SEOUL, South Korea and CUPERTINO, Calif., July 30, 2013 /PRNewswire/ -- MagnaChip Semiconductor Corporation ("MagnaChip") (NYSE: MX), a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products, today announced financial results for the second quarter ended June 30, 2013.
(Logo: http://photos.prnewswire.com/prnh/20120305/NY61184LOGO )
Revenue for the second quarter of 2013 was $215.3 million, a 4.9% increase compared to $205.3 million for the first quarter of 2013 and a 6.2% increase compared to $202.6 million for the second quarter of 2012.
Gross margin was $71.0 million or 33.0%, as a percent of revenue, for the second quarter of 2013. This compares to gross margin of $65.7 million or 32.0% for the first quarter of 2013 and $62.9 million or 31.0% for the second quarter of 2012.
Net income, on a GAAP basis, for the second quarter of 2013 totaled $4.4 million or $0.12 per diluted share. This compares to a net loss of $7.4 million or $0.21 per diluted share for the first quarter of 2013 and a net income of $4.3 million or $0.12 per diluted share for the second quarter of 2012.
"We delivered solid results in the second quarter. Revenue of $215.3 million dollars was up 4.9% sequentially and up 6.2% year-over-year. Gross margin of 33.0% was up 100 basis points compared to last quarter and up 200 basis points compared to Q2 of last year," said Sang Park, MagnaChip Chairman and CEO. "We're excited that our effort to focus on fast growing markets with our expanding list of innovative partners has enabled us to deliver ten consecutive quarters of meeting or exceeding our financial guidance, in spite of the recent soft demand from high-end smartphone makers."
Adjusted net income, a non-GAAP measurement, for the second quarter of 2013 totaled $26.2 million or $0.71 per diluted share compared to $19.7 million or $0.53 per diluted share for the first quarter of 2013 and $17.9 million or $0.48 per diluted share for the second quarter of 2012.
Management believes that non-GAAP financial measures, when viewed in conjunction with GAAP results, can provide a more meaningful understanding of the factors and trends affecting MagnaChip's business and operations. 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 following the financial statements.
Combined cash balances (cash and cash equivalents plus restricted cash) totaled $192.6 million at the end of the second quarter of 2013, an increase of $9.6 million from the end of the prior quarter. Cash provided from operations totaled approximately $11.0 million for the second quarter of 2013.
|
Revenue by Segment
|
|
|
|
|
In thousands of US dollars
|
Three Months Ended
|
|
June 30, 2013
|
March 31, 2013
|
June 30, 2012
|
|
Semiconductor Manufacturing Services (Foundry)
|
$ 109,751
|
$ 104,138
|
$ 91,318
|
|
Display Solutions
|
68,867
|
70,323
|
76,784
|
|
Power Solutions
|
35,959
|
30,184
|
33,699
|
|
Other
|
712
|
653
|
833
|
|
Total Revenue
|
$ 215,289
|
$ 205,298
|
$ 202,634
|
Second Quarter and Recent Company Highlights
- Completed Private Offering of $225 Million of Senior Notes.
- Lowered Cash Interest Expense by 30.3% or $6.5 Million Annually.
- Corporate Credit and Debt Rating Upgraded by Moody's Investors Service.
- Tenth Consecutive Quarter of Meeting or Exceeding Financial Guidance.
Business Outlook
For the third quarter of 2013, MagnaChip expects:
- Revenue will be in the range of $215 million to $225 million.
- Gross margin will be 33.0% to 34.0% as a percent of revenue.
Conference Call
MagnaChip will hold a conference call at 5 p.m. EDT today to discuss the second quarter 2013 financial results. The conference call will be webcast live and is also available by dialing 1-866-776-2061 in the U.S. or 1-706-679-0298 for all other locations. The conference ID number is 18170301 and participants are encouraged to initiate their calls at least 10 minutes in advance of the 5 p.m. EDT 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 access numbers are 1-855-859-2056 or 1-404-537-3406. The access code is 18170301.
