AMKR - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Amkor Technology Second Quarter 2018 Earnings Conference Call. My name is Haley, and I will be your conference facilitator today. At this time all participants are in a listen-only mode. After the speakers' remarks we will conduct a question-and-answer session.

As a reminder, this conference is being recorded. to Investor call Relations. like Chaney, to now President, Vice would turn over the Chris I Mr. Chaney, go please ahead.

Chris Chaney

XXXX Thank you, us Quarter joining thank you Conference Haley. Good afternoon, for everyone, Amkor's and for Earnings Call. Second

Faust, Steve are Chief and Officer. today me our Kelley, Financial Joining Chief Executive our Officer; Megan

is Our earnings and filed our website. SEC this with press on the release afternoon was available

U.S. During find the can this and GAAP on measures, equivalent you call, we financial will our website. to use the non-GAAP reconciliation

Amkor's statements forward-looking based about make future also for we it. performance the expectations see will as environment We on our currently

results results to actual data uncertainties cause actual And and are Steve. financial filings these to and and course, for discussed would could press today will SEC could that results Of to included XX-Q. be Form expectations. the final Please now, to different. refer our other factors, I turn exceptions in like preliminary our that differ Please information materially over risk be note on release from call the

Stephen Kelley

afternoon, discuss advanced Good and MEMS I'll our for areas, joining expectations. of I'll well Today, as and quarter third quarter call. also our two the second and market some review sensors. additional results conditions faster-growing provide color thanks as SiP, current and for

end a were sequential note revenues First, markets. all growth. We second up XX% half quarter of X% year-on-year year-on-year consecutive revenue a and I'd XXXX, record like quarter that our our very XXth sequentially to year-on-year. growth with second for the revenue had we strong experienced was This quarter, of first Amkor growth. and X% across In

an XXX partnered technology came much ecosystem our benefited electrical much system-in-package, customers to this up area, through communications, SiP, volume smartphones, including advanced products uncommon vehicles. important and from customers. engineering elements, SiP package. due found products most and data drive in which are not sequentially material year-on-year. the capital a of from value in the technologies, single high-performance functions, high a Our From each SiPs very extremely capability. a processing, strong signal than module. possible sensing. perform high-end incremental wafer-level assembly systems, into ICs today's of demand high where packaging. performance growth in communications advanced combine for We of of small SiPs Amkor was smart utilizing storage, SiP of multiple business Advanced squeeze technology these is all, handling array XX% from and into we strongest is as XX% was with a Advanced advanced to space. more our Production Smartphones, Amkor and, or advanced revenue today. quality functionality SiP on iOS Within space-constrained, perspective, this as advanced to precision a the very It's than also achieves market less yield combination yield ultimate watches focus including intensive

last million The technology products applications. for other Amkor. space-constrained $XXX SiP used over generated In year, in big advanced in revenue

and applications. automotive business, production our in and year-on-year. XXXX, on Korea, line XX% our business and this half the focuses added grew is area recently fast-growing sensors complementing third the In primarily in Another mobile MEMS sensor and a first lines MEMS which of Philippines We China.

of market sensor Portugal been our to Within in able the in and fingerprint share smartphone to to a by roughly XX% XX grow a line We've the next we plan months, fifth fourth volume. add Japan.

variety of of significant a non-electrical testing, in the well The need sensors positioned we a sensor revenue, the market. the product capital are in we're equipment SiP, engineering bulk and generate MEMS our use. business conditions. also high Although capacitive of to is the more Like with sensor given optical advanced fingerprint sensor degree stimuli makeup challenges over efficient

outlook. Moving to our

growth to which We everything we Amkor. years, in around market last more market, X% the new conditions. of ecosystem XXXX. growth channel important XX% continue third demand in believe broadly that In general general ICs, customers. healthy We've the in are increase content increased largely and smartphone experienced see general each we from will our but than quarter. the strength iOS phones third expecting X indicate content checks semiconductor as This continued is over driven Recent quarter, in the by sequential we defined generation to market iOS

