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Amkor Technology Reports Record Financial Results for the Third Quarter 2022

TEMPE, Ariz., October 31, 2022--(BUSINESS WIRE)--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, 2022.

Record Third Quarter 2022 Highlights

  • Net sales $2.1 billion, up 24% year-on-year

  • Gross profit $421 million, operating income $319 million

  • Net income $306 million, earnings per diluted share $1.24

  • EBITDA $481 million

"Amkor delivered outstanding results in the third quarter. Revenue of $2.1 billion and EPS of $1.24 are quarterly records, with all end markets hitting new record revenue levels. Quality execution of steep production ramps for new high-volume products drove this excellent performance," said Giel Rutten, Amkor’s president and chief executive officer. "Despite macroeconomic uncertainty, we remain well positioned to execute on our strategy, leveraging our leadership position in Advanced packaging and our broad geographic footprint to support the industry megatrends of 5G, IoT, Automotive, and HPC."

Quarterly Financial Results

($ in millions, except per share data)

Q3 2022

Q2 2022

Q3 2021

Net sales

$2,084

$1,505

$1,681

Gross margin

20.2%

16.6%

19.3%

Operating income

$319

$143

$211

Operating income margin

15.3%

9.5%

12.6%

Net income attributable to Amkor

$306

$125

$181

Earnings per diluted share

$1.24

$0.51

$0.74

EBITDA (1)

$481

$302

$358

(1) EBITDA is a non-GAAP financial measure. The reconciliation to the most directly comparable GAAP financial measure is included below under "Selected Operating Data."

At September 30, 2022, total cash and short-term investments was $0.9 billion, and total debt was $1.1 billion.

The company paid a quarterly dividend of $0.05 per share on September 26, 2022. 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.

Business Outlook

The following information presents Amkor’s guidance for the fourth quarter 2022 (unless otherwise noted):

  • Net sales of $1.80 billion to $1.90 billion

  • Gross margin of 16.0% to 18.0%

  • Net income of $150 million to $195 million, or $0.60 to $0.80 per diluted share

  • Full year 2022 capital expenditures of approximately $900 million

Conference Call Information

Amkor will conduct a conference call on Monday, October 31, 2022, at 5:00 p.m. Eastern Time. This call may include material information not included in this press release. To access the live audio webcast and the accompanying slide presentation, visit the Investor Relations section of Amkor’s website, located at ir.amkor.com. The live call can also be accessed by dialing 1-877-407-4019 or 1-201-689-8337.

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 amkor.com.

AMKOR TECHNOLOGY, INC.

Selected Operating Data

Q3 2022

Q2 2022

Q3 2021

Net Sales Data:

Net sales (in millions):

Advanced products (1)

$

1,640

$

1,084

$

1,236

Mainstream products (2)

444

421

445

Total net sales

$

2,084

$

1,505

$

1,681

Packaging services

87

%

87

%

87

%

Test services

13

%

13

%

13

%

Net sales from top ten customers

67

%

65

%

64

%

End Market Data:

Communications (smart phones, tablets)

47

%

37

%

43

%

Consumer (AR & gaming, connected home, home electronics, wearables)

20

%

22

%

22

%

Automotive, industrial and other (ADAS, electrification, infotainment, safety)

18

%

23

%

20

%

Computing (data center, infrastructure, PC/laptop, storage)

15

%

18

%

15

%

Total

100

%

100

%

100

%

Gross Margin Data:

Net sales

100.0

%

100.0

%

100.0

%

Cost of sales:

Materials

53.3

%

49.2

%

48.3

%

Labor

8.6

%

11.8

%

11.5

%

Other manufacturing

17.9

%

22.4

%

20.9

%

Gross margin

20.2

%

16.6

%

19.3

%

(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.

AMKOR TECHNOLOGY, INC.

