SEOUL, South Korea and
SAN JOSE, Calif., May 6, 2020 /PRNewswire/ -- MagnaChip
Semiconductor Corporation (NYSE: MX) ("MagnaChip" or the "Company")
today announced financial results for the first quarter of
2020.
In accordance with U.S. GAAP, the Company's Foundry Services
Group has been accounted for as a discontinued operation beginning
in the first quarter of 2020, thereby impacting comparability to
previously issued financial guidance. In March 2020, the Company announced the execution
of a definitive agreement to sell the Foundry business and Fab 4.
As previously reported, the transaction value is approximately
$435 million, which includes
$344.7 million in cash and
approximately $90 million in accrued
severance liabilities that will be transferred along with
approximately 1,500 employees to the buyer at the close of the
sale, expected in four to five months.
The Company now has one reporting segment for continuing
operations, which consists of the results of operations of the
standard products business, together with transitional foundry
services related to Fab 3 that it expects to perform for the buyer
of the Foundry business and Fab 4 for a period of up to three years
("Transitional Fab 3 Foundry Services"). The Transitional Fab 3
Foundry Services revenue will be accounted for at cost prior to the
closing of the sale of the Foundry business and Fab 4.
Additionally, the Foundry business and Fab 4 will be operated in
the ordinary course of day-to-day business, but the related
operational results will be shown as discontinued operations for
accounting purposes until the closing of the sale.
First Quarter 2020: Results of Continuing Operations
Revenue from continuing operations (standard products business
and Transitional Fab 3 Foundry Services) was $120.5 million, up 12.3% YoY.
Gross profit from continuing operations (standard products
business and Transitional Fab 3 Foundry Services) was $29.1 million or 24.2% as a percentage of revenue
from continuing operations, as compared to $19.0 million or 17.7% in the first quarter of
2019.
The Company is providing the following results of continuing
operations, which excludes the impact of Transitional Fab 3 Foundry
Services, in order to show the comparable results of the standard
products business. This segment will constitute the Company's core
operations going forward.
Revenue from the standard products business, comprised of
Display Solutions and Power Solutions business lines, was
$110.7 million, up 10.4% YoY, and
revenue from the Foundry Services Group was $86.3 million, up 51.1% from the same
quarter a year ago.
The combined non-GAAP revenue of continuing and discontinued
operations was $197.0 million, up
25.2% as compared with $157.4 million
in the first quarter of 2019, and at the high-end of guidance
range.
Gross profit from the standard products business was
$29.1 million or 26.3% as a
percentage of revenue from the standard products business, as
compared with $19.0 million or 19.0%
in the first quarter of 2019.
The combined non-GAAP gross profit margin of continuing and
discontinued operations was 25.3%, up nearly 11 percentage points
YoY and slightly exceeding the high end of guidance of 23-25%.
Management believes that segregating the revenue of the
Transitional Fab 3 Foundry Services, which is more closely
associated with the Foundry Services Group discontinued operations
and not expected to be long-term core operations for the Company,
from the revenue of continuing operations allows investors to
better understand the results of continuing operations of our core
standard products display solutions and power solutions
businesses.
Due to the fact that these Transitional Fab 3 Foundry Services
are being shown for accounting purposes at cost, management also
believes that showing gross profit margin as a percentage of the
standard products business provides investors with a clearer
picture of the Company's core operations for its standard products
business.
We are providing certain non-GAAP combined results of continuing
and discontinued operations to aid in the comparison to the updated
financial guidance range provided on March
10, 2020. For a reconciliation of the Non-GAAP combined
results of operations, please see the tables attached to this
release.
CEO YJ Kim comments on Q1
Our business performed very
well in the first quarter despite the COVID-19 pandemic that
disrupted the global economy, as well as typical seasonal softness.
OLED revenue of $69.7 million set a
record for a first quarter, as eight OLED smartphones launched
using our OLED display drivers. The Power business was impacted in
part by COVID-19-related market softness and supply chain issues in
China that have since improved,
and we now expect Power revenue to show sequential revenue
improvement in the second quarter. Gross profit margin from our
standard products business, which is now our continuing business,
was 26.3% in the first quarter and gross profit margin from the
Foundry Services Group was 24.0%. Cash and cash equivalents of
$157.3 million at the end of Q1 was
at the highest level in seven years. We generated positive net
operating cash flow of $21.1 million
and free cash flow of $17.7 million.
