Amkor Technology Reports Financial Results for the Third Quarter 2024
Third Quarter 2024 Highlights
-
Net sales
$1.86 billion , up 27% sequentially -
Gross profit
$272 million , operating income$149 million -
Net income
$123 million , earnings per diluted share$0.49 -
EBITDA
$309 million
“Amkor delivered third quarter revenue of
Quarterly Financial Results
($ in millions, except per share data) |
|
Q3 2024 |
|
Q2 2024 |
|
Q3 2023 |
Net sales |
|
|
|
|
|
|
Gross margin |
|
14.6% |
|
14.5% |
|
15.5% |
Operating income |
|
|
|
|
|
|
Operating income margin |
|
8.0% |
|
5.6% |
|
9.1% |
Net income attributable to |
|
|
|
|
|
|
Earnings per diluted share |
|
|
|
|
|
|
EBITDA (1) |
|
|
|
|
|
|
(1) EBITDA is a non-GAAP measure. The reconciliation to the comparable GAAP measure is included below under “Selected Operating Data.” |
At
The company paid a quarterly dividend of
Business Outlook
The following information presents Amkor’s guidance for the fourth quarter 2024 (unless otherwise noted):
-
Net sales of
$1.60 billion to$1.70 billion - Gross margin of 13.5% to 15.5%
-
Net income of
$70 million to$110 million , or$0.28 to$0.44 per diluted share -
Full year 2024 capital expenditures of approximately
$750 million
Conference Call Information
About
Selected Operating Data |
|||||||||||
|
Q3 2024 |
|
Q2 2024 |
|
Q3 2023 |
||||||
Net Sales Data: |
|
|
|
|
|
||||||
Net sales (in millions): |
|
|
|
|
|
||||||
Advanced products (1) |
$ |
1,568 |
|
|
$ |
1,180 |
|
|
$ |
1,452 |
|
Mainstream products (2) |
|
294 |
|
|
|
281 |
|
|
|
370 |
|
Total net sales |
$ |
1,862 |
|
|
$ |
1,461 |
|
|
$ |
1,822 |
|
|
|
|
|
|
|
||||||
Packaging services |
|
90 |
% |
|
|
88 |
% |
|
|
88 |
% |
Test services |
|
10 |
% |
|
|
12 |
% |
|
|
12 |
% |
|
|
|
|
|
|
||||||
Net sales from top ten customers |
|
74 |
% |
|
|
72 |
% |
|
|
72 |
% |
|
|
|
|
|
|
||||||
End Market Distribution Data: |
|
|
|
|
|
||||||
Communications (smartphones, tablets) |
|
52 |
% |
|
|
48 |
% |
|
|
55 |
% |
Automotive, industrial and other (ADAS, electrification, infotainment, safety) |
|
16 |
% |
|
|
20 |
% |
|
|
19 |
% |
Computing (data center, infrastructure, PC/laptop, storage) |
|
16 |
% |
|
|
20 |
% |
|
|
14 |
% |
Consumer (AR & gaming, connected home, home electronics, wearables) |
|
16 |
% |
|
|
12 |
% |
|
|
12 |
% |
Total |
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
||||||
Gross Margin Data: |
|
|
|
|
|
||||||
Net sales |
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of sales: |
|
|
|
|
|
||||||
Materials |
|
58.4 |
% |
|
|
54.0 |
% |
|
|
56.8 |
% |
Labor |
|
8.7 |
% |
|
|
10.4 |
% |
|
|
8.8 |
% |
Other manufacturing |
|
18.3 |
% |
|
|
21.1 |
% |
|
|
18.9 |
% |
Gross margin |
|
14.6 |
% |
|
|
14.5 |
% |
|
|
15.5 |
% |
(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. |
Selected Operating Data |
|||||||||||
In this press release, we refer to EBITDA, which is not defined by |
|||||||||||
Non-GAAP Financial Measure Reconciliation: |
|
|
|
|
|
||||||
(in millions) |
Q3 2024 |
|
Q2 2024 |
|
Q3 2023 |
||||||
EBITDA Data: |
|
|
|
|
|
||||||
Net income |
$ |
123 |
|
$ |
67 |
|
$ |
133 |
|||
Plus: Interest expense |
|
16 |
|
|
|
16 |
|
|
|
13 |
|
Plus: Income tax expense |
|
19 |
|
|
|
14 |
|
|
|
29 |
|
Plus: Depreciation & amortization |
|
151 |
|
|
|
150 |
|
|
|
158 |
|
EBITDA |
$ |
309 |
|
|
$ |
247 |
|
|
$ |
333 |
|
CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) |
|||||||||||||||
For the Three Months
Ended |
|
For the Nine Months
Ended |
|||||||||||||
|
2024* |
|
2023 |
|
2024* |
|
2023 |
||||||||
Net sales |
$ |
1,861,589 |
|
|
$ |
1,821,793 |
|
|
$ |
4,688,574 |
|
|
$ |
4,751,254 |
|
Cost of sales |
|
1,589,105 |
|
|
|
1,539,040 |
|
|
|
4,002,072 |
|
|
|
4,087,210 |
|
Gross profit |
|
272,484 |
|
|
|
282,753 |
|
|
|
686,502 |
|
|
|
664,044 |
|
Selling, general and administrative |
|
80,753 |
|
|
|
73,020 |
|
|
|
262,379 |
|
|
|
216,551 |
|
Research and development |
|
42,364 |
|
|
|
43,135 |
|
|
|
120,103 |
|
|
|
135,870 |
|
Total operating expenses |
|
123,117 |
|
|
|
116,155 |
|
|
|
382,482 |
|
|
|
352,421 |
|
Operating income |
|
149,367 |
|
|
|
166,598 |
|
|
|
304,020 |
|
|
|
311,623 |
|
Interest expense |
|
15,622 |
|
|
|
13,001 |
|
|
|
47,866 |
|
|
|
43,522 |
|
Other (income) expense, net |
|
(8,130 |
) |
|
|
(8,777 |
) |
|
|
(39,273 |
) |
|
|
(24,212 |
) |
Total other expense, net |
