DELAWARE | 000-29472 | 23-1722724 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
Common Stock, $0.001 par value | AMKR | The NASDAQ Global Select Market |
AMKOR TECHNOLOGY, INC. | ||||
By: | /s/ Megan Faust | |||
Megan Faust | ||||
Corporate Vice President and Chief Financial Officer | ||||
News Release |
• | Second quarter net sales $895 million |
• | Operating income $23 million |
• | Net loss $9 million, earnings per diluted share ($0.04) |
• | EBITDA $149 million |
Results | Q2 2019 | Q1 2019 | Q2 2018 | |||
($ in millions, except per share data) | ||||||
Net sales | $895 | $895 | $1,066 | |||
Gross margin | 13.8% | 13.5% | 15.9% | |||
Operating income | $23 | $13 | $54 | |||
Net income attributable to Amkor (1) | ($9) | ($23) | $33 | |||
Earnings per diluted share (1) | ($0.04) | ($0.10) | $0.14 | |||
EBITDA (2) | $149 | $153 | $208 |
• | Net sales of $990 million to $1.07 billion |
• | Gross margin of 12% to 16% |
• | Net income of ($7) million to $41 million, or ($0.03) to $0.17 per diluted share |
• | Full year 2019 capital expenditures of approximately $475 million |
Q2 2019 | Q1 2019 | Q2 2018 | |||||||||
Net Sales Data: | |||||||||||
Net sales (in millions): | |||||||||||
Advanced products (1) | $ | 433 | $ | 422 | $ | 496 | |||||
Mainstream products (2) | 462 | 473 | 570 | ||||||||
Total net sales | $ | 895 | $ | 895 | $ | 1,066 | |||||
Packaging services | 83 | % | 82 | % | 83 | % | |||||
Test services | 17 | % | 18 | % | 17 | % | |||||
Net sales from top ten customers | 62 | % | 66 | % | 65 | % | |||||
End Market Data: | |||||||||||
Communications (handheld devices, smartphones, tablets) | 37 | % | 38 | % | 42 | % | |||||
Automotive, industrial and other (driver assist, infotainment, performance, safety) | 29 | % | 28 | % | 26 | % | |||||
Computing (datacenter, infrastructure, PC/laptop, storage) | 19 | % | 20 | % | 19 | % | |||||
Consumer (connected home, set-top boxes, televisions, visual imaging, wearables) | 15 | % | 14 | % | 13 | % | |||||
Total | 100 | % | 100 | % | 100 | % | |||||
Gross Margin Data: | |||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | |||||
Cost of sales: | |||||||||||
Materials | 38.0 | % | 38.0 | % | 38.9 | % | |||||
Labor | 17.4 | % | 17.4 | % | 16.0 | % | |||||
Other manufacturing | 30.8 | % | 31.1 | % | 29.2 | % | |||||
Gross margin | 13.8 | % | 13.5 | % | 15.9 | % |
Non-GAAP Financial Measure Reconciliation: | |||||||||||
Q2 2019 | Q1 2019 | Q2 2018 | |||||||||
(in millions) | |||||||||||
EBITDA Data: | |||||||||||
Net income | $ | (9 | ) | $ | (23 | ) | $ | 33 | |||
Plus: Interest expense | 19 | 19 | 21 | ||||||||
Plus: Income tax expense | 6 | 21 | 11 | ||||||||
Plus: Depreciation & amortization | 133 | 136 | 143 | ||||||||
EBITDA | $ | 149 | $ | 153 | $ | 208 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net sales | $ | 895,305 | $ | 1,065,684 | $ | 1,790,269 | $ | 2,091,003 | |||||||
Cost of sales | 771,851 | 895,967 | 1,546,054 | 1,763,515 | |||||||||||
Gross profit | 123,454 | 169,717 | 244,215 | 327,488 | |||||||||||
Selling, general and administrative | 64,758 | 74,700 | 136,345 | 155,423 | |||||||||||
Research and development | 36,186 | 41,076 | 71,940 | 82,005 | |||||||||||
Total operating expenses | 100,944 | 115,776 | 208,285 | 237,428 | |||||||||||
Operating income | 22,510 | 53,941 | 35,930 | 90,060 | |||||||||||
Interest expense | 18,653 | 21,127 | 37,926 | 41,138 | |||||||||||
Other (income) expense, net | 6,966 | (11,001 | ) | 2,401 | (7,569 | ) | |||||||||
Total other expense, net | 25,619 | 10,126 | 40,327 | 33,569 | |||||||||||
Income (loss) before taxes | (3,109 | ) | 43,815 | (4,397 | ) | 56,491 | |||||||||
Income tax expense | 5,897 | 10,631 | 27,277 | 13,112 | |||||||||||
Net income (loss) | (9,006 | ) | 33,184 | (31,674 | ) | 43,379 | |||||||||
Net income attributable to non-controlling interests | (444 | ) | (593 | ) | (655 | ) | (1,244 | ) | |||||||
Net income (loss) attributable to Amkor | $ | (9,450 | ) | $ | 32,591 | $ | (32,329 | ) | $ | 42,135 | |||||
Net income (loss) attributable to Amkor per common share: | |||||||||||||||
Basic | $ | (0.04 | ) | $ | 0.14 | $ | (0.14 | ) | $ | 0.18 | |||||
Diluted | $ | (0.04 | ) | $ | 0.14 | $ | (0.14 | ) | $ | 0.18 | |||||
Shares used in computing per common share amounts: | |||||||||||||||
