SEOUL, South Korea and
CUPERTINO, Calif., May 28,
2015 /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 first quarter ended March 31, 2015.
The Company also announced the appointment of YJ Kim, a
semiconductor industry veteran, as Chief Executive Officer and a
member of the Company's Board of Directors, and Jonathan Kim as Executive Vice President and
Chief Financial Officer. Both held the same posts on an interim
basis for the past year. In addition, the Company named
Theodore Kim as Executive Vice
President and Chief Compliance Officer, a newly created position,
reporting directly to the Board of Directors. He continues to serve
as General Counsel.
On behalf of MagnaChip's Board, Chairman Doug Norby said, "I am pleased that, after
conducting a broad and thorough search process, the Board has
unanimously appointed YJ to lead MagnaChip and Jonathan to serve as
CFO. As interim CEO, YJ provided strong leadership and strategic
vision to the Company during this important period. Jonathan
successfully led the completion of the restatement process, and has
proven himself to be a very capable financial executive. The Board
looks forward to working with the two leaders to improve
MagnaChip's performance."
Revenue for the first quarter of 2015 was $164.9 million, a 1.7% decline compared to
$167.7 million for the fourth quarter
of 2014 and flat compared to $164.2
million for the first quarter of 2014.
Gross profit was $35.0 million or
21.2%, as a percent of revenue, for the first quarter of 2015. This
compares to gross profit of $34.5
million or 20.6% for the fourth quarter of 2014 and
$40.3 million or 24.5% for the first
quarter of 2014.
Net loss, on a GAAP basis, for the first quarter of 2015 totaled
$20.0 million or $0.59 per diluted share. This compares to a net
loss of $63.8 million or $1.87 per diluted share for the fourth quarter of
2014 and a net loss of $21.6 million
or $0.63 per diluted share for the
first quarter of 2014. Net loss was impacted primarily by lower
revenue and gross margin as well as by substantial accounting,
legal and other related costs associated with our restatement and
certain related litigation and other regulatory investigations and
actions.
"We continue to face major challenges as a result of strategic
missteps in the past, so we have implemented a comprehensive cost
and portfolio optimization program to position MagnaChip for growth
over the long-term while we also work to improve fab utilization
and boost engineering efficiencies," said CEO YJ Kim. "Our goal is
to broaden our customer base, expand into new markets including
sensors and the Internet of Things (IoT), accelerate product
innovation and improve engineering productivity. To help achieve
these goals and streamline product functions, we recently combined
our Display Solutions and Power Solutions divisions into a single
Standard Products Group."
MagnaChip also announced today that HK Kim, Executive Vice
President and General Manager of the Power Solutions Division, and
Brent Rowe, Executive Vice President
of Worldwide Sales, have resigned. The Company announced earlier
this month that TY Hwang, formerly the President and Chief
Operating Officer, resigned effective April 30.
"We devoted substantial efforts and resources to getting caught
up on our delayed SEC filings. With today's filing of our
2014 10-K and with the filing of our 10-Q for the first quarter of
2015, which we expect to file within the next two weeks, we will be
current with our filings and plan to be a timely filer starting in
the second quarter," said Jonathan
Kim, Chief Financial Officer. "We are committed to achieving
and maintaining a strong internal control over financial reporting
and financial reporting integrity." In addition, Mr. Kim said, "We
have engaged a global consulting firm with considerable expertise
in cost and portfolio optimization to help us focus on strategies
to emerge from our current challenges and to drive our business
forward and return long-term value to our shareholders."
Adjusted net loss, a non-GAAP measurement, for the first quarter
of 2015 totaled $9.6 million or
$0.28 per diluted share compared to
an adjusted net loss of $10.8 million
or $0.32 per diluted share for the
fourth quarter of 2014 and an adjusted net loss of $6.4 million or $0.19 per diluted share for the first quarter of
2014.
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) totaled
$91.4 million at the end of the first
quarter of 2015, a decrease of $11.0
million from the end of the prior quarter.