Selected Operating Data

In this press release, we refer to 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, and our ability to service debt, and our ability to fund capital expenditures and pay dividends. 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:

(in millions)

Q3 2022

Q2 2022

Q3 2021

EBITDA Data:

Net income

$

306

$

125

$

182

Plus: Interest expense

15

15

13

Plus: Income tax expense

4

11

17

Plus: Depreciation & amortization

156

151

146

EBITDA

$

481

$

302

$

358

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2022

2021

2022

2021

Net sales

$

2,083,691

$

1,681,000

$

5,185,375

$

4,413,685

Cost of sales

1,662,463

1,356,168

4,189,662

3,550,499

Gross profit

421,228

324,832

995,713

863,186

Selling, general and administrative

67,947

72,581

213,774

223,538

Research and development

33,994

40,790

109,835

128,624

Total operating expenses

101,941

113,371

323,609

352,162

Operating income

319,287

211,461

672,104

511,024

Interest expense

14,879

12,896

43,620

38,333

Other (income) expense, net

(5,692

)

(501

)

(18,829

)

(508

)

Total other expense, net

9,187

12,395

24,791

37,825

Income before taxes

310,100

199,066

647,313

473,199

Income tax expense

3,643

17,219

44,159

44,875

Net income

306,457

181,847

603,154

428,324

Net income attributable to non-controlling interests

(376

)

(993

)

(1,632

)

(1,855

)

Net income attributable to Amkor

$

306,081

$

180,854

$

601,522

$

426,469

Net income attributable to Amkor per common share:

Basic

$

1.25

$

0.74

$

2.46

$

1.75

Diluted

$

1.24

$

0.74

$

2.45

$

1.74

Shares used in computing per common share amounts:

Basic

244,744

244,100

244,581

243,746

Diluted

246,094

245,942

246,015

245,611

AMKOR TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

September 30, 2022

December 31, 2021

ASSETS

Current assets:

Cash and cash equivalents

$

624,084

$

826,744

Restricted cash

962

Short-term investments

308,063

251,530

Accounts receivable, net of allowances

1,550,517

1,258,767

Inventories

669,297

484,959

Other current assets

49,185

33,601

Total current assets

3,201,146

2,856,563

Property, plant and equipment, net

3,087,061

2,871,058

Operating lease right of use assets

168,778

159,742

Goodwill

19,492

24,516

Restricted cash

3,235

3,815

Other assets

214,212

122,860

Total assets

$

6,693,924

$

6,038,554

LIABILITIES AND EQUITY

Current liabilities:

Short-term borrowings and current portion of long-term debt

$

123,521

$

153,008

Trade accounts payable

927,527

828,727

Capital expenditures payable

287,936

210,875

Short-term operating lease liability

69,161

64,233

Accrued expenses

381,012

422,892

Total current liabilities

1,789,157

1,679,735

Long-term debt

1,001,544

984,988

Pension and severance obligations

104,206

120,472

Long-term operating lease liabilities

73,776

83,937

Other non-current liabilities

206,398

196,876

Total liabilities

3,175,081

3,066,008

Stockholders’ equity:

Preferred stock

Common stock

291

290

Additional paid-in capital

1,991,045

1,977,134

Retained earnings

1,728,740

1,163,939

Accumulated other comprehensive income (loss)

(13,583

)

19,978

Treasury stock

(219,147

)

(219,065

)

Total Amkor stockholders’ equity

3,487,346

2,942,276

Non-controlling interests in subsidiaries

31,497

30,270

Total equity

3,518,843

2,972,546

Total liabilities and equity

$

6,693,924

$

6,038,554

AMKOR TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

For the Nine Months Ended September 30,

2022

2021

Cash flows from operating activities:

Net income

$

603,154

$

428,324

Depreciation and amortization

455,679

420,970

Other operating activities and non-cash items

(20,396

)

22,222

Changes in assets and liabilities

(492,673

)

(239,897

)

Net cash provided by operating activities

545,764

631,619

Cash flows from investing activities:

Payments for property, plant and equipment

(575,502

)

(491,425

)

Proceeds from sale of property, plant and equipment

2,691

2,722

Payments for short-term investments

(364,274

)

(348,822

)

Proceeds from sale of short-term investments

26,202

70,085

Proceeds from maturities of short-term investments

274,452

165,774

Other investing activities

(86,785

)

(34,703

)

Net cash used in investing activities

(723,216

)

(636,369

)

Cash flows from financing activities:

Proceeds from revolving credit facilities

80,000

Payments of revolving credit facilities

(80,000

)

