MX Magnachip Semiconductor Corp

Financial Highlights

• Q2 consolidated revenue was $53.2 million, above the mid-point of guidance range of $49-54 million.
  • Q2 standard product business revenue was up 11.6% sequentially.
• Q2 consolidated gross profit margin was 21.8%, above the upper end of guidance range of 17-19%.
  • Q2 standard product business gross profit margin was 23.1%, up nearly two percentage points sequentially.
• Ended Q2 with cash of $132.5 million; and also have an additional short-term financial investment of $30 million.
• Repurchased approximately 0.5 million shares for aggregate purchase price of $2.3 million during the quarter.

Operational Highlights

• Held formal opening ceremony in China for newly formed subsidiary, Magnachip Technology Company, Ltd. (MTC).
• Secured a purchase commitment for OLED driver targeted for a premium smartphone OEM; mass production and revenue currently expected to begin by year-end.
• Delivered samples of our next-generation OLED driver to a panel supplier for a leading Chinese smartphone OEM's winter 2024 model, now in the final design validation phase.
• Taped out a new OLED driver designed with next-generation IP including sub-pixel rendering (SPR), refined color enhancement, color filter, brightness uniformity control and more than 20% reduction in power consumption than previous generation.
• Sampled our first OLED smartwatch DDIC in Q2 following a Q1 tape-out, demonstrating our expansion into new, adjacent markets.
• Power IC revenue increased sequentially, driven primarily by demand for LCD TVs and OLED IT monitors.
• Sequential revenue growth in PAS segment was driven by industrial, communication and consumer applications. Automotive rebounded with new design wins in Japan and China.
• Launched new 75A/1200V IGBT for a design opportunity in solar applications; expected to begin mass production in the second half of the year.

Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the second quarter 2024.

YJ Kim, Magnachip’s CEO, commented, “Our Q2 revenue was above the mid-point of guidance and gross margin was better than expected. Revenue in our Standard Products Business, which is comprised of our MSS and PAS businesses, increased sequentially by double digits in Q2. We benefited from a recovery in our Power business, increased demand for OLED drivers for China smartphones and European autos, and an upturn in Power IC demand for OLED IT panels and LED TVs.”

YJ Kim added, “Looking ahead, we currently expect Standard Product Business revenue will increase sequentially once again in Q3, driven by leaner distribution channels in Power, as well as seasonality, and an increase in OLED and Power IC businesses.”

Q2 2024 Financial Highlights

 

In thousands of U.S. dollars, except share data

 

GAAP

 

Q2 2024

 

Q1 2024

Q/Q change

Q2 2023

Y/Y change

Consolidated Revenues

53,171

 

49,067

up

8.4

%

60,979

down

12.8

%

Standard Products Business

50,835

 

45,541

 

up

11.6

%

51,375

 

down

1.1

%

Mixed-Signal Solutions

11,595

 

9,006

 

up

28.7

%

12,357

 

down

6.2

%

Power Analog Solutions

39,240

 

36,535

 

up

7.4

%

39,018

 

up

0.6

%

Transitional Fab 3 foundry services(1)

2,336

 

3,526

 

down

33.7

%

9,604

 

down

75.7

%

Consolidated Gross Profit Margin

21.8

%

18.3

%

up

3.5

%pts

22.2

%

down

0.4

%pts

Standard Products Business

23.1

%

21.2

%

up

1.9

%pts

26.3

%

down

3.2

%pts

Mixed-Signal Solutions

34.6

%

44.6

%

down

10.0

%pts

36.4

%

down

1.8

%pts

Power Analog Solutions

19.7

%

15.4

%

up

4.3

%pts

23.1

%

down

3.4

%pts

Operating Loss

(12,824

)

(13,459

)

up

n/a

 

(10,656

)

down

n/a

 

Net Loss

(12,997

)

(15,417

)

up

n/a

 

(3,947

)

down

n/a

 

Basic Loss per Common Share

(0.34

)

(0.40

)

up

n/a

 

(0.09

)

down

n/a

 

Diluted Loss per Common Share

(0.34

)

(0.40

)

up

n/a

 

(0.09

)

down

n/a

 

 

 

In thousands of U.S. dollars, except share data

 

Non-GAAP(2)

 

Q2 2024

 

Q1 2024

Q/Q change

 

Q2 2023

Y/Y change

Adjusted Operating Loss

(11,608

)

(12,559

)

up

n/a

 

(7,762

)

down

n/a

 

Adjusted EBITDA

(7,569

)

(8,441

)

up

n/a

 

(3,594

)

down

n/a

 

Adjusted Net Loss

(8,134

)

(10,884

)

up

n/a

 

(2,472

)

down

n/a

 

Adjusted Loss per Common Share—Diluted

(0.21

)

(0.28

)

up

n/a

 

(0.06

)

down

n/a

 

___________

(1)

 

Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, we provided transitional foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi, Korea, known as “Fab 3” (“Transitional Fab 3 Foundry Services”). The contractual obligation to provide the Transitional Fab 3 Foundry Services ended August 31, 2023, and we are winding down these foundry services and planning to convert portions of the idle capacity to PAS products beginning around the second half of 2024. Because these foundry services during the wind-down period are still provided to the same buyer by us using our Fab 3 based on mutually agreed terms and conditions, we will continue to report our revenue from providing these foundry services and related cost of sales within the Transitional Fab 3 Foundry Services line in our consolidated statement of operations until such wind down is completed. 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 MSS and PAS 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 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.

