917,326 | $ | 1,903,047 | $ | 1,786,008 | |||||||
Cost of sales | 817,212 | 785,720 | 1,587,906 | 1,531,518 | |||||||||||
Gross profit | 172,235 | 131,606 | 315,141 | 254,490 | |||||||||||
Selling, general and administrative | 67,783 | 70,896 | 144,478 | 144,531 | |||||||||||
Research and development | 44,268 | 30,168 | 85,824 | 57,323 | |||||||||||
Gain on sale of real estate | (108,109 | ) | — | (108,109 | ) | — | |||||||||
Total operating expenses | 3,942 | 101,064 | 122,193 | 201,854 | |||||||||||
Operating income | 168,293 | 30,542 | 192,948 | 52,636 | |||||||||||
Interest expense | 22,158 | 20,816 | 43,412 | 37,008 | |||||||||||
Interest expense, related party | 293 | 1,242 | 1,535 | 2,484 | |||||||||||
Other (income) expense, net | (3,190 | ) | (242 | ) | 7,674 | 2,950 | |||||||||
Total other expense, net | 19,261 | 21,816 | 52,621 | 42,442 | |||||||||||
Income before taxes | 149,032 | 8,726 | 140,327 | 10,194 | |||||||||||
Income tax expense | 32,573 | 3,360 | 33,012 | 5,233 | |||||||||||
Net income | 116,459 | 5,366 | 107,315 | 4,961 | |||||||||||
Net income attributable to non-controlling interests | (952 | ) | (653 | ) | (1,814 | ) | (1,123 | ) | |||||||
Net income attributable to Amkor | $ | 115,507 | $ | 4,713 | $ | 105,501 | $ | 3,838 | |||||||
Net income attributable to Amkor per common share: | |||||||||||||||
Basic | $ | 0.48 | $ | 0.02 | $ | 0.44 | $ | 0.02 | |||||||
Diluted | $ | 0.48 | $ | 0.02 | $ | 0.44 | $ | 0.02 | |||||||
Shares used in computing per common share amounts: | |||||||||||||||
Basic | 238,863 | 237,090 | 238,774 | 237,058 | |||||||||||
Diluted | 239,679 | 237,434 | 239,601 | 237,297 |
June 30, 2017 | December 31, 2016 | ||||||
(In thousands) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 657,627 | $ | 549,518 | |||
Restricted cash | 2,000 | 2,000 | |||||
Accounts receivable, net of allowances | 604,366 | 563,107 | |||||
Inventories | 295,750 | 267,990 | |||||
Other current assets | 36,889 | 27,081 | |||||
Total current assets | 1,596,632 | 1,409,696 | |||||
Property, plant and equipment, net | 2,645,810 | 2,564,648 | |||||
Goodwill | 25,161 | 24,122 | |||||
Restricted cash | 4,225 | 3,977 | |||||
Other assets | 112,303 | 89,643 | |||||
Total assets | $ | 4,384,131 | $ | 4,092,086 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Short-term borrowings and current portion of long-term debt | $ | 313,004 | $ | 35,192 | |||
Current portion of long-term debt, related party | 17,546 | — | |||||
Trade accounts payable | 477,191 | 487,430 | |||||
Capital expenditures payable | 231,481 | 144,370 | |||||
Accrued expenses | 348,869 | 338,669 | |||||
Total current liabilities | 1,388,091 | 1,005,661 | |||||
Long-term debt | 1,220,236 | 1,364,638 | |||||
Long-term debt, related party | 17,454 | 75,000 | |||||
Pension and severance obligations | 170,554 | 166,701 | |||||
Other non-current liabilities | 60,842 | 76,682 | |||||
Total liabilities | 2,857,177 | 2,688,682 | |||||
Stockholders’ equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 285 | 284 | |||||
Additional paid-in capital | 1,899,970 | 1,895,089 | |||||
Accumulated deficit | (198,056 | ) | (303,557 | ) | |||
Accumulated other comprehensive income (loss) | 19,263 | 6,262 | |||||
Treasury stock | (215,868 | ) | (214,490 | ) | |||
Total Amkor stockholders’ equity | 1,505,594 | 1,383,588 | |||||
Non-controlling interests in subsidiaries | 21,360 | 19,816 | |||||
Total equity | 1,526,954 | 1,403,404 | |||||
Total liabilities and equity | $ | 4,384,131 | $ | 4,092,086 |
For the Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 107,315 | $ | 4,961 | |||
Depreciation and amortization | 287,068 | 275,241 | |||||
Gain on sale of real estate | (108,109 | ) | — | ||||
Other operating activities and non-cash items | (3,787 | ) | (6,177 | ) | |||
Changes in assets and liabilities | (82,528 | ) | (826 | ) | |||
Net cash provided by operating activities | 199,959 | 273,199 | |||||
Cash flows from investing activities: | |||||||
Payments for property, plant and equipment | (271,651 | ) | (355,974 | ) | |||
Proceeds from sale of property, plant and equipment | 130,962 | 593 | |||||
Acquisition of business, net of cash acquired | (43,771 | ) | — | ||||
Other investing activities | (2,117 | ) | (830 | ) | |||
Net cash used in investing activities | (186,577 | ) | (356,211 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from revolving credit facilities | 75,000 | 115,000 | |||||
Payments of revolving credit facilities | — | (100,000 | ) | ||||
Proceeds from short-term debt | 41,228 | 24,630 | |||||
Payments of short-term debt | (32,110 | ) | (23,035 | ) | |||
Proceeds from issuance of long-term debt | 215,086 | 34,000 | |||||
Payments of long-term debt | (207,653 | ) | (8,582 | ) | |||
Payment of deferred consideration for purchase of facility | (3,890 | ) | — | ||||
Payments of capital lease obligations | (2,665 | ) | (887 | ) | |||
Other financing activities | 561 | (604 | ) | ||||
Net cash provided by financing activities | 85,557 | 40,522 | |||||
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash | 9,418 | 18,782 | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 108,357 | (23,708 | ) | ||||
Cash, cash equivalents and restricted cash, beginning of period | 555,495 | 527,348 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 663,852 | $ | 503,640 |
• | 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; |
• | 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; |
• | 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 possible tax reforms proposed by new administrations), 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, natural disasters and military conflict; |
• | competition, competitive pricing and declines in average selling prices; |
• | fluctuations in manufacturing yields; |
• | dependence on international operations and sales and fluctuations in foreign currency exchange rates, particularly in Japan; |
• | 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; |
• | environmental and other governmental regulations, including regulatory efforts by foreign governments to support local competitors; and |
• | technological challenges. |