Amkor Technology Reports Record Financial Results for the Third Quarter 2021

Third Quarter Highlights

  • Record net sales $1.68 billion, up 20% sequentially and 24% year-on-year
  • Record gross profit $325 million, record operating income $211 million
  • Gross margin 19.3%, operating income margin 12.6%
  • Record net income $181 million, record earnings per diluted share $0.74
  • Record EBITDA $358 million

TEMPE, Ariz.–(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, 2021.

“We delivered an outstanding third quarter with record revenue of $1.68 billion, up $274 million from the second quarter, reflecting a 20% sequential increase. All of our end markets set new record revenue levels this quarter,” said Giel Rutten, Amkor’s president and chief executive officer. “The organization rapidly and efficiently scaled for substantial growth, including ramps of multiple new product introductions in Communications and Consumer.”

Results

 

Q3 2021

 

Q2 2021

 

Q3 2020

 

 

($ in millions, except per share data)

Net sales

 

$1,681

 

$1,407

 

$1,354

Gross margin

 

19.3%

 

19.4%

 

17.8%

Operating income

 

$211

 

$155

 

$127

Operating income margin

 

12.6%

 

11.0%

 

9.4%

Net income attributable to Amkor

 

$181

 

$126

 

$92

Earnings per diluted share

 

$0.74

 

$0.51

 

$0.38

EBITDA (1)

 

$358

 

$295

 

$255

 

(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.”

“High utilization and excellent factory execution drove record profitability in the third quarter,” said Megan Faust, Amkor’s executive vice president and chief financial officer. “With gross profit of $325 million and operating income of $211 million, we posted EPS of $0.74, nearly double the prior year period.”

At September 30, 2021, total cash and short-term investments was $0.8 billion, and total debt was $1.0 billion.

The company paid a quarterly dividend of $0.04 per share, representing a dividend payment of $9.8 million in the aggregate, on September 30, 2021 to stockholders of record as of September 7, 2021. 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

“We expect our momentum to continue in the fourth quarter, with 20% year-on-year revenue growth for both the quarter and the full year,” said Rutten. “We remain confident in our strong market position within the fastest growing semiconductor markets of 5G, Automotive, High Performance Computing and IoT.”

Fourth quarter 2021 outlook (unless otherwise noted):

  • Net sales of $1.59 billion to $1.69 billion
  • Gross margin of 18.0% to 20.5%
  • Net income of $140 million to $190 million, or $0.55 to $0.75 per diluted share
  • Full year 2021 capital expenditures of approximately $775 million

Conference Call Information

Amkor will conduct a conference call on Monday, October 25, 2021, 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 https://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 www.amkor.com.

AMKOR TECHNOLOGY, INC.

Selected Operating Data

 

 

Q3 2021

 

Q2 2021

 

Q3 2020

Net Sales Data:

 

 

 

 

 

Net sales (in millions):

 

 

 

 

 

Advanced products (1) (3)

$

1,236

 

 

$

980

 

 

$

1,003

 

Mainstream products (2) (3)

445

 

 

427

 

 

351

 

Total net sales

$

1,681

 

 

$

1,407

 

 

$

1,354

 

 

 

 

 

 

 

Packaging services

87

%

 

85

%

 

86

%

Test services

13

%

 

15

%

 

14

%

 

 

 

 

 

 

Net sales from top ten customers

64

%

 

61

%

 

63

%

 

 

 

 

 

 

End Market Data:

 

 

 

 

 

Communications (handheld devices, smartphones, tablets)

43

%

 

40

%

 

43

%

Consumer (connected home, set-top boxes, televisions, visual imaging, wearables)

22

%

 

22

%

 

25

%

Automotive, industrial and other (driver assist, infotainment, performance, safety)

20

%

 

22

%

 

17

%

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

48.3

%

 

44.7

%

 

46.9

%

Labor

11.5

%

 

13.1

%

 

12.8

%

Other manufacturing

20.9

%

 

22.8

%

 

22.5

%

Gross margin

19.3

%

 

19.4

%

 

17.8

%

 

(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.

(3) Beginning in 2021, we are reporting memory net sales in Advanced products. Previously, memory net sales were reported in Mainstream products. Prior year amounts were reclassified to conform to current year presentation.

