SEOUL, South Korea and
SAN JOSE, Calif., Feb. 14, 2019 /PRNewswire/ -- MagnaChip
Semiconductor Corporation (NYSE: MX) today announced financial
results for the fourth quarter and full year 2018. Revenue in the
fourth quarter was $179.4 million and
gross profit margin was 24.5%. For the year 2018, revenue was
$750.9 million and gross margin was
26.4%.
MagnaChip also announced today that it has undertaken a
strategic evaluation of the Company's Foundry business and Fab 4,
the larger of the Company's two 8" manufacturing
facilities. Fab 4 is an analog and mixed signal fab that
produces approximately 73% of the Company's total capacity, and is
used primarily to meet wafer demand from Foundry customers that
rely on outside suppliers. The strategic evaluation is expected to
include a range of possible options, including, but not limited to,
joint ventures, strategic partnerships as well as M&A
possibilities. The Company has retained financial and legal
advisors to assist in the evaluation.
Nader Tavakoli, Chairman of the
Board of MagnaChip, said, "The Board is committed to improving
MagnaChip's profitability and unlocking shareholder value. As we
undertake this strategic evaluation of the Foundry business, we
will be mindful of the best interests of all of our stakeholders
including shareholders, customers and employees."
In commenting on the Company's financial performance in Q4, YJ
Kim, CEO of MagnaChip, said, "We are pleased to have met our
revenue guidance in the seasonally soft fourth quarter despite a
challenging macroeconomic backdrop, a slowdown in China, and an inventory correction by
customers."
In commenting on the 2018 financial results, Mr. Kim said, "Our
OLED and Power businesses both had record annual revenue in 2018
and are positioned for success in 2019 due to a strong product
lineup, robust product roadmap and well-established customer
traction. Higher-margin Premium Power products represented over 45%
of total Power revenue in Q4, due mainly to growth in the
industrial, television, and lighting markets. In the OLED business,
MagnaChip secured new design wins for display driver ICs from
China smartphone makers and three
design wins from a major smartphone maker in Korea for a line of
mid-range smartphones. Our latest and lowest-power 28 nanometer
OLED display driver IC will sample at the end of this month, and we
anticipate volume production in the second half of this
year." Mr. Kim added, "Our foundry business under-performed in
Q4 2018 on an "as adjusted" basis, due in part to an inventory
correction by customers that caused a drop in utilization in Fab 4.
We expect utilization in Fab 4 will decline significantly further
in the first half of 2019, due in part to a continuing inventory
correction and our decision to be more selective about business as
we undergo our strategic evaluation process."
Q4 2018 Summary
- Revenue of $179.4 million within
guidance range of $174-$184 million; revenue up 2.8% Year-over-Year
(YoY)
- Standard Products Group revenue of $96.3
million up 2.5% YoY on an "as reported" basis; up 14.3% on
an "as adjusted" basis
- Foundry Services Group revenue of $83.1
million up 3.1% YoY on an "as reported" basis; down 8.0% on
an "as adjusted" basis
- Record Power standard products revenue of $46.1 million; up 14.6% YoY
- Total gross profit margin of 24.5% was below the guidance range
of 25-27%; gross margin down 3.8 percentage points YoY primarily
due to lower Foundry-related fab utilization and increased costs
for wafers
- Operating income of $7.9 million,
or 4.4% of revenue, up 2.9% YoY and Net Loss, on a GAAP basis, of
$2.4 million, down 105.5% YoY
- Adjusted EBITDA of $17.4 million,
or 9.7% of revenue, down 15.4% YoY
Full Year 2018 Summary
- Revenue of $750.9 million, up
10.5% YoY
- Record OLED revenue of $188.0
million, up 3-fold YoY
- Record Power revenue of $169.3
million, up 13.0% YoY
- Foundry revenue of $325.3
million, up 1.6% YoY on an "as reported" basis; down 7.2% on
an "as adjusted" basis
- Gross margin of 26.4% declined by 1.2 percentage points YoY
primarily due to lower Foundry-related fab utilization
First Quarter 2019 Business Outlook
For the first
quarter of 2019, MagnaChip anticipates:
- Revenue in this seasonally soft quarter to be in the range of
$150 million to $155 million, down sequentially about 15.0% at
the mid-point of the projected range. The guidance for the first
quarter of 2019 compares with revenue of $179.4 million in the fourth quarter of 2018, and
$165.8 million in the first quarter
of 2018.
- Gross profit margin to be in the range of 14% to 16%. This
compares to 24.5% in the fourth quarter of 2018, and 26.9% in the
first quarter of 2018.
Both revenue and gross profit margin guidance reflect a downturn
in the Foundry business due in part to a continuing inventory
correction and the Company's decision to be more selective about
business as it undergoes a strategic evaluation process.
