SEOUL, South Korea and
SAN JOSE, Calif., July 30, 2020 /PRNewswire/ -- MagnaChip
Semiconductor Corporation (NYSE: MX) ("MagnaChip" or the "Company")
today announced financial results for the second quarter of
2020.
"We executed well and delivered an excellent quarter despite
market disruptions caused by COVID-19 by achieving key financial
metrics above expectations, said YJ Kim, MagnaChip's chief
executive officer. In addition to delivering outstanding financial
results, our team is making substantial progress with the pending
sale of our Foundry Services Group business and Fab 4. Based on the
progress we made so far, we now anticipate that the transaction
likely will close in the third quarter instead of our previous
estimate of the September-October timeframe."
"The new MagnaChip is undergoing a dramatic transformation to
accelerate our profitability. While we can't be completely immune
to the risk of COVID-19 and macroeconomic conditions, we will
continue our relentless execution to deliver a successful close of
the pending transaction and strengthen our business foundation for
profitable growth."
Q2 2020 Financial Highlights
The following table sets forth certain financial and other
information relating to the continuing and discontinued operations.
Following the execution of the definitive agreement to sell the
Foundry business and Fab 4, the Foundry Services Group has been
accounted for as a discontinued operations beginning in the first
quarter of 2020.
In thousands of US
dollars, except share data
|
|
|
Q2
2020
|
Q1
2020
|
Q/Q
change
|
Q2
2019
|
Y/Y
change
|
Revenues
|
|
|
|
|
|
|
Continuing
Operations(1)
|
118,828
|
120,473
|
down 1.4 %
|
140,885
|
down 15.7
%
|
|
Standard Products
Business(1)
|
108,955
|
110,736
|
down 1.6 %
|
132,006
|
down 17.5
%
|
|
Foundry Services
Group
|
95,779
|
86,279
|
up 11.0 %
|
73,139
|
up 31.0 %
|
|
Non-GAAP Combined
Total Revenues(2)
|
204,734
|
197,015
|
up 3.9 %
|
205,145
|
down 0.2 %
|
Gross Profit
Margin
|
|
|
|
|
|
|
Continuing
Operations(1)
|
27.0%
|
24.2%
|
up 2.8 pts
|
22.4%
|
up 4.6 pts
|
|
Standard Products
Business(1)
|
29.5%
|
26.3%
|
up 3.2 pts
|
24.0%
|
up 5.5 pts
|
|
Foundry Services
Group(3)
|
32.3%
|
24.0%
|
up 8.3 pts
|
16.7%
|
up 15.6
pts
|
|
Non-GAAP Combined
Total Gross Profit Margin(2)(3)
|
30.8%
|
25.3%
|
up 5.5 pts
|
21.4%
|
up 9.4 pts
|
Net Income
(Loss)
|
|
|
|
|
|
|
Continuing
Operations
|
11,774
|
(31,078)
|
up 137.9 %
|
(8,490)
|
up 238.7 %
|
Diluted Earnings
(Loss) per Common Share
|
|
|
|
|
|
Continuing
Operations
|
0.28
|
(0.89)
|
up 131.5%
|
(0.25)
|
up 212.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands of US
dollars, except share data
|
|
|
Non-GAAP(2)
|
|
|
Q2
2020
|
Q1
2020
|
Q/Q
change
|
Q2
2019
|
Y/Y
change
|
Continuing
Operations
|
|
|
|
|
|
|
Adjusted Operating
Income
|
10,125
|
7,281
|
up 39.1 %
|
9,423
|
up 7.4 %
|
|
Adjusted Net
Income
|
4,753
|
1,092
|
up 335.3 %
|
3,829
|
up 24.1 %
|
|
Adjusted Net Income
per Common Share—Diluted
|
0.13
|
0.03
|
up 333.3 %
|
0.11
|
up 18.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands of US
dollars
|
|
|
GAAP
|
|
|
Q2
2020
|
Q1
2020
|
Q/Q
change
|
Q2
2019
|
Y/Y
change
|
Revenues -
Standard Products Business
|
|
|
|
|
|
Display
Solutions
|
69,176
|
77,593
|
down 10.8
%
|
84,261
|
down 17.9
%
|
|
Power
Solutions
|
39,779
|
33,143
|
up 20.0 %
|
47,745
|
down 16.7
%
|
(1) Following the consummation of the sale of the Foundry
Services Group 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 ("Transitional Fab 3 Foundry
Services"). For the periods prior to the disposal of the Foundry
Services Group business and Fab 4, revenue from the Transitional
Fab 3 Foundry Services by the Company to the Foundry Services Group
(i.e., discontinued operations) is recorded at cost as part of its
continuing operations. Management believes that excluding the
revenue of the Transitional Fab 3 Foundry Services from the
continuing operations (i.e., revenue from standard products
business) allows investors to better understand the results of
continuing operations 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 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.