First Quarter and Recent Company Events
- Appointed YJ Kim as CEO and Jonathan
Kim as CFO
- Appointed Theodore Kim as Chief
Compliance Officer
- Announced Diversified Products for Internet of Things
Applications
- Announced 5th Annual Foundry Technology Symposium in
Taiwan, California, and Texas
- Introduced Automotive Qualified Display Driver ICs for Major
Japanese LCM Maker
- Completed Review and Restatement of Financial Results
- Introduced New Step-Down LED Backlight Drivers
- Offered Enhanced 0.13 Micron Embedded EEPROM Process
Technology
The Company today filed its Annual Report on Form 10-K for the
year ended Dec. 31, 2014, with the
Securities and Exchange Commission. A copy of this and other
MagnaChip SEC filings is available at www.magnachip.com.
Business Outlook
For the second quarter of 2015, MagnaChip anticipates:
- Revenue will be in the range of $155
million to $165 million.
- Gross margin will be 17.0% to 19.0% as a percent of
revenue.
Conference Call
MagnaChip will hold a conference call at 5 p.m. EDT today to discuss the first quarter
2015 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
49272803 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 49272803.
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 second quarter 2015 revenue and gross margin.
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
May 28, 2015 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:
Robert
Pursel
Director of Investor
Relations
Tel.
+1-408-625-1262
robert.pursel@magnachip.com
|
In
Korea:
Chankeun
Park
Senior Manager,
Public Relations
Tel.
+82-2-6903-3195
chankeun.park@magnachip.com
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In
thousands of US dollars, except share
data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
March
31, 2015
|
|
|
December
31, 2014
|
|
|
March
31, 2014
|
Net sales
|
$
|
164,885
|
|
$
|
167,652
|
|
$
|
164,164
|
Cost of
sales
|
|
129,908
|
|
|
133,154
|
|
|
123,887
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
34,977
|
|
|
34,498
|
|
|
40,277
|
Gross profit
%
|
|
21.2%
|
|
|
20.6%
|
|
|
24.5%
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
25,030
|
|
|
32,491
|
|
|
25,027
|
Research and
development expenses
|
|
22,160
|
|
|
22,147
|
|
|
23,137
|
Restructuring and
impairment charges
|
|
—
|
|
|
10,269
|
|
|
—
|
Total operating
expenses
|
|
47,190
|
|
|
64,907
|
|
|
48,164
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(12,213)
|
|
|
(30,409)
|
|
|
(7,887)
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(4,063)
|
|
|
(4,134)
|
|
|
(4,070)
|
Foreign currency
loss, net
|
|
(3,176)
|
|
|
(30,160)
|
|
|
(9,406)
|
Other income,
net
|
|
556
|
|
|
626
|
|
|
561
|
Loss before income
taxes
|
|
(18,896)
|
|
|
(64,077)
|
|
|
(20,802)
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
1,133
|
|
|
(247)
|
|
|
803
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(20,029)
|
|
$
|
(63,830)
|
|
$
|
