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, 2023.

First Quarter 2023 Highlights

Net sales $1.5 billion
Gross profit $194 million, operating income $69 million
Net income $45 million, earnings per diluted share $0.18
EBITDA $229 million

"Amkor delivered revenue and profitability above the midpoint of guidance. Revenue in the Automotive and Industrial end market grew 14% year-on-year, and revenue in the Communications end market grew 2% year-on-year, reflecting our strong leadership in Advanced packaging," said Giel Rutten, Amkor's president and chief executive officer. "We are confident that the secular growth drivers for the industry remain in place and will drive growth beyond the current cycle. With our leading technology portfolio and diversified manufacturing and end market footprint, Amkor is well positioned to outperform the semiconductor market."

Quarterly Financial Results

($ in millions, except per share data)	Q1 2023	Q4 2022	Q1 2022
Net sales	$1,472	$1,906	$1,597
Gross margin	13.2%	17.5%	20.4%
Operating income	$69	$225	$210
Operating income margin	4.7%	11.8%	13.2%
Net income attributable to Amkor	$45	$164	$171
Earnings per diluted share	$0.18	$0.67	$0.69
EBITDA (1)	$229	$382	$363

(1)

EBITDA is a non-GAAP measure. The reconciliation to the comparable GAAP measure is included below under "Selected Operating Data."

At March 31, 2023, total cash and short-term investments was $1.3 billion, and total debt was $1.2 billion.

The company paid a quarterly dividend of $0.075 per share on March 20, 2023. 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 second quarter 2023 (unless otherwise noted):

Net sales of $1.425 billion to $1.525 billion
Gross margin of 12.0% to 14.0%
Net income of $30 million to $70 million, or $0.12 to $0.28 per diluted share
Full year 2023 capital expenditures of approximately $800 million

Conference Call Information

Amkor will conduct a conference call on Monday, May 1, 2023, 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

	Q1 2023			Q4 2022			Q1 2022
Net Sales Data:
Net sales (in millions):
Advanced products (1)	$	1,068		$	1,488		$	1,157
Mainstream products (2)		404			418			440
Total net sales	$	1,472		$	1,906		$	1,597

Packaging services		88	%		88	%		86	%
Test services		12	%		12	%		14	%

Net sales from top ten customers		66	%		67	%		64	%

End Market Distribution Data:
Communications (smartphones, tablets)		45	%		50	%		41	%
Automotive, industrial and other (ADAS, electrification, infotainment, safety)		26	%		20	%		21	%
Consumer (AR & gaming, connected home, home electronics, wearables)		12	%		17	%		19	%
Computing (data center, infrastructure, PC/laptop, storage)		17	%		13	%		19	%
Total		100	%		100	%		100	%

Gross Margin Data:
Net sales		100.0	%		100.0	%		100.0	%
Cost of sales:
Materials		52.9	%		55.1	%		46.7	%
Labor		11.3	%		9.0	%		11.5	%
Other manufacturing		22.6	%		18.4	%		21.4	%
Gross margin		13.2	%		17.5	%		20.4	%

(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)	Q1 2023		Q4 2022		Q1 2022
EBITDA Data:
Net income	$	45	$	164	$	171
Plus: Interest expense		16		15		14
Plus: Income tax expense		11		46		30
Plus: Depreciation & amortization		157		157		148
EBITDA	$	229	$	382	$	363

AMKOR TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)

	For the Three Months Ended March 31,
		2023			2022
Net sales	$	1,471,539		$	1,596,816
Cost of sales		1,277,118			1,271,486
Gross profit		194,421			325,330
Selling, general and administrative		78,671			76,959
Research and development		47,047			38,363
Total operating expenses		125,718			115,322
Operating income		68,703			210,008
Interest expense		16,167			14,148
Other (income) expense, net		(3,552	)		(5,096	)
Total other expense, net		12,615			9,052
Income before taxes		56,088			200,956
Income tax expense		10,864			29,728
Net income		45,224			171,228
Net loss (income) attributable to non-controlling interests		127			(565	)
Net income attributable to Amkor	$	45,351		$	170,663

Net income attributable to Amkor per common share:
Basic	$	0.18		$	0.70
Diluted	$	0.18		$	0.69