Notably, Q1 was the fourth consecutive quarter of positive net
operating cash flow.
On COVID-19, mitigating risks to employees and supply
chain
Our thoughts and prayers go out to everyone impacted
by the COVID-19 pandemic, and we salute the brave first responders
and essential health workers here in Korea and around the world.
Due to the extraordinary nature of the global COVID-19 pandemic, we
have taken several steps to mitigate potential risks related to the
health and safety of our employees and to the resiliency of our
supply chain. We disinfect areas in our fabs where employees gather, built
partitions to separate employees in a cafeteria, upgraded the air
filtration systems in our Seoul
office, and require all employees to wear protective face masks and
practice social distancing. Our supply chain currently is operating
at normal levels, and steps have been taken to mitigate risks of
disruption. Some of our Display subcontractors in Korea now carry
extra inventory, while some Power assembly and test subcontractors
in China now are capable of
assembling multiple package types to help avoid a potential
shortage at any individual plant.
Q2 2020 financial guidance
The COVID-19 pandemic is a
rapidly evolving situation that reduces our forward visibility.
While Korea and China appear to
have made significant strides in controlling the spread of the
COVID-19 outbreak, global markets are experiencing a sharp slowdown
in business activity due to the global pandemic. To help account
for market uncertainties, we have widened the typical guidance
range we normally would provide for Q2. While actual results may
vary based upon COVID-19 events that are still unfolding, MagnaChip
currently anticipates based on best available current estimates for
Q2 2020:
- Revenue from the standard products business to be flattish to
down from the first quarter of 2020. Revenue from the Foundry
Services Group to be flattish to up. Non-GAAP combined revenue to
be in the range of $191.0 million to
$203.0 million, flattish at the
mid-point of the projected range when compared with combined
revenue of $197.0 million in the
first quarter of 2020.
- Gross profit margin from both the standard products business
and the Foundry Services Group to be up. Non-GAAP combined gross
profit margin to be in the range of 26.0% to 28.0%, when compared
to 25.3% in the first quarter of 2020.
First Quarter Financial Review
Revenue
Revenue from continuing operations was $120.5 million in the first quarter of 2020, up
12.3% as compared with $107.3 million
in the first quarter of 2019.
Revenue from the standard products business was $110.7 million in the first quarter of 2020, up
10.4% as compared with $100.3 million
in the first quarter of 2019.
Revenue from the Foundry Services Group was $86.3 million in the first quarter of 2020,
up 51.1% as compared with $57.1
million in the first quarter of 2019.
Gross Profit and Gross Profit Margin
Gross profit from continuing operations was $29.1 million or 24.2% as a percentage of revenue
from continuing operations, as compared with $19.0
million or 17.7% in the first quarter of 2019.
Gross profit from the standard products business was
$29.1 million or 26.3% as a
percentage of revenue from the standard products business, as
compared with $19.0 million or 19.0%
in the first quarter of 2019. The YoY improvement in gross profit
margin was due primarily to an improved product mix and a decrease
in inventory reserve related to a legacy display product.
Gross profit from the Foundry Services Group was $20.7 million or 24.0% as a percentage of revenue
from revenue from the Foundry Services Group, as compared with
$3.7 million or 6.4% in the first
quarter of 2019. The YoY improvement in gross profit and gross
profit margin was primarily due to a higher utilization rate
stemmed from a recovery from a global customer inventory correction
and an improved product mix.
Operating Income, Net Income, Adjusted Net Income,
Adjusted EBITDA
Operating income from continuing operations for the first
quarter was $6.0 million as compared
to operating loss from continuing operations of $5.1 million in the first quarter of 2019.
Net loss from continuing operations, on a GAAP basis, was
$31.1 million or $0.89 per basic and diluted share in the
first quarter of 2020 as compared with net loss from continuing
operations of $21.6 million or
$0.63 per basic and diluted share in
the first quarter of 2019.
Adjusted net income from continuing operations, a non-GAAP
financial measure, totaled $1.1 million or $0.03 per basic share and diluted share in
the first quarter of 2020 as compared to adjusted net loss from
continuing operations of $9.7 million or $0.28 per basic and diluted share in the
first quarter of 2019.
Adjusted EBITDA from continuing operations, a non-GAAP financial
measure, was $9.9 million or
8.9% of revenue from the standard products business in the first
quarter of 2020, as compared to negative $1.3 million in the first quarter of
2019.
