Amkor Technology(AMKR) - 2024 Q2 - Quarterly Report

Financial Performance - Amkor's net sales for Q2 2024 were $1,461.5 million, consistent with Q2 2023, driven by growth in the communications market, while automotive and industrial sales declined [108][112]. - Gross margin increased to 14.5$91.3 million in Q2 2024 from $64.9 million in Q2 2023, largely due to startup costs at the Vietnam Facility and higher employee compensation [117]. - Research and development expenses decreased by 13.4$262.5 million, a decrease from $282.3 million in the same period of 2023, focusing on advanced packaging and test equipment [109]. - Capital expenditures for the six months ended June 30, 2024, amounted to$262.5 million, with expectations for 2024 capital expenditures to be approximately $750 million [139][140]. Cash Flow and Liquidity - Net cash provided by operating activities was$387.1 million for the first half of 2024, down from $422.6 million in the same period of 2023, mainly due to changes in working capital [109]. - Cash and cash equivalents, along with short-term investments, totaled$1,545.5 million as of June 30, 2024, with $1,354.0 million held offshore by foreign subsidiaries [128]. - Free cash flow for the six months ended June 30, 2024 was$134,781 thousand, down from $145,964 thousand in the prior year [146]. - The company anticipates continuing to pay quarterly cash dividends, having paid a total of$38.8 million in dividends during the six months ended June 30, 2024 [138]. Debt and Interest - The company had debt of $1,103.7 million as of June 30, 2024, with$154.4 million due within 12 months [132]. - The maximum borrowing capacity under the 2022 Singapore Revolver was $600.0 million as of June 30, 2024, with$615.0 million available for future borrowings under revolving credit facilities [131]. - Interest expense for the three months ended June 30, 2024, increased to $15,805 thousand, a rise of 10.1$14,354 thousand in the same period of 2023 [121]. - Interest income for the three months ended June 30, 2024, rose to $(17,698) thousand, reflecting a significant increase of 47.3$(12,019) thousand in the prior year [121]. - Total other income (expense), net, showed a dramatic decline to $(43) thousand for the three months ended June 30, 2024, down from$2,471 thousand in the same period of 2023, representing a change of over 100% [121]. Foreign Currency and Risk Management - Approximately 90% of net sales for the six months ended June 30, 2024 were denominated in U.S. dollars, with the remaining sales primarily in Japanese yen [152]. - A 10% appreciation of foreign currencies against the U.S. dollar would have resulted in a $12 million decrease in income before taxes for the six months ended June 30, 2024 [151]. - The company has foreign currency forward contracts to mitigate foreign currency risk, resulting in a loss of$11.4 million for the six months ended June 30, 2024 [154]. - The company started hedging certain net investment positions in foreign subsidiaries beginning in April 2024 [154]. Interest Rate and Debt Structure - The average interest rate for fixed-rate debt is 4.4%, while the average interest rate for variable-rate debt is 6.1% [157]. - Total fixed rate debt amounts to $616,273 thousand with an average interest rate of 5.9$138,579 thousand with an average interest rate of 6.1% [157]. - Total debt maturities amount to $1,108,545 thousand, with$57,349 thousand due in 2024 [157]. - The company’s total debt structure reflects a significant reliance on fixed rate debt [157].