Amkor Technology(US:AMKR)2024-10-29 19:43Financial Performance - Net sales increased by $39.8 million, or 2.2%, to $1,861.6 million for the three months ended September 30, 2024, driven by growth in consumer and computing end markets, which rose by 30% and 23%, respectively [97][104]. - Gross margin decreased to 14.6% for the three months ended September 30, 2024, down from 15.5% in the same period of 2023, primarily due to higher material content and overhead costs [98][107]. - Operating income margin decreased by 110 basis points to 8.0% for the three months ended September 30, 2024, attributed to decreased gross margin and increased employee compensation costs [99]. - The automotive and industrial end market saw a 17% decline in net sales for the nine months ended September 30, 2024, primarily due to elevated customer inventories and weaker demand [105]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $551.3 million for the nine months ended September 30, 2024, down from $696.2 million in the same period of 2023, mainly due to changes in working capital [101]. - Capital expenditures totaled $458.1 million for the nine months ended September 30, 2024, a decrease from $511.7 million in the same period of 2023, focusing on advanced packaging and test equipment [100]. - Free cash flow for the nine months ended September 30, 2024, was $105,832, down from $190,701 in the prior year [145]. - Capital expenditures for the nine months ended September 30, 2024, amounted to $458.1 million, with expectations of approximately $750 million for the full year 2024 [138][139]. Debt and Interest - Total debt as of September 30, 2024, was $1,101.6 million, with $207.6 million due within 12 months [128]. - Interest expense increased by 20.2% to $15,622 thousand for the three months ended September 30, 2024, compared to $13,001 thousand for the same period in 2023 [113]. - Interest income rose by 30.7% to $(15,862) thousand for the three months ended September 30, 2024, compared to $(12,137) thousand for the same period in 2023 [114]. - Fixed rate debt totaled $29,834, with an average interest rate of 1.4% [156]. - Variable rate debt amounted to $2,000, with an average interest rate of 5.8% [156]. - Total debt maturities were $31,834 for the nine months ended September 30, 2024 [156]. Foreign Exchange and Investments - Approximately 90% of net sales for the nine months ended September 30, 2024, were denominated in U.S. dollars, with the remaining primarily in Japanese yen [150]. - A 10% appreciation of foreign currencies against the U.S. dollar would have resulted in an estimated $18 million decrease in income before taxes for the nine months ended September 30, 2024 [149]. - The company experienced a loss of $6.0 million due to foreign exchange rate translation for the nine months ended September 30, 2024 [153]. - The company has implemented foreign currency forward contracts to hedge certain net investment positions in foreign subsidiaries starting April 2024 [153]. Research and Development - Research and development expenses decreased by 11.6% to $120.1 million for the nine months ended September 30, 2024, compared to $135.9 million in 2023, due to a shift in asset utilization and projects moving into production [111]. Other Financial Metrics - Income tax expense decreased by 33.7% to $19,185 thousand for the three months ended September 30, 2024, compared to $28,923 thousand for the same period in 2023 [116]. - Cash and cash equivalents, along with short-term investments, totaled $1,471.5 million as of September 30, 2024, with $1,305.5 million held offshore [122]. - The company paid total quarterly cash dividends of $58.2 million during the nine months ended September 30, 2024 [137]. - The maximum borrowing capacity under the 2022 Singapore Revolver was $600.0 million as of September 30, 2024 [127]. - Off-balance sheet purchase obligations for capital expenditures were $368.3 million as of September 30, 2024, with $323.9 million payable within 12 months [135]. Operational Developments - The company began delivering advanced packages from its Vietnam Facility in Q3 2024 and is planning to build an advanced packaging and test facility in Arizona [90]. - The semiconductor industry is currently experiencing a cyclical correction, with historical trends indicating a strong correlation between GDP levels and semiconductor cycles [93]. Internal Controls - There were no changes in internal control over financial reporting that materially affected the company's controls during the quarter ended September 30, 2024 [159].