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, as well as providing a meaningful comparison
to previous information provided on a basis prior to the
discontinued operations classification of the Foundry Services
Group. However, such non-GAAP financial measures have limitations
and should not be considered as a substitute for net income from
continuing operations 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 $157.3
million in the first quarter, up from $151.7 million in the fourth quarter of 2019.
|
Note: The following
table sets forth supplemental information relating to the
continuing and discontinued operations (in thousands). Upon the
execution of the definitive agreement to sell the Foundry business
and Fab 4, the Foundry Services Group is accounted for as a
discontinued operation.
|
|
|
Three Months Ended
|
|
|
|
|
|
March
31,
2020
|
|
|
March
31,
2019
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Net sales – standard
products business
|
|
$
|
110,736
|
|
|
$
|
100,264
|
|
|
|
|
Net sales –
transitional Fab 3 foundry services(1)
|
|
|
9,737
|
|
|
|
7,003
|
|
|
|
|
Total
revenues
|
|
$
|
120,473
|
|
|
$
|
107,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2020
|
|
|
March 31,
2019
|
|
|
|
Amount
|
|
|
%
of
Net Sales
|
|
|
Amount
|
|
|
%
of
Net Sales
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit –
standard products business
|
|
$
|
29,130
|
|
|
|
26.3%
|
|
|
$
|
19,023
|
|
|
|
19.0%
|
|
|
Gross profit –
transitional Fab 3 foundry
services(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total gross
profit
|
|
$
|
29,130
|
|
|
|
24.2%
|
|
|
$
|
19,023
|
|
|
|
17.7%
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March
31,
2020
|
|
|
March
31,
2019
|
|
|
|
|
Discontinued
Operation
|
|
|
|
|
|
|
|
|
|
|
|
Net sales – Foundry
Services Group
|
|
$
|
86,279
|
|
|
$
|
57,116
|
|
|
|
|
Net sales –
transitional Fab 3 foundry services(1)
|
|
|
(9,737)
|
|
|
|
(7,003)
|
|
|
|
|
Total net
sales
|
|
$
|
76,542
|
|
|
$
|
50,113
|
|
|
|
|
Gross profit – Foundry
Services Group
|
|
$
|
20,696
|
|
|
$
|
3,678
|
|
|
|
|
Gross profit –
transitional Fab 3 foundry services(1)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
Gross profit margin –
Foundry Services Group
|
|
|
24.0%
|
|
|
|
6.4%
|
|
|
|
|
____________
|
|
(1)
Following the consummation of the sale of the Foundry business and
Fab 4, and for a period up to three years, the Company will provide
transitional foundry services to the buyer for Foundry products
manufactured in the Company's fabrication facility located in Gumi
("Fab 3"). For the periods prior to the disposal of the
Foundry business and Fab 4, revenue from Fab 3 transitional foundry
services by the Company to the Foundry Services Group (i.e.,
discontinued operation) is recorded at cost in both of the
Company's continuing and discontinued operations for accounting
purposes only.
|
First Quarter 2020 and Recent Company
Highlights
MagnaChip:
- Entered into a definitive agreement (the "Agreement") by
certain of its wholly owned subsidiaries to sell the Company's
Foundry Services Group and the factory in Cheongju, the larger of
the Company's two 8" manufacturing facilities, to a special purpose
company in South Korea established by Alchemist Capital
Partners Korea Co., Ltd. and Credian Partners, Inc. Under the terms
of the Agreement, the total transaction value is approximately
$435 million.
http://investors.magnachip.com/news-releases/news-release-details/magnachip-semiconductor-announces-definitive-agreement-sell
- Announced its offering of a 0.13 micron BCD process with
improved performance to help automotive power semiconductor
designers build more competitive products. BCD (Bipolar-CMOS-DMOS)
is a process technology that combines three different process
technologies onto a single chip: Bipolar for analog signal control
and CMOS (Complementary Metal Oxide Semiconductor) and DMOS (Double
Diffused Metal Oxide Semiconductor) for digital signal control and
high-power handling, used primarily for power semiconductors.
http://investors.magnachip.com/news-releases/news-release-details/magnachip-offers-013-micron-bcd-process-enhanced-performance
- Launched a new MOSFET for wireless earphones for preventing the
battery from overcharging and entered to the wireless earphone
market. This MOSFET is designed to control excessive current
flowing into wireless earphones while recharging the battery in
order to protect wireless earphones from being damaged. Since 2010,
MagnaChip has been providing the world's highest volume of MOSFETs
for smartphone battery charging protection.
http://investors.magnachip.com/news-releases/news-release-details/magnachip-launches-new-mosfet-enhance-protection-wireless
First Quarter 2020 Earnings Conference Call
The
conference call will be webcast live 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 4448257. Participants are encouraged to initiate
their calls at least 10 minutes in advance of the 5 p.m. ET 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 4448257.
