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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Amkor Technology Inc | NASDAQ:AMKR | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-2.24 | -6.92% | 30.11 | 30.17 | 31.00 | 32.08 | 30.04 | 32.00 | 2,153,826 | 22:55:51 |
Third Quarter Highlights
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, 2020 and the initiation of a regular quarterly cash dividend of $0.04 per share.
“Stronger than expected demand in the communications and automotive and industrial end markets drove revenue above the high end of our guidance,” said Giel Rutten, Amkor’s president and chief executive officer. “The Board’s decision to initiate a dividend is a significant milestone for Amkor. Over the past several years, Amkor has capitalized on growth opportunities in advanced packaging technologies that target 5G, advanced automotive systems, IoT and high-performance computing, and the introduction of a regular cash dividend reflects our consistent operating performance, strong free cash flow generation and confidence in our long-term financial outlook.”
Results
Q3 2020
Q2 2020
Q3 2019
($ in millions, except per share data)
Net sales
$1,354
$1,173
$1,084
Gross margin
17.8%
16.4%
16.8%
Operating income
$127
$87
$79
Operating income margin
9.4%
7.4%
7.3%
Net income attributable to Amkor
$92
$55
$54
Earnings per diluted share
$0.38
$0.23
$0.23
EBITDA*
$255
$209
$209
“All-time record quarterly revenue drove operating income margin to 9.4% and EPS to $0.38 for the quarter. We also paid down $230 million of debt this quarter, bringing our net debt to $0.4 billion, the lowest in our public company history,” said Megan Faust, Amkor’s executive vice president and chief financial officer. “The initiation of a dividend expands Amkor’s capital allocation strategy for delivering value to stockholders. Our consistent free cash flow and strong balance sheet give us the financial flexibility to continue to make investments in future growth opportunities and return capital to stockholders.”
At September 30, 2020, total cash and short-term investments was $0.9 billion, and total debt was $1.3 billion.
The initial quarterly cash dividend of $0.04 per share is payable on January 7, 2021 to stockholders of record at the close of business on December 18, 2020. 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.
*EBITDA and net debt are non-GAAP financial measures. The reconciliation to the comparable GAAP financial measure is included below under “Selected Operating Data.”
Business Outlook
“Continued strength in advanced packaging and a recovering automotive end market are expected to drive solid revenue performance in the fourth quarter of 2020,” said Rutten. “Growing demand and share gains in the communications end market is expected to drive year on year revenue growth of 10% in the fourth quarter.”
Fourth quarter 2020 outlook (unless otherwise noted):
Conference Call Information
Amkor will conduct a conference call on Monday, October 26, 2020, 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 1-877-407-4019 or 1-201-689-8337. A replay of the call will be made available at Amkor’s website or by dialing 1-877-660-6853 or 1-201-612-7415 (conference ID 13711716). 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 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.
AMKOR TECHNOLOGY, INC.
Selected Operating Data
Q3 2020
Q2 2020
Q3 2019
Net Sales Data:
Net sales (in millions):
Advanced products (1)
$
899
$
729
$
589
Mainstream products (2)
455
444
495
Total net sales
$
1,354
$
1,173
$
1,084
Packaging services
86
%
84
%
84
%
Test services
14
%
16
%
16
%
Net sales from top ten customers
63
%
69
%
62
%
End Market Data:
Communications (handheld devices, smartphones, tablets)
43
%
38
%
41
%
Consumer (connected home, set-top boxes, televisions, visual imaging, wearables)
25
%
27
%
18
%
Automotive, industrial and other (driver assist, infotainment, performance, safety)
17
%
19
%
26
%
Computing (data center, infrastructure, PC/laptop, storage)
15
%
16
%
15
%
Total
100
%
100
%
100
%
Gross Margin Data:
Net sales
100.0
%
100.0
%
100.0
%
Cost of sales:
Materials
46.9
%
45.2
%
40.4
%
Labor
12.8
%
13.9
%
15.8
%
Other manufacturing
22.5
%
24.5
%
27.0
%
Gross margin
17.8
%
16.4
%
16.8
%
(1) Advanced products include flip chip and wafer-level processing and related test services
(2) Mainstream products include wirebond packaging and related test services
AMKOR TECHNOLOGY, INC.
Selected Operating Data
This press release includes 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 2020
Q2 2020
Q3 2019
(in millions)
EBITDA Data:
Net income
$
93
$
56
$
54
Plus: Interest expense
16
16
17
Plus: Income tax expense
16
13
9
Plus: Depreciation & amortization
130
124
129
EBITDA
$
255
$
209
$
209
This press release also includes net debt, which is not defined by U.S. GAAP. We define net debt as total debt as reported on the consolidated balance sheet less the sum of cash and cash equivalents, and short term investments. We believe net debt to be relevant and useful information to our investors because it provides them with additional information in assessing our capital structure, financial leverage, and our ability to reduce debt and to fund investing and financing activities. This measure should be considered in addition to, and not as a substitute for, or superior to, total debt, prepared in accordance with U.S. GAAP. Furthermore, our definition of net debt may not be comparable to similarly titled measures reported by other companies.