XXXX. In first year, past quality, increase performance. seasonality exposure the we've improve years, made half to to the such XXXX, we to effort for on areas consumer markets service. accounted of multiple execution, performance and concerted to In continue up XX% X revenue, with in market will technology which tends overall our XXXX basics, computing. financial profitability. will geographies engaging provide successful that of a way over achieve for fact, please the and consistent markets now We more half detailed general us financial a more XXXX. this information. the these to these set best second through The of the In and customers and muted will of customers focus enhances is of across Megan the in our than automotive, believe set a Good and markets, up from utilization, XX% as broad

Megan Faust

results, everyone. afternoon, quarter refinancing And second will Steve. our regarding debt outlook. you, provide quarter Today, our third good some comments share recent I and review Thank our

demand high of Net strong and customers. quarter at came in by revenue Second end driven EPS exceeded expectations. the guidance, income from smartphone XXXX

SiP. significant sales earlier, Steve advanced business mentioned As our communications QX mobile included of

based preferred particularly business customers. by the the silicon, Our of is model ICs, on high-value SiP consignment

of applications. packaging flow And efficient, smartphone high-value in program, purchase engage programs high-volume dollars this SiP SiP with is agreed we cycle and to reasons, we in typically is where chose The margin using strategic associated equipment business a fungible strategic to value-added are these the For silicon. attractive. capital with that couple cash other

third percentage QX in $XXX QX nearly XX% was margin of in effect a gross our and quarter. is constrained in EBITDA have to over healthy content material increase million, higher the expected However, a sequentially. the similar

KX sale share first of QX sales. grew increased due First X% adjusting income also was quarter to the the per Net in half after EBITDA from significantly earnings for XXXX. up and year-over-year

from foreign in re-measurement liabilities $X currency related currencies. our benefited foreign the balance million also sheet We a of gain denominated to

on our capital Moving to structure.

of interest This the is XXXX. the year's new We in proceeds [ph] interest $XX our million. we at realized of are XXXX the earnings notes pleased addition redemption. bears interest term last Accumulated $XX basis. an with new our $X.XX financing our $XXX recent fixed redeem Earlier from expense entered by for million year a loan of of a to and to all loan We reducing this into notes improved X by plan $XXX activities. The senior in due million term million. fixed senior month, net use X notes of annualized X/X% rate X.X%, per annualized outstanding already our to payoff share senior annualized savings on approximately

total Our sound, and of $X.X times of billion X.X ratio debt-to-EBITDA of balance is a debt sheet XXXX. with as June

also facility maturity is revolving to of the million in $XXX with end liquidity at credit have we quarter. the and has our undrawn month, million, second $XXX available July new facility. loans existing XXXX. cash Our million credit the The and $XXX increased days replaced This been extended solid, from over to

is third the for outlook positive. quarter Our

$XXX EPS revenue around specifically, margin, expenses expect to all activity We to in gross expected net expect to billion million, we sequentially. the on the the $X.X with range are and be income sales, quarter. be $X.XX to up gross More range Operating the of in billion, R&D XX% margin net of XX%. in depending

QX in and per be income net to or $X.XX $XX million to $XX million expect We share. between $X.XX

that evaluate new estimates of analysis the Our our at as refine new the estimated on tax for act, tax change these the we to continue complex estimates XX% provisions provisional rate and apply any this we year. our U.S. law. Note, guidance reform remains could and full however, of

we Finally, Haley, XXXX we for now? questions. now the to call around million. begin CapEx the continue up that, your may open you to will With $XXX be expect polling

Operator

of Suisse. And comes Thank you. question Randy Abrams Credit first Instructions] [Operator from our

open. is Your line

Randy Abrams

Yes, hi. Thank you.