About MagnaChip Semiconductor
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 the
standard products business and Foundry Services Group provide a
broad range of standard products and manufacturing services to
customers worldwide. MagnaChip, with more than 40 years of
operating history, owns a portfolio of approximately 2,950
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 MagnaChip's future operating and financial
performance, outlook and business plans, including second quarter
2020 revenue and gross profit margin expectations, and the impact
of the COVID-19 pandemic on MagnaChip's second quarter 2020 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
the impact of changes in macroeconomic and/or general economic
conditions, including those caused by or related to the COVID-19
outbreak, recessions, economic instability and the outbreak of
disease; 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; the risk that the pending sale of our Foundry
Services Group business and the Fab 4 facility to Magnus
Semiconductor, LLC or one of its wholly owned subsidiaries is not
consummated according to our current expectations or at all; public
health issues, including the COVID-19 pandemic; other business
interruptions that could disrupt supply or delivery of, or demand
for, MagnaChip's products, including uncertainties regarding the
impacts of the COVID-19 pandemic that may result in factory
closures, reduced workforces, scarcity of raw materials and goods
produced in infected areas, as well as reduced consumer and
business spending affecting demand for MagnaChip's products due to
government and private sector mandatory business closures, travel
restrictions or the like to prevent the spread of disease; and
other risks detailed from time to time in MagnaChip's filings with
the SEC, including our Form 10-K filed on February 21, 2020 (including that the impact of
the COVID-19 pandemic may also exacerbate the risks discussed
therein) and subsequent registration statements, amendments or
other reports that we may file from time to time with the
Securities and Exchange Commission 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:
Bruce
Entin
Investor
Relations
Tel.
+1-408-625-1262
Investor.relations@magnachip.com
So-Yeon
Jeong
Investor
Relations
Tel+1-408-712-6151
Soyeon.jeong@magnachip.com
|
In
Korea:
Chankeun
Park
Director, Public
Relations
Tel. +82-2-6903-5223
chankeun.park@magnachip.com
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In thousands of
US dollars, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2020
|
|
|
December 31,
2019
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
157,293
|
|
|
$
|
151,657
|
|
|
Accounts receivable,
net
|
|
|
60,688
|
|
|
|
47,447
|
|
|
Inventories,
net
|
|
|
37,130
|
|
|
|
41,404
|
|
|
Other
receivables
|
|
|
8,297
|
|
|
|
10,200
|
|
|
Prepaid
expenses
|
|
|
11,148
|
|
|
|
9,003
|
|
|
Hedge
collateral
|
|
|
13,270
|
|
|
|
9,820
|
|
|
Other current
assets
|
|
|
6,762
|
|
|
|
10,013
|
|
|
Current assets held
for sale
|
|
|
201,619
|
|
|
|
99,821
|
|
|
Total current
assets
|
|
|
496,207
|
|
|
|
379,365
|
|
|
Property, plant and
equipment, net
|
|
|
67,201
|
|
|
|
73,068
|
|
|
Operating lease
right-of-use assets
|
|
|
1,413
|
|
|
|
1,876
|
|
|
Intangible assets,
net
|
|
|
2,583
|
|
|
|
2,769
|
|
|
Long-term prepaid
expenses
|
|
|
4,117
|
|
|
|
5,757
|
|
|
Other non-current
assets
|
|
|
8,439
|
|
|
|
9,059
|
|
|
Non-current assets
held for sale
