- Revenue of $61.2 million
was in-line with guidance.
- Gross profit margin of 23.6% increased 140 basis
points from Q2, mainly driven by higher fab
utilization.
- GAAP diluted loss per share was $0.13.
- Non-GAAP diluted loss per share was $0.04.
- Completed $5.4 million of
stock buybacks during Q3.
- Ended Q3 with a solid balance sheet with $166.6 million cash and no debt.
- The internal separation of our Display and Power businesses
is expected to be completed and be effective on January 1st, 2024.
SEOUL,
South Korea, Nov. 2, 2023
/PRNewswire/ -- Magnachip Semiconductor Corporation (NYSE: MX)
("Magnachip" or the "Company") today announced financial results
for the third quarter 2023.
YJ Kim, Magnachip's Chief Executive Officer commented, "Our Q3
results were in-line with our guidance. In our Display business, we
have completed the qualification of two DDI chips at our new tier 1
panel maker and are going through the qualification process with
two smartphone makers. We are now working on additional Driver ICs
that cover broader segments of the smartphone market to include
mass market smartphones in addition to the premium models. Despite
near-term market challenges, our outlook for long-term growth
remains positive. Our confidence is driven by our strong belief
that our display products offer distinct competitive advantages
that position us well for success in the rapidly growing OLED
market in Asia."
YJ continued, "In our Power business, our product portfolio is
getting stronger as we continue to focus on rolling out
next-generation power products to maintain our momentum of
design-in/wins. Looking ahead, amid heightened global geopolitical
and macroeconomic uncertainty, we expect demand to remain soft,
driven by normal Q4 seasonality and inventory correction in
industrial end markets."
Q3 2023 Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands of U.S.
dollars, except share data
|
|
|
|
GAAP
|
|
|
|
Q3 2023
|
|
|
Q2 2023
|
|
|
Q/Q
change
|
|
|
Q3 2022
|
|
|
Y/Y
change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Standard Products
Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Display
Solutions
|
|
|
6,404
|
|
|
|
9,657
|
|
|
|
down
|
|
|
|
33.7
|
%
|
|
|
6,355
|
|
|
|
up
|
|
|
|
0.8
|
%
|
Power
Solutions
|
|
|
45,215
|
|
|
|
41,718
|
|
|
|
up
|
|
|
|
8.4
|
%
|
|
|
56,416
|
|
|
|
down
|
|
|
|
19.9
|
%
|
Transitional Fab 3
foundry services(1)
|
|
|
9,626
|
|
|
|
9,604
|
|
|
|
up
|
|
|
|
0.2
|
%
|
|
|
8,428
|
|
|
|
up
|
|
|
|
14.2
|
%
|
Gross Profit
Margin
|
|
|
23.6
|
%
|
|
|
22.2
|
%
|
|
|
up
|
|
|
|
1.4
|
%pts
|
|
|
24.2
|
%
|
|
|
down
|
|
|
|
0.6
|
%pts
|
Operating
Loss
|
|
|
(9,235)
|
|
|
|
(10,656)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
(10,008)
|
|
|
|
up
|
|
|
|
n/a
|
|
Net
Loss
|
|
|
(5,165)
|
|
|
|
(3,947)
|
|
|
|
down
|
|
|
|
n/a
|
|
|
|
(17,195)
|
|
|
|
up
|
|
|
|
n/a
|
|
Basic Loss per
Common Share
|
|
|
(0.13)
|
|
|
|
(0.09)
|
|
|
|
down
|
|
|
|
n/a
|
|
|
|
(0.38)
|
|
|
|
up
|
|
|
|
n/a
|
|
Diluted Loss per
Common Share
|
|
|
(0.13)
|
|
|
|
(0.09)
|
|
|
|
down
|
|
|
|
n/a
|
|
|
|
(0.38)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
|
|
In thousands of U.S.