Fourth Quarter Financial Review
Total Revenue
Total revenue in the fourth quarter of
2018 was $179.4 million, up 2.8% as
compared to reported revenue of $174.6
million from the fourth quarter of 2017, and down 12.9% from
$206.0 million in the third quarter
of 2018.
Segment Revenue and Segment Adjustments
In
January 2018, as part of our ongoing
portfolio optimization effort to realign business processes and
streamline our organizational structure, we transferred a portion
of our non-OLED display solutions business ("Transferred
Business"), which represented $13.4
million of net sales for Q4 2018 and $33.0 million of net sales for the 2018 year,
from our Standards Products Group to our Foundry Services Group.
The corresponding non-OLED display business represented
$30.3 million of net sales for
the year ended December 31, 2017. As a result, the historical
financial results in the tables below are discussed both on an "as
reported" basis, which presents the Transferred Business in the
Standards Products Group results, and "as adjusted" basis, which
presents the Transferred Business in the Foundry Services Group
results, for comparative purposes.
Foundry Services Group revenue in the fourth quarter was
$83.1 million, up 3.1%, on an "as
reported" basis from the fourth quarter of 2017, and down 0.9% from
$83.9 million in the third quarter of
2018; and on an "as adjusted" basis, down 8.0% from $90.3 million in the fourth quarter of 2017.
Following the strategic realignment and portfolio optimization
discussed above, Standard Products Group revenue in the fourth
quarter was $96.3 million, up 2.5%
year-over-year on an "as reported" basis, and down 21.1%
sequentially; and on an "as adjusted" basis, up 14.3%
year-over-year.
The improved results in the Standard Products Group
year-over-year were primarily attributable to a sharp increase in
revenue from mobile OLED display driver ICs in connection with the
introduction of new OLED smartphones from China manufacturers, which was offset in part
by a strategic reduction of low-margin LCD business. In addition,
the increase was also attributable to a higher demand for premium
Power products such as high-end MOSFETs and IGBTs, primarily for TV
and industrial applications.
Total Gross Profit and Gross Profit Margin
Total gross
profit in the fourth quarter of 2018 was $43.9 million or 24.5% as a percentage of sales
as compared with gross profit of $49.4
million or 28.3% in the fourth quarter of 2017, and
$55.7 million or 27.1% in the third
quarter of 2018.
Segment Gross Profit Margin
Foundry Services Group
gross profit margin was 23.2% in the fourth quarter of 2018 as
compared with, on an "as reported" basis, 31.7% in the fourth
quarter of 2017 and 24.4% in the third quarter of 2018. The
Foundry Services Group gross profit margin was, on an "as adjusted"
basis, 30.4% in the fourth quarter of 2017. The Standard
Products Group gross profit margin was 25.6% in the fourth quarter
of 2018 as compared with, on an "as reported" basis, 25.3% in
the fourth quarter of 2017, and 28.8% in the third quarter of
2018. The Standard Products Group gross profit margin was, on
an "as adjusted" basis, 25.9% in the fourth quarter of 2017.
Operating Income, Net Income, Adjusted Net Income,
Adjusted EBITDA
Operating income, on a GAAP basis, for the
fourth quarter was $7.9 million as
compared with $7.6 million in the
fourth quarter of 2017 and $18.3
million in the third quarter of 2018.
Net loss, on a GAAP basis, for the fourth quarter was
$2.4 million or $0.07 cents per basic and diluted share as
compared with net income of $43.7
million or $1.28 per basic
share and $0.99 per diluted share in
the fourth quarter of 2017, and net income of $17.2 million or $0.50 per basic share and $0.41 per diluted share in the third quarter of
2018.
Adjusted Net Income, a non-GAAP financial measure, for the
fourth quarter of 2018 totaled $3.5
million or $0.10 per basic
share and $0.10 per diluted share, as
compared with Adjusted Net Income of $9.1
million or $0.27 per basic
share and $0.23 per diluted share in
the fourth quarter of 2017, and compared with Adjusted Net Income
of $13.3 million or $0.38 per basic share and $0.32 per diluted share in the third quarter of
2018.
Adjusted EBITDA, a non-GAAP financial measure, in the
fourth quarter was $17.4 million or
9.7% of revenue as compared with Adjusted EBITDA of $20.5 million or 11.8% of revenue in the fourth
quarter of 2017, and compared with Adjusted EBITDA of $27.9 million or 13.5% of revenue in the third
quarter of 2018.
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 MagnaChip's
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 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.
Cash and cash equivalents totaled $132.4
million at the end of the fourth quarter, slightly down from
$133.5 million at the end of the
third quarter of 2018.