Basic | 239,508 | 239,351 | 239,461 | 239,283 | |||||||||||
Diluted | 239,508 | 239,804 | 239,461 | 239,805 |
June 30, 2019 | December 31, 2018 | ||||||
(In thousands) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 551,438 | $ | 681,569 | |||
Restricted cash | 2,590 | 2,589 | |||||
Accounts receivable, net of allowances | 702,466 | 724,456 | |||||
Inventories | 217,638 | 230,589 | |||||
Other current assets | 38,988 | 32,005 | |||||
Total current assets | 1,513,120 | 1,671,208 | |||||
Property, plant and equipment, net | 2,515,533 | 2,650,448 | |||||
Operating lease right of use asset * | 132,763 | — | |||||
Goodwill | 26,159 | 25,720 | |||||
Restricted cash | 2,878 | 3,893 | |||||
Other assets | 118,831 | 144,178 | |||||
Total assets | $ | 4,309,284 | $ | 4,495,447 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Short-term borrowings and current portion of long-term debt | $ | 198,230 | $ | 114,579 | |||
Trade accounts payable | 459,548 | 530,398 | |||||
Capital expenditures payable | 134,500 | 255,237 | |||||
Accrued expenses | 246,615 | 258,209 | |||||
Total current liabilities | 1,038,893 | 1,158,423 | |||||
Long-term debt | 1,109,945 | 1,217,732 | |||||
Pension and severance obligations | 174,897 | 184,321 | |||||
Long-term operating lease liability * | 80,049 | — | |||||
Other non-current liabilities | 74,324 | 79,071 | |||||
Total liabilities | 2,478,108 | 2,639,547 | |||||
Stockholders’ equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 285 | 285 | |||||
Additional paid-in capital | 1,913,103 | 1,909,425 | |||||
Retained earnings | 80,860 | 113,189 | |||||
Accumulated other comprehensive income (loss) | 27,317 | 23,812 | |||||
Treasury stock | (216,254 | ) | (216,171 | ) | |||
Total Amkor stockholders’ equity | 1,805,311 | 1,830,540 | |||||
Non-controlling interests in subsidiaries | 25,865 | 25,360 | |||||
Total equity | 1,831,176 | 1,855,900 | |||||
Total liabilities and equity | $ | 4,309,284 | $ | 4,495,447 |
For the Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (31,674 | ) | $ | 43,379 | ||
Depreciation and amortization | 268,819 | 285,515 | |||||
Other operating activities and non-cash items | 33,112 | (3,239 | ) | ||||
Changes in assets and liabilities | (101,329 | ) | (119,276 | ) | |||
Net cash provided by operating activities | 168,928 | 206,379 | |||||
Cash flows from investing activities: | |||||||
Payments for property, plant and equipment | (273,672 | ) | (389,568 | ) | |||
Proceeds from sale of property, plant and equipment | 8,247 | 603 | |||||
Proceeds from insurance recovery for property, plant and equipment | 1,538 | — | |||||
Other investing activities | 2,864 | 2,647 | |||||
Net cash used in investing activities | (261,023 | ) | (386,318 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from revolving credit facilities | 85,000 | — | |||||
Payments of revolving credit facilities | (5,000 | ) | — | ||||
Proceeds from short-term debt | 29,781 | 7,264 | |||||
Payments of short-term debt | (25,548 | ) | (31,546 | ) | |||
Proceeds from issuance of long-term debt | 614,375 | 64,000 | |||||
Payments of long-term debt | (732,178 | ) | (77,015 | ) | |||
Payments of finance lease obligations | (2,746 | ) | (1,689 | ) | |||
Other financing activities | (3,865 | ) | 492 | ||||
Net cash used in financing activities | (40,181 | ) | (38,494 | ) | |||
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash | 1,131 | 1,347 | |||||
Net decrease in cash, cash equivalents and restricted cash | (131,145 | ) | (217,086 | ) | |||
Cash, cash equivalents and restricted cash, beginning of period | 688,051 | 602,851 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 556,906 | $ | 385,765 |
• | 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 the 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, and in particular the recent increase in protectionist measures considered or adopted by the U.S. and foreign governments; |
• | 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, interest rate fluctuations and other 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, including the potential impact of the phase-out of LIBOR on our variable interest rate debt; |
• | 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 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. |