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, 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 2021

 

Q2 2021

 

Q3 2020

 

(in millions)

EBITDA Data:

 

 

 

 

 

Net income

$

182

 

 

$

126

 

 

$

93

 

Plus: Interest expense

13

 

 

13

 

 

16

 

Plus: Income tax expense

17

 

 

16

 

 

16

 

Plus: Depreciation & amortization

146

 

 

140

 

 

130

 

EBITDA

$

358

 

 

$

295

 

 

$

255

 

AMKOR TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

(In thousands, except per share data)

Net sales

$

1,681,000

 

 

 

$

1,354,023

 

 

 

$

4,413,685

 

 

 

$

3,679,548

 

 

Cost of sales

1,356,168

 

 

 

1,112,938

 

 

 

3,550,499

 

 

 

3,057,235

 

 

Gross profit

324,832

 

 

 

241,085

 

 

 

863,186

 

 

 

622,313

 

 

Selling, general and administrative

72,581

 

 

 

77,781

 

 

 

223,538

 

 

 

224,623

 

 

Research and development

40,790

 

 

 

35,835

 

 

 

128,624

 

 

 

99,624

 

 

Total operating expenses

113,371

 

 

 

113,616

 

 

 

352,162

 

 

 

324,247

 

 

Operating income

211,461

 

 

 

127,469

 

 

 

511,024

 

 

 

298,066

 

 

Interest expense

12,896

 

 

 

16,404

 

 

 

38,333

 

 

 

49,461

 

 

Other (income) expense, net

(501

)

 

 

2,415

 

 

 

(508

)

 

 

1,567

 

 

Total other expense, net

12,395

 

 

 

18,819

 

 

 

37,825

 

 

 

51,028

 

 

Income before taxes

199,066

 

 

 

108,650

 

 

 

473,199

 

 

 

247,038

 

 

Income tax expense

17,219

 

 

 

15,753

 

 

 

44,875

 

 

 

33,504

 

 

Net income

181,847

 

 

 

92,897

 

 

 

428,324

 

 

 

213,534

 

 

Net income attributable to non-controlling interests

(993

)

 

 

(746

)

 

 

(1,855

)

 

 

(2,070

)

 

Net income attributable to Amkor

$

180,854

 

 

 

$

92,151

 

 

 

$

426,469

 

 

 

$

211,464

 

 

 

 

 

 

 

 

 

 

Net income attributable to Amkor per common share:

 

 

 

 

 

 

 

Basic

$

0.74

 

 

 

$

0.38

 

 

 

$

1.75

 

 

 

$

0.88

 

 

Diluted

$

0.74

 

 

 

$

0.38

 

 

 

$

1.74

 

 

 

$

0.87

 

 

 

 

 

 

 

 

 

 

Shares used in computing per common share amounts:

 

 

 

 

 

 

 

Basic

244,100

 

 

 

241,675

 

 

 

243,746

 

 

 

241,232

 

 

Diluted

245,942

 

 

 

242,592

 

 

 

245,611

 

 

 

241,937

 

 

AMKOR TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

September 30, 2021

 

December 31, 2020

 

(In thousands)

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

545,592

 

 

 

$

698,002

 

 

Restricted cash

929

 

 

 

1,007

 

 

Short-term investments

244,470

 

 

 

133,769

 

 

Accounts receivable, net of allowances

1,289,617

 

 

 

962,643

 

 

Inventories

445,918

 

 

 

297,293

 

 

Other current assets

48,598

 

 

 

40,218

 

 

Total current assets

2,575,124

 

 

 

2,132,932

 

 

Property, plant and equipment, net

2,901,564

 

 

 

2,566,002

 

 

Operating lease right of use assets

146,210

 

 

 

147,236

 

 

Goodwill

25,351

 

 

 

27,325

 

 

Restricted cash

3,508

 

 

 

3,188

 

 

Other assets

118,691

 

 

 

145,628

 

 

Total assets

$

5,770,448

 

 

 

$

5,022,311

 

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

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

$

140,380

 

 

 

$

149,007

 

 

Trade accounts payable

815,877

 

 

 

636,434

 

 

Capital expenditures payable

393,660

 

 

 

181,339

 

 

Accrued expenses

389,068

 

 

 

349,207

 

 

Total current liabilities

1,738,985

 

 

 

1,315,987

 

 

Long-term debt

884,236

 

 

 

1,005,339

 

 

Pension and severance obligations

145,633

 

 

 

159,610

 

 

Long-term operating lease liabilities

76,955

 

 

 

84,420

 

 

Other non-current liabilities

164,960

 

 

 

102,996

 

 

Total liabilities

3,010,769

 

 

 

2,668,352

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock

 

 

 

 

 

Common stock

290

 

 

 

289

 

 

Additional paid-in capital

1,973,207

 

 

 

1,953,378

 

 

Retained earnings

959,641

 

 

 

562,502

 

 

Accumulated other comprehensive income (loss)

15,936

 

 

 