dollars, except share data
|
|
|
|
Non-GAAP(2)
|
|
|
|
Q3
2023
|
|
|
Q2
2023
|
|
|
Q/Q
change
|
|
|
Q3
2022
|
|
|
Y/Y
change
|
|
Adjusted Operating
Loss
|
|
|
(7,064)
|
|
|
|
(7,762)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
(6,646)
|
|
|
|
down
|
|
|
|
n/a
|
|
Adjusted
EBITDA
|
|
|
(2,735)
|
|
|
|
(3,594)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
(2,995)
|
|
|
|
up
|
|
|
|
n/a
|
|
Adjusted Net Income
(Loss)
|
|
|
(1,591)
|
|
|
|
(2,472)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
1,097
|
|
|
|
down
|
|
|
|
n/a
|
|
Adjusted Earnings
(Loss) per Common Share—Diluted
|
|
|
(0.04)
|
|
|
|
(0.06)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
0.02
|
|
|
|
down
|
|
|
|
n/a
|
|
___________
|
(1)
|
Following the
consummation of the sale of the Foundry Services Group business and
Fab 4 in Q3 2020, we provided transitional foundry services to the
buyer for foundry products manufactured in our fabrication facility
located in Gumi, Korea, known as "Fab 3" ("Transitional Fab 3
Foundry Services"). The contractual obligation to provide the
Transitional Fab 3 Foundry Services ended August 31, 2023, and we
are planning to wind down these foundry services and convert
portions of the idle capacity to Power Solutions standard products
beginning around the second half of 2024. Because these foundry
services during the wind-down period are still provided to the same
buyer by us using our Fab 3 based on mutually agreed terms and
conditions, we will continue to report our revenue from providing
these foundry services and related cost of sales within the
Transitional Fab 3 Foundry Services line in our consolidated
statement of operations until such wind down is completed.
Management believes that disclosing revenue of Transitional Fab 3
Foundry Services separately from the standard products business
allows investors to better understand the results of our core
standard products display solutions and power solutions
businesses.
|
(2)
|
Management believes
that non-GAAP financial measures, when viewed in conjunction with
GAAP results, can provide a meaningful understanding of the factors
and trends affecting our business and operations and assist in
evaluating our core operating performance. However, such non-GAAP
financial measures have limitations and should not be considered as
a substitute for net income (loss) or as a better indicator of our
operating performance than measures that are presented in
accordance with GAAP. A reconciliation of GAAP results to non-GAAP
results is included in this press release.
|
Q4 2023 Financial Guidance
Amid heightened global
geopolitical and macroeconomic uncertainty, we expect Power demand
to soften driven by normal Q4 seasonality and inventory correction
in industrial end markets.
While actual results may vary, Magnachip currently expects the
following for Q4 2023:
- Revenue to be in the range of $50
million to $55 million,
including approximately $8 million of
Transitional Fab 3 Foundry Services.
- Gross profit margin to be in the range of 22.5% to 24.5%.
Q3 2023 Earnings Conference Call
Magnachip will
host a corresponding conference call at 2:00
p.m. PT / 5:00 p.m. ET on Thursday,
November 2, 2023, to discuss its financial results. In
advance of the conference call, all participants must use the
following link to complete the online registration process. Upon
registering, each participant will receive access details for this
event including the dial-in numbers, a PIN number, and an e-mail
with detailed instructions to join the conference call. A live and
archived webcast of the conference call and a copy of earnings
release will be accessible from the 'Investors' section of the
Company's website at www.magnachip.com.