Note: The following table sets forth information relating to our
operating segments (in thousands). The historical amounts
below are presented both on an "as reported" and "as adjusted"
basis to show the impact of the strategic realignment and transfer
of a portion of the non-OLED Display business from the Standard
Products Group to the Foundry Services Group beginning in the first
quarter of 2018:
|
|
Three Months Ended
|
|
|
|
December 31,
2018
|
|
|
December 31,
2017
As Reported
|
|
|
December 31,
2017
As Adjusted
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Foundry Services
Group
|
|
$
|
83,114
|
|
|
$
|
80,629
|
|
|
$
|
90,300
|
|
Standard Products
Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Display
Solutions
|
|
|
50,127
|
|
|
|
53,671
|
|
|
|
44,000
|
|
Power
Solutions
|
|
|
46,131
|
|
|
|
40,241
|
|
|
|
40,241
|
|
Total Standard
Products Group
|
|
$
|
96,258
|
|
|
$
|
93,912
|
|
|
$
|
84,241
|
|
All other
|
|
|
22
|
|
|
|
39
|
|
|
|
39
|
|
Total net
sales
|
|
$
|
179,394
|
|
|
$
|
174,580
|
|
|
$
|
174,580
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
2018
|
|
|
December 31,
2017
As Reported
|
|
|
December 31,
2017
As Adjusted
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Foundry Services
Group
|
|
$
|
325,312
|
|
|
$
|
320,089
|
|
|
$
|
350,395
|
|
Standard Products
Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Display
Solutions
|
|
|
256,113
|
|
|
|
209,539
|
|
|
|
179,233
|
|
Power
Solutions
|
|
|
169,284
|
|
|
|
149,836
|
|
|
|
149,836
|
|
Total Standard
Products Group
|
|
$
|
425,397
|
|
|
$
|
359,375
|
|
|
$
|
329,069
|
|
All other
|
|
|
189
|
|
|
|
208
|
|
|
|
208
|
|
Total net
sales
|
|
$
|
750,898
|
|
|
$
|
679,672
|
|
|
$
|
679,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
December 31,
2018
|
|
|
December 31,
2017
As
Reported
|
|
|
December 31,
2017
As
Adjusted
|
|
|
|
Amount
|
|
|
%
of
Net Sales
|
|
|
Amount
|
|
|
%
of
Net Sales
|
|
|
Amount
|
|
|
%
of
Net Sales
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foundry Services
Group
|
|
$
|
19,286
|
|
|
|
23.2%
|
|
|
$
|
25,564
|
|
|
|
31.7%
|
|
|
$
|
27,454
|
|
|
|
30.4%
|
|
Standard Products
Group
|
|
|
24,604
|
|
|
|
25.6
|
|
|
|
23,748
|
|
|
|
25.3
|
|
|
|
21,858
|
|
|
|
25.9
|
|
All other
|
|
|
22
|
|
|
|
100.0
|
|
|
|
39
|
|
|
|
100.0
|
|
|
|
39
|
|
|
|
100.0
|
|
Total gross
profit
|
|
$
|
43,912
|
|
|
|
24.5%
|
|
|
$
|
49,351
|
|
|
|
28.3%
|
|
|
$
|
49,351
|
|
|
|
28.3%
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
2018
|
|
|
December 31,
2017
As
Reported
|
|
|
December 31,
2017
As
Adjusted
|
|
|
|
Amount
|
|
|
%
of
Net Sales
|
|
|
Amount
|
|
|
%
of
Net Sales
|
|
|
Amount
|
|
|
%
of
Net Sales
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foundry Services
Group
|
|
$
|
82,578
|
|
|
|
25.4%
|
|
|
$
|
95,458
|
|
|
|
29.8%
|
|
|
$
|
101,780
|
|
|
|
29.0%
|
|
Standard Products
Group
|
|
|
115,478
|
|
|
|
27.1
|
|
|
|
92,227
|
|
|
|
25.7
|
|
|
|
85,905
|
|
|
|
26.1
|
|
All other
|
|
|
40
|
|
|
|
21.2
|
|
|
|
208
|
|
|
|
100.0
|
|
|
|
208
|
|
|
|
100.0
|
|
Total gross
profit
|
|
$
|
198,096
|
|
|
|
26.4%
|
|
|
$
|
187,893
|
|
|
|
27.6%
|
|
|
$
|
187,893
|
|
|
|
27.6%
|
|
Fourth Quarter 2018 and Recent Company
Highlights
MagnaChip announced:
- The introduction of a new High-Voltage Super Junction MOSFET
with a 900V breakdown voltage and low total gate charge (Qg). The
device with two package types, I-PAK and D-PAK, will be
manufactured in high volume in the first quarter of 2019.
http://www.magnachip.com/aboutus/aboutus_sub12_view.html?tname=ez_Press_Room_e&seq=223&page=1
- Volume production of a new Display Driver IC (DDIC) for
automotive panel displays has commenced. MagnaChip is planning to
expand its business to various automotive display applications,
starting with the design-win of a new product at a leading Japanese
panel maker of automotive CSD (Center Stack Display) panels. The
application of this LCD-based display driver product will be
further extended to a wide range of automotive applications such as
instrument cluster, GPS navigation and car entertainment displays
in the future. Over time, it is widely anticipated that OLED
display drivers also will be adopted for use in automotive
applications.
