Amkor Technology, Inc. Net Income dropped on 51.8% while Revenue increased on 2.6%
02/11/2019 • About Amkor Technology, Inc. (
$AMKR) • By InTwits
Amkor Technology, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Amkor Technology, Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.5%. At the same time it's a lot of higher than industry average of 8.7%.
- CAPEX is quite volatile: $34m in FY2018, $68m in FY2017, $41m in FY2016, $51m in FY2015, $11m in FY2014
- The company has business model with low profitability: ROIC is 8.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.8x while industry average is -1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 2.6%. Revenue growth showed slowdown in 18Q4 - it was -6.0% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.3 pp from 18.8% to 8.5% in FY2018.
Gross Margin decreased slightly on 1.6 pp from 18.1% to 16.5% in 2018. SG&A as a % of Revenue showed almost no change in 2018. SG&A as a % of Revenue declined at -0.36 pp per annum in 2014-2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018.
Net Income margin decreased on 3.3 pp from 6.3% to 2.9% in 2018. The efficient tax rate was 30.7% in 2018 while the average for the last five years was 21.8%.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 12.7%. The company's CAPEX/Revenue decreased on 6.0 pp from 18.6% in 2015 to 12.7% in 2018. Average CAPEX/Revenue for the last three years was 14.1%. Amkor Technology, Inc. invested a large share of EBITDA (65.9%) to CAPEX. CAPEX as a % of Revenue stuck to a declining trend at -2.4 pp per annum in 2014-2018.
Accounts receivable as a % of Revenue decreased on 2.2 pp from 19.0% to 16.8% in 2018. Inventories as a % of Revenue showed almost no change at 5.3% in 2018. Accounts payable as a % of Revenue decreased slightly on 1.8 pp from 16.5% to 14.7% in 2018.
Return on investment
The company operates at low ROIC (8.1%) and ROE (7.2%). ROIC decreased on 5.3 pp from 13.5% to 8.1% in 2018. ROE decreased on 9.9 pp from 17.1% to 7.2% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.8x and Debt / EBITDA is 1.6x. Net Debt / EBITDA increased slightly on 0.0061x from 0.8x to 0.8x in 2018. Debt decreased on 2.4% while cash jumped on 14.3%. Net Debt/EBITDA stuck to a declining trend at -0.2x per annum in 2014-2018.
Amkor Technology, Inc. has no short term refinancing risk: cash is higher than short term debt (594.8%).
Valuation and dividends
Amkor Technology, Inc.'s trades at EV/EBITDA 3.2x and P/E 15.9x.
Management team
Stephen Douglas Kelley "Steve" is a Amkor Technology, Inc.'s CEO. Stephen Douglas Kelley "Steve" is a founder and has spent 6 years with the company. CEO total compensation was
$3,919,422 in 2018 which included
$858,656 salary and
$2,125,000 annual bonus. The company's CFO is Megan Faust. Megan Faust has 2 years tenure at the company.
At the end of financial year the company had 63.0% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 30,850 employees. The number of employees increased on 5.3%. Average revenue per employee in 2018 was
$139,918 and it decreased on 2.6%.
Financial and operational results
FY ended 12/31/2018
Amkor Technology, Inc. ($AMKR) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 3,129 | 2,885 | 3,928 | 4,207 | 4,316 | 2.6% |
| Gross Profit | 553 | 479 | 710 | 761 | 711 | -6.6% |
| SG&A | 254 | 232 | 284 | 297 | 295 | -0.6% |
| EBITDA | 688 | 659 | 864 | 987 | 830 | -15.9% |
| EBIT | 221 | 165 | 309 | 406 | 258 | -36.3% |
| Tax | 34 | 28 | 51 | 40 | 56 | 41.4% |
