Amkor Technology(US:AMKR)2025-02-21 21:00Financial Performance - Net sales decreased by $185.4 million or 2.9% to $6,317.7 million in 2024 from $6,503.1 million in 2023, primarily due to lower sales in automotive and industrial markets [239]. - Gross profit for 2024 was $933.2 million, down from $943.2 million in 2023, reflecting a gross margin of approximately 14.8% [326]. - Operating income decreased to $438.5 million in 2024 from $470.3 million in 2023, indicating a decline of 6.8% [326]. - Net income attributable to Amkor for 2024 was $354.0 million, compared to $359.8 million in 2023, representing a decrease of 1.1% [326]. - Comprehensive income attributable to Amkor for 2024 was $345.2 million, down from $359.5 million in 2023 [329]. - Income before taxes for 2024 was $431,016 thousand, a decrease of 2.0% from $443,841 thousand in 2023 [411]. - Net income for the year ended December 31, 2024, was $355,535, a decrease of 1.6% compared to $362,131 in 2023 [336]. Expenses and Margins - Gross margin increased to 14.8% in 2024 compared to 14.5% in 2023, attributed to the extension of the estimated useful life of test equipment and favorable foreign currency exchange movements [240]. - Operating income margin decreased to 6.9% in 2024 from 7.2% in 2023, primarily due to increased employee compensation costs and start-up costs at the Vietnam Facility [241]. - Research and development expenses decreased by 8.2% to $162.9 million in 2024 compared to 2023, due to the utilization mix of assets shared with manufacturing [250]. - Total operating expenses increased to $494.8 million in 2024 from $472.9 million in 2023, reflecting a rise of 4.6% [326]. Cash Flow and Investments - Net cash provided by operating activities was $1,088.9 million for 2024, down from $1,270.0 million in 2023, primarily due to changes in working capital and lower operating profits [242]. - Free cash flow for 2024 was $359,275 thousand, a decrease from $533,585 thousand in 2023 [282]. - Payments for property, plant, and equipment were $743,796 in 2024, slightly down from $749,467 in 2023 [336]. - The company reported a net cash used in investing activities of $800,324 in 2024, compared to $951,910 in 2023, indicating a decrease of 15.9% [336]. Debt and Capital Expenditures - Capital expenditures totaled $743.8 million in 2024, representing 11.8% of net sales, focused on investments in advanced packaging and test equipment [242]. - As of December 31, 2024, total debt was $1,159.5 million, with $236.0 million due within 12 months [267]. - The company expects 2025 capital expenditures to be approximately $850 million, with 5% to 10% allocated for the Arizona Facility construction [277]. Taxation - Income tax expense for 2024 was $75,481 thousand, a decrease of $6,229 thousand (7.6%) from 2023, which was $81,710 thousand [254]. - The effective tax rate for 2024 was 17.5%, down from 18.4% in 2023, primarily due to lower tax rates in foreign jurisdictions [255]. - The total income tax expense for 2024 was $75,481 thousand, down from $81,710 thousand in 2023, reflecting a decrease of 7.5% [411]. Foreign Currency and Interest - Interest expense increased by 10.1% to $64.9 million in 2024 compared to 2023, primarily due to a decrease in capitalized interest for the Vietnam Facility [252]. - The company performed a sensitivity analysis indicating that a 10% appreciation of foreign currencies against the U.S. dollar could result in an operating income decrease of approximately $148 million for the year ended December 31, 2024 [301]. - The foreign exchange rate translation resulted in a loss of $8.8 million for the year ended December 31, 2024, recognized as an adjustment to equity through other comprehensive income [303]. Assets and Liabilities - Total assets increased to $6,944,328, up from $6,771,125, representing a growth of 2.55% year-over-year [332]. - Total current assets decreased to $3,073,472, down from $3,195,810, a decline of 3.82% [332]. - Total liabilities decreased slightly to $2,761,163 from $2,776,090, a decrease of 0.54% [332]. - Total stockholders' equity increased to $4,149,545, compared to $3,962,308, reflecting a growth of 4.73% [332]. Inventory and Receivables - The company reported a decrease in inventories to $310,910 from $393,128, a decline of 20.94% [332]. - The company sold accounts receivable totaling $158.6 million in 2024, down from $253.9 million in 2023 [263]. - As of December 31, 2024, total unbilled receivables amounted to $210.1 million, down from $260.8 million in 2023 [382]. Shareholder Returns - Total cash dividends paid in 2024 were $178.6 million, with future payments subject to Board discretion [275]. - Cash dividends declared increased to $0.72440 per common share, up from $0.30375, representing a growth of 138.36% [334]. Research and Development - The company has focused on developing innovative packaging and test technologies in high-growth markets, including artificial intelligence [341]. - Research and development expenses are expensed as incurred, focusing on new package designs and improving production efficiency [385]. Regulatory and Compliance - The company signed a Direct Funding Agreement for up to $407 million in government incentives under the CHIPS Act, contingent on meeting future milestones [265]. - The company recognizes that changes in tax laws or regulations could result in increased tax expenses and effective tax rates in the future [291].