Online
registration: https://register.vevent.com/register/BI9578e24ef24a498a8d8ee6536b08edc6
Safe Harbor for Forward-Looking
Statements
Information in this release regarding Magnachip's
forecasts, business outlook, expectations and beliefs are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and
uncertainties. These statements include expectations about
estimated historical or future operating results and financial
performance, outlook and business plans, including fourth quarter
2023 revenue and gross profit margin expectations, and the impact
of market conditions associated with inflation and higher interest
rates, remaining effects from the COVID-19 pandemic, geopolitical
conflicts between Russia-
Ukraine and between Israel-Hamas,
escalated trade tensions between the U.S. and China and continuing supply constraints on
Magnachip's fourth quarter 2023 and future operating results. All
forward-looking statements included in this release are based upon
information available to Magnachip as of the date of this release,
which may change, and we assume no obligation to update any such
forward-looking statements. These statements are not guarantees of
future performance and actual results could differ materially from
our current expectations. Factors that could cause or contribute to
such differences include, among others: the impact of changes in
macroeconomic conditions, including those caused by or related to
inflation, potential recessions or other deteriorations, economic
instability or civil unrest; remaining effects from the COVID-19
pandemic, the geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, and
escalated trade tensions between the U.S. and China; manufacturing capacity constraints or
supply chain disruptions that may impact our ability to deliver our
products or affect the price of components, which may lead to an
increase in our costs and impact demand for our products from
customers who are similarly affected by such capacity constraints
or disruptions; the impact of competitive products and pricing;
timely acceptance of our designs by customers; timely introduction
of new products and technologies; our ability to ramp new products
into volume production; industry-wide shifts in supply and demand
for semiconductor products; overcapacity within the industry or at
Magnachip; effective and cost-efficient utilization of
manufacturing capacity; financial stability in foreign markets and
the impact of foreign exchange rates; unanticipated costs and
expenses or the inability to identify expenses that can be
eliminated; compliance with U.S. and international trade and export
laws and regulations by us, our customers and our distributors;
change to or ratification of local or international laws and
regulations, including those related to environment, health and
safety; public health issues, including the remaining effects of
the COVID-19 pandemic; other business interruptions that could
disrupt supply or delivery of, or demand for, Magnachip's products;
and other risks detailed from time to time in Magnachip's filings
with the U.S. Securities and Exchange Commission (the "SEC"),
including our Form 10-K filed on February
22, 2023, and subsequent registration statements, amendments
or other reports that we may file from time to time with the SEC
and/or make available on our website. Magnachip assumes no
obligation and does not intend to update the forward-looking
statements provided, whether as a result of new information, future
events or otherwise.
About Magnachip Semiconductor
Magnachip is a designer
and manufacturer of analog and mixed-signal semiconductor platform
solutions for communications, IoT, consumer, computing, industrial
and automotive applications. The Company provides a broad range of
standard products to customers worldwide. Magnachip, with more than