| Net Income | 130 | 51 | 176 | 264 | 127 | -51.8% |
| Stock Based Compensation | 4 | 4 | 3 | 5 | 5 | -2.5% |
Balance Sheet
|
|---|
| Cash | 450 | 523 | 550 | 596 | 682 | 14.3% |
| Accounts Receivable | 470 | 526 | 563 | 798 | 724 | -9.2% |
| Inventory | 223 | 238 | 268 | 214 | 231 | 7.9% |
| Accounts Payable | 309 | 434 | 487 | 569 | 530 | -6.8% |
| Short Term Debt | 5 | 77 | 35 | 124 | 115 | -7.5% |
| Long Term Debt | 1,526 | 1,510 | 1,440 | 1,241 | 1,218 | -1.8% |
Cash flow
|
|---|
| Capex | 681 | 538 | 650 | 551 | 547 | -0.7% |
| Acquisitions | | -23 | | 44 | | |
Ratios
|
|---|
| Revenue growth | 5.9% | -7.8% | 36.2% | 7.1% | 2.6% | |
| EBITDA growth | 6.7% | -4.3% | 31.1% | 14.3% | -15.9% | |
|
|---|
| Gross Margin | 17.7% | 16.6% | 18.1% | 18.1% | 16.5% | -1.6% |
| EBITDA Margin | 22.0% | 22.8% | 22.0% | 23.5% | 19.2% | -4.2% |
| EBIT Margin | 7.1% | 5.7% | 7.9% | 9.6% | 6.0% | -3.7% |
| SG&A, % of revenue | 8.1% | 8.1% | 7.2% | 7.1% | 6.8% | -0.2% |
| SBC, % of revenue | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% | -0.0% |
| Net Income Margin | 4.2% | 1.8% | 4.5% | 6.3% | 2.9% | -3.3% |
| CAPEX, % of revenue | 21.8% | 18.6% | 16.5% | 13.1% | 12.7% | -0.4% |
|
|---|
| ROIC | 8.4% | 6.0% | 10.8% | 13.5% | 8.1% | -5.3% |
| ROE | 12.6% | 4.4% | 13.6% | 17.1% | 7.2% | -9.9% |
| Net Debt/EBITDA | 1.6x | 1.6x | 1.1x | 0.8x | 0.8x | 0.0x |
People
|
|---|
| Insider ownership | 63.0% | 63.0% | 63.0% | 63.0% | 63.0% | 0.0% |
| Employees | 21,900 | 22,200 | 27,900 | 29,300 | 30,850 | 5.3% |
| Revenue/Employee, th. $ | 143 | 130 | 141 | 144 | 140 | -2.6% |
Amkor Technology, Inc. ($AMKR) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,025 | 1,066 | 1,144 | 1,081 | | 14.0% | 5.7% | -0.4% | -6.0% |
| EBITDA | 179 | 197 | 236 | 218 | | 11.5% | -38.0% | -7.0% | -14.5% |
| Net Income | 10 | 33 | 57 | 28 | | | -72.6% | -4.4% | -71.7% |
Balance Sheet
|
|---|
| Cash | 495 | 380 | 548 | 682 | | -19.3% | -42.2% | 5.4% | 14.3% |
| Short Term Debt | 105 | 115 | 98 | 115 | | 185.6% | -65.2% | -17.2% | -7.5% |
| Long Term Debt | 1,240 | 1,215 | 1,268 | 1,218 | | -16.5% | -1.9% | 2.0% | -1.8% |
Ratios
|
|---|
| Gross Margin | 15.4% | 15.9% | 17.5% | 16.9% | | 0.2% | -1.6% | -1.9% | -2.6% |
| EBITDA Margin | 17.4% | 18.5% | 20.7% | 20.2% | | -0.4% | -13.0% | -1.5% | -2.0% |
| Net Income Margin | 0.9% | 3.1% | 5.0% | 2.6% | | 2.6% | -8.7% | -0.2% | -6.1% |
Peers in Semiconductor Equipment
Below we provide Amkor Technology, Inc. benchmarking against other companies in Semiconductor Equipment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -0.5% | 6.5% | 24.7% | 15.5% |
|---|
| Amkor Technology, Inc. ($AMKR) | | -7.8% | 36.2% | 7.1% | 2.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.6% | 38.9% | 40.0% | 44.0% | 41.2% |
|---|
| Amkor Technology, Inc. ($AMKR) | 17.7% | 16.6% | 18.1% | 18.1% | 16.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 6.8% | 9.8% | 11.4% | 16.0% | 16.2% |
|---|
| Amkor Technology, Inc. ($AMKR) | 22.0% | 22.8% | 22.0% | 23.5% | 19.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.2% | 2.7% | 2.2% | 2.8% | 2.9% |
|---|
| Amkor Technology, Inc. ($AMKR) | 21.8% | 18.6% | 16.5% | 13.1% | 12.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.4% | 5.2% | 6.9% | 12.2% | 12.1% |
|---|
| Amkor Technology, Inc. ($AMKR) | 8.4% | 6.0% | 10.8% | 13.5% | 8.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| |
|---|
| Median (31 companies) | -1.2x | -1.3x | -1.3x | -0.7x | -1.0x |
|---|
| Amkor Technology, Inc. ($AMKR) | 1.6x | 1.6x | 1.1x | 0.8x | 0.8x |