(3) In the second quarter, depreciation and amortization
associated with the assets classified as held-for-sale ceased,
which resulted in an increase in gross profit from discontinued
operations by approximately $2
million.
Q3 2020 financial guidance
On July 20, 2020, our Fab 3
facility in Gumi, South Korea
experienced a temporary power outage for approximately 9 hours and
15 minutes as a result of an accident involving branches of a
nearby tree falling onto cables connecting one of the electricity
pylons that supplies power to the Gumi plant. We are nearly fully
operational in our Fab 3 facility as of the date of this earnings
report. The accident caused damage to our work-in-process wafers
with an estimated total cost of up to approximately $2.3 million. The related impact to our
revenue from continuing operations is expected to be negligible. We
are currently evaluating potential insurance and other claims that
we may have for the above loss and damages.
As we expect to close the pending sale of the Foundry business
and Fab 4 in Q3, we will provide a quarterly outlook on continuing
operations only. The COVID-19 global pandemic and escalated trade
tension are rapidly evolving situations and reduce our forward
visibility. While actual results may vary, MagnaChip currently
anticipates for Q3 2020:
- Revenue from the continuing operations to be in the range of
$118 million to $124 million, including $9.5 million to $10
million of the Transitional Fab 3 Foundry Services at
cost
- Gross profit margin from continuing operations to be in the
range of 25% to 27%
-
- Without the estimated power outage impact, gross profit margin
from continuing operations would have been in the range of 27% and
29%
Second Quarter 2020 Earnings Conference Call
MagnaChip will host a conference call at 5 p.m. Eastern Time on July 30, 2020. 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 8269223.
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
8269223.
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
third quarter 2020 revenue and gross profit margin expectations,
the evaluation and expectation of costs and related revenue impact
and timing as a result of the power outage, and the impact of
the COVID-19 pandemic and escalated trade tensions on MagnaChip's
third 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), our Form 10-Q filed on May 11, 2020 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.
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
provides 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.
CONTACTS:
|
|
In the United
States:
So-Yeon
Jeong
Head of Investor
Relations
Tel.
+1-408-712-6151
Investor.relations@magnachip.com
|
In
Korea:
Chankeun
Park
Director, Public
Relations
Tel.
