- Revenue of $61.0 million was
in-line with guidance (vs $60.5M
mid-point) and was down 39.8% YoY and up 7%
sequentially.
- Gross profit margin was 22.2%, up 100 basis points
from Q1. The sequential improvement was primarily driven by
higher utilization at our Gumi Fab.
- GAAP diluted loss per share was $0.09; Non-GAAP diluted loss per share was
$0.06.
- Completed $25.5 million of
stock buyback during the quarter.
- Ended the quarter with a strong balance sheet with
$173 million cash and no
debt.
- Board of Directors authorized a new $50 million stock buyback program.
SEOUL,
South Korea, Aug. 7, 2023
/PRNewswire/ -- Magnachip Semiconductor Corporation (NYSE: MX)
("Magnachip" or the "Company") today announced financial results
for the second quarter 2023.
YJ Kim, Magnachip's chief executive officer commented, "Our
year-over-year results continued to be impacted by macro challenges
but I am pleased to see sequential improvement in our Power
business driven by Industrial and Automotive applications. We also
continued our strong pace of design-in and design win activities
during the quarter. Looking forward, we expect to see further
sequential growth in our Power business in Q3."
YJ Kim continued, "In our Display business, we continue to
collaborate closely with our new global panel customer. We are very
optimistic about our long-term growth prospects, as our products
offer compelling competitive advantages that will enable us to
penetrate the rapidly expanding OLED market in Asia. Additionally, we are pleased to announce
our Board of Directors' authorization of a new $50 million stock buyback program as part of our
commitment to enhance shareholder value."
Q2 2023 Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands of U.S.
dollars, except share data
|
|
|
|
GAAP
|
|
|
|
Q2 2023
|
|
|
Q1 2023
|
|
|
Q/Q
change
|
|
|
Q2 2022
|
|
|
Y/Y
change
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Standard Products
Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Display
Solutions
|
|
|
9,657
|
|
|
|
10,841
|
|
|
|
down
|
|
|
|
10.9
|
%
|
|
|
28,336
|
|
|
|
down
|
|
|
|
65.9
|
%
|
Power
Solutions
|
|
|
41,718
|
|
|
|
40,673
|
|
|
|
up
|
|
|
|
2.6
|
%
|
|
|
62,952
|
|
|
|
down
|
|
|
|
33.7
|
%
|
Transitional Fab 3
foundry services(1)
|
|
|
9,604
|
|
|
|
5,491
|
|
|
|
up
|
|
|
|
74.9
|
%
|
|
|
10,088
|
|
|
|
down
|
|
|
|
4.8
|
%
|
Gross Profit
Margin
|
|
|
22.2
|
%
|
|
|
21.2
|
%
|
|
|
up
|
|
|
|
1.0
|
%pts
|
|
|
28.6
|
%
|
|
|
down
|
|
|
|
6.4
|
%pts
|
Operating Income
(Loss)
|
|
|
(10,656)
|
|
|
|
(21,818)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
2,002
|
|
|
down
|
|
|
|
n/a
|
|
Net Income
(Loss)
|
|
|
(3,947)
|
|
|
|
(21,470)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
(3,340)
|
|
|
|
down
|
|
|
|
n/a
|
|
Basic Loss per
Common Share
|
|
|
(0.09)
|
|
|
|
(0.49)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
(0.07)
|
|
|
|
down
|
|
|
|
n/a
|
|
Diluted Loss per
Common Share
|
|
|
(0.09)
|
|
|
|
(0.49)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
(0.07)
|
|
|
|
down
|
|
|
|
n/a
|
|
|
|
|
|
In thousands of U.S.
dollars, except share data
|
|
|
|
Non-GAAP(2)
|
|
|
|
Q2
2023
|
|
|
Q1
2023
|
|
|
Q/Q
change
|
|
|
Q2
2022
|
|
|
Y/Y
change
|
|
Adjusted Operating
Income (Loss)
|
|
|
(7,762)
|
|
|
|
(12,249)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
4,787
|
|
|
|
down
|
|
|
|
n/a
|
|
Adjusted
EBITDA
|
|
|
(3,594)
|
|
|
|
(7,873)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
8,525
|
|
|
|
down
|
|
|
|
n/a
|
|
Adjusted Net Income
(Loss)
|
|
|
(2,472)
|
|
|
|
(10,367)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
10,567
|
|
|
|
down
|
|
|
|
n/a
|
|
Adjusted Earnings
(Loss) per Common Share—Diluted
|
|
|
(0.06)
|
|
|
|
(0.24)
|
|
|
|
up
|
|
|
|
n/a
|
|
|
|
0.23
|
|
|
|
down
|
|
|
|
n/a
|
|
___________
|
(1)
|
Following the
consummation of the sale of the Foundry Services Group business and
Fab 4 in Q3 2020, and for a period of up to three years, we will
provide transitional foundry services to the buyer for foundry
products manufactured in our fabrication facility located in Gumi
("Transitional Fab 3 Foundry Services"). 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.
|
Financial Guidance
While actual results may vary,
Magnachip currently expects the following for Q3 2023:
- Revenue to be in the range of $59
million to $65 million,
including about $8 million of
Transitional Fab 3 Foundry Services.
- Gross profit margin to be in the range of 22.5% to 24.5%.
Q2 2023 Earnings Conference Call
Magnachip
will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Monday, August 7, 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/BI115ecf6f0d5b4f12ae6130b5b7b40ff1
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 third 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
conflict between Russia and
Ukraine, escalated trade tensions
between the U.S. and China and
continuing supply constraints on Magnachip's third 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 conflict between Russia and Ukraine, 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
|
|
Six Months Ended
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Net sales – standard
products
business
|
$
51,375
|
|
$
51,514
|
|
$
91,288
|
|
$
102,889
|
|
$
185,298
|
Net sales –
transitional Fab 3 foundry
services
|
9,604
|
|
5,491
|
|
10,088
|
|
15,095
|
|
20,171
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
60,979
|
|
57,005
|
|
101,376
|
|
117,984
|
|
205,469
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
Cost of sales –
standard products business
|
37,867
|
|
37,312
|
|
63,620
|
|
75,179
|
|
119,700
|
Cost of sales –
transitional Fab 3 foundry services
|
9,574
|
|
7,599
|
|
8,811
|
|
17,173
|
|
17,828
|
Total cost of
sales
|
47,441
|
|
44,911
|
|
72,431
|
|
92,352
|
|
137,528
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
13,538
|
|
12,094
|
|
28,945
|
|
25,632
|
|
67,941
|
Gross profit as a
percentage of standard products business net
sales
|
26.3 %
|
|
27.6 %
|
|
30.3 %
|
|
26.9 %
|
|
35.4 %
|
Gross profit as a
percentage of total
revenues
|
22.2 %
|
|
21.2 %
|
|
28.6 %
|
|
21.7 %
|
|
33.1 %
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
expenses
|
12,137
|
|
12,165
|
|
12,736
|
|
24,302
|
|
26,899
|
Research and
development
expenses
|
11,255
|
|
13,298
|
|
13,410
|
|
24,553
|
|
25,364
|
Early termination and
other
charges
|
802
|
|
8,449
|
|
797
|
|
9,251
|
|
797
|
Total operating
expenses
|
24,194
|
|
33,912
|
|
26,943
|
|
58,106
|
|
53,060
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(10,656)
|
|
(21,818)
|
|
2,002
|
|
(32,474)
|
|
14,881
|
Interest income
|
2,692
|
|
2,842
|
|
1,061
|
|
5,534
|
|
1,776
|
Interest
expense
|
(200)
|
|
(256)
|
|
(499)
|
|
(456)
|
|
(610)
|
Foreign currency gain
(loss), net
|
1,237
|
|
(3,430)
|
|
(7,012)
|
|
(2,193)
|
|
(7,702)
|
Other income (loss),
net
|
3
|
|
(35)
|
|
211
|
|
(32)
|
|
429
|
Income (loss) before
income tax expense
|
(6,924)
|
|
(22,697)
|
|
(4,237)
|
|
(29,621)
|
|
8,774
|
Income tax expense
(benefit)
|
(2,977)
|
|
(1,227)
|
|
(897)
|
|
(4,204)
|
|
2,586
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(3,947)
|
|
$
(21,470)
|
|
$
(3,340)
|
|
$
(25,417)
|
|
$
6,188
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share—
|
$
(0.09)
|
|
(0.49)
|
|
$
(0.07)
|
|
$
(0.60)
|
|
$
0.14
|
Diluted earnings (loss)
per common share—
|
$
(0.09)
|
|
(0.49)
|
|
$
(0.07)
|
|
$
(0.60)
|
|
$
0.13
|
Weighted average number
of shares—
|
|
|
|
|
|
|
|
|
|
Basic
|
41,741,310
|
|
43,390,832
|
|
44,897,278
|
|
42,561,514
|
|
45,248,293
|
Diluted
|
41,741,310
|
|
43,390,832
|
|
44,897,278
|
|
42,561,514
|
|
46,329,559
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In thousands of
U.S. dollars, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
June 30,
2023
|
December 31,
2022
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 172,954
|
|
|
$ 225,477
|
|
Accounts receivable,
net
|
|
35,009
|
|
|
35,380
|
|
Inventories,
net
|
|
32,337
|
|
|
39,883
|
|
Other
receivables
|
|
3,498
|
|
|
7,847
|
|
Prepaid
expenses
|
|
9,553
|
|
|
10,560
|
|
Hedge
collateral
|
|
2,120
|
|
|
2,940
|
|
Other current
assets
|
|
19,070
|
|
|
15,766
|
|
Total current
assets
|
|
274,541
|
|
|
337,853
|
|
Property, plant and
equipment, net
|
|
101,067
|
|
|
110,747
|
|
Operating lease
right-of-use assets
|
|
5,224
|
|
|
5,265
|
|
Intangible assets,
net
|
|
1,706
|
|
|
1,930
|
|
Long-term prepaid
expenses
|
|
7,430
|
|
|
10,939
|
|
Deferred income
taxes
|
|
37,141
|
|
|
38,324
|
|
Other non-current
assets
|
|
16,626
|
|
|
11,587
|
|
Total
assets
|
|
$ 443,735
|
|
|
$
516,645
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$ 20,367
|
|
|
$ 17,998
|
|
Other accounts
payable
|
|
8,473
|
|
|
9,702
|
|
Accrued
expenses
|
|
10,456
|
|
|
9,688
|
|
Accrued income taxes
|
|
91
|
|
|
3,154
|
|
Operating lease
liabilities
|
|
1,745
|
|
|
1,397
|
|
Other current
liabilities
|
|
4,506
|
|
|
5,306
|
|
Total current
liabilities
|
|
45,638
|
|
|
47,245
|
|
Accrued severance
benefits, net
|
|
20,123
|
|
|
23,121
|
|
Non-current operating
lease liabilities
|
|
3,671
|
|
|
4,091
|
|
Other non-current
liabilities
|
|
10,011
|
|
|
14,035
|
|
Total
liabilities
|
|
79,443
|
|
|
88,492
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Common stock, $0.01
par value, 150,000,000 shares authorized, 56,449,782 shares issued
and 40,133,898
outstanding at June 30, 2023 and 56,432,449
shares issued and 43,824,575 outstanding at December 31,
2022
|
|
564
|
|
|
564
|
|
Additional paid-in
capital
|
|
269,297
|
|
|
266,058
|
|
Retained
earnings
|
|
310,089
|
|
|
335,506
|
|
Treasury stock,
16,315,884 shares at June 30, 2023 and 12,607,874 shares at
December 31, 2022,
respectively
|
|
(199,248)
|
|
|
(161,422)
|
|
Accumulated other
comprehensive loss
|
|
(16,410)
|
|
|
(12,553)
|
|
Total stockholders'
equity
|
|
364,292
|
|
|
428,153
|
|
Total liabilities and
stockholders' equity
|
|
$
443,735
|
|
|
$
516,645
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands of
U.S. dollars)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Six
Months Ended
|
|
|
June 30,
2023
|
|
June 30,
2023
|
|
June 30,
2022
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
Net income
(loss)
|
$
(3,947)
|
|
$
(25,417)
|
|
$
6,188
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities
|
|
|
|
|
|
|
Depreciation and
amortization
|
4,145
|
|
8,502
|
|
7,602
|
|
Provision for
severance benefits
|
1,761
|
|
4,091
|
|
3,240
|
|
Loss on foreign
currency, net
|
35
|
|
9,117
|
|
29,183
|
|
Provision for
inventory reserves
|
(17)
|
|
1,121
|
|
5,282
|
|
Stock-based
compensation
|
2,092
|
|
3,212
|
|
3,626
|
|
Other,
net
|
213
|
|
450
|
|
712
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
Accounts receivable,
net
|
(3,315)
|
|
(342)
|
|
(12,377)
|
|
Inventories
|
3,849
|
|
4,911
|
|
(5,486)
|
|
Other
receivables
|
2,031
|
|
4,407
|
|
11,640
|
|
Other current
assets
|
(1,061)
|
|
395
|
|
(2,089)
|
|
Accounts
payable
|
976
|
|
2,880
|
|
2,429
|
|
Other accounts
payable
|
(5,064)
|
|
(6,488)
|
|
(5,861)
|
|
Accrued
expenses
|
(6,496)
|
|
1,104
|
|
(2,709)
|
|
Accrued income
taxes
|
(49)
|
|
(2,972)
|
|
(11,513)
|
|
Other current
liabilities
|
125
|
|
(471)
|
|
(2,153)
|
|
Other non-current
liabilities
|
(45)
|
|
(214)
|
|
570
|
|
Payment of severance
benefits
|
(4,857)
|
|
(5,728)
|
|
(2,934)
|
|
Other,
net
|
(181)
|
|
(487)
|
|
(385)
|
|
Net cash provided by
(used in) operating activities
|
(9,805)
|
|
(1,929)
|
|
24,965
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
Proceeds from
settlement of hedge
collateral
|
2,180
|
|
3,335
|
|
2,805
|
|
Payment of hedge
collateral
|
(1,493)
|
|
(2,586)
|
|
(6,844)
|
|
Purchase of property,
plant and equipment
|
(1,383)
|
|
(1,518)
|
|
(1,511)
|
|
Payment for
intellectual property
registration
|
(89)
|
|
(163)
|
|
(153)
|
|
Payment of guarantee
deposits
|
(3,425)
|
|
(6,907)
|
|
(1,049)
|
|
Other,
net
|
1,426
|
|
1,445
|
|
14
|
|
Net cash used in
investing
activities
|
(2,784)
|
|
(6,394 )
|
|
(6,738 )
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
Proceeds from exercise
of stock options
|
18
|
|
27
|
|
1,786
|
|
Acquisition of
treasury stock
|
(24,576)
|
|
(36,840)
|
|
(1,826)
|
|
Repayment of financing
related to water treatment facility
arrangement
|
(122)
|
|
(248)
|
|
(261)
|
|
Repayment of principal
portion of finance lease
liabilities
|
(22)
|
|
(46)
|
|
(32)
|
|
|
|
|
|
|
|
|
Net cash used in
financing
activities
|
(24,702)
|
|
(37,107)
|
|
(333)
|
|
Effect of exchange
rates on cash and cash
equivalents
|
(1,840)
|
|
(7,093)
|
|
(23,644)
|
|
|
|
|
|
|
|
|
Net decrease in cash
and cash
equivalents
|
(39,131)
|
|
(52,523)
|
|
(5,750)
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
Beginning of the
period
|
212,085
|
|
225,477
|
|
279,547
|
|
End of the
period
|
$
172,954
|
|
$
172,954
|
|
$
273,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months Ended
|
|
|
|
June 30,
2023
|
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
|
Operating income
(loss)
|
|
$
|
(10,656)
|
|
|
$
|
(21,818)
|
|
|
$
|
2,002
|
|
|
$
|
(32,474)
|
|
|
$
|
14,881
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation expense
|
|
|
2,092
|
|
|
|
1,120
|
|
|
|
1,988
|
|
|
|
3,212
|
|
|
|
3,626
|
|
Early termination and
other charges
|
|
|
802
|
|
|
|
8,449
|
|
|
|
797
|
|
|
|
9,251
|
|
|
|
797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income (Loss)
|
|
$
|
(7,762)
|
|
|
$
|
(12,249)
|
|
|
$
|
4,787
|
|
|
$
|
(20,011)
|
|
|
$
|
19,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
For the three months ended March 31,
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 and six months ended
June 30, 2023, we recorded
$802 thousand of one-time employee
incentives.
For the three and six months ended June
30, 2022, we recorded $797
thousand of professional service fees and expenses incurred
in connection with certain strategic evaluations.
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF
NET INCOME (LOSS) TO ADJUSTED EBITDA AND ADJUSTED NET INCOME
(LOSS)
(In thousands of
U.S. dollars, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
|
Net income
(loss)
|
$
(3,947)
|
|
$
(21,470)
|
|
$
(3,340)
|
|
$
(25,417)
|
|
$
6,188
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
(2,692)
|
|
(2,842)
|
|
(1,061)
|
|
(5,534)
|
|
(1,776 )
|
|
Interest
expense
|
200
|
|
256
|
|
499
|
|
456
|
|
610
|
|
Income tax expense
(benefit)
|
(2,977)
|
|
(1,227)
|
|
(897)
|
|
(4,204)
|
|
2,586
|
|
Depreciation and
amortization
|
4,145
|
|
4,357
|
|
3,711
|
|
8,502
|
|
7,602
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
(5,271)
|
|
(20,926)
|
|
(1,088)
|
|
(26,197)
|
|
15,210
|
|
Equity-based
compensation expense
|
2,092
|
|
1,120
|
|
1,988
|
|
3,212
|
|
3,626
|
|
Foreign currency loss
(gain),
net
|
(1,237)
|
|
3,430
|
|
7,012
|
|
2,193
|
|
7,702
|
|
Derivative valuation
loss (gain),
net
|
20
|
|
54
|
|
(184)
|
|
74
|
|
(55 )
|
|
Early termination and
other charges
|
802
|
|
8,449
|
|
797
|
|
9,251
|
|
797
|
|
Adjusted
EBITDA
|
$
(3,594)
|
|
$
(7,873)
|
|
$
8,525
|
|
$
(11,467)
|
|
$
27,280
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(3,947)
|
|
$
(21,470)
|
|
$
(3,340)
|
|
$
(25,417)
|
|
$
6,188
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation expense
|
2,092
|
|
1,120
|
|
1,988
|
|
3,212
|
|
3,626
|
|
Foreign currency loss
(gain),
net
|
(1,237)
|
|
3,430
|
|
7,012
|
|
2,193
|
|
7,702
|
|
Derivative valuation
loss (gain),
net
|
20
|
|
54
|
|
(184)
|
|
74
|
|
(55 )
|
|
Early termination and
other charges
|
802
|
|
8,449
|
|
797
|
|
9,251
|
|
797
|
|
Income tax effect on
non-GAAP
adjustments
|
(202)
|
|
(1,950)
|
|
4,294
|
|
(2,152)
|
|
5,245
|
|
Adjusted Net Income
(Loss)
|
$
(2,472)
|
|
$ (10,367)
|
|
$
10,567
|
|
$
(12,839)
|
|
$ 23,503
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss) per common share—
|
|
|
|
|
|
|
|
|
|
|
-
Basic
|
$
(0.06)
|
|
$
(0.24)
|
|
$
0.24
|
|
$
(0.30)
|
|
$
0.52
|
|
- Diluted
|
$
(0.06)
|
|
$
(0.24)
|
|
$
0.23
|
|
$
(0.30)
|
|
$
0.51
|
|
Weighted average number
of shares – basic
|
41,741,310
|
|
43,390,832
|
|
44,897,278
|
|
42,561,514
|
|
45,248,293
|
|
Weighted average number
of shares – diluted
|
41,741,310
|
|
43,390,832
|
|
45,937,515
|
|
42,561,514
|
|
46,329,559
|
|
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. EBITDA for the
periods indicated is defined as net income (loss) before interest
income, interest expense, income tax expense (benefit) and
depreciation and amortization.
We prepare Adjusted Net Income (Loss) 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 (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 income (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 and (v)
Income tax effect on non-GAAP adjustments.
For the three months ended March 31,
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 and six months ended
June 30, 2023, we recorded
$802 thousand of one-time employee
incentives.
For the three and six months ended June
30, 2022, we recorded $797
thousand of professional service fees and expenses incurred
in connection with certain strategic evaluations.
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SOURCE Magnachip Semiconductor Corporation