|
|
|
—
|
|
|
|
123,434
|
|
|
Total
assets
|
|
$
|
579,960
|
|
|
$
|
595,328
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
40,206
|
|
|
$
|
40,376
|
|
|
Other accounts
payable
|
|
|
6,379
|
|
|
|
6,410
|
|
|
Accrued
expenses
|
|
|
41,489
|
|
|
|
44,799
|
|
|
Operating lease
liabilities
|
|
|
1,301
|
|
|
|
1,625
|
|
|
Current portion of
long-term borrowings, net
|
|
|
82,328
|
|
|
|
—
|
|
|
Other current
liabilities
|
|
|
6,982
|
|
|
|
3,583
|
|
|
Current liabilities
held for sale
|
|
|
142,013
|
|
|
|
37,040
|
|
|
Total current
liabilities
|
|
|
320,698
|
|
|
|
133,833
|
|
|
Long-term borrowings,
net
|
|
|
223,012
|
|
|
|
304,743
|
|
|
Accrued severance
benefits, net
|
|
|
48,765
|
|
|
|
51,181
|
|
|
Other non-current
liabilities
|
|
|
8,641
|
|
|
|
9,671
|
|
|
Non-current
liabilities held for sale
|
|
|
—
|
|
|
|
110,881
|
|
|
Total
liabilities
|
|
|
601,116
|
|
|
|
610,309
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
|
Common stock,
$0.01 par value, 150,000,000 shares authorized,
44,160,355 shares issued and 35,054,682 outstanding at
March 31, 2020 and 43,851,991 shares issued and 34,800,312
outstanding at December 31, 2019
|
|
|
442
|
|
|
|
439
|
|
|
Additional paid-in
capital
|
|
|
153,286
|
|
|
|
152,404
|
|
|
Accumulated
deficit
|
|
|
(81,880)
|
|
|
|
(58,131)
|
|
|
Treasury stock,
9,105,673 shares at March 31, 2020 and 9,051,679 shares at
December 31, 2019, respectively
|
|
|
(107,649)
|
|
|
|
(107,033)
|
|
|
Accumulated other
comprehensive income (loss)
|
|
|
14,645
|
|
|
|
(2,660)
|
|
|
Total stockholders'
deficit
|
|
|
(21,156)
|
|
|
|
(14,981)
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
579,960
|
|
|
$
|
595,328
|
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands of
US dollars, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2020
|
|
|
March 31,
2019
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Net sales – standard
products business
|
|
$
|
110,736
|
|
|
$
|
100,264
|
|
|
|
Net sales –
transitional Fab 3 foundry services
|
|
|
9,737
|
|
|
|
7,003
|
|
|
|
Total
revenues
|
|
|
120,473
|
|
|
|
107,267
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
Cost of sales –
standard products business
|
|
|
81,606
|
|
|
|
81,241
|
|
|
|
Cost of sales –
transitional Fab 3 foundry services
|
|
|
9,737
|
|
|
|
7,003
|
|
|
|
Total cost of
sales
|
|
|
91,343
|
|
|
|
88,244
|
|
|
|
Gross
profit
|
|
|
29,130
|
|
|
|
19,023
|
|
|
|
Gross profit as a
percentage of standard products business net sales
|
|
|
26.3%
|
|
|
|
19.0%
|
|
|
|
Gross profit as a
percentage of total revenues
|
|
|
24.2%
|
|
|
|
17.7%
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
12,102
|
|
|
|
12,036
|
|
|
|
Research and
development expenses
|
|
|
10,509
|
|
|
|
12,044
|
|
|
|
Other
charges
|
|
|
554
|
|
|
|
—
|
|
|
|
Total operating
expenses
|
|
|
23,165
|
|
|
|
24,080
|
|
|
|
Operating income
(loss)
|
|
|
5,965
|
|
|
|
(5,057)
|
|
|
|
Interest
expense
|
|
|
(5,607)
|
|
|
|
(5,637)
|
|
|
|
Foreign currency loss,
net
|
|
|
(30,971)
|
|
|
|
(10,610)
|
|
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
|
—
|
|
|
|
(42)
|
|
|
|
Other income,
net
|
|
|
838
|
|
|
|
587
|
|
|
|
Loss from continuing
operations before income tax expense
|
|
|
(29,775)
|
|
|
|
(20,759)
|
|
|
|
Income tax
expense
|
|
|
1,303
|
|
|
|
796
|
|
|
|
Loss from continuing
operations
|
|
|
(31,078)
|
|
|
|
(21,555)
|
|
|
|
Income (loss) from
discontinued operations, net of tax
|
|
|
7,329
|
|
|
|