40 years of operating history, owns a portfolio of approximately
1,100 registered patents and pending applications, and has
extensive engineering, design, and manufacturing process expertise.
For more information, please visit www.magnachip.com. Information
on or accessible through Magnachip's website is not a part of, and
is not incorporated into, this release.
CONTACT:
Yujia Zhai
The Blueshirt Group
Tel. (860) 214-0809
Yujia@blueshirtgroup.com
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands of
U.S. dollars, except share data)
(Unaudited)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
September 30,
2023
|
|
June 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
September 30,
2022
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Net sales – standard
products
business
|
$
51,619
|
|
$
51,375
|
|
$
62,771
|
|
$
154,508
|
|
$
248,069
|
Net sales –
transitional Fab 3 foundry services
|
9,626
|
|
9,604
|
|
8,428
|
|
24,721
|
|
28,599
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
61,245
|
|
60,979
|
|
71,199
|
|
179,229
|
|
276,668
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
Cost of sales –
standard products business
|
36,829
|
|
37,867
|
|
45,497
|
|
112,008
|
|
165,197
|
Cost of sales –
transitional Fab 3 foundry services
|
9,935
|
|
9,574
|
|
8,477
|
|
27,108
|
|
26,305
|
|
|
|
|
|
|
|
|
|
|
Total cost of
sales
|
46,764
|
|
47,441
|
|
53,974
|
|
139,116
|
|
191,502
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
14,481
|
|
13,538
|
|
17,225
|
|
40,113
|
|
85,166
|
Gross profit as a
percentage of standard products business net
sales
|
28.7 %
|
|
26.3 %
|
|
27.5 %
|
|
27.5 %
|
|
33.4 %
|
Gross profit as a
percentage of total
revenues
|
23.6 %
|
|
22.2 %
|
|
24.2 %
|
|
22.4 %
|
|
30.8 %
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
12,089
|
|
12,137
|
|
11,411
|
|
36,391
|
|
38,310
|
Research and
development
expenses
|
11,627
|
|
11,255
|
|
13,321
|
|
36,180
|
|
38,685
|
Early termination and
other charges,
net
|
—
|
|
802
|
|
2,501
|
|
9,251
|
|
3,298
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
23,716
|
|
24,194
|
|
27,233
|
|
81,822
|
|
80,293
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(9,235)
|
|
(10,656)
|
|
(10,008)
|
|
(41,709)
|
|
4,873
|
Interest income
|
2,382
|
|
2,692
|
|
1,784
|
|
7,916
|
|
3,560
|
Interest
expense
|
(189)
|
|
(200)
|
|
(278)
|
|
(645)
|
|
(888)
|
Foreign currency gain
(loss), net
|
(2,583)
|
|
1,237
|
|
(12,809)
|
|
(4,776)
|
|
(20,511)
|
Other income,
net
|
87
|
|
3
|
|
174
|
|
55
|
|
603
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax
expense
|
(9,538)
|
|
(6,924)
|
|
(21,137)
|
|
(39,159)
|
|
(12,363)
|
Income tax
benefit
|
(4,373)
|
|
(2,977)
|
|
(3,942)
|
|
(8,577)
|
|
(1,356)
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(5,165)
|
|
$
(3,947)
|
|
$
(17,195)
|
|
$
(30,582)
|
|
$
(11,007)
|
|
|
|
|
|
|
|
|
|
|
Basic loss per common
share—
|
$
(0.13)
|
|
$
(0.09)
|
|
$
(0.38)
|
|
$
(0.73)
|
|
$
(0.24)
|
Diluted loss per common
share—
|
$
(0.13)
|
|
$
(0.09)
|
|
$
(0.38)
|
|
$
(0.73)
|
|
$
(0.24)
|
Weighted average number
of shares—
|
|
|
|
|
|
|
|
|
|
Basic
|
40,145,290
|
|
41,741,310
|
|
44,865,266
|
|
41,747,255
|
|
45,119,214
|
Diluted
|
40,145,290
|
|
41,741,310
|
|
44,865,266
|
|
41,747,255
|
|
45,119,214
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In thousands of
U.S. dollars, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
September 30,
2023
|
December 31,
2022
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 166,644
|
|
|
$ 225,477
|
|
Accounts receivable,
net
|
|
41,119
|
|
|
35,380
|
|
Inventories,
net
|
|
30,836
|
|
|
39,883
|
|
Other
receivables
|
|
2,799
|
|
|
7,847
|
|
Prepaid
expenses
|
|
9,095
|
|
|
10,560
|
|
Hedge
collateral
|
|
2,680
|
|
|
2,940
|
|
Other current
assets
|
|
24,572
|
|
|
15,766
|
|
Total current
assets
|
|
277,745
|
|
|
337,853