+82-2-6903-5223
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
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
2020
|
|
|
March
31,
2020
|
|
|
June
30,
2019
|
|
|
|
June
30,
2020
|
|
June
30,
2019
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales – standard
products business
|
$
|
108,955
|
|
|
$
|
110,736
|
|
|
$
|
132,006
|
|
|
|
$
|
219,691
|
|
$
|
232,270
|
|
|
Net sales –
transitional Fab 3 foundry services
|
|
9,873
|
|
|
|
9,737
|
|
|
|
8,879
|
|
|
|
|
19,610
|
|
|
15,882
|
|
|
Total
revenues
|
|
118,828
|
|
|
|
120,473
|
|
|
|
140,885
|
|
|
|
|
239,301
|
|
|
248,152
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales –
standard products business
|
|
76,817
|
|
|
|
81,606
|
|
|
|
100,384
|
|
|
|
|
158,423
|
|
|
181,625
|
|
|
Cost of sales –
transitional Fab 3 foundry services
|
|
9,873
|
|
|
|
9,737
|
|
|
|
8,879
|
|
|
|
|
19,610
|
|
|
15,882
|
|
|
Total cost of
sales
|
|
86,690
|
|
|
|
91,343
|
|
|
|
109,263
|
|
|
|
|
178,033
|
|
|
197,507
|
|
|
Gross
profit
|
|
32,138
|
|
|
|
29,130
|
|
|
|
31,622
|
|
|
|
|
61,268
|
|
|
50,645
|
|
|
Gross profit as a
percentage of standard products business net sales
|
|
29.5
|
%
|
|
|
26.3
|
%
|
|
|
24.0
|
%
|
|
|
|
27.9
|
%
|
|
21.8
|
%
|
|
Gross profit as a
percentage of total revenues
|
|
27.0
|
%
|
|
|
24.2
|
%
|
|
|
22.4
|
%
|
|
|
|
25.6
|
%
|
|
20.4
|
%
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
12,408
|
|
|
|
12,102
|
|
|
|
11,095
|
|
|
|
|
24,510
|
|
|
23,131
|
|
|
Research and
development expenses
|
|
11,108
|
|
|
|
10,509
|
|
|
|
11,772
|
|
|
|
|
21,617
|
|
|
23,816
|
|
|
Other
charges
|
|
—
|
|
|
|
554
|
|
|
|
—
|
|
|
|
|
554
|
|
|
—
|
|
|
Total operating
expenses
|
|
23,516
|
|
|
|
23,165
|
|
|
|
22,867
|
|
|
|
|
46,681
|
|
|
46,947
|
|
|
Operating
income:
|
|
8,622
|
|
|
|
5,965
|
|
|
|
8,755
|
|
|
|
|
14,587
|
|
|
3,698
|
|
|
Interest
expense
|
|
(5,430)
|
|
|
|
(5,607)
|
|
|
|
(5,439)
|
|
|
|
|
(11,037)
|
|
|
(11,076)
|
|
|
Foreign
currency gain (loss), net
|
|
8,469
|
|
|
|
(30,971)
|
|
|
|
(11,571)
|
|
|
|
|
(22,502)
|
|
|
(22,181)
|
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
(42)
|
|
|
Other income,
net
|
|
791
|
|
|
|
838
|
|
|
|
551
|
|
|
|
|
1,629
|
|
|
1,138
|
|
|
Income (loss) from
continuing operations before income tax expense
|
|
12,452
|
|
|
|
(29,775)
|
|
|
|
(7,704)
|
|
|
|
|
(17,323)
|
|
|
(28,463)
|
|
|
Income tax
expense
|
|
678
|
|
|
|
1,303
|
|
|
|
786
|
|
|
|
|
1,981
|
|
|
1,582
|
|
|
Income (loss) from
continuing operations
|
|
11,774
|
|
|
|
(31,078)
|
|
|
|
(8,490)
|
|
|
|
|
(19,304)
|
|
|
(30,045)
|
|
|
Income (loss) from
discontinued operations, net of tax
|
|
17,397
|
|
|
|
7,329
|
|
|
|
(1,030)
|
|
|
|
|
24,726
|
|
|
(13,600)
|
|
|
Net income
(loss)
|
$
|
29,171
|
|
|
$
|
(23,749)
|
|
|
$
|
(9,520)
|
|
|
|
$
|
5,422
|
|
$
|