|
7,492 |
|
|
|
4,224 |
|
|
|
8,593 |
|
|
|
19,310 |
|
Income before taxes |
|
141,875 |
|
|
|
162,374 |
|
|
|
295,427 |
|
|
|
292,313 |
|
Income tax expense |
|
19,185 |
|
|
|
28,923 |
|
|
|
45,693 |
|
|
|
49,194 |
|
Net income |
|
122,690 |
|
|
|
133,451 |
|
|
|
249,734 |
|
|
|
243,119 |
|
Net income attributable to non-controlling interests |
|
(121 |
) |
|
|
(837 |
) |
|
|
(1,371 |
) |
|
|
(868 |
) |
Net income attributable to |
$ |
122,569 |
|
|
$ |
132,614 |
|
|
$ |
248,363 |
|
|
$ |
242,251 |
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.50 |
|
|
$ |
0.54 |
|
|
$ |
1.01 |
|
|
$ |
0.99 |
|
Diluted |
$ |
0.49 |
|
|
$ |
0.54 |
|
|
$ |
1.00 |
|
|
$ |
0.98 |
|
|
|
|
|
|
|
|
|
||||||||
Shares used in computing per common share amounts: |
|
|
|
|
|
|
|
||||||||
Basic |
|
246,480 |
|
|
|
245,740 |
|
|
|
246,239 |
|
|
|
245,571 |
|
Diluted |
|
247,922 |
|
|
|
247,129 |
|
|
|
247,798 |
|
|
|
247,080 |
|
*We periodically assess the estimated useful lives of our property, plant and equipment. Based on our assessment of test equipment and its increased interchangeability enabling broader and longer use, we extended the estimated useful lives of test equipment from five years to seven years as of |
CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) |
|||||||
|
|
|
|||||
ASSETS |
|||||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
959,140 |
|
|
$ |
1,119,818 |
|
Short-term investments |
|
512,333 |
|
|
|
474,869 |
|
Accounts receivable, net of allowances |
|
1,351,817 |
|
|
|
1,149,493 |
|
Inventories |
|
349,513 |
|
|
|
393,128 |
|
Other current assets |
|
71,515 |
|
|
|
58,502 |
|
Total current assets |
|
3,244,318 |
|
|
|
3,195,810 |
|
Property, plant and equipment, net |
|
3,538,841 |
|
|
|
3,299,445 |
|
Operating lease right of use assets |
|
114,104 |
|
|
|
117,006 |
|
|
|
19,643 |
|
|
|
20,003 |
|
Restricted cash |
|
786 |
|
|
|
799 |
|
Other assets |
|
111,394 |
|
|
|
138,062 |
|
Total assets |
$ |
7,029,086 |
|
|
$ |
6,771,125 |
|
LIABILITIES AND EQUITY |
|||||||
Current liabilities: |
|
|
|
||||
Short-term borrowings and current portion of long-term debt |
$ |
207,570 |
|
|
$ |
131,624 |
|
Trade accounts payable |
|
811,946 |
|
|
|
754,453 |
|
Capital expenditures payable |
|
210,398 |
|
|
|
106,368 |
|
Short-term operating lease liability |
|
27,657 |
|
|
|
33,616 |
|
Accrued expenses |
|
315,260 |
|
|
|
358,414 |
|
Total current liabilities |
|
1,572,831 |
|
|
|
1,384,475 |
|
Long-term debt |
|
893,994 |
|
|
|
1,071,832 |
|
Pension and severance obligations |
|
87,584 |
|
|
|
87,133 |
|
Long-term operating lease liabilities |
|
62,279 |
|
|
|
56,837 |
|
Other non-current liabilities |
|
215,144 |
|
|
|
175,813 |
|
Total liabilities |
|
2,831,832 |
|
|
|
2,776,090 |
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
293 |
|
|
|
292 |
|
Additional paid-in capital |
|
2,028,024 |
|
|
|
2,008,170 |
|
Retained earnings |
|
2,349,938 |
|
|
|
2,159,831 |
|
Accumulated other comprehensive income (loss) |
|
10,248 |
|
|
|
16,350 |
|
|
|
(224,882 |
) |
|
|
(222,335 |
) |
Total |
|
4,163,621 |
|
|
|
3,962,308 |
|
Non-controlling interests in subsidiaries |
|
33,633 |
|
|
|
32,727 |
|
Total equity |
|
4,197,254 |
|
|
|
3,995,035 |
|
Total liabilities and equity |
$ |
7,029,086 |
|
|
$ |
6,771,125 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|||||||
For the Nine Months Ended
|
|||||||
|
2024 |
|
2023 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
249,734 |
|
|
$ |
243,119 |
|
Depreciation and amortization |
|
445,470 |
|
|
|
472,396 |
|
Other operating activities and non-cash items |
|
22,558 |
|
|
|
30,717 |
|
Changes in assets and liabilities |
|
(166,502 |
) |
|
|
(50,045 |
) |
Net cash provided by operating activities |
|
551,260 |
|
|
|
696,187 |
|
Cash flows from investing activities: |
|
|
|
||||
Payments for property, plant and equipment |
|
(458,067 |
) |
|
|
(511,654 |
) |
Proceeds from sale of property, plant and equipment |
|
5,097 |
|
|
|
1,580 |
|
Proceeds from foreign exchange forward contracts |
|
32,185 |
|
|
|
31,038 |
|
Payments for foreign exchange forward contracts |
|
(58,430 |
) |
|
|
(70,251 |
) |
Payments for short-term investments |
|
(441,851 |
) |
|
|
(491,056 |
) |
Proceeds from sale of short-term investments |
|
44,361 |
|
|
|
71,159 |
|
Proceeds from maturities of short-term investments |