(21,605)
|
|
|
|
|
|
|
|
|
|
Loss per common share
:
|
|
|
|
|
|
|
|
|
-
Basic
|
$
|
(0.59)
|
|
$
|
(1.87)
|
|
$
|
(0.63)
|
-
Diluted
|
$
|
(0.59)
|
|
$
|
(1.87)
|
|
$
|
(0.63)
|
Weighted average number
of shares—Basic
|
|
34,056,468
|
|
|
34,056,413
|
|
|
34,052,875
|
Weighted average number
of shares—Diluted
|
|
34,056,468
|
|
|
34,056,413
|
|
|
34,052,875
|
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
|
|
|
March
31, 2015
|
|
|
December
31, 2014
|
|
|
March
31, 2014
|
Net loss
|
$
|
(20,029)
|
|
$
|
(63,830)
|
|
$
|
(21,605)
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
6,870
|
|
|
7,143
|
|
|
7,268
|
Interest expense,
net
|
|
4,063
|
|
|
4,134
|
|
|
4,070
|
Income tax expense
(benefit)
|
|
1,133
|
|
|
(247)
|
|
|
803
|
Restructuring and
impairment charges
|
|
—
|
|
|
10,269
|
|
|
—
|
Equity-based
compensation expense
|
|
185
|
|
|
407
|
|
|
617
|
Foreign currency
loss, net
|
|
3,176
|
|
|
30,161
|
|
|
9,407
|
Derivative valuation
loss (gain), net
|
|
—
|
|
|
(49)
|
|
|
16
|
Restatement related
expenses
|
|
7,058
|
|
|
12,145
|
|
|
4,797
|
Adjusted
EBITDA
|
$
|
2,456
|
|
$
|
133
|
|
$
|
5,373
|
Adjusted EBITDA per
common share:
|
|
|
|
|
|
|
|
|
- Diluted
|
$
|
0.07
|
|
$
|
0.00
|
|
$
|
0.16
|
Weighted average number
of shares - Diluted
|
|
34,056,468
|
|
|
34,056,413
|
|
|
34,052,875
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(20,029)
|
|
$
|
(63,830)
|
|
$
|
(21,605)
|
Adjustments:
|
|
|
|
|
|
|
|
|
Restructuring and
impairment charges
|
|
—
|
|
|
10,269
|
|
|
—
|
Equity-based
compensation expense
|
|
185
|
|
|
407
|
|
|
617
|
Amortization of
intangibles
|
|
—
|
|
|
120
|
|
|
357
|
Foreign currency
loss, net
|
|
3,176
|
|
|
30,161
|
|
|
9,407
|
Derivative valuation
loss (gain), net
|
|
—
|
|
|
(49)
|
|
|
16
|
Restatement related
expenses
|
|
7,058
|
|
|
12,145
|
|
|
4,797
|
Adjusted net
loss
|
$
|
(9,610)
|
|
$
|
(10,777)
|
|
$
|
(6,411)
|
Adjusted net loss per
common share:
|
|
|
|
|
|
|
|
|
- Diluted
|
$
|
(0.28)
|
|
$
|
(0.32)
|
|
$
|
(0.19)
|
Weighted average number
of shares - Diluted
|
|
34,056,468
|
|
|
34,056,413
|
|
|
34,052,875
|
We define Adjusted EBITDA for the periods indicated as net
income (loss), adjusted to exclude (i) depreciation and
amortization, (ii) interest expense, net, (iii) income tax expenses
(benefits), (iv) restructuring and impairment charges, (v)
equity-based compensation expense, (vi) foreign currency loss
(gain), net, (vii) derivative valuation loss (gain), net, and
(viii) restatement related expenses.
We present Adjusted Net Income as a further supplemental measure
of our performance. 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 (loss), adjusted
to exclude (i) restructuring and impairment charges, (ii)
equity-based compensation expense, (iii) amortization of
intangibles, (iv) foreign currency loss (gain), net, (v) derivative
valuation loss (gain), net, and (vi) restatement related
expenses.