http://www.magnachip.com/aboutus/aboutus_sub12_view.html?tname=ez_Press_Room_e&seq=224&page=1
- Appointment of Jeong Ki Min to
the newly created position of Chief of Strategic Planning. Mr. Min,
a seasoned semiconductor executive with 33 years of global business
experience, previously held senior positions at Samsung
Semiconductor, Samsung Electronics, Samsung Display, and SK
Telecom. During his more than three decades in the high-tech
industry, Mr. Min has initiated and negotiated high-profile joint
venture agreements, strategic alliances and acquisitions. Among his
other accomplishments, Mr. Min also has led new business planning
teams, managed R&D operations, led Foundry marketing teams, and
helped develop semiconductor growth strategies.
http://www.magnachip.com/aboutus/aboutus_sub12_view.html?tname=ez_Press_Room_e&seq=226&page=1
- It now offers Foundry customers a 0.18 micron BCD
(Bipolar-CMOS-DMOS) 200V high-voltage process. This new BCD process
uses SOI (Silicon On Insulator) substrates with solid high-voltage
isolation and extends MagnaChip's existing BCD processes from 100V
to 200V. Having 200V devices in a BCD process is valuable because
it enables a Power IC to be designed for high voltage applications,
including automobiles, electrical vehicles, industrial motor
drivers, ultrasonic medical imaging systems and solar panels.
http://www.magnachip.com/aboutus/aboutus_sub12_view.html?tname=ez_Press_Room_e&seq=227&page=1
- Volume production has commenced for an IGBT product for power
module targeted to high-voltage industrial applications. IGBT is
one of a MagnaChip family of Power standard products called
Insulated Gate Bipolar Transistors.The new IGBT P-series
("MBW100T120PHF") allows designers to operate devices at an
improved switching frequency, which enables reducing the size and
cost of capacitors and inductive devices in circuits.
http://www.magnachip.com/aboutus/aboutus_sub12_view.html?tname=ez_Press_Room_e&seq=228&page=1
- The appointment of Nader
Tavakoli as its new non-executive Chairman of the Board of
Directors, effective November 26,
2018. Mr. Tavakoli replaces Gary
Tanner as the Company's Chairman. Mr. Tanner will remain a
Director on the Board and will continue to serve as a member of the
Audit, Compensation and Risk Committees of the Board. Mr. Tanner
joined MagnaChip's Board in August
2015, and has served as its non-executive Chairman since
October 2016. Mr. Tavakoli has served
on MagnaChip's Board of Directors since 2009. He has served on, and
chaired, various committees of the Board, and is currently a member
of the Audit, Compensation and Risk Committees. Mr. Tavakoli is the
Chief Executive Officer of Cobalt International Energy and serves
as a Plan Administrator of MF Global Inc.
http://www.magnachip.com/aboutus/aboutus_sub12_view.html?tname=ez_Press_Room_e&seq=229&page=1
- The release of a low noise, low power consumption, fast
transient LDO (Low Dropout) regulator that also can be designed
into BGA (Ball Grid Array) SSD (Solid State Drive) components
commonly used in mobile devices. An LDO regulator is a power
standard product whose function can be designed into various
components.
http://www.magnachip.com/aboutus/aboutus_sub12_view.html?tname=ez_Press_Room_e&seq=230&page=1
- Availability of its third generation 0.18 micron
Bipolar-CMOS-DMOS (BCD) process technology for Foundry customers.
The technology is highly suitable for PMIC, DC-DC converters,
battery charger ICs, protection ICs, motor driver ICs, LED driver
ICs and audio amplifiers.
http://www.magnachip.com/aboutus/aboutus_sub12_view.html?tname=ez_Press_Room_e&seq=231&page=1.
Fourth Quarter 2018 Conference Call
The conference
call will be webcast live today (February
14, 2019) at 5:00 p.m. EST and
also is available by dialing toll-free at 1-844 536 5472.
International call-in participants can dial 1-614-999-9318. The
conference ID number is 9483865. Participants are encouraged to
initiate their calls at least 10 minutes in advance of the
5:00 p.m. EST start time to ensure a
timely connection. The webcast and earnings release will be
accessible at www.magnachip.com. A replay of the conference call
will be available the same day and will run for 72 hours. The
replay dial-in numbers are 1-404-537-3406 or toll-free at
1-855-859-2056. The access code is 9483865.
About MagnaChip Semiconductor Corporation
MagnaChip is a designer and manufacturer of analog and mixed-signal
semiconductor platform solutions for communications, IoT, consumer,
industrial and automotive applications. The Company's Standard
Products Group and Foundry Services Group provide a broad range of
standard products and manufacturing services to customers
worldwide. MagnaChip, with over 30 years of operating history, owns
a portfolio of approximately 3,000 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.
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 statements about our future operating and
financial performance, including first quarter 2019 revenue and
gross profit margin expectations. 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 general economic conditions, the impact of
competitive products and pricing, timely design acceptance by our
customers, timely introduction of new products and technologies,
ability to ramp new products into volume production, industry wide
shifts in supply and demand for semiconductor products, industry
and/or company overcapacity, 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 which can be eliminated, compliance with U.S. and
international trade and export laws and regulations by us and our
distributors, and other risks detailed from time to time in
MagnaChip's filings with the SEC, including our Form 10-K filed on
February 22, 2018 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.
CONTACTS:
|
|
In the United
States:
|
In
Korea:
|
Bruce
Entin
|
Chankeun
Park
|
Investor
Relations
|
Director, Public
Relations
|
Tel.
+1-408-625-1262
|
Tel.
+82-2-6903-5223
|
Investor.relations@magnachip.com
|
chankeun.park@magnachip.com
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands of
US dollars, except share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December 31,
2018
|
|
|
September 30,
2018
|
|
|
December 31,
2017
|
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
Net sales
|
|
$
|
179,394
|
|
|
$
|
206,000
|
|
|
$
|
174,580
|
|
|
$
|
750,898
|
|
|
$
|
679,672
|
|
Cost of
sales
|
|
|
135,482
|
|
|
|
150,251
|
|
|
|
125,229
|
|
|
|
552,802
|
|
|
|
491,779
|
|
Gross
profit
|
|
|
43,912
|
|
|
|
55,749
|
|
|
|
49,351
|
|
|
|
198,096
|
|
|
|
187,893
|
|
Gross profit
%
|
|
|
24.5%
|
|
|
|
27.1%
|
|
|
|
28.3%
|
|
|
|
26.4%
|
|
|
|
27.6%
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
17,516
|
|
|
|
18,566
|
|
|
|
23,631
|
|
|
|
72,639
|
|
|
|
81,775
|
|
Research and
development expenses
|
|
|
18,536
|
|
|
|
18,918
|
|
|
|
18,083
|
|
|
|
78,039
|
|
|
|
70,523
|
|
Restructuring and
other gain
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,010)
|
|
Early termination
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,369
|
|
Total operating
expenses
|
|
|
36,052
|
|
|
|
37,484
|
|
|
|
41,714
|
|
|
|
150,678
|
|
|
|
148,657
|
|
Operating
income
|
|
|
7,860
|
|
|
|
18,265
|
|
|
|
7,637
|
|
|
|
47,418
|
|
|
|
39,236
|
|
Interest
expense
|
|
|
(5,743)
|
|
|
|
(5,587)
|
|
|
|
(5,460)
|
|
|
|
(22,282)
|
|
|
|
(21,559)
|
|
Foreign currency gain
(loss), net
|
|
|
(4,316)
|
|
|
|
6,002
|
|
|
|
39,297
|
|
|
|
(24,445)
|
|
|
|
65,516
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
|
(206)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(206)
|
|
|
|
—
|
|
Other income,
net
|
|
|
555
|
|
|
|
150
|
|
|
|
1,006
|
|
|
|
264
|
|
|
|
2,898
|
|
Income (loss) before
income tax expenses
|
|
|
(1,850)
|
|
|
|
18,830
|
|
|
|
42,480
|
|
|
|
749
|
|
|
|
86,091
|
|
Income tax expenses
(benefits)
|
|
|
530
|
|
|
|
1,608
|
|
|
|
(1,173)
|
|
|
|
4,649
|
|
|
|
1,155
|
|
Net income
(loss)
|
|
$
|
(2,380)
|
|
|
$
|
17,222
|
|
|
$
|
43,653
|
|
|
$
|
(3,900)
|
|
|
$
|
84,936
|
|
Earnings (loss) per
common share :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
$
|
(0.07)
|
|
|
$
|
0.50
|
|
|
$
|
1.28
|
|
|
$
|
(0.11)
|
|
|
$
|
2.50
|
|
- Diluted
|
|
$
|
(0.07)
|
|
|
$
|
0.41
|
|
|
$
|
0.99
|
|
|
$
|
(0.11)
|
|
|
$
|
2.02
|
|
Weighted average
number of shares—Basic
|
|
|
34,627,292
|
|
|
|
34,573,377
|
|
|
|
34,176,812
|
|
|
|
34,469,921
|
|
|
|
33,943,264
|
|
Weighted average
number of shares—Diluted
|
|
|
34,627,292
|
|
|
|
46,021,610
|
|
|
|
45,573,889
|
|
|
|
34,469,921
|
|
|
|
44,755,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
|
RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA AND ADJUSTED NET
INCOME
|
(In thousands of
US dollars, except share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December 31,
2018
|
|
|
September 30,
2018
|
|
|
December 31,
2017
|
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
Net income
(loss)
|
|
$
|
(2,380)
|
|