|
367,522 |
|
|
|
267,393 |
|
Other investing activities |
|
7,431 |
|
|
|
4,894 |
|
Net cash used in investing activities |
|
(501,752 |
) |
|
|
(696,897 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from revolving credit facilities |
|
— |
|
|
|
370,000 |
|
Payments of revolving credit facilities |
|
— |
|
|
|
(370,000 |
) |
Proceeds from short-term debt |
|
5,012 |
|
|
|
20,712 |
|
Payments of short-term debt |
|
(9,731 |
) |
|
|
(14,632 |
) |
Proceeds from long-term debt |
|
58,727 |
|
|
|
— |
|
Payments of long-term debt |
|
(147,603 |
) |
|
|
(104,952 |
) |
Payments of finance lease obligations |
|
(56,359 |
) |
|
|
(48,409 |
) |
Payments of dividends |
|
(58,196 |
) |
|
|
(55,328 |
) |
Other financing activities |
|
819 |
|
|
|
(1,801 |
) |
Net cash used in financing activities |
|
(207,331 |
) |
|
|
(204,410 |
) |
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash |
|
(2,868 |
) |
|
|
(17,603 |
) |
Net decrease in cash, cash equivalents and restricted cash |
|
(160,691 |
) |
|
|
(222,723 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
1,120,617 |
|
|
|
962,406 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
959,926 |
|
|
$ |
739,683 |
|
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements within the meaning of the 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:
- dependence on the cyclical and volatile semiconductor industry and vulnerability to industry downturns and declines in global economic and financial conditions;
- dependence on key customers or concentration of customers in certain end markets, such as mobile communications and automotive;
- changes in costs, quality, availability and delivery times of raw materials, components and equipment;
- 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;
- fluctuations in operating results and cash flows;
- our substantial indebtedness;
- dependence on international factories and operations and risks relating to trade restrictions and regional conflict;
- the effects of business, economic, political, legal and regulatory impacts or conflicts upon our global operations;
- fluctuations in interest rates and changes in credit risk;
- competition with established competitors in the packaging and test business, the internal capabilities of integrated device manufacturers and new competitors, including foundries and contract manufacturers;
- difficulty funding our liquidity needs, including as a result of disruptions to the banking system and capital markets;
- our substantial investments in equipment and facilities to support the demand of our customers;
- difficulty attracting, retaining or replacing qualified personnel;
- difficulty achieving the relatively high-capacity utilization rates necessary to realize satisfactory gross margins given our high percentage of fixed costs;
- maintaining an effective system of internal controls;
- the absence of backlog and the short-term nature of our customers’ commitments;
- our continuing development and implementation of changes to, and maintenance and security of, our information technology systems;
- the historical downward pressure on the prices of our packaging and test services;
- challenges with integrating diverse operations;
- fluctuations in our manufacturing yields;
- any changes in tax laws, taxing authorities not agreeing with our interpretation of applicable tax laws, including whether we continue to qualify for conditional reduced tax rates, 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;
- conditions to, and obligations related to, the receipt of government incentives;
- environmental, health and safety liabilities and expenditures;
- 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;
- natural disasters and other calamities, political instability, hostilities or other disruptions;
- restrictive covenants in the indentures and agreements governing our current and future indebtedness;
- the possibility that we may decrease or suspend our quarterly dividend;
-
significant severance plan obligations associated with our manufacturing operations in
Korea ; 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
View source version on businesswire.com: https://www.businesswire.com/news/home/20241028993598/en/
Vice President, Investor Relations and Finance
480-786-7594
jennifer.jue@amkor.com
Source: