Form 8-K AMKOR TECHNOLOGY, INC. For: May 02

May 2, 2022 4:12 PM EDT

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Amkor Technology Reports Financial Results for the First Quarter 2022

TEMPE, Ariz. -- May 2, 2022 -- Amkor Technology, Inc. (Nasdaq: AMKR), a leading provider of semiconductor packaging and test services, today announced financial results for the first quarter ended March 31, 2022.

First Quarter 2022 Highlights
Net sales $1.6 billion, up 20% year-on-year
Gross margin 20.4%, operating income margin 13.2%
Net income $171 million, earnings per diluted share $0.69
EBITDA $363 million

“Amkor delivered another strong quarter of financial results, driven by continued demand for our Advanced packaging solutions. Advanced packaging grew 26% year-on-year and drove sales to $1.6 billion and EPS to $0.69, both of which are first quarter records,” said Giel Rutten, Amkor’s president and chief executive officer.

Quarterly Financial Results

($ in millions, except per share data)
Q1 2022Q4 2021Q1 2021
Net sales$1,597$1,725$1,326
Gross margin20.4%21.0%20.0%
Operating income$210$252$144
Operating income margin13.2%14.6%10.9%
Net income attributable to Amkor$171$217$120
Earnings per diluted share$0.69$0.88$0.49
EBITDA (1)$363$398$280

(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 March 31, 2022, total cash and short-term investments was $1.2 billion, and total debt was $1.2 billion.

The company paid a quarterly dividend of $0.05 per share on March 21, 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

“Our second quarter guidance reflects the estimated impact from a temporary, government mandated COVID-19 lockdown of our Shanghai operations. We anticipate that our Shanghai factory will return to normal production during the second half of the quarter,” said Rutten.

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

Net sales of $1.47 billion to $1.57 billion
Gross margin of 16.5% to 18.5%
Net income of $90 million to $140 million, or $0.37 to $0.57 per diluted share
Full year 2022 capital expenditures of approximately $950 million


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Conference Call Information

Amkor will conduct a conference call on Monday, May 2, 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.


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



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AMKOR TECHNOLOGY, INC.
Selected Operating Data
Q1 2022Q4 2021Q1 2021
Net Sales Data:   
Net sales (in millions):   
Advanced products (1)$1,157 $1,273 $921 
Mainstream products (2)440 452 405 
Total net sales$1,597 $1,725 $1,326 
Packaging services86 %86 %85 %
Test services14 %14 %15 %
Net sales from top ten customers64 %66 %61 %
End Market Data:
Communications (smart phones, tablets)41 %42 %40 %
Automotive, industrial and other (ADAS, electrification, infotainment, safety)21 %20 %22 %
Consumer (AR & gaming, connected home, home electronics, wearables)19 %22 %21 %
Computing (data center, infrastructure, PC/laptop, storage)
19 %16 %17 %
Total100 %100 %100 %
 
Gross Margin Data:
Net sales100.0 %100.0 %100.0 %
Cost of sales:
Materials46.7 %47.4 %43.2 %
Labor11.5 %11.4 %13.8 %
Other manufacturing21.4 %20.2 %23.0 %
Gross margin20.4 %21.0 %20.0 %

(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.


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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)Q1 2022Q4 2021Q1 2021
EBITDA Data:
Net income$171 $217 $120 
Plus: Interest expense14 13 13 
Plus: Income tax expense30 25 12 
Plus: Depreciation & amortization148 143 135 
EBITDA$363 $398 $280 



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AMKOR TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended March 31,
(In thousands, except per share data)20222021
Net sales$1,596,816 $1,326,150 
Cost of sales1,271,486 1,060,616 
Gross profit325,330 265,534 
Selling, general and administrative76,959 76,768 
Research and development38,363 44,318 
Total operating expenses115,322 121,086 
Operating income210,008 144,448 
Interest expense14,148 12,673 
Other (income) expense, net(5,096)89 
Total other expense, net9,052 12,762 
Income before taxes200,956 131,686 
Income tax expense29,728 11,667 
Net income171,228 120,019 
Net income attributable to non-controlling interests(565)(210)
Net income attributable to Amkor$170,663 $119,809 
Net income attributable to Amkor per common share:
Basic$0.70 $0.49 
Diluted$0.69 $0.49 
Shares used in computing per common share amounts:
Basic244,403 243,267 
Diluted246,000 245,129 




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AMKOR TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands)March 31, 2022December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents$854,802 $826,744 
Restricted cash637 962 
Short-term investments307,016 251,530 
Accounts receivable, net of allowances1,201,007 1,258,767 
Inventories516,437 484,959 
Other current assets59,656 33,601 
Total current assets2,939,555 2,856,563 
Property, plant and equipment, net2,938,742 2,871,058 
Operating lease right of use assets 180,883 159,742 
Goodwill23,182 24,516 
Restricted cash3,692 3,815 
Other assets139,733 122,860 
Total assets$6,225,787 $6,038,554 
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt$156,692 $153,008 
Trade accounts payable753,279 828,727 
Capital expenditures payable267,598 210,875 
Short-term operating lease liability71,229 64,233 
Accrued expenses374,319 422,892 
Total current liabilities1,623,117 1,679,735 
Long-term debt1,087,408 984,988 
Pension and severance obligations116,138 120,472 
Long-term operating lease liabilities86,300 83,937 
Other non-current liabilities186,002 196,876 
Total liabilities3,098,965 3,066,008 
Stockholders’ equity:
Preferred stock— — 
Common stock291 290 
Additional paid-in capital1,982,113 1,977,134 
Retained earnings1,322,370 1,163,939 
Accumulated other comprehensive income (loss)10,496 19,978 
Treasury stock(219,147)(219,065)
Total Amkor stockholders’ equity3,096,123 2,942,276 
Non-controlling interests in subsidiaries30,699 30,270 
Total equity3,126,822 2,972,546 
Total liabilities and equity$6,225,787 $6,038,554 
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AMKOR TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31,
(In thousands)20222021
Cash flows from operating activities:
Net income$171,228 $120,019 
Depreciation and amortization148,192 135,390 
Other operating activities and non-cash items11,061 2,370 
Changes in assets and liabilities(164,303)(80,991)
Net cash provided by operating activities166,178 176,788 
Cash flows from investing activities:
Payments for property, plant and equipment(158,154)(110,351)
Proceeds from sale of property, plant and equipment416 547 
Payments for short-term investments(125,693)(92,879)
Proceeds from sale of short-term investments4,246 19,838 
Proceeds from maturities of short-term investments66,694 43,790 
Other investing activities(27,518)(25,317)
Net cash used in investing activities(240,009)(164,372)
Cash flows from financing activities:
Proceeds from short-term debt18,112 3,679 
Payments of short-term debt(3,790)(7,803)
Proceeds from issuance of long-term debt150,000 50,000 
Payments of long-term debt(35,973)(79,684)
Payments of finance lease obligations(7,538)(3,216)
Payments of dividends(12,228)(19,457)
Other financing activities653 7,037 
Net cash provided by (used in) financing activities109,236 (49,444)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash(7,795)(10,397)
Net increase (decrease) in cash, cash equivalents and restricted cash27,610 (47,425)
Cash, cash equivalents and restricted cash, beginning of period831,521 702,197 
Cash, cash equivalents and restricted cash, end of period$859,131 $654,772 
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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. 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;
our substantial indebtedness and restrictive covenants in the indentures and agreements governing our current and future indebtedness;
dependence on international factories and operations and risks relating to our customers’ and vendors’ international operations;
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;
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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 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;
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”). 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 attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement. 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.


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