|
$
|
17,222
|
|
|
$
|
43,653
|
|
|
$
|
(3,900)
|
|
|
$
|
84,936
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
5,180
|
|
|
|
5,055
|
|
|
|
5,149
|
|
|
|
20,417
|
|
|
|
20,505
|
|
Income tax expenses
(benefits)
|
|
|
530
|
|
|
|
1,608
|
|
|
|
(1,173)
|
|
|
|
4,649
|
|
|
|
1,155
|
|
Depreciation and
amortization
|
|
|
8,165
|
|
|
|
7,913
|
|
|
|
7,457
|
|
|
|
32,048
|
|
|
|
28,146
|
|
EBITDA
|
|
|
11,495
|
|
|
|
31,798
|
|
|
|
55,086
|
|
|
|
53,214
|
|
|
|
134,742
|
|
Restructuring and
other gain
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,010)
|
|
Early termination
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,369
|
|
Equity-based
compensation expense
|
|
|
1,320
|
|
|
|
1,083
|
|
|
|
722
|
|
|
|
4,409
|
|
|
|
2,336
|
|
Foreign currency loss
(gain), net
|
|
|
4,315
|
|
|
|
(6,001)
|
|
|
|
(39,297)
|
|
|
|
24,445
|
|
|
|
(65,516)
|
|
Derivative valuation
loss (gain), net
|
|
|
144
|
|
|
|
518
|
|
|
|
(436)
|
|
|
|
2,369
|
|
|
|
(236)
|
|
Restatement related
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
4,319
|
|
|
|
(765)
|
|
|
|
10,306
|
|
Secondary offering
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
154
|
|
|
|
—
|
|
|
|
669
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
|
206
|
|
|
|
—
|
|
|
|
—
|
|
|
|
206
|
|
|
|
—
|
|
Other indemnification
costs and reimbursement
|
|
|
(89)
|
|
|
|
473
|
|
|
|
—
|
|
|
|
384
|
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
17,391
|
|
|
$
|
27,871
|
|
|
$
|
20,548
|
|
|
$
|
84,262
|
|
|
$
|
78,660
|
|
Net income
(loss)
|
|
$
|
(2,380)
|
|
|
$
|
17,222
|
|
|
$
|
43,653
|
|
|
$
|
(3,900)
|
|
|
$
|
84,936
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
other gain
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,010)
|
|
Early termination
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,369
|
|
Equity-based
compensation expense
|
|
|
1,320
|
|
|
|
1,083
|
|
|
|
722
|
|
|
|
4,409
|
|
|
|
2,336
|
|
Foreign currency loss
(gain), net
|
|
|
4,315
|
|
|
|
(6,001)
|
|
|
|
(39,297)
|
|
|
|
24,445
|
|
|
|
(65,516)
|
|
Derivative valuation
loss (gain), net
|
|
|
144
|
|
|
|
518
|
|
|
|
(436)
|
|
|
|
2,369
|
|
|
|
(236)
|
|
Restatement related
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
4,319
|
|
|
|
(765)
|
|
|
|
10,306
|
|
Secondary offering
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
154
|
|
|
|
—
|
|
|
|
669
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
|
206
|
|
|
|
—
|
|
|
|
—
|
|
|
|
206
|
|
|
|
—
|
|
Other indemnification
costs and reimbursements
|
|
|
(89)
|
|
|
|
473
|
|
|
|
—
|
|
|
|
384
|
|
|
|
—
|
|
Adjusted Net
Income
|
|
$
|
3,516
|
|
|
$
|
13,295
|
|
|
$
|
9,115
|
|
|
$
|
27,148
|
|
|
$
|
28,854
|
|
Adjusted Net
Income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
$
|
0.10
|
|
|
$
|
0.38
|
|
|
$
|
0.27
|
|
|
$
|
0.79
|
|
|
$
|
0.85
|
|
- Diluted
|
|
$
|
0.10
|
|
|
$
|
0.32
|
|
|
$
|
0.23
|
|
|
$
|
0.71
|
|
|
$
|
0.76
|
|
Weighted average
number of shares – Basic
|
|
|
34,627,292
|
|
|
|
34,573,377
|
|
|
|
34,176,812
|
|
|
|
34,469,921
|
|
|
|
33,943,264
|
|
Weighted average
number of shares – Diluted
|
|
|
35,128,341
|
|
|
|
46,021,610
|
|
|
|
45,573,889
|
|
|
|
45,941,853
|
|
|
|
44,755,137
|
|
We present Adjusted EBITDA and Adjusted Net Income as
supplemental measures of our performance. We define Adjusted EBITDA
for the periods indicated as EBITDA (as defined below), adjusted to
exclude (i) Restructuring and other gain, (ii) Early
termination charges, (iii) Equity-based compensation expense,
(iv) Foreign currency loss (gain), net, (v) Derivative
valuation loss (gain), net, (vi) Restatement related expenses,
(vii) Secondary offering expenses, (viii) Loss on early
extinguishment of long-term borrowings, net and (ix) Other
indemnification costs and reimbursements. EBITDA for the periods
indicated is defined as net income (loss) before interest expense,
net, income tax expenses and depreciation and amortization. We
prepare Adjusted Net Income by adjusting net income (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 is particularly
useful because it reflects the impact of our asset base and capital
structure on our operating performance. We define Adjusted Net
Income for the periods as net income, adjusted to exclude
(i) Restructuring and other gain, (ii) Early termination
charges, (iii) Equity-based compensation expense,
(iv) Foreign currency loss (gain), net, (v) Derivative
valuation loss (gain), net, (vi) Restatement related expenses,
(vii) Secondary offering expenses, (viii) Loss on early
extinguishment of long-term borrowings, net and (ix) Other
indemnification costs and reimbursements.