27,270

 

 

Treasury stock

(219,061

)

 

 

(217,740

)

 

Total Amkor stockholders’ equity

2,730,013

 

 

 

2,325,699

 

 

Non-controlling interests in subsidiaries

29,666

 

 

 

28,260

 

 

Total equity

2,759,679

 

 

 

2,353,959

 

 

Total liabilities and equity

$

5,770,448

 

 

 

$

5,022,311

 

 

AMKOR TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Nine Months Ended September 30,

 

2021

 

 

2020

 

 

(In thousands)

Cash flows from operating activities:

 

 

 

Net income

$

428,324

 

 

 

$

213,534

 

 

Depreciation and amortization

420,970

 

 

 

377,722

 

 

Other operating activities and non-cash items

22,222

 

 

 

20,368

 

 

Changes in assets and liabilities

(239,897

)

 

 

(177,576

)

 

Net cash provided by operating activities

631,619

 

 

 

434,048

 

 

Cash flows from investing activities:

 

 

 

Payments for property, plant and equipment

(491,425

)

 

 

(275,531

)

 

Proceeds from sale of property, plant and equipment

2,722

 

 

 

2,710

 

 

Payments for short-term investments

(348,822

)

 

 

(475,696

)

 

Proceeds from sale of short-term investments

70,085

 

 

 

37,633

 

 

Proceeds from maturities of short-term investments

165,774

 

 

 

86,216

 

 

Other investing activities

(34,703

)

 

 

13,331

 

 

Net cash used in investing activities

(636,369

)

 

 

(611,337

)

 

Cash flows from financing activities:

 

 

 

Proceeds from revolving credit facilities

 

 

 

312,000

 

 

Payments of revolving credit facilities

 

 

 

(332,000

)

 

Proceeds from short-term debt

15,514

 

 

 

86,769

 

 

Payments of short-term debt

(14,228

)

 

 

(76,004

)

 

Proceeds from issuance of long-term debt

154,784

 

 

 

225,985

 

 

Payments of long-term debt

(250,402

)

 

 

(370,426

)

 

Payments of finance lease obligations

(12,785

)

 

 

(7,193

)

 

Payments of dividends

(38,993

)

 

 

 

 

Other financing activities

9,462

 

 

 

7,707

 

 

Net cash used in financing activities

(136,648

)

 

 

(153,162

)

 

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

(10,770

)

 

 

2,696

 

 

Net decrease in cash, cash equivalents and restricted cash

(152,168

)

 

 

(327,755

)

 

Cash, cash equivalents and restricted cash, beginning of period

702,197

 

 

 

898,532

 

 

Cash, cash equivalents and restricted cash, end of period

$

550,029

 

 

 

$

570,777

 

 

Forward-Looking Statement Disclaimer

This press release contains forward-looking statements within the meaning of 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. These forward-looking statements, including all of the statements made under “Business Outlook” above, 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:

  • 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;
  • changes in cost, 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;
  • industry downturns and declines in global economic and financial conditions;
  • 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;
  • changes in our capacity and capacity utilization rates and fluctuations in our manufacturing yields;
  • 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 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;
  • dependence on key customers or concentration of customers in certain end markets, such as Communications and Automotive and Industrial;
  • 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 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;
  • 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;
  • competition with established competitors in the packaging and test business, the internal capabilities of integrated device manufacturers and new competitors, including foundries;
  • our substantial investments in equipment and facilities to support the demand of our customers;
  • decisions by our integrated device manufacturer and foundry customers to curtail outsourcing;
  • difficulty achieving high capacity utilization rates due to high percentage of fixed costs;
  • the historical downward pressure on the prices of our packaging and test services;
  • 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;
  • our substantial indebtedness and restrictive covenants in the indentures and agreements governing our current and future indebtedness;
  • the possibility that we may decrease or suspend our quarterly dividend;
  • difficulty funding our liquidity needs;
  • our significant severance plan obligations associated with our manufacturing operations in Korea;
  • maintaining an effective system of internal controls;
  • difficulty attracting, retaining or replacing qualified personnel;
  • 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;
  • 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, 2020 (the “Form 10-K”) and in the company’s subsequent filings with the Securities and Exchange Commission (“SEC”) made prior to or after the date hereof. 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 those set forth in the Form 10-K and from time to time in our other reports filed with or furnished to the 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 the following trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose part or all of your investment. All forward-looking statements in this press release are made based on our current expectations, forecasts, estimates and assumptions. 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. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

Contacts

Jennifer Jue

Senior Director, Investor Relations and Finance

480-786-7594

[email protected]

error: Content is protected !!