About MagnaChip Semiconductor Corporation
Headquartered in South Korea, MagnaChip is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high-volume consumer applications. MagnaChip believes it has one of the broadest and deepest ranges of analog and mixed-signal semiconductor platforms in the industry, supported by its 30-year operating history, a large portfolio of registered and pending patents, and extensive engineering 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 ability to capitalize on improving market dynamics and future operating and financial performance including third quarter 2013 revenue and gross margin. All forward-looking statements included in this release are based upon information available to MagnaChip Semiconductor 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, 2013 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.
|
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of US dollars, except share data)
(Unaudited)
|
|
|
Three Months Ended
|
|
|
June 30,
2013
|
|
|
March 31,
2013
|
|
|
June 30,
2012
|
|
Net sales
|
$
|
215,289
|
|
$
|
205,298
|
|
$
|
202,634
|
|
Cost of sales
|
|
144,241
|
|
|
139,555
|
|
|
139,776
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
71,048
|
|
|
65,743
|
|
|
62,858
|
|
Gross profit %
|
|
33.0%
|
|
|
32.0%
|
|
|
31.0%
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
19,709
|
|
|
19,791
|
|
|
20,093
|
|
Research and development expenses
|
|
21,131
|
|
|
20,582
|
|
|
19,762
|
|
Restructuring and impairment charges
|
|
—
|
|
|
2,446
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
30,208
|
|
|
22,924
|
|
|
23,003
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses)
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
(5,879)
|
|
|
(5,849)
|
|
|
(5,619)
|
|
Foreign currency loss, net
|
|
(20,978)
|
|
|
(22,558)
|
|
|
(10,586)
|
|
Other
|
|
(230)
|
|
|
(260)
|
|
|
701
|
|
|
|
|
|
|
|
|
|
|
|
(27,087)
|
|
|
(28,667)
|
|
|
(15,504)
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
3,121
|
|
|
(5,743)
|
|
|
7,499
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
(1,315)
|
|
|
1,662
|
|
|
3,159
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
4,436
|
|
$
|
(7,405)
|
|
$
|
4,340
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share :
|
|
|
|
|
|
|
|
|
|
- Basic
|
$
|
0.13
|
|
$
|
(0.21)
|
|
$
|
0.12
|
|
- Diluted
|
$
|
0.12
|
|
$
|
(0.21)
|
|
$
|
0.12
|
|
Weighted average number of shares—Basic
|
|
35,474,001
|
|
|
35,539,413
|
|
|
36,713,569
|
|
Weighted average number of shares—Diluted
|
|
37,125,005
|
|
|
35,539,413
|
|
|
37,566,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
June 30,
2013
|
|
|
March 31,
2013
|
|
|
June 30,
2012
|
|
Net income (loss)
|
$
|
4,436
|
|
$
|
(7,405)
|
|
$
|
4,340
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
8,359
|
|
|
8,522
|
|
|
7,923
|
|
Interest expense, net
|
|
5,879
|
|
|
5,849
|
|
|
5,619
|
|
Income tax expense (benefit)
|
|
(1,315)
|
|
|
1,662
|
|
|
3,159
|
|
Restructuring and impairment charges
|
|
—
|
|
|
2,446
|
|
|
—
|
|
Stock-based compensation expense
|
|
493
|
|
|
420
|
|
|
457
|
|
Foreign currency loss, net
|
|
20,978
|
|
|
22,558
|
|
|
10,586
|
|
Derivative valuation loss (gain), net
|
|
230
|
|
|
267
|
|
|
(701)
|
|
Secondary offering expense
|
|
—
|
|
|
669
|
|
|
1,216
|
|
Adjusted EBITDA
|
$
|
39,060
|
|
$
|
34,988
|
|
$
|
32,599
|
|
Adjusted EBITDA per common share:
|
|
|
|
|
|
|
|
|
|
- Diluted
|
$
|
1.05
|
|
$
|
0.94
|
|
$
|
0.87
|
|
Weighted average number of shares
- Diluted
|
|
37,125,005
|
|
|
37,138,414
|
|
|
37,566,699
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
4,436
|
|
$
|
(7,405)
|
|
$
|
4,340
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and impairment charges
|
|
—
|
|
|
2,446
|
|
|
—
|
|
Stock-based compensation expense
|
|
493
|
|
|
420
|
|
|
457
|
|
Amortization of intangibles
|
|
1,492
|
|
|
1,749
|
|
|
1,980
|
|
Foreign currency loss, net
|
|
20,978
|
|
|
22,558
|
|
|
10,586
|
|
Derivative valuation loss (gain), net
|
|
230
|
|
|
267
|
|
|
(701)
|
|
Secondary offering expense
|
|
—
|
|
|
669
|
|
|
1,216
|
|
GAAP and cash tax expense difference
|
|
(1,452)
|
|
|
(998)
|
|
|
—
|
|
Adjusted net income
|
$
|
26,177
|
|
$
|
19,706
|
|
$
|
17,878
|
|
Adjusted net income per common share:
|
|
|
|
|
|
|
|
|
|
- Diluted
|
$
|
0.71
|
|
$
|
0.53
|
|
$
|
0.48
|
|
Weighted average number of shares - Diluted
|
|
37,125,005
|
|
|
37,138,414
|
|
|
37,566,699
|
|
|
|
|
|
|
|
|
|
We define Adjusted EBITDA as net income (loss) adjusted to exclude (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit), (iv) restructuring and impairment charges, (v) stock-based compensation expense, (vi) foreign currency loss, net, (vii) derivative valuation loss (gain), net, and (viii) secondary offering expense.
