Document


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 26, 2018
AMKOR TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
DELAWARE
 
000-29472
 
23-1722724
 
 
 
 
 
(State or Other Jurisdiction of Incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

2045 EAST INNOVATION CIRCLE
TEMPE, AZ 85284
(Address of principal executive offices, including zip code)

(480) 821-5000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o





Item 2.02. Results of Operations and Financial Condition.

Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for Amkor Technology, Inc. for the three months ended March 31, 2018, and forward-looking statements relating to the second quarter and full year 2018 as presented in a press release dated April 26, 2018. The information in this Form 8-K and the exhibit attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.
Exhibit
 
Description
 






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
AMKOR TECHNOLOGY, INC.

 
 
By:
/s/ Megan Faust
 
 
 
Megan Faust
 
 
 
Corporate Vice President and Chief Financial Officer
 
 
Date: April 26, 2018


Exhibit



https://cdn.kscope.io/edecdbf3496da3852e0ecbfa4fd129dc-amkorlogo_01a02a32.jpg
News Release


Amkor Technology Reports Financial Results for the First Quarter 2018

First Quarter Highlights
Net sales $1,025 million, up 14% year-on-year
Net income $10 million, earnings per diluted share $0.04
EBITDA $175 million, up 17% year-on-year

TEMPE, Ariz. - April 26, 2018 - 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, 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 benefitted 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.







Contact:

Amkor Technology, Inc.
Megan Faust
Corporate Vice President & Chief Financial Officer
480-786-7707
megan.faust@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





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:
 
 
 
 
 
 
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.