Proceeds from short-term debt

29,711

15,514

Payments of short-term debt

(21,662

)

(14,228

)

Proceeds from issuance of long-term debt

250,000

154,784

Payments of long-term debt

(183,493

)

(250,402

)

Payments of finance lease obligations

(26,938

)

(12,785

)

Payments of dividends

(36,725

)

(38,993

)

Other financing activities

(4,152

)

9,462

Net cash provided by (used in) in financing activities

6,741

(136,648

)

Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash

(33,491

)

(10,770

)

Net decrease in cash, cash equivalents and restricted cash

(204,202

)

(152,168

)

Cash, cash equivalents and restricted cash, beginning of period

831,521

702,197

Cash, cash equivalents and restricted cash, end of period

$

627,319

$

550,029

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:

  • 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;

  • dependence on the highly cyclical, volatile semiconductor industry;

  • industry downturns and declines in global economic and financial conditions;

  • changes in costs, quality, availability and delivery times of raw materials, components and equipment, including any disruption in the supply of certain materials due to regulations and customer requirements, as well as supply constraints, production delays, fluctuations in commodity prices and wage inflation;

  • dependence on international factories and operations and risks relating to our customers’ and vendors’ international operations;

  • laws, rules, regulations and policies imposed by U.S. or other governments, such as tariffs, customs, duties, export controls, sanctions and other restrictive trade barriers and national security, data privacy and cybersecurity, antitrust and competition, tax, currency and banking, labor, environmental, health and safety laws;

  • our substantial indebtedness and restrictive covenants in the indentures and agreements governing our current and future indebtedness;

  • fluctuations in interest rates and changes in credit risk;

  • difficulty funding our liquidity needs;

  • dependence on key customers or concentration of customers in certain end markets, such as Communications and Automotive and Industrial;

  • fluctuation in demand for semiconductors and conditions in the semiconductor industry generally, as well as by specific customers, such as inventory reductions by our customers impacting demand in key markets;

  • our substantial investments in equipment and facilities to support the demand of our customers;

  • difficulty attracting, retaining or replacing qualified personnel;

  • difficulty achieving high capacity utilization rates due to high percentage of fixed costs;

  • changes in our capacity and capacity utilization rates and fluctuations in our manufacturing yields;

  • competition with established competitors in the packaging and test business, the internal capabilities of integrated device manufacturers and new competitors, including foundries;

  • decisions by our integrated device manufacturer and foundry customers to curtail outsourcing;

  • maintaining an effective system of internal controls;

  • the absence of backlog, the short-term nature of our customers’ commitments, double bookings by customers and deterioration in customer forecasts and the impact of these factors, including the possible delay, rescheduling and cancellation of large orders, or the timing and volume of orders relative to our production capacity;

  • the development, transition and ramp to high volume manufacture of more advanced silicon nodes and evolving wafer, packaging and test services technologies, which may cause production delays, lower manufacturing yields and supply constraints for new wafers and other materials;

  • the historical downward pressure on the prices of our packaging and test services;

  • 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;

  • fluctuations in currency exchange rates, particularly the dollar/yen exchange rate for our operations in Japan;

  • any 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;

  • the possibility that we may decrease or suspend our quarterly dividend;

  • our continuing development and implementation of changes to, and maintenance and security of, our information technology systems;

  • challenges with integrating diverse operations;

  • any changes in tax laws, taxing authorities not agreeing with our interpretation of applicable tax laws, including whether we continue to qualify for tax holidays, 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;

  • our significant severance plan obligations associated with our manufacturing operations in Korea;

  • natural disasters and other calamities, political instability, hostilities or other disruptions; 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 December 31, 2021 (the "Form 10-K") and from time to time in our other reports filed with or furnished to the Securities and Exchange Commission ("SEC"). You should carefully consider the trends, risks and uncertainties described in this press release, the Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties continues or occurs, our business, financial condition or operating results could be materially and adversely affected, the trading prices of our securities could decline, and you could lose part or all of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. We assume 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 applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221031005571/en/

Contacts

Jennifer Jue
Senior Director, Investor Relations and Finance
480-786-7594
jennifer.jue@amkor.com