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands of
US dollars, except share data)
|
(Unaudited)
|
|
|
December 31,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
132,438
|
|
$
128,575
|
Accounts receivable,
net
|
80,003
|
|
92,026
|
Unbilled accounts
receivable
|
38,181
|
|
—
|
Inventories,
net
|
71,611
|
|
73,073
|
Other
receivables
|
3,702
|
|
4,292
|
Prepaid
expenses
|
11,133
|
|
9,250
|
Hedge
collateral
|
5,810
|
|
7,600
|
Other current
assets
|
9,867
|
|
15,444
|
Total current
assets
|
352,745
|
|
330,260
|
|
|
|
|
Property, plant and
equipment, net
|
202,171
|
|
205,903
|
Intangible assets,
net
|
3,953
|
|
4,061
|
Long-term prepaid
expenses
|
15,598
|
|
12,791
|
Other non-current
assets
|
8,729
|
|
5,774
|
Total
assets
|
$
583,196
|
|
$
558,789
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
55,631
|
|
$
65,940
|
Other accounts
payable
|
15,168
|
|
10,261
|
Accrued
expenses
|
46,250
|
|
51,746
|
Deferred
revenue
|
6,477
|
|
8,335
|
Other current
liabilities
|
9,133
|
|
1,860
|
Total current
liabilities
|
132,659
|
|
138,142
|
Long-term borrowings,
net
|
303,577
|
|
303,416
|
Accrued severance
benefits, net
|
146,031
|
|
148,905
|
Other non-current
liabilities
|
18,239
|
|
7,963
|
Total
liabilities
|
600,506
|
|
598,426
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity
|
|
|
|
Common stock, $0.01
par value, 150,000,000 shares authorized, 43,054,458 shares issued
and 34,441,232 outstanding at December 31, 2018 and 42,563,808
shares issued and 34,189,599 outstanding at December 31,
2017
|
431
|
|
426
|
Additional paid-in
capital
|
142,600
|
|
136,259
|
Accumulated
deficit
|
(36,305)
|
|
(40,889)
|
Treasury stock,
8,613,226 shares at December 31, 2018 and 8,374,209 shares at
December 31, 2017, respectively
|
(103,926)
|
|
(102,319)
|
Accumulated other
comprehensive loss
|
(20,110)
|
|
(33,114)
|
Total stockholders'
deficit
|
(17,310)
|
|
(39,637)
|
Total liabilities and
stockholders' equity
|
$
583,196
|
|
$
558,789
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In thousands of
US dollars)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December 31,
2018
|
|
|
December
31,
2018
|
|
|
December
31,
2017
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
(2,380)
|
|
|
$
|
(3,900)
|
|
|
$
|
84,936
|
|
Adjustments to
reconcile net income to net cash provided by (used in)
operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
8,165
|
|
|
|
32,048
|
|
|
|
28,146
|
|
Provision for
severance benefits
|
|
|
2,958
|
|
|
|
17,644
|
|
|
|
24,373
|
|
Amortization of debt
issuance costs and original issue discount
|
|
|
560
|
|
|
|
2,183
|
|
|
|
1,987
|
|
Loss (gain) on foreign
currency, net
|
|
|
3,284
|
|
|
|
30,215
|
|
|
|
(77,600)
|
|
Restructuring gain and
other
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,010)
|
|
Stock-based
compensation
|
|
|
1,320
|
|
|
|
5,213
|
|
|
|
2,336
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
|
206
|
|
|
|
206
|
|
|
|
—
|
|
Other
|
|
|
(271)
|
|
|
|
(1,235)
|
|
|
|
49
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
22,576
|
|
|
|
8,294
|
|
|
|
(22,210)
|
|
Unbilled accounts
receivable
|
|
|
(2,471)
|
|
|
|
(1,284)
|
|
|
|
