Amkor Technology(US:AMKR)2025-04-29 19:45Financial Performance - Net sales decreased by $43.9 million, or 3.2%, to $1,321.6 million for the three months ended March 31, 2025, compared to $1,365.5 million for the same period in 2024, primarily due to lower sales in the communications end market [98]. - Gross margin for the three months ended March 31, 2025, decreased to 11.9% from 14.8% in the same period of 2024, impacted by lower net sales and factory utilization [99]. - Operating income margin decreased by 300 basis points to 2.4% for the three months ended March 31, 2025, from 5.4% for the same period in 2024, primarily due to decreased gross margin and increased research and development expenses [100]. - The communications end market sales decreased by 19% compared to 2024, primarily due to lower supported content in premium tier smartphones, while consumer and computing end markets grew by 23% and 21%, respectively [103]. - Free cash flow for the three months ended March 31, 2025, was $(49.981) million, a decrease from $74.165 million in the same period of 2024 [134]. - The company experienced a decrease in cash flow provided by operating activities for the three months ended March 31, 2025, totaling $24.149 million, down from $162.312 million in 2024 [130]. Capital Expenditures and Investments - Capital expenditures totaled $79.9 million for the three months ended March 31, 2025, compared to $96.2 million for the same period in 2024, focusing on advanced packaging and test equipment [101]. - Capital expenditures for the three months ended March 31, 2025, amounted to $79.9 million, with expectations for total capital expenditures in 2025 to be approximately $850 million [128][129]. - The company signed a Direct Funding Agreement in December 2024 for up to $407 million in government incentives under the CHIPS Act, contingent on achieving construction and production milestones [118]. - The company began delivering advanced packages from the Vietnam Facility in Q3 2024 and plans to build an advanced packaging and test facility in Arizona, supported by up to $407 million in funding from the U.S. Department of Commerce [91]. Research and Development - Research and development expenses increased by 19.6% to $38.2 million for the three months ended March 31, 2025, compared to $45.7 million for the same period in 2024, driven by new advanced packaging technology projects [108]. Liquidity and Cash Management - As of March 31, 2025, cash and cash equivalents and short-term investments totaled $1,057.6 million and $505.2 million, respectively [96]. - The company assesses liquidity based on expectations regarding sales, operating expenses, and capital spending, believing current cash flow will be sufficient for at least the next 12 months [112]. - As of March 31, 2025, the company had cash and cash equivalents and short-term investments totaling $1,562.7 million, with $1,350.7 million held offshore by foreign subsidiaries [115]. - The company declared total quarterly cash dividends of $20.4 million during the three months ended March 31, 2025, and anticipates continuing future dividends [127]. Debt and Borrowing - As of March 31, 2025, the company had total debt of $1,149.3 million, with $236.5 million due within 12 months [120]. - The company has a maximum borrowing capacity of $600.0 million under the 2022 Singapore Revolver, with $57.6 million available to be borrowed under term loan credit facilities as of March 31, 2025 [119]. - The total fixed rate debt amounts to $1,019,912,000 with a fair value of $1,008,176,000 [144]. - The average interest rate for fixed rate debt is 4.3% [144]. - The total variable rate debt is $134,000,000 with a fair value of $133,512,000 [144]. - The average interest rate for variable rate debt is 5.1% [144]. - Total debt maturities amount to $1,153,912,000 with a fair value of $1,141,688,000 [144]. - The largest portion of fixed rate debt is due in 2027, totaling $642,085,000 [144]. - The average interest rate for fixed rate debt due in 2027 is 5.8% [144]. - The company has no variable rate debt maturing in 2027 [144]. - The remaining fixed rate debt for 2025 is $124,320,000 [144]. - The company’s total debt includes maturities across various years, with significant amounts due in 2026 and 2028 [144]. Operating Expenses - Selling, general and administrative expenses decreased by 11.0% to $80.4 million for the three months ended March 31, 2025, compared to $90.3 million for the same period in 2024 [106].