|
|
Property, plant and
equipment, net
|
|
96,141
|
|
|
110,747
|
|
Operating lease
right-of-use assets
|
|
4,725
|
|
|
5,265
|
|
Intangible assets,
net
|
|
1,583
|
|
|
1,930
|
|
Long-term prepaid
expenses
|
|
6,124
|
|
|
10,939
|
|
Deferred income
taxes
|
|
36,358
|
|
|
38,324
|
|
Other non-current
assets
|
|
11,622
|
|
|
11,587
|
|
Total
assets
|
|
$ 434,298
|
|
|
$
516,645
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$ 23,446
|
|
|
$ 17,998
|
|
Other accounts
payable
|
|
8,025
|
|
|
9,702
|
|
Accrued
expenses
|
|
9,668
|
|
|
9,688
|
|
Accrued income taxes
|
|
48
|
|
|
3,154
|
|
Operating lease
liabilities
|
|
1,735
|
|
|
1,397
|
|
Other current
liabilities
|
|
4,495
|
|
|
5,306
|
|
Total current
liabilities
|
|
47,417
|
|
|
47,245
|
|
Accrued severance
benefits, net
|
|
20,160
|
|
|
23,121
|
|
Non-current operating
lease liabilities
|
|
3,167
|
|
|
4,091
|
|
Other non-current
liabilities
|
|
9,862
|
|
|
14,035
|
|
Total
liabilities
|
|
80,606
|
|
|
88,492
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Common stock, $0.01
par value, 150,000,000 shares authorized, 56,655,377 shares issued
and 39,667,995
outstanding at September 30, 2023 and
56,432,449 shares issued and 43,824,575 outstanding at
December 31, 2022
|
|
566
|
|
|
564
|
|
Additional paid-in
capital
|
|
271,419
|
|
|
266,058
|
|
Retained
earnings
|
|
304,924
|
|
|
335,506
|
|
Treasury stock,
16,987,382 shares at September 30, 2023 and 12,607,874 shares at
December 31, 2022,
respectively
|
|
(204,645)
|
|
|
(161,422)
|
|
Accumulated other
comprehensive loss
|
|
(18,572)
|
|
|
(12,553)
|
|
Total stockholders'
equity
|
|
353,692
|
|
|
428,153
|
|
Total liabilities and
stockholders' equity
|
|
$ 434,298
|
|
|
$
516,645
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands of
U.S. dollars)
(Unaudited)
|
|
|
|
Three
Months
Ended
|
|
Nine
Months Ended
|
|
|
September 30,
2023
|
|
September 30,
2023
|
|
September 30,
2022
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
Net
loss
|
$
(5,165)
|
|
$
(30,582)
|
|
$
(11,007)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities
|
|
|
|
|
|
|
Depreciation and
amortization
|
4,081
|
|
12,583
|
|
11,225
|
|
Provision for
severance benefits
|
1,267
|
|
5,358
|
|
5,163
|
|
Loss on foreign
currency, net
|
5,415
|
|
14,532
|
|
66,335
|
|
Provision for
inventory reserves
|
1,914
|
|
3,035
|
|
7,730
|
|
Stock-based
compensation
|
2,171
|
|
5,383
|
|
4,487
|
|
Other,
net
|
230
|
|
680
|
|
631
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
Accounts receivable,
net
|
(6,067)
|
|
(6,409)
|
|
7,805
|
|
Inventories
|
(1,276)
|
|
3,635
|
|
(13,208)
|
|
Other
receivables
|
586
|
|
4,993
|
|
17,115
|
|
Other current
assets
|
(2,686)
|
|
(2,291)
|
|
(14,117)
|
|
Accounts
payable
|
3,186
|
|
6,066
|
|
(14,792)
|
|
Other accounts
payable
|
(250)
|
|
(6,738)
|
|
(6,215)
|
|
Accrued
expenses
|
(485)
|
|
619
|
|
5,866
|
|
Accrued income
taxes
|
(42)
|
|
(3,014)
|
|
(11,483)
|
|
Other current
liabilities
|
(270)
|
|
(741)
|
|
(1,583)
|
|
Other non-current
liabilities
|
(65)
|
|
(279)
|
|
523
|
|
Payment of severance
benefits
|
(455)
|
|
(6,183)
|
|
(4,181)
|
|
Other,
net
|
(354)
|
|
(841)
|
|
(50)
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
1,735
|
|
(194)
|
|
50,244
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
Proceeds from
settlement of hedge
collateral
|
—
|
|
3,335
|
|
2,805
|
|
Payment of hedge
collateral
|
(568)
|
|
(3,154)
|
|
(15,282)
|
|
Purchase of property,
plant and equipment
|
(762)
|
|
(2,280)
|
|
(11,812)
|
|
Payment for
intellectual property
registration
|
(67)
|
|
(230)
|
|
(301)
|
|
Collection of
guarantee deposits
|
3,539
|
|
4,984
|
|
242
|
|
Payment of guarantee
deposits
|
(369)
|
|
(7,276)
|
|
(2,075)
|
|
Other
|
—
|
|
—
|
|
550
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) investing activities
|
1,773
|
|
(4,621)
|
|