(43,645)
|
|
|
Basic earnings (loss)
per common share—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.34
|
|
|
$
|
(0.89)
|
|
|
$
|
(0.25)
|
|
|
|
$
|
(0.55)
|
|
$
|
(0.88)
|
|
|
Discontinued
operations
|
|
0.50
|
|
|
|
0.21
|
|
|
|
(0.03)
|
|
|
|
|
0.71
|
|
|
(0.40)
|
|
|
Total
|
$
|
0.84
|
|
|
$
|
(0.68)
|
|
|
$
|
(0.28)
|
|
|
|
$
|
0.16
|
|
$
|
(1.28)
|
|
|
Diluted earnings
(loss) per common share—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.28
|
|
|
$
|
(0.89)
|
|
|
$
|
(0.25)
|
|
|
|
$
|
(0.55)
|
|
$
|
(0.88)
|
|
|
Discontinued
operations
|
|
0.37
|
|
|
|
0.21
|
|
|
|
(0.03)
|
|
|
|
|
0.71
|
|
|
(0.40)
|
|
|
Total
|
$
|
0.65
|
|
|
$
|
(0.68)
|
|
|
$
|
(0.28)
|
|
|
|
$
|
0.16
|
|
$
|
(1.28)
|
|
|
Weighted average
number of shares—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35,092,312
|
|
|
|
34,893,157
|
|
|
|
34,245,127
|
|
|
|
|
34,992,734
|
|
|
34,220,141
|
|
|
Diluted
|
|
46,474,237
|
|
|
|
34,893,157
|
|
|
|
34,245,127
|
|
|
|
|
34,992,734
|
|
|
34,220,141
|
|
|
|
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands of
US dollars, except share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
June
30,
2020
|
|
|
December
31,
2019
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
192,824
|
|
|
$
|
151,657
|
|
Accounts receivable,
net
|
|
48,548
|
|
|
|
47,447
|
|
Inventories,
net
|
|
45,511
|
|
|
|
41,404
|
|
Other
receivables
|
|
10,406
|
|
|
|
10,200
|
|
Prepaid
expenses
|
|
8,598
|
|
|
|
9,003
|
|
Hedge
collateral
|
|
11,740
|
|
|
|
9,820
|
|
Other current
assets
|
|
7,405
|
|
|
|
10,013
|
|
Current assets held
for sale
|
|
205,086
|
|
|
|
99,821
|
|
Total current
assets
|
|
530,118
|
|
|
|
379,365
|
|
Property, plant and
equipment, net
|
|
69,110
|
|
|
|
73,068
|
|
Operating lease
right-of-use assets
|
|
1,182
|
|
|
|
1,876
|
|
Intangible assets,
net
|
|
2,590
|
|
|
|
2,769
|
|
Long-term prepaid
expenses
|
|
2,936
|
|
|
|
5,757
|
|
Other non-current
assets
|
|
9,212
|
|
|
|
9,059
|
|
Non-current assets
held for sale
|
|
—
|
|
|
|
123,434
|
|
Total
assets
|
$
|
615,148
|
|
|
$
|
595,328
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
42,366
|
|
|
$
|
40,376
|
|
Other accounts
payable
|
|
4,049
|
|
|
|
6,410
|
|
Accrued
expenses
|
|
45,735
|
|
|
|
44,799
|
|
Operating lease
liabilities
|
|
1,053
|
|
|
|
1,625
|
|
Current portion of
long-term borrowings, net
|
|
82,706
|
|
|
|
—
|
|
Other current
liabilities
|
|
5,481
|
|
|
|
3,583
|
|
Current liabilities
held for sale
|
|
146,569
|
|
|
|
37,040
|
|
Total current
liabilities
|
|
327,959
|
|
|
|
133,833
|
|
Long-term borrowings,
net
|
|
223,242
|
|
|
|
304,743
|
|
Accrued severance
benefits, net
|
|
49,927
|
|
|
|
51,181
|
|
Other non-current
liabilities
|
|
7,845
|
|
|
|
9,671
|
|
Non-current
liabilities held for sale
|
|
—
|
|
|
|
110,881
|
|
Total
liabilities