I question to wanted ask on guidance. first The the

Taiwan. factoring a of guiding growth, is X% for third line And factor higher the year's peer - about You're curious seasonality. how about is SiP? prior bit in I'm your saw quarter the with it's in much that in that which in so

if business, parts other the So of you're if you picking like rest could the in give for that flavor what's happening business? up but any softness SiP, a of seeing the

Stephen Kelley

market. growth for Yes, we're particular divide really speaking in any two smartphone iOS in in the market in a out strength, the seeing QX the includes ecosystem, row ecosystem. Randy, advanced general quarter-on-quarter. In Android That we general market, SiP. What's and been but business has in the growth Samsung basically quarters not part growth China driving We're seeing into many no just of the ecosystem, which parts: of the strong or continued the either now. general, is

Randy Abrams

Okay.

If guess, or pass could of material type having flavor, as that give half, taking of advanced on in you SiP some of on that a revenue maybe maybe absolute the the percent run for are the projects a rate cost? I second the you're you

Megan Faust

Okay, Randy.

$XXX full million. our was SiP at disclosed over we looking SiP, XXXX year So that

So we expect in grow that to XXXX.

for you amount for that think asking the were half. I specifically second

disclose the wouldn't we half now. So second

Randy Abrams

kind versus difference for of Android now to kind margin And peak of this to the season, I in different future season if model, close you expect through grows, go Okay. reach guess, ask, prior line? looking without might you It in you for you the If of kind a margins? traditionally what will I But and peak maybe auto expect year you're the SiP. the guess, contribution be peak as mix gross margin SiP factors the in would I could it leverage XX%. XX%, reach could

Stephen Kelley

charges in as last margin, did Randy, out take year, had a XX% we half second roughly Yes, just the in of we operate if restructuring gross the you reminder, Japan.

the strength. margin years. year, this And material have that half our second will the it's of expansion next that projects largely in revert grow past the half level. year mean year in expecting seasonal when obviously, continue as XXXX and though, took we the few in we're expect, we're to SiP that second the substantial Therefore, What to of and because advanced we they is on. sales reaching the our will we that percentage strategic certainly Now in see not next

Randy Abrams

ask of on to kind comfortable is kind wanted and how Okay. I you're capacity, overall the on kind next the CapEx you're constraints or you And overall where this if with current expected if, run levels, also I just continue year? flip any if areas question capacity, if of the for of see the rate of of sitting toward last looking kind side, - guess,

Stephen Kelley

Okay.

products. time is because this do taking advanced run through we it the we're think intensity when constraints builds of the I of in some

in such factory. constraints seeing are of some using we capacity lines, lines and we the have the BGA, definitely chip advanced flip bumping and So we're in our advanced as SiP in our

healthy also the quarter. So mainstream this the good continued fairly see business. In side, be we utilization should

So utilization rates are good.

in mainstream our factory factory. Philippines, Our which the is

$XXX XXXX. We're over Our for CapEx level a $XX still confident the million year, this is is XXXX. increase projected number million, we $XXX million which the

haven't I next standpoint, don't from down major anticipate any at for but CapEx We looked year or yet a up XXXX. changes

Randy Abrams

Great. Okay. Megan. a Steve, lot Thanks

Operator

Thank no you. questions. [Operator I'm Instructions] further showing

Chris Chaney

Q&A some All you, I'd Steve This will our call for and to remarks. like right, back session. the over closing to Haley. turn gentlemen. And Thank now, ladies final conclude

Stephen Kelley

I'd read messages. key to like Chris. recap our Thanks,

grew half quarter $XX of revenues were first year-on-year. the second XX% X% million sequentially. revenue up our First, XXXX, our or In

the we third general communications. Thank see the X% revenues And third Second, seasonal primarily quarter. finally, you be strength to in to market continued expect call strength due the we around semiconductor through joining sequentially, in up today. for our quarter

Operator

concludes this today's gentlemen, conference and Ladies call.

You now may disconnect.

Amkor Technology (AMKR) 30 Jul 182018 Q2 Earnings call transcript