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars, except share data)
(Unaudited)
|
|
|
|
March
31, 2015
|
|
December 31,
2014
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
91,395
|
|
$
|
102,434
|
Accounts receivable,
net
|
|
|
71,848
|
|
|
72,957
|
Inventories,
net
|
|
|
76,422
|
|
|
75,334
|
Other
receivables
|
|
|
4,535
|
|
|
10,616
|
Prepaid
expenses
|
|
|
10,311
|
|
|
7,560
|
Current deferred
income tax assets
|
|
|
43
|
|
|
237
|
Other current
assets
|
|
|
7,224
|
|
|
6,898
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
261,778
|
|
|
276,036
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
216,486
|
|
|
223,766
|
Intangible assets,
net
|
|
|
2,422
|
|
|
2,451
|
Long-term prepaid
expenses
|
|
|
9,951
|
|
|
10,916
|
Deferred income tax
assets
|
|
|
281
|
|
|
415
|
Other non-current
assets
|
|
|
14,548
|
|
|
14,147
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
505,466
|
|
$
|
527,731
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
73,812
|
|
$
|
70,767
|
Other accounts
payable
|
|
|
8,195
|
|
|
10,986
|
Accrued
expenses
|
|
|
74,573
|
|
|
81,060
|
Other current
liabilities
|
|
|
4,616
|
|
|
6,460
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
161,196
|
|
|
169,273
|
|
|
|
|
|
|
|
Long-term borrowings,
net
|
|
|
224,065
|
|
|
224,035
|
Accrued severance
benefits, net
|
|
|
144,491
|
|
|
139,289
|
Other non-current
liabilities
|
|
|
11,489
|
|
|
13,636
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
541,241
|
|
|
546,233
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Common stock, $0.01
par value, 150,000,000 shares authorized, 40,635,233 shares issued
and 34,056,468 outstanding at March 31, 2015 and
December 31, 2014
|
|
|
406
|
|
|
406
|
Additional paid-in
capital
|
|
|
118,604
|
|
|
118,419
|
Accumulated
deficit
|
|
|
(31,372)
|
|
|
(11,343)
|
Treasury stock,
6,578,765 shares at March 31, 2015 and December 31, 2014
|
|
|
(90,918)
|
|
|
(90,918
|
Accumulated other
comprehensive loss
|
|
|
(32,495)
|
|
|
(35,066
|
|
|
|
|
|
|
|
Total stockholders'
equity (deficit)
|
|
|
(35,775)
|
|
|
(18,502
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
505,466
|
|
$
|
527,731
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US dollars)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
March
31, 2015
|
|
March
31, 2014
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(20,029)
|
|
$
|
(21,605)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
6,870
|
|
|
7,268
|
|
Provision for
severance benefits
|
|
|
7,260
|
|
|
4,034
|
|
Bad debt expenses
(reversal of allowance)
|
|
|
(20)
|
|
|
94
|
|
Amortization of debt
issuance costs and original issue discount
|
|
|
162
|
|
|
149
|
|
Loss on foreign
currency, net
|
|
|
4,179
|
|
|
11,007
|
|
Stock-based
compensation
|
|
|
185
|
|
|
617
|
|
Other
|
|
|
(222)
|
|
|
367
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
133
|
|
|
(28,094)
|
|
Inventories,
net
|
|
|
(1,701)
|
|
|
(10,028)
|
|
Other
receivables
|
|
|
6,140
|
|
|
691
|
|
Other current
assets
|
|
|
(1,653)
|
|
|
(806)
|
|
Deferred tax
assets
|
|
|
324
|
|
|
366
|
|
Accounts
payable
|
|
|
5,902
|
|
|
(837)
|
|
Other accounts
payable
|
|
|
(4,881)
|
|
|
(1,230)
|
|
Accrued
expenses
|
|
|
(7,626)
|
|
|
(3,273)
|
|
Other current
liabilities
|
|
|
(1,774)
|
|
|
(1,790)
|
|
Other non-current
Liabilities
|
|
|
(220)
|
|
|
548
|
|
Payment of severance
benefits
|
|
|
(1,341)
|
|
|
(1,514)
|
|
Other
|
|
|
(367)
|
|
|
(150)
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
|
(8,679)
|
|
|
(44,186)
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
Purchase of plant,
property and equipment
|
|
|
(557)
|
|
|
(6,259)
|
|
Payment for
intellectual property registration
|
|
|
(77)
|
|
|
(92)
|
|
Payment of guarantee
deposits
|
|
|
(411)
|
|
|
(289)
|
|
Other
|
|
|
15
|
|
|
7
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(1,030)
|
|
|
(6,633)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock
|
|
|
—
|
|
|
67
|
|
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
|
—
|
|
|
67
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
|
(1,330)
|
|
|
1,914
|
|
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
|
(11,039)
|
|
|
(48,838)
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
Beginning of the
period
|
|
|
102,434
|
|
|
153,606
|
|
|
|
|
|
|
|
|
End of the
period
|
|
$
|
91,395
|
|
$
|
104,768
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/magnachip-reports-first-quarter-2015-financial-results-300090538.html
SOURCE MagnaChip Semiconductor Corporation