- 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