—
|
|
Inventories,
net
|
|
|
(379)
|
|
|
|
(30,675)
|
|
|
|
(8,077)
|
|
Other
receivables
|
|
|
3,929
|
|
|
|
1,260
|
|
|
|
2,218
|
|
Other current
assets
|
|
|
7,428
|
|
|
|
9,942
|
|
|
|
2,318
|
|
Accounts
payable
|
|
|
(25,803)
|
|
|
|
(8,389)
|
|
|
|
10,320
|
|
Other accounts
payable
|
|
|
(2,372)
|
|
|
|
(11,183)
|
|
|
|
(12,141)
|
|
Accrued
expenses
|
|
|
640
|
|
|
|
(4,730)
|
|
|
|
(12,020)
|
|
Deferred
revenue
|
|
|
(669)
|
|
|
|
2,891
|
|
|
|
(3,949)
|
|
Other current
liabilities
|
|
|
590
|
|
|
|
2,123
|
|
|
|
(1,281)
|
|
Other non-current
liabilities
|
|
|
1,311
|
|
|
|
2,346
|
|
|
|
(760)
|
|
Payment of severance
benefits
|
|
|
(2,684)
|
|
|
|
(11,688)
|
|
|
|
(21,506)
|
|
Other
|
|
|
(1,716)
|
|
|
|
(2,045)
|
|
|
|
(382)
|
|
Net cash provided by
(used in) operating activities
|
|
|
14,222
|
|
|
|
39,236
|
|
|
|
(20,253)
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
settlement of hedge collateral
|
|
|
3,052
|
|
|
|
14,342
|
|
|
|
10,615
|
|
Payment of hedge
collateral
|
|
|
(1,942)
|
|
|
|
(12,907)
|
|
|
|
(14,839)
|
|
Proceeds from disposal
of plant, property and equipment
|
|
|
—
|
|
|
|
1,685
|
|
|
|
1,209
|
|
Purchase of plant,
property and equipment
|
|
|
(10,073)
|
|
|
|
(28,948)
|
|
|
|
(32,661)
|
|
Payment for property
related to water treatment facility arrangement
|
|
|
—
|
|
|
|
(4,283)
|
|
|
|
—
|
|
Payment for
intellectual property registration
|
|
|
(185)
|
|
|
|
(961)
|
|
|
|
(1,207)
|
|
Collection of
guarantee deposits
|
|
|
7
|
|
|
|
801
|
|
|
|
1,462
|
|
Payment of guarantee
deposits
|
|
|
(2,927
|
|
|
|
(3,016)
|
|
|
|
(41)
|
|
Other
|
|
|
19
|
|
|
|
(19)
|
|
|
|
94
|
|
Net cash used in
investing activities
|
|
|
(12,049
|
|
|
|
(33,306)
|
|
|
|
(35,368)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of senior notes
|
|
|
—
|
|
|
|
—
|
|
|
|
86,250
|
|
Payment of debt
issuance costs
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,902)
|
|
Repurchase of
long-term borrowings
|
|
|
(2,228)
|
|
|
|
(2,228)
|
|
|
|
—
|
|
Proceeds from exercise
of stock options
|
|
|
19
|
|
|
|
1,132
|
|
|
|
3,744
|
|
Acquisition of
treasury stock
|
|
|
(1,408)
|
|
|
|
(1,607)
|
|
|
|
(11,401)
|
|
Proceeds from property
related to water treatment facility arrangement
|
|
|
—
|
|
|
|
4,283
|
|
|
|
—
|
|
Repayment of financing
related to water treatment facility arrangement
|
|
|
(213)
|
|
|
|
(286)
|
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
|
|
(3,830)
|
|
|
|
1,294
|
|
|
|
72,691
|
|
Effect of exchange
rates on cash, cash equivalents and restricted cash
|
|
|
613
|
|
|
|
(3,361)
|
|
|
|
9,899
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash
|
|
|
(1,044)
|
|
|
|
3,863
|
|
|
|
26,969
|
|
Cash, cash
equivalents and restricted
cash
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of the
period
|
|
|
133,482
|
|
|
|
128,575
|
|
|
|
101,606
|
|
End of the
period
|
|
$
|
132,438
|
|
|
$
|
132,438
|
|
|
$
|
128,575
|
|
View original
content:http://www.prnewswire.com/news-releases/magnachip-reports-fourth-quarter-and-full-year-2018-financial-results-and-announces-strategic-review-process-of-its-foundry-operations-300795828.html
SOURCE MagnaChip Semiconductor Corporation