(25,873)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
Proceeds from exercise
of stock options
|
—
|
|
27
|
|
1,786
|
|
Acquisition of
treasury stock
|
(6,247)
|
|
(43,087)
|
|
(5,065)
|
|
Repayment of financing
related to water treatment facility
arrangement
|
(123)
|
|
(371)
|
|
(381)
|
|
Repayment of principal
portion of finance lease
liabilities
|
(23)
|
|
(69)
|
|
(50)
|
|
|
|
|
|
|
|
|
Net cash used in
financing
activities
|
(6,393)
|
|
(43,500)
|
|
(3,710)
|
|
Effect of exchange
rates on cash and cash
equivalents
|
(3,425)
|
|
(10,518)
|
|
(49,377)
|
|
|
|
|
|
|
|
|
Net decrease in cash
and cash
equivalents
|
(6,310 )
|
|
(58,833)
|
|
(28,716)
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
Beginning of the
period
|
172,954
|
|
225,477
|
|
279,547
|
|
|
|
|
|
|
|
|
End of the
period
|
$
166,644
|
|
$
166,644
|
|
$
250,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF
OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME
(LOSS)
(In thousands of
U.S. dollars)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
2023
|
|
|
June 30,
2023
|
|
|
September 30,
2022
|
|
|
September 30,
2023
|
|
|
September 30,
2022
|
|
Operating income
(loss)
|
|
$
|
(9,235)
|
|
|
$
|
(10,656)
|
|
|
$
|
(10,008)
|
|
|
$
|
(41,709)
|
|
|
$
|
4,873
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation expense
|
|
|
2,171
|
|
|
|
2,092
|
|
|
|
861
|
|
|
|
5,383
|
|
|
|
4,487
|
|
Early termination and
other charges, net
|
|
|
—
|
|
|
|
802
|
|
|
|
2,501
|
|
|
|
9,251
|
|
|
|
3,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss)
|
|
$
|
(7,064)
|
|
|
$
|
(7,762)
|
|
|
$
|
(6,646)
|
|
|
$
|
(27,075)
|
|
|
$
|
12,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We present Adjusted Operating Income (Loss) as a supplemental
measure of our performance. We define Adjusted Operating Income
(Loss) for the periods indicated as operating income (loss)
adjusted to exclude (i) Equity-based compensation expense and (ii)
Early termination and other charges, net.
For the nine months ended September 30,
2023, we recorded in our consolidated statement of
operations $8,449 thousand of
termination related charges in connection with the voluntary
resignation program that we offered to certain employees during the
first quarter of 2023. For the three months ended June 30, 2023 and nine months ended September 30, 2023, we recorded $802 thousand of one-time employee incentives, in
each period.
For the three and nine months ended September 30, 2022, Early termination and other
charges, net includes $2,821 thousand
of one-time employee incentives, in each period, and professional
service fees and expenses of $217
thousand and $1,014 thousand,
respectively, incurred in connection with certain strategic
evaluations, both of which were offset in part by a $537 thousand gain on sale of certain legacy
equipment of the closed back-end line in our fabrication facility
in Gumi.
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF
NET LOSS TO ADJUSTED EBITDA AND ADJUSTED NET INCOME
(LOSS)
(In thousands of
U.S. dollars, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months
Ended
|
|
September
30,
2023
|
|
June 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
September 30,
2022
|
|
Net
loss
|
$
(5,165)
|
|
$
(3,947)
|
|
$
(17,195)
|
|
$
(30,582)
|
|
$
(11,007)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
(2,382)
|
|
(2,692)
|
|
(1,784)
|
|
(7,916)
|
|
(3,560)
|
|
Interest
expense
|
189
|
|
200
|
|
278
|
|
645
|
|
888
|
|
Income tax
benefit
|
(4,373)
|
|
(2,977)
|
|
(3,942)
|
|
(8,577)
|
|
(1,356)
|
|
Depreciation and
amortization
|
4,081
|
|
4,145
|
|
3,623
|
|
12,583
|
|
11,225
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
(7,650)
|
|
(5,271)
|
|
(19,020 )
|
|
(33,847)
|
|
(3,810)
|
|
Equity-based
compensation
expense
|
2,171
|
|
2,092
|
|
861
|
|
5,383
|
|
4,487
|
|
Foreign currency loss
