Amkor Technology, Inc.

Good day, ladies and gentlemen, and welcome to the MCOR Technology First Quarter 2020 Earnings Conference Call. My name is Chris, and I'll be your conference facilitator today. At this time, all participants are in a listen-only mode. After the speaker's remarks, we will conduct a question-and-answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Vincent Keenan, Vice President, Investor Relations. Mr. Keenan, please go ahead.

Thank you, Chris. Good afternoon, everyone, and thank you for joining us for AMCOR's first quarter 2020 earnings conference call. Joining me today are Steve Kelly, our Chief Executive Officer, and Megan Faust, our Chief Financial Officer. Our earnings press release was filed with the SEC this afternoon and is available on our website. During this conference call, we will use non-GAAP financial measures, and you can find the reconciliation to the U.S. GAAP equivalent on our website. We will also make forward-looking statements about our expectations for AMCOR's future performance based on the environment as we currently see it. Of course, actual results could be different. Please refer to our press release and other SEC filings for information on risk factors, uncertainties, and exceptions that could cause actual results to differ materially from these expectations. Please note that the financial results discussed today are preliminary. and final data will be included in our Form 10-Q. And now I would like to turn the call over to Steve.

Good afternoon. Thanks for joining the call. Today I'll review our first quarter performance and our second quarter outlook. During today's call, I'll also discuss how we dealt with the coronavirus in the first quarter and how we expect it to affect our business in the second quarter. Fundamentally, We believe that the virus, while impacting near-term demand, will not have a significant negative impact on the medium or long-term growth of the semiconductor industry. We expect the market's secular growth drivers, including high-performance computing, 5G, and digital automotive, to remain intact. And we are well positioned for growth. We believe that our long-term strategy to achieve balanced revenue growth by delivering an unmatched combination of technology, quality, execution, and service will continue to deliver value to our customers and to our shareholders. Now, onto the first quarter results. We just completed the best first quarter in Amcor's history, largely due to strong demand for advanced packaging in the consumer and communications markets. Revenue grew nearly 30% year-on-year to a first quarter record of $1.15 billion. In response to the virus, we implemented new hygiene, health monitoring, and people density protocols throughout our factory network. These protocols have kept our employees safe and allowed us to maintain a high operating tempo. In a challenging environment, our manufacturing team's execution Thank you for joining us. is that the output from our factories in the Philippines and Malaysia has largely recovered. Our teams in both countries have done an excellent job bringing our factories back to a near normal operating tempo while maintaining a safe environment. In the first quarter, sales into the mobile communications market were strong, driven by spring phone launches. Sales into the computing and consumer markets were solid, Automotive and industrial sales were down. Our advanced SIP revenue in the quarter more than doubled year-on-year. Amcor's advanced SIP technology, quality, and yield performance match up nicely with the needs of our customers. From a business standpoint, we believe that advanced SIP manufacturing is a solid, long-term growth engine for the company with good cash flow, and moderate capital investment requirements. Amcor has long been a leading supplier of advanced SIP modules for smartphones, including RF front-end modules for 4G and 5G phones. We built on that expertise to establish a leadership position in antenna and package modules, which ramped the volume in the first quarter. Amcor's advanced SIP technology is also being used by automotive and consumer customers who benefit from our long-time experience building high-yield, high-quality modules. And all of our customers have access to AMCOR's advanced SIP toolkit, which includes double-sided assembly, advanced RDL molding, and RF shielding technologies. Moving to our outlook for the second quarter. Given the level of near-term demand uncertainty, this is not a typical quarter. Here's what's happened so far in April. In our advanced packaging factories, which account for more than 60% of our revenue, overall demand has stayed reasonably strong. Supply constraints have been minimal. In our wire bond factories, overall demand has remained sluggish, similar to the first quarter. And over the past two weeks, we have received indications from a number of customers Thank you. Thank you. We see the coronavirus as a near-term challenge for the semiconductor industry and for Amcor. Our medium-term and long-term outlooks remain quite strong. We will continue to execute our strategy and invest for growth in a disciplined way. We have produced strong positive free cash flow in each of the past five years, in both up years and down years. As a result, we now have the strongest balance sheet in Amcor's history. with roughly $1 billion in cash and around $500 million in net debt. Megan will now provide more detailed financial information.