We present Adjusted Net Income as a further supplemental measure of our performance. We prepare Adjusted Net Income by adjusting net income 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 as net income (loss) adjusted to exclude (i) restructuring and impairment charges, (ii) stock-based compensation expense, (iii) amortization of intangibles, (iv) foreign currency loss, net, (v) derivative valuation loss (gain), net, (vi) secondary offering expense, and (vii) GAAP and cash tax expense difference.
|
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars, except share data)
(Unaudited)
|
|
|
June 30,
2013
|
|
December 31,
2012
|
|
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
192,641
|
|
$
|
182,238
|
|
Restricted cash
|
|
6
|
|
133
|
|
Accounts receivable, net
|
|
165,181
|
|
|
143,331
|
|
Inventories, net
|
|
76,342
|
|
|
89,363
|
|
Other receivables
|
|
2,459
|
|
|
1,429
|
|
Prepaid expenses
|
|
9,366
|
|
|
7,884
|
|
Current deferred income tax assets
|
|
25,347
|
|
|
22,768
|
|
Other current assets
|
|
3,695
|
|
|
9,680
|
|
|
|
|
|
|
|
Total current assets
|
|
475,037
|
|
|
456,826
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
247,242
|
|
|
238,256
|
|
Intangible assets, net
|
|
10,068
|
|
|
15,260
|
|
Long-term prepaid expenses
|
|
17,962
|
|
|
18,048
|
|
Deferred income tax assets
|
|
42,631
|
|
|
46,710
|
|
Other non-current assets
|
|
15,422
|
|
|
14,866
|
|
|
|
|
|
|
|
Total assets
|
$
|
808,362
|
|
$
|
789,966
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Accounts payable
|
$
|
76,175
|
|
$
|
79,236
|
|
Other accounts payable
|
|
16,804
|
|
|
15,600
|
|
Accrued expenses
|
|
49,918
|
|
|
43,486
|
|
Derivative liabilities
|
|
10,247
|
|
|
—
|
|
Other current liabilities
|
|
6,912
|
|
|
9,973
|
|
|
|
|
|
|
|
Total current liabilities
|
|
160,056
|
|
|
148,295
|
|
|
|
|
|
|
|
Long-term borrowings, net
|
|
201,801
|
|
|
201,653
|
|
Accrued severance benefits, net
|
|
112,198
|
|
|
112,446
|
|
Other non-current liabilities
|
|
17,880
|
|
|
17,263
|
|
|
|
|
|
|
|
Total liabilities
|
|
491,935
|
|
|
479,657
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
Common stock, $0.01 par value, 150,000,000 shares authorized,
40,021,283 shares issued and 35,681,382 shares outstanding at June
30, 2013 and 39,599,374 shares issued and 35,635,357 shares
outstanding at December 31, 2012
|
|
400
|
|
|
396
|
|
Additional paid-in capital
|
|
107,375
|
|
|
101,885
|
|
Retained earnings
|
|
284,282
|
|
|
287,251
|
|
Treasury stock, 4,339,901 shares at June 30, 2013 and 3,964,017
shares at December 31, 2012
|
|
(45,918)
|
|
|
(39,918)
|
|
Accumulated other comprehensive loss
|
|
(29,712)
|
|
|
(39,305)
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
316,427
|
|
|
310,309
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
808,362
|
|
$
|
789,966
|
|
|
|
|
|
|
|
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US dollars)
(Unaudited)
|
|
|
Three Months Ended
|
|
Six Months
Ended
|
|
June 30,
2013
|
|
June 30,
2013
|
|
June 30,
2012