Non-GAAP Financial Measure Reconciliation:
Q3 2020
Q2 2020
Q3 2019
(in millions)
Net Debt Data:
Total Debt
$
1,319
$
1,545
$
1,298
Less: Cash and Cash Equivalents
567
783
599
Less: Short-term Investments
356
311
6
Net Debt
$
396
$
451
$
693
AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2020
2019
2020
2019
(In thousands, except per share data)
Net sales
$
1,354,023
$
1,083,917
$
3,679,548
$
2,874,186
Cost of sales
1,112,938
901,677
3,057,235
2,447,731
Gross profit
241,085
182,240
622,313
426,455
Selling, general and administrative
77,781
70,458
224,623
206,803
Research and development
35,835
32,927
99,624
104,867
Total operating expenses
113,616
103,385
324,247
311,670
Operating income
127,469
78,855
298,066
114,785
Interest expense
16,404
16,988
49,461
54,914
Other (income) expense, net
2,415
(1,760
)
1,567
641
Total other expense, net
18,819
15,228
51,028
55,555
Income before taxes
108,650
63,627
247,038
59,230
Income tax expense
15,753
9,141
33,504
36,418
Net income
92,897
54,486
213,534
22,812
Net income attributable to non-controlling interests
(746
)
(416
)
(2,070
)
(1,071
)
Net income attributable to Amkor
$
92,151
$
54,070
$
211,464
$
21,741
Net income attributable to Amkor per common share:
Basic
$
0.38
$
0.23
$
0.88
$
0.09
Diluted
$
0.38
$
0.23
$
0.87
$
0.09
Shares used in computing per common share amounts:
Basic
241,675
239,586
241,232
239,503
Diluted
242,592
239,937
241,937
239,858
AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,
2020
December 31,
2019
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents
$
566,745
$
894,948
Restricted cash
945
610
Short-term investments
356,150
6,348
Accounts receivable, net of allowances
990,637
850,753
Inventories
299,830
220,602
Other current assets
54,264
28,272
Total current assets
2,268,571
2,001,533
Property, plant and equipment, net
2,560,195
2,404,850
Operating lease right of use assets
149,727
148,549
Goodwill
26,747
25,976
Restricted cash
3,087
2,974
Other assets
128,293
111,733
Total assets
$
5,136,620
$
4,695,615
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt
$
136,526
$
144,479
Trade accounts payable
611,965
571,054
Capital expenditures payable
328,171
77,044
Accrued expenses
298,708
267,226
Total current liabilities
1,375,370
1,059,803
Long-term debt
1,182,573
1,305,755
Pension and severance obligations
175,941
176,971
Long-term operating lease liabilities
88,257
91,107
Other non-current liabilities
91,742
71,740
Total liabilities
2,913,883
2,705,376
Stockholders’ equity:
Preferred stock
—
—
Common stock
288
287
Additional paid-in capital
1,943,140
1,927,739
Retained earnings
445,541
234,077
Accumulated other comprehensive income (loss)
23,309
19,115
Treasury stock
(217,660
)
(217,479
)
Total Amkor stockholders’ equity
2,194,618
1,963,739
Non-controlling interests in subsidiaries
28,119
26,500
Total equity
2,222,737
1,990,239
Total liabilities and equity
$
5,136,620
$
4,695,615
AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended September 30,
2020
2019
(In thousands)
Cash flows from operating activities:
Net income
$
213,534
$
22,812
Depreciation and amortization
377,722
398,013
Other operating activities and non-cash items
20,368
51,533
Changes in assets and liabilities
(177,576
)
(189,026
)
Net cash provided by operating activities
434,048
283,332
Cash flows from investing activities:
Payments for property, plant and equipment
(275,531
)
(328,497
)
Proceeds from sale of property, plant and equipment
2,710
8,495
Proceeds from insurance recovery for property, plant and equipment
—
1,538
Proceeds from sale of short-term investments
37,633
—
Proceeds from maturities of short-term investments
86,216
6,469
Payments for short-term investments
(475,696
)
(5,935
)
Other investing activities
13,331
(887
)
Net cash used in investing activities
(611,337
)
(318,817
)
Cash flows from financing activities:
Proceeds from revolving credit facilities
312,000
172,700
Payments of revolving credit facilities
(332,000
)
(92,700
)
Proceeds from short-term debt
86,769
51,434
Payments of short-term debt
(76,004
)
(42,067
)
Proceeds from issuance of long-term debt
225,985
714,375
Payments of long-term debt
(370,426
)
(847,155
)
Payments of finance lease obligations
(7,193
)
(4,358
)
Other financing activities
7,707
(1,963
)
Net cash used in financing activities
(153,162
)
(49,734
)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
2,696
1,385
Net decrease in cash, cash equivalents and restricted cash
(327,755
)
(83,834
)
Cash, cash equivalents and restricted cash, beginning of period
898,532
688,051
Cash, cash equivalents and restricted cash, end of period
$
570,777
$
604,217
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 statements regarding future demand, operating performance, free cash flow generation, financial outlook, investment and return of capital, statements regarding future dividends and 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:
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, 2019 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 except as may be required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20201026005855/en/
Vincent Keenan Vice President, Investor Relations 480-786-7594 vincent.keenan@amkor.com
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