|
|
608,973
|
|
|
|
610,309
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
Common stock, $0.01
par value, 150,000,000 shares authorized, 44,248,706 shares
issued and 35,143,033 outstanding at June 30, 2020 and 43,851,991
shares issued and 34,800,312 outstanding at December 31,
2019
|
|
443
|
|
|
|
439
|
|
Additional paid-in
capital
|
|
155,591
|
|
|
|
152,404
|
|
Accumulated
deficit
|
|
(52,709)
|
|
|
|
(58,131)
|
|
Treasury stock,
9,105,673 shares at June 30, 2020 and 9,051,679 shares at December
31, 2019, respectively
|
|
(107,649)
|
|
|
|
(107,033)
|
|
Accumulated other
comprehensive income (loss)
|
|
10,499
|
|
|
|
(2,660)
|
|
Total stockholders'
equity (deficit)
|
|
6,175
|
|
|
|
(14,981)
|
|
Total liabilities and
stockholders' equity
|
$
|
615,148
|
|
|
$
|
595,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In thousands of
US dollars)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
June 30,
2020
|
|
|
June 30,
2020
|
|
|
June 30,
2019
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
29,171
|
|
|
$
|
5,422
|
|
|
$
|
(43,645)
|
|
Adjustments to
reconcile net income (loss) to net cash provided
by operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,544
|
|
|
|
10,479
|
|
|
|
16,505
|
|
Provision for
severance benefits
|
|
5,108
|
|
|
|
10,179
|
|
|
|
6,406
|
|
Amortization of debt
issuance costs and original issue discount
|
|
607
|
|
|
|
1,205
|
|
|
|
1,134
|
|
Loss (gain) on foreign currency,
net
|
|
(12,083)
|
|
|
|
26,397
|
|
|
|
24,609
|
|
Restructuring and
other charges
|
|
141
|
|
|
|
141
|
|
|
|
732
|
|
Provision for
inventory reserves
|
|
1,463
|
|
|
|
2,033
|
|
|
|
8,940
|
|
Stock-based
compensation
|
|
1,643
|
|
|
|
2,528
|
|
|
|
1,441
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
—
|
|
|
|
—
|
|
|
|
42
|
|
Other
|
|
(218)
|
|
|
|
(111)
|
|
|
|
(494)
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
9,992
|
|
|
|
(438)
|
|
|
|
(20,974)
|
|
Unbilled accounts
receivable, net
|
|
3,996
|
|
|
|
10,933
|
|
|
|
6,201
|
|
Inventories
|
|
(9,197)
|
|
|
|
(14,060)
|
|
|
|
(7,351)
|
|
Other
receivables
|
|
(1,915)
|
|
|
|
67
|
|
|
|
(2,969)
|
|
Other current
assets
|
|
3,838
|
|
|
|
4,747
|
|
|
|
5,929
|
|
Accounts
payable
|
|
2,959
|
|
|
|
4,947
|
|
|
|
32,137
|
|
Other accounts
payable
|
|
(4,325)
|
|
|
|
(5,898)
|
|
|
|
(3,960)
|
|
Accrued
expenses
|
|
4,878
|
|
|
|
161
|
|
|
|
2,880
|
|
Other current
liabilities
|
|
158
|
|
|
|
1,220
|
|
|
|
(7,491)
|
|
Other non-current
liabilities
|
|
(570)
|
|
|
|
1,238
|
|
|
|
1,716
|
|
Payment of severance
benefits
|
|
(2,192)
|
|
|
|
(4,272)
|
|
|
|
(4,579)
|
|
Other
|
|
(1)
|
|
|
|
147
|
|
|
|
(54)
|
|
Net cash provided
by operating activities
|
|
35,997
|
|
|
|
57,065
|
|
|
|
17,155
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
settlement of hedge collateral