(12,570)
|
|
|
|
Net loss
|
|
$
|
(23,749)
|
|
|
$
|
(34,125)
|
|
|
|
Basic and diluted
earnings (loss) per common share—
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.89)
|
|
|
$
|
(0.63)
|
|
|
|
Discontinued
operations
|
|
|
0.21
|
|
|
|
(0.37)
|
|
|
|
Total
|
|
$
|
(0.68)
|
|
|
$
|
(1.00)
|
|
|
|
Weighted average
number of shares – basic and diluted
|
|
|
34,893,157
|
|
|
|
34,194,878
|
|
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands of
US dollars)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
March 31,
2020
|
|
|
March 31,
2019
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(23,749)
|
|
|
$
|
(34,125)
|
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
7,935
|
|
|
|
8,303
|
|
|
Provision for
severance benefits
|
|
5,071
|
|
|
|
3,117
|
|
|
Amortization of debt
issuance costs and original issue discount
|
|
598
|
|
|
|
571
|
|
|
Loss on foreign
currency, net
|
|
38,480
|
|
|
|
11,720
|
|
|
Restructuring gain and
other
|
|
2,138
|
|
|
|
2,822
|
|
|
Provision for
inventory reserves
|
|
570
|
|
|
|
4,645
|
|
|
Stock-based
compensation
|
|
885
|
|
|
|
669
|
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
—
|
|
|
|
42
|
|
|
Other
|
|
107
|
|
|
|
96
|
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
(10,430)
|
|
|
|
(12,844)
|
|
|
Unbilled accounts
receivable, net
|
|
6,937
|
|
|
|
9,726
|
|
|
Inventories
|
|
(4,863)
|
|
|
|
(15,230)
|
|
|
Other
receivables
|
|
1,982
|
|
|
|
(4,205)
|
|
|
Other current
assets
|
|
909
|
|
|
|
1,836
|
|
|
Accounts
payable
|
|
1,988
|
|
|
|
20,874
|
|
|
Other accounts
payable
|
|
(1,817)
|
|
|
|
2,797
|
|
|
Accrued
expenses
|
|
(6,611)
|
|
|
|
(5,365)
|
|
|
Other current
liabilities
|
|
1,062
|
|
|
|
(6,293)
|
|
|
Other non-current liabilities
|
|
1,808
|
|
|
|
1,085
|
|
|
Payment of severance
benefits
|
|
(2,080)
|
|
|
|
(2,263)
|
|
|
Other
|
|
148
|
|
|
|
347
|
|
|
Net cash provided by
(used in) operating activities
|
|
21,068
|
|
|
|
(11,675)
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Proceeds from
settlement of hedge collateral
|
|
4,239
|
|
|
|
2,242
|
|
|
Payment of hedge
collateral
|
|
(7,841)
|
|
|
|
—
|
|
|
Purchase of property,
plant and equipment
|
|
(3,351)
|
|
|
|
(11,207)
|
|
|
Payment for
intellectual property registration
|
|
(229)
|
|
|
|
(232)
|
|
|
Collection of
guarantee deposits
|
|
47
|
|
|
|
298
|
|
|
Payment of guarantee
deposits
|
|
—
|
|
|
|
(892)
|
|
|
Other
|
|
8
|
|
|
|
(10)
|
|
|
Net cash used in
investing activities
|
|
(7,127)
|
|
|
|
(9,801)
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Repurchase of
long-term borrowings
|
|
—
|
|
|
|
(1,175)
|
|
|
Proceeds from exercise
of stock options
|
|
—
|
|
|
|
48
|
|
|
Acquisition of
treasury stock
|
|
(1,021)
|
|
|
|
(2,353)
|
|
|
Repayment of financing
related to water treatment facility arrangement
|
|
(135)
|
|
|
|
(143)
|
|
|
Repayment of principal
portion of lease liabilities
|
|
(60)
|
|
|
|
(59)
|
|
|
Net cash used in
financing activities
|
|
(1,216)
|
|
|
|
(3,682)
|
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
(7,089)
|
|
|
|
(1,468)
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
5,636
|
|
|
|
(26,626)
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
Beginning of the
period
|
|
151,657
|
|
|
|
132,438
|
|
|
End of the
period
|
$
|
157,293
|
|
|
$
|
105,812
|
|
|
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,
2020
|
|
|
March 31,
2019
|
|
|
Loss from continuing
operations
|
|
$
|
(31,078)
|
|
|
$
|
