Amkor technology reports financial results for the second quarter 2022
Tempe, ariz.--(business wire)--amkor technology, inc. (nasdaq: amkr), a leading provider of semiconductor packaging and test services, today announced financial results for the second quarter ended june 30, 2022. second quarter 2022 highlights net sales $1.5 billion net income $125 million, earnings per diluted share $0.51 ebitda $302 million “amkor delivered record second quarter revenue of $1.5 billion. demand for advanced packaging solutions remained strong and drove our automotive & industrial end market to 16% year-on-year growth and a new record,” said giel rutten, amkor’s president and chief executive officer. “we have returned to normal output levels in shanghai after a government mandated covid-19 lockdown, and our global factory network is prepared to support the growth expected in the second half of the year.” quarterly financial results ($ in millions, except per share data) q2 2022 q1 2022 q2 2021 net sales $1,505 $1,597 $1,407 gross margin 16.6% 20.4% 19.4% operating income $143 $210 $155 operating income margin 9.5% 13.2% 11.0% net income attributable to amkor $125 $171 $126 earnings per diluted share $0.51 $0.69 $0.51 ebitda (1) $302 $363 $295 (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 june 30, 2022, total cash and short-term investments was $1.1 billion, and total debt was $1.1 billion. the company paid a quarterly dividend of $0.05 per share on june 27, 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 third quarter 2022 (unless otherwise noted): net sales of $1.88 billion to $1.98 billion, a sequential increase of 25% to 32% and a year-on-year increase of 12% to 18% gross margin of 19.0% to 21.0% net income of $200 million to $250 million, or $0.82 to $1.02 per diluted share full year 2022 capital expenditures of approximately $950 million conference call information amkor will conduct a conference call on monday, august 1, 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 q2 2022 q1 2022 q2 2021 net sales data: net sales (in millions): advanced products (1) $ 1,084 $ 1,157 $ 980 mainstream products (2) 421 440 427 total net sales $ 1,505 $ 1,597 $ 1,407 packaging services 87 % 86 % 85 % test services 13 % 14 % 15 % net sales from top ten customers 65 % 64 % 61 % end market data: communications (smart phones, tablets) 37 % 41 % 40 % automotive, industrial and other (adas, electrification, infotainment, safety) 23 % 21 % 22 % consumer (ar & gaming, connected home, home electronics, wearables) 22 % 19 % 22 % computing (data center, infrastructure, pc/laptop, storage) 18 % 19 % 16 % total 100 % 100 % 100 % gross margin data: net sales 100.0 % 100.0 % 100.0 % cost of sales: materials 49.2 % 46.7 % 44.7 % labor 11.8 % 11.5 % 13.1 % other manufacturing 22.4 % 21.4 % 22.8 % gross margin 16.6 % 20.4 % 19.4 % (1) advanced products include flip chip, memory and wafer-level processing and related test services. (2) 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) q2 2022 q1 2022 q2 2021 ebitda data: net income $ 125 $ 171 $ 126 plus: interest expense 15 14 13 plus: income tax expense 11 30 16 plus: depreciation & amortization 151 148 140 ebitda $ 302 $ 363 $ 295 amkor technology, inc. consolidated statements of income (in thousands, except per share data) (unaudited) for the three months ended june 30, for the six months ended june 30, 2022 2021 2022 2021 net sales $ 1,504,868 $ 1,406,535 $ 3,101,684 $ 2,732,685 cost of sales 1,255,713 1,133,715 2,527,199 2,194,331 gross profit 249,155 272,820 574,485 538,354 selling, general and administrative 68,868 74,189 145,827 150,957 research and development 37,478 43,516 75,841 87,834 total operating expenses 106,346 117,705 221,668 238,791 operating income 142,809 155,115 352,817 299,563 interest expense 14,593 12,764 28,741 25,437 other (income) expense, net (8,041 ) (96 ) (13,137 ) (7 ) total other expense, net 6,552 12,668 15,604 25,430 income before taxes 136,257 142,447 337,213 274,133 