|
|
1,616
|
|
|
|
5,855
|
|
|
|
4,627
|
|
Payment of hedge
collateral
|
|
—
|
|
|
|
(7,841)
|
|
|
|
(8,395)
|
|
Purchase of property,
plant and equipment
|
|
(5,491)
|
|
|
|
(8,842)
|
|
|
|
(15,000)
|
|
Payment for
intellectual property registration
|
|
(244)
|
|
|
|
(473)
|
|
|
|
(642)
|
|
Collection of
guarantee deposits
|
|
—
|
|
|
|
47
|
|
|
|
388
|
|
Payment of guarantee
deposits
|
|
(571)
|
|
|
|
(571)
|
|
|
|
(1,330)
|
|
Other
|
|
13
|
|
|
|
21
|
|
|
|
193
|
|
Net cash used in
investing activities
|
|
(4,677)
|
|
|
|
(11,804)
|
|
|
|
(20,159)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of
long-term borrowings
|
|
—
|
|
|
|
—
|
|
|
|
(1,175)
|
|
Proceeds from exercise
of stock options
|
|
663
|
|
|
|
663
|
|
|
|
149
|
|
Acquisition of
treasury stock
|
|
—
|
|
|
|
(1,021)
|
|
|
|
(2,588)
|
|
Repayment of financing
related to water treatment facility arrangement
|
|
(132)
|
|
|
|
(267)
|
|
|
|
(281)
|
|
Repayment of principal
portion of lease liabilities
|
|
(59)
|
|
|
|
(119)
|
|
|
|
(118)
|
|
Net
cash provided by (used in) financing
activities
|
|
472
|
|
|
|
(744)
|
|
|
|
(4,013)
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
3,739
|
|
|
|
(3,350)
|
|
|
|
(1,668)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
35,531
|
|
|
|
41,167
|
|
|
|
(8,685)
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of the
period
|
|
157,293
|
|
|
|
151,657
|
|
|
|
132,438
|
|
End of the
period
|
$
|
192,824
|
|
|
|
192,824
|
|
|
|
123,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
|
RECONCILIATION
OF OPERATING INCOME TO ADJUSTED OPERATING
INCOME
|
(In thousands of
US dollars)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
2020
|
|
|
March
31,
2020
|
|
|
June
30,
2019
|
|
June
30,
2020
|
|
June
30,
2019
|
Operating
income
|
$
|
8,622
|
|
|
$
|
5,965
|
|
|
$
|
8,755
|
|
$
|
14,587
|
|
$
|
3,698
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation expense
|
|
1,503
|
|
|
|
762
|
|
|
|
668
|
|
|
2,265
|
|
|
1,231
|
Others
|
|
—
|
|
|
|
554
|
|
|
|
—
|
|
|
554
|
|
|
585
|
Adjusted Operating
Income
|
$
|
10,125
|
|
|
$
|
7,281
|
|
|
$
|
9,423
|
|
$
|
17,406
|
|
$
|
5,514
|
|
We present Adjusted Operating Income as supplemental measures of
our performance. We define Adjusted Operating Income for the
periods indicated as operating income adjusted to exclude (i)
Equity-based compensation expense and (ii) Others. Others include
non-recurring professional fees and expenses incurred in connection
with certain treasury and finance initiatives for the three months
ended March 31, 2020, and a
$0.6 million legal settlement charge
related to dispute with a prior customer and a legal expense
related to the indemnification of a former employee, which is borne
by us under a negotiated separation agreement for the three months
ended March 31, 2019.