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
4,436
|
|
$
|
(2,969)
|
|
$
|
19,603
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
8,359
|
|
|
16,881
|
|
|
15,397
|
|
Provision for severance benefits
|
|
6,457
|
|
|
10,686
|
|
|
10,975
|
|
Amortization of debt issuance costs and original issue discount
|
|
285
|
|
|
568
|
|
|
497
|
|
Loss on foreign currency translation, net
|
|
26,728
|
|
|
55,008
|
|
|
55
|
|
Gain on disposal of property, plant and equipment, net
|
|
(26)
|
|
|
(26)
|
|
|
(190)
|
|
Loss on disposal of intangible assets, net
|
|
—
|
|
|
1
|
|
|
15
|
|
Restructuring and impairment charges
|
|
—
|
|
|
618
|
|
|
—
|
|
Stock-based compensation
|
|
493
|
|
|
913
|
|
|
915
|
|
Other
|
|
776
|
|
|
1,411
|
|
|
(348)
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(23,077)
|
|
|
(29,486)
|
|
|
(8,296)
|
|
Inventories
|
|
4,738
|
|
|
6,760
|
|
|
(11,498)
|
|
Other receivables
|
|
1,878
|
|
|
600
|
|
|
(2,580)
|
|
Other current assets
|
|
5,411
|
|
|
7,425
|
|
|
8,851
|
|
Deferred tax assets
|
|
(3,177)
|
|
|
(995)
|
|
|
1,146
|
|
Accounts payable
|
|
(1,437)
|
|
|
853
|
|
|
14,654
|
|
Other accounts payable
|
|
(17,256)
|
|
|
(7,522)
|
|
|
9,677
|
|
Accrued expenses
|
|
(5,878)
|
|
|
(7,003)
|
|
|
7,890
|
|
Other current liabilities
|
|
4,741
|
|
|
(1,097)
|
|
|
6,611
|
|
Payment of severance benefits
|
|
(2,312)
|
|
|
(2,939)
|
|
|
(4,816)
|
|
Other
|
|
(103)
|
|
|
(1,107)
|
|
|
(1,996)
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
11,036
|
|
|
48,580
|
|
|
66,562
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
Decrease in restricted cash
|
|
30
|
|
|
122
|
|
|
1,634
|
|
Proceeds from disposal of plant, property and equipment
|
|
27
|
|
|
27
|
|
|
891
|
|
Purchase of plant, property and equipment
|
|
(6,963)
|
|
|
(39,890)
|
|
|
(46,728)
|
|
Payment for intellectual property registration
|
|
(101)
|
|
|
(243)
|
|
|
(565)
|
|
Payment for acquisition
|
|
—
|
|
|
—
|
|
|
(8,642)
|
|
Decrease in short-term financial instruments
|
|
—
|
|
|
—
|
|
|
173
|
|
Collection of guarantee deposits
|
|
117
|
|
|
117
|
|
|
70
|
|
Payment of guarantee deposits
|
|
(198)
|
|
|
(939)
|
|
|
(176)
|
|
Other
|
|
3
|
|
|
11
|
|
|
(53)
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
(7,085)
|
|
|
(40,795)
|
|
|
(53,396)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
3,575
|
|
|
4,581
|
|
|
183
|
|
Repayment of obligations under capital lease
|
|
—
|
|
|
—
|
|
|
(2,968)
|
|
Acquisition of treasury stock
|
|
—
|
|
|
(6,000)
|
|
|
(16,935)
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
3,575
|
|
|
(1,419)
|
|
|
(19,720)
|
|
Effect of exchange rates on cash and cash equivalents
|
|
2,128
|
|
|
4,037
|
|
|
207
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
9,654
|
|
|
10,403
|
|
|
(6,347)
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
Beginning of the period
|
|
182,987
|
|
|
182,238
|
|
|
162,111
|
|
|
|
|
|
|
|
End of the period
|
$
|
192,641
|
|
$
|
192,641
|
|
$
|
155,764
|
|
|
|
|
|
|
|
|
|
SOURCE MagnaChip Semiconductor Corporation