Shares used in computing per common share amounts:
Basic		245,330			244,403
Diluted		247,087			246,000

AMKOR TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

	March 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	909,802		$	959,072
Short-term investments		341,822			281,964
Accounts receivable, net of allowances		1,165,240			1,365,504
Inventories		568,565			629,576
Other current assets		48,174			65,123
Total current assets		3,033,603			3,301,239
Property, plant and equipment, net		3,185,278			3,135,614
Operating lease right of use assets		152,650			171,163
Goodwill		21,235			21,517
Restricted cash		3,497			3,334
Other assets		185,528			188,890
Total assets	$	6,581,791		$	6,821,757
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	137,469		$	143,813
Trade accounts payable		666,615			899,164
Capital expenditures payable		228,056			146,602
Short-term operating lease liability		64,235			70,991
Accrued expenses		361,174			401,841
Total current liabilities		1,457,549			1,662,411
Long-term debt		1,059,997			1,088,521
Pension and severance obligations		91,359			93,540
Long-term operating lease liabilities		63,278			75,745
Other non-current liabilities		182,445			201,839
Total liabilities		2,854,628			3,122,056

Stockholders' equity:
Preferred stock		—			—
Common stock		292			291
Additional paid-in capital		2,001,575			1,996,344
Retained earnings		1,901,569			1,874,644
Accumulated other comprehensive income (loss)		15,090			16,699
Treasury stock		(222,049	)		(219,226	)
Total Amkor stockholders' equity		3,696,477			3,668,752
Non-controlling interests in subsidiaries		30,686			30,949
Total equity		3,727,163			3,699,701
Total liabilities and equity	$	6,581,791		$	6,821,757

AMKOR TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

	For the Three Months Ended March 31,
		2023			2022
Cash flows from operating activities:
Net income	$	45,224		$	171,228
Depreciation and amortization		156,762			148,192
Other operating activities and non-cash items		(2,821	)		11,061
Changes in assets and liabilities		(23,419	)		(164,303	)
Net cash provided by operating activities		175,746			166,178
Cash flows from investing activities:
Payments for property, plant and equipment		(98,224	)		(158,154	)
Proceeds from sale of property, plant and equipment		652			416
Payments for short-term investments		(172,409	)		(125,693	)
Proceeds from sale of short-term investments		21,549			4,246
Proceeds from maturities of short-term investments		92,655			66,694
Other investing activities		73			(27,518	)
Net cash used in investing activities		(155,704	)		(240,009	)
Cash flows from financing activities:
Proceeds from revolving credit facilities		370,000			—
Payments of revolving credit facilities		(370,000	)		—
Proceeds from short-term debt		11,042			18,112
Payments of short-term debt		(5,840	)		(3,790	)
Proceeds from issuance of long-term debt		—			150,000
Payments of long-term debt		(35,980	)		(35,973	)
Payments of finance lease obligations		(15,148	)		(7,538	)
Payments of dividends		(18,430	)		(12,228	)
Other financing activities		(1,850	)		653
Net cash (used in) provided by financing activities		(66,206	)		109,236
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash		(2,943	)		(7,795	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(49,107	)		27,610
Cash, cash equivalents and restricted cash, beginning of period		962,406			831,521
Cash, cash equivalents and restricted cash, end of period	$	913,299		$	859,131

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;
health conditions or pandemics, such as the COVID-19 pandemic, impacting labor availability and operating capacity, capital availability, the supply chain and consumer demand for our customers' products and services;
changes in costs, quality, availability and delivery times of raw materials, components and equipment;
dependence on key customers or concentration of customers in certain end markets, such as mobile communications and automotive;
fluctuations in operating results and cash flows;
our substantial 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;
competition with established competitors in the packaging and test business, the internal capabilities of integrated device manufacturers and new competitors, including foundries;
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;
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;
environmental, health and safety liabilities and expenditures;
restrictive covenants in the indentures and agreements governing our current and future indebtedness;
natural disasters and other calamities, political instability, hostilities or other disruptions;
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 December 31, 2022 (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.

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Amkor Technology Reports Financial Results for the First Quarter 2023