|
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
|
RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA AND ADJUSTED NET INCOME
(LOSS)
|
(In thousands of
US dollars, except share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June
30,
2020
|
|
|
March
31,
2020
|
|
|
June
30,
2019
|
|
|
|
June
30,
2020
|
|
June
30,
2019
|
|
|
Income (loss) from
continuing operations
|
$
|
11,774
|
|
|
$
|
(31,078)
|
|
|
$
|
(8,490)
|
|
|
|
|
(19,304)
|
|
|
(30,045)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
4,736
|
|
|
|
4,930
|
|
|
|
4,852
|
|
|
|
|
9,666
|
|
|
9,911
|
|
|
Income tax
expense
|
|
678
|
|
|
|
1,303
|
|
|
|
786
|
|
|
|
|
1,981
|
|
|
1,582
|
|
|
Depreciation and
amortization
|
|
2,544
|
|
|
|
2,570
|
|
|
|
2,551
|
|
|
|
|
5,114
|
|
|
5,102
|
|
|
EBITDA
|
|
19,732
|
|
|
|
(22,275)
|
|
|
|
(301)
|
|
|
|
|
(2,543)
|
|
|
(13,450)
|
|
|
Equity-based
compensation expense
|
|
1,503
|
|
|
|
762
|
|
|
|
668
|
|
|
|
|
2,265
|
|
|
1,231
|
|
|
Foreign currency
loss (gain), net
|
|
(8,469)
|
|
|
|
30,971
|
|
|
|
11,571
|
|
|
|
|
22,502
|
|
|
22,181
|
|
|
Derivative valuation
loss (gain), net
|
|
(55)
|
|
|
|
(117)
|
|
|
|
80
|
|
|
|
|
(172)
|
|
|
136
|
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
42
|
|
|
Others
|
|
—
|
|
|
|
554
|
|
|
|
—
|
|
|
|
|
554
|
|
|
585
|
|
|
Adjusted
EBITDA
|
|
12,711
|
|
|
|
9,895
|
|
|
|
12,018
|
|
|
|
|
22,606
|
|
|
10,725
|
|
|
Income
(loss) from continuing operations
|
$
|
11,774
|
|
|
$
|
(31,078)
|
|
|
$
|
(8,490)
|
|
|
|
$
|
(19,304)
|
|
$
|
(30,045)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation expense
|
|
1,503
|
|
|
|
762
|
|
|
|
668
|
|
|
|
|
2,265
|
|
|
1,231
|
|
|
Foreign currency
loss (gain), net
|
|
(8,469)
|
|
|
|
30,971
|
|
|
|
11,571
|
|
|
|
|
22,502
|
|
|
22,181
|
|
|
Derivative valuation
loss (gain), net
|
|
(55)
|
|
|
|
(117)
|
|
|
|
80
|
|
|
|
|
(172)
|
|
|
136
|
|
|
Loss on early
extinguishment of long-term borrowings, net
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
42
|
|
|
Others
|
|
—
|
|
|
|
554
|
|
|
|
—
|
|
|
|
|
554
|
|
|
585
|
|
|
Adjusted Net Income
(Loss)
|
$
|
4,753
|
|
|
$
|
1,092
|
|
|
$
|
3,829
|
|
|
|
$
|
5,845
|
|
$
|
(5,870)
|
|
|
Adjusted Net
Income (Loss) per common share—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
$
|
0.14
|
|
|
$
|
0.03
|
|
|
$
|
0.11
|
|
|
|
$
|
0.17
|
|
$
|
(0.17)
|
|
|
- Diluted
|
$
|
0.13
|
|
|
$
|
0.03
|
|
|
$
|
0.11
|
|
|
|
$
|
0.16
|
|
$
|
(0.17)
|
|
|
Weighted average
number of shares – basic
|
|
35,092,312
|
|
|
|
34,893,157
|
|
|
|
34,245,127
|
|
|
|
|
34,992,734
|
|
|
34,220,141
|
|
|
Weighted average
number of shares – diluted
|
|
36,330,083
|
|
|
|
35,883,200
|
|
|
|
34,965,562
|
|
|
|
|
36,248,039
|
|
|
34,220,141
|
|
|
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, (iv) Loss on early extinguishment of long-term
borrowings, net and (v) Others. Others include non-recurring
professional fees and expenses incurred in connection with certain
treasury and finance initiatives for the three months ended
March 31, 2020, and a $0.6 million legal settlement charge related to
dispute with a prior customer and a legal expense related to the
indemnification of a former employee, which is borne by us under a
negotiated separation agreement for the three months ended
March 31, 2019. EBITDA for the
periods indicated is defined as Income (loss) from continuing
operations before interest expense, net, income tax expense and
depreciation and amortization. We prepare Adjusted Net Income
(Loss) by adjusting income (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 income (loss) from
continuing operations, adjusted to exclude (i) Equity-based
compensation expense, (ii) Foreign currency loss (gain), net, (iii)
Derivative valuation loss (gain), net, (iv) Loss on early
extinguishment of long-term borrowings, net and (v) Others. Others
include non-recurring professional fees and expenses incurred in
connection with certain treasury and finance initiatives for the
three months ended March 31, 2020,
and a $0.6 million legal settlement
charge related to dispute with a prior customer and a legal expense
related to the indemnification of a former employee, which is borne
by us under a negotiated separation agreement for the three months
ended March 31, 2019.