(21,555)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
4,930
|
|
|
|
5,059
|
|
|
Income tax
expense
|
|
|
1,303
|
|
|
|
796
|
|
|
Depreciation and
amortization
|
|
|
2,570
|
|
|
|
2,551
|
|
|
EBITDA
|
|
|
(22,275)
|
|
|
|
(13,149)
|
|
|
Equity-based
compensation expense
|
|
|
762
|
|
|
|
563
|
|
|
Foreign currency loss,
net
|
|
|
30,971
|
|
|
|
10,610
|
|
|
Derivative valuation
loss (gain), net
|
|
|
(117)
|
|
|
|
56
|
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
|
—
|
|
|
|
42
|
|
|
Others
|
|
|
554
|
|
|
|
585
|
|
|
Adjusted
EBITDA
|
|
$
|
9,895
|
|
|
$
|
(1,293)
|
|
|
Loss from continuing
operations
|
|
$
|
(31,078)
|
|
|
$
|
(21,555)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation expense
|
|
|
762
|
|
|
|
563
|
|
|
Foreign currency loss,
net
|
|
|
30,971
|
|
|
|
10,610
|
|
|
Derivative valuation
loss (gain), net
|
|
|
(117)
|
|
|
|
56
|
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
|
—
|
|
|
|
42
|
|
|
Others
|
|
|
554
|
|
|
|
585
|
|
|
Adjusted Net Income
(Loss)
|
|
$
|
1,092
|
|
|
$
|
(9,699)
|
|
|
Adjusted Net Income
(Loss) per common share—
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
$
|
0.03
|
|
|
$
|
(0.28)
|
|
|
- Diluted
|
|
$
|
0.03
|
|
|
$
|
(0.28)
|
|
|
Weighted average
number of shares – Basic
|
|
|
34,893,157
|
|
|
|
34,194,878
|
|
|
Weighted average
number of shares – Diluted
|
|
|
35,883,200
|
|
|
|
34,194,878
|
|
|
|
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, net, (iii) Derivative valuation gain (loss),
net, (iv) Loss on early extinguishment of long-term
borrowings, net and (v) Others. EBITDA for the periods
indicated is defined as Loss from continuing operations before
interest expense, net, income tax expense and depreciation and
amortization. We prepare Adjusted Net Income (Loss) by adjusting
loss from continuing operations 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 loss from continuing operations, adjusted to exclude
(i) Equity-based compensation expense, (ii) Foreign
currency loss, net, (iii) Derivative valuation loss (gain),
net, (iv) Loss on early extinguishment of long-term
borrowings, net and (v) Others.
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP COMBINED RESULTS OF OPERATIONS
(In thousands of
US dollars, except share data)
(Unaudited)
|
|
|
Three Months Ended
March 31, 2020
|
|
|
Continuing
Operations
|
|
|
Discontinued
Operations
|
|
|
Combined
|
|
|
Combined results
of operations (non-GAAP):
|
|
Standard products
business
|
|
|
Transitional Fab 3 foundry
services
|
|
|
Foundry
Services
Group
|
|
|
Transitional Fab
3 foundry services
|
|
|
|
|
|
|
Net sales
|
|
$
|
110,736
|
|
|
|
9,737
|
|
|
$
|
86,279
|
|
|
$
|
(9,737)
|
|
|
$
|
197,015
|
|
|
Gross profit
margin
|
|
|
26.3%
|
|
|
|
—
|
|
|
|
24.0%
|
|
|
|
—
|
|
|
|
25.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2019
|
|
|
Continuing
Operations
|
|
|
Discontinued
Operations
|
|
|
Combined
|
|
|
Combined results
of operations (non-GAAP):
|
|
Standard products
business
|
|
|
Transitional Fab 3 foundry
services
|
|
|
Foundry
Services
Group
|
|
|
Transitional Fab
3 foundry services
|
|
|
|
|
|
|
Net sales
|
|
$
|
100,264
|
|
|
|
7,003
|
|
|
$
|
57,116
|
|
|
$
|
(7,003)
|
|
|
$
|
157,380
|
|
|
Gross profit
margin
|
|
|
19.0%
|
|
|
|
—
|
|
|
|
6.4%
|
|
|
|
—
|
|
|
|
14.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/magnachip-delivers-solid-execution-in-first-quarter-2020-301053661.html
SOURCE MagnaChip Semiconductor Corporation