(gain), net
|
2,583
|
|
(1,237)
|
|
12,809
|
|
4,776
|
|
20,511
|
|
Derivative valuation
loss (gain),
net
|
161
|
|
20
|
|
(146)
|
|
235
|
|
(201)
|
|
Early termination and
other charges, net
|
—
|
|
802
|
|
2,501
|
|
9,251
|
|
3,298
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
(2,735)
|
|
$
(3,594)
|
|
$
(2,995)
|
|
$
(14,202)
|
|
$
24,285
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(5,165)
|
|
$
(3,947)
|
|
$
(17,195)
|
|
$
(30,582)
|
|
$
(11,007)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation
expense
|
2,171
|
|
2,092
|
|
861
|
|
5,383
|
|
4,487
|
|
Foreign currency loss
(gain), net
|
2,583
|
|
(1,237)
|
|
12,809
|
|
4,776
|
|
20,511
|
|
Derivative valuation
loss (gain),
net
|
161
|
|
20
|
|
(146)
|
|
235
|
|
(201)
|
|
Early termination and
other charges, net
|
—
|
|
802
|
|
2,501
|
|
9,251
|
|
3,298
|
|
Income tax effect on
non-GAAP
adjustments
|
(1,341)
|
|
(202)
|
|
2,267
|
|
(3,493)
|
|
7,512
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss)
|
$
(1,591)
|
|
$
(2,472)
|
|
$
1,097
|
|
$
(14,430)
|
|
$ 24,600
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss) per common share—
|
|
|
|
|
|
|
|
|
|
|
-
Basic
|
$
(0.04)
|
|
$
(0.06)
|
|
$
0.02
|
|
$
(0.35)
|
|
$
0.55
|
|
- Diluted
|
$
(0.04)
|
|
$
(0.06)
|
|
$
0.02
|
|
$
(0.35)
|
|
$
0.53
|
|
Weighted average number
of shares – basic
|
40,145,290
|
|
41,741,310
|
|
44,865,266
|
|
41,747,255
|
|
45,119,214
|
|
Weighted average number
of shares – diluted
|
40,145,290
|
|
41,741,310
|
|
45,747,255
|
|
41,747,255
|
|
46,134,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We present Adjusted EBITDA and Adjusted Net Income (Loss) as
supplemental measures of our performance. We define Adjusted EBITDA
for the periods indicated as EBITDA (as defined below), adjusted to
exclude (i) Equity-based compensation expense, (ii) Foreign
currency loss (gain), net, (iii) Derivative valuation loss (gain),
net and (iv) Early termination and other charges, net. EBITDA for
the periods indicated is defined as net loss before interest
income, interest expense, income tax benefit and depreciation and
amortization.
We prepare Adjusted Net Income (Loss) by adjusting net loss to
eliminate the impact of a number of non-cash expenses and other
items that may be either one time or recurring that we do not
consider to be indicative of our core ongoing operating
performance. We believe that Adjusted Net Income (Loss) is
particularly useful because it reflects the impact of our asset
base and capital structure on our operating performance. We define
Adjusted Net Income (Loss) for the periods as net loss, adjusted to
exclude (i) Equity-based compensation expense, (ii) Foreign
currency loss (gain), net, (iii) Derivative valuation loss (gain),
net, (iv) Early termination and other charges, net and (v) Income
tax effect on non-GAAP adjustments.
For the nine months ended September 30,
2023, we recorded in our consolidated statement of
operations $8,449 thousand of
termination related charges in connection with the voluntary
resignation program that we offered to certain employees during the
first quarter of 2023. For the three months ended June 30, 2023 and nine months ended September 30, 2023, we recorded $802 thousand of one-time employee incentives, in
each period.
For the three and nine months ended September 30, 2022, Early termination and other
charges, net includes $2,821 thousand
of one-time employee incentives, in each period, and professional
service fees and expenses of $217
thousand and $1,014 thousand,
respectively, incurred in connection with certain strategic
evaluations, both of which were offset in part by a $537 thousand gain on sale of certain legacy
equipment of the closed back-end line in our fabrication facility
in Gumi.
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SOURCE Magnachip Semiconductor Corporation