|
|
|
|
MAGNACHIP
SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP COMBINED RESULTS OF OPERATIONS
|
(In thousands of
US dollars)
|
(Unaudited)
|
|
|
|
|
Three Months
Ended June 30, 2020
|
|
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Combined
|
|
|
|
Standard
|
Transitional
|
|
Foundry
|
Transitional
|
|
|
|
|
|
|
Fab 3
|
|
Fab
3
|
|
|
|
|
Combined results
of operations (non-GAAP):
|
|
products
|
foundry
|
|
Services
|
foundry
|
|
|
|
|
|
business
|
services
|
|
Group
|
services
|
|
|
|
|
Net sales
|
$ 108,955
|
$9,873
|
$95,779
|
$
|
(9,873)
|
|
$204,734
|
|
Gross profit
margin
|
29.5%
|
—
|
32.3%
|
|
—
|
|
30.8%
|
|
|
|
Three Months
Ended June 30, 2019
|
|
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Combined
|
|
|
|
Standard
|
Transitional
|
|
Foundry
|
Transitional
|
|
|
|
|
|
|
Fab 3
|
|
Fab
3
|
|
|
|
|
Combined results
of operations (non-GAAP):
|
|
products
|
foundry
|
|
Services
|
foundry
|
|
|
|
|
|
business
|
services
|
|
Group
|
services
|
|
|
|
|
Net sales
|
$132,006
|
$8,879
|
$73,139
|
$
|
(8,879)
|
|
$205,145
|
|
Gross profit
margin
|
24.0%
|
—
|
16.7%
|
|
—
|
|
21.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2020
|
|
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Combined
|
|
|
|
Standard
|
Transitional
|
|
Foundry
|
Transitional
|
|
|
|
|
|
|
Fab 3
|
|
Fab
3
|
|
|
|
|
Combined results
of operations (non-GAAP):
|
|
products
|
foundry
|
|
Services
|
foundry
|
|
|
|
|
|
business
|
services
|
|
Group
|
services
|
|
|
|
|
Net sales
|
$219,691
|
$19,610
|
$182,058
|
$
|
(19,610)
|
|
$401,749
|
|
Gross profit
margin
|
27.9%
|
—
|
28.3%
|
|
—
|
|
28.1%
|
|
|
|
Six Months Ended
June 30, 2019
|
|
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Combined
|
|
|
|
Standard
|
Transitional
|
|
Foundry
|
Transitional
|
|
|
|
|
|
|
Fab 3
|
|
Fab
3
|
|
|
|
|
Combined results
of operations (non-GAAP):
|
|
products
|
foundry
|
|
Services
|
foundry
|
|
|
|
|
|
business
|
services
|
|
Group
|
services
|
|
|
|
|
Net sales
|
$232,270
|
$15,882
|
$130,255
|
$
|
(15,882)
|
|
$362,525
|
|
Gross profit
margin
|
21.8%
|
—
|
12.2%
|
|
—
|
|
18.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/magnachip-reports-results-for-second-quarter-2020-301103020.html
SOURCE MagnaChip Semiconductor Corporation