income tax expense 10,788 15,989 40,516 27,656 net income 125,469 126,458 296,697 246,477 net income attributable to non-controlling interests (691 ) (652 ) (1,256 ) (862 ) net income attributable to amkor $ 124,778 $ 125,806 $ 295,441 $ 245,615 net income attributable to amkor per common share: basic $ 0.51 $ 0.52 $ 1.21 $ 1.01 diluted $ 0.51 $ 0.51 $ 1.20 $ 1.00 shares used in computing per common share amounts: basic 244,592 243,863 244,498 243,566 diluted 245,855 245,551 245,938 245,372 amkor technology, inc. consolidated balance sheets (in thousands) (unaudited) june 30, 2022 december 31, 2021 assets current assets: cash and cash equivalents $ 733,922 $ 826,744 restricted cash — 962 short-term investments 375,137 251,530 accounts receivable, net of allowances 1,169,028 1,258,767 inventories 636,969 484,959 other current assets 48,831 33,601 total current assets 2,963,887 2,856,563 property, plant and equipment, net 3,059,978 2,871,058 operating lease right of use assets 168,618 159,742 goodwill 20,787 24,516 restricted cash 3,451 3,815 other assets 173,941 122,860 total assets $ 6,390,662 $ 6,038,554 liabilities and equity current liabilities: short-term borrowings and current portion of long-term debt $ 127,998 $ 153,008 trade accounts payable 859,455 828,727 capital expenditures payable 344,301 210,875 short-term operating lease liability 68,099 64,233 accrued expenses 385,109 422,892 total current liabilities 1,784,962 1,679,735 long-term debt 981,220 984,988 pension and severance obligations 109,924 120,472 long-term operating lease liabilities 75,461 83,937 other non-current liabilities 211,545 196,876 total liabilities 3,163,112 3,066,008 stockholders’ equity: preferred stock — — common stock 291 290 additional paid-in capital 1,985,992 1,977,134 retained earnings 1,434,906 1,163,939 accumulated other comprehensive income (loss) (5,747 ) 19,978 treasury stock (219,147 ) (219,065 ) total amkor stockholders’ equity 3,196,295 2,942,276 non-controlling interests in subsidiaries 31,255 30,270 total equity 3,227,550 2,972,546 total liabilities and equity $ 6,390,662 $ 6,038,554 amkor technology, inc. condensed consolidated statements of cash flows (in thousands) (unaudited) for the six months ended june 30, 2022 2021 cash flows from operating activities: net income $ 296,697 $ 246,477 depreciation and amortization 299,341 274,991 other operating activities and non-cash items (10,041 ) 305 changes in assets and liabilities (123,728 ) (65,442 ) net cash provided by operating activities 462,269 456,331 cash flows from investing activities: payments for property, plant and equipment (340,208 ) (273,617 ) proceeds from sale of property, plant and equipment 773 2,249 payments for short-term investments (298,351 ) (173,307 ) proceeds from sale of short-term investments 14,120 45,396 proceeds from maturities of short-term investments 155,910 103,116 other investing activities (58,916 ) (25,332 ) net cash used in investing activities (526,672 ) (321,495 ) cash flows from financing activities: proceeds from short-term debt 18,112 3,679 payments of short-term debt (12,048 ) (10,431 ) proceeds from issuance of long-term debt 190,000 120,992 payments of long-term debt (155,284 ) (184,212 ) payments of finance lease obligations (15,943 ) (6,633 ) payments of dividends (24,473 ) (29,221 ) other financing activities (5,089 ) 8,287 net cash used in financing activities (4,725 ) (97,539 ) effect of exchange rate fluctuations on cash, cash equivalents and restricted cash (25,020 ) (10,274 ) net increase (decrease) in cash, cash equivalents and restricted cash (94,148 ) 27,023 cash, cash equivalents and restricted cash, beginning of period 831,521 702,197 cash, cash equivalents and restricted cash, end of period $ 737,373 $ 729,220 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; 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 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”). 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.