Q3 and Full-year 2024 Financial Guidance

Beginning in Q1, the Company began reporting results under its newly organized businesses: MSS (Mixed-Signal Solutions) and PAS (Power Analog Solutions). While actual results may vary, Magnachip currently expects the following:

For Q3 2024:

• Consolidated revenue to be in the range of $61.5 to $66.5 million, including approximately $1.5 million of Transitional Foundry Services.
  • MSS revenue to be in the range of $14.5 to $16.5 million, up 33.7% sequentially and 46.2% year-over-year at the mid-point. This compares with MSS equivalent revenue of $11.6 million in Q2 2024 and $10.6 million in Q3 2023.
  • PAS revenue to be in the range of $45.5 to $48.5 million, up 19.8% sequentially and 14.6% year-over-year at the mid-point. This compares with PAS equivalent revenue of $39.2 million in Q2 2024 and $41.0 million in Q3 2023.
• Consolidated gross profit margin to be in the range of 22.5% to 24.5%.
  • MSS gross profit margin to be in the range of 36.5% to 39.5%. This compares with MSS equivalent gross profit margin of 34.6% in Q2 2024 and 28.8% in Q3 2023.
  • PAS gross profit margin to be in the range of 18.5% to 20.5%. This compares with PAS equivalent gross profit margin of 19.7% in Q2 2024 and 28.6% in Q3 2023.

For the full-year 2024, we currently expect:

• MSS revenue to grow double digits year-over-year as compared with MSS equivalent revenue of $44.4 million in 2023, consistent with what we communicated at the beginning of the year.
• PAS revenue to grow double digits year-over-year as compared with PAS equivalent revenue of $151.3 million in 2023, consistent with what we communicated at the beginning of the year.
• Transitional Foundry Services revenue will decline in 2024, as expected. We expect this revenue to phase out by the end of the year.
• Consolidated revenue flattish-to-slightly down, compared to prior expectation of flat-to-up-slightly year-over-year.
• Consolidated gross profit margin between 19% to 22%, above our prior expectation of 17% to 20%. This compares with the consolidated gross profit margin of 22.4% in 2023.

Q2 2024 Earnings Conference Call

Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, July 31, 2024, 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/BId7d466aa72124a439fec483c2b65d307

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 and full year 2024 revenue and gross profit margin expectations, future growth and revenue opportunities from new and existing products and customers, the timing and extent of future revenue contributions by our products and businesses, and the impact of market conditions associated with inflation and higher interest rates, geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and trade tensions between the U.S. and China, on Magnachip’s third quarter and full year 2024 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; the geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and 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, 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 March 8, 2024, 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 communication, Internet of Things (“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 1,050 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.

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, 2024

March 31, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Revenues:

 

 

 

 

 

Net sales – standard products business

$

50,835

 

$

45,541

 

$

51,375

 

$

96,376

 

$

102,889

 

Net sales – transitional Fab 3 foundry services

 

2,336

 

 

3,526

 

 

9,604

 

 

5,862

 

 

15,095

 

Total revenues

 

53,171

 

 

49,067

 

 

60,979

 

 

102,238

 

 

117,984

 

Cost of sales:

 

 

 

 

 

Cost of sales – standard products business

 

39,113

 

 

35,888

 

 

37,867

 

 

75,001

 

 

75,179

 

Cost of sales – transitional Fab 3 foundry services

 

2,457

 

 

4,211

 

 

9,574

 

 

6,668

 

 

17,173

 

Total cost of sales

 

41,570

 

 

40,099

 

 

47,441

 

 

81,669

 

 

92,352

 

Gross profit

 

11,601

 

 

8,968

 

 

13,538

 

 

20,569

 

 

25,632

 

Gross profit as a percentage of standard products business net sales

 

23.1

%

 

21.2

%

 

26.3

%

 

22.2

%

 

26.9

%

Gross profit as a percentage of total revenues

 

21.8

%

 

18.3

%

 

22.2

%

 

20.1

%

 

21.7

%

Operating expenses:

 

 

 

 

 

Selling, general and administrative expenses

 

11,734

 

 

11,264

 

 

12,137

 

 

22,998

 

 

24,302

 

Research and development expenses

 

12,691

 

 

11,163

 

 

11,255

 

 

23,854

 

 

24,553

 

Early termination and other charges

 

—

 

 

—

 

 

802

 

 

—

 

 

9,251

 

Total operating expenses

 

24,425

 

 

22,427

 

 

24,194

 

 

46,852

 

 

58,106

 

Operating loss

 

(12,824

)

 

(13,459

)

 

(10,656

)

 

(26,283

)

 

(32,474

)

Interest income

 

2,228

 

 

2,213

 

 

2,692

 

 

4,441

 

 

5,534

 

Interest expense

 

(554

)

 

(238

)

 

(200

)

 

(792

)

 

(456

)

Foreign currency gain (loss), net

 

(3,557

)

 

(5,001

)

 

1,237

 

 

(8,558

)

 

(2,193

)

Other income (loss), net

 

108

 

 

44

 

 

3

 

 

152

 

 

(32

)

Loss before income tax benefit

 

(14,599

)

 

(16,441

)

 

(6,924

)

 

(31,040

)

 

(29,621

)

Income tax benefit

 

(1,602

)

 

(1,024

)

 

(2,977

)

 

(2,626

)

 

(4,204

)

Net loss

$

(12,997

)

$

(15,417

)

$

(3,947

)

$

(28,414

)

$

(25,417

)

Basic loss per common share—

$

(0.34

)

 

(0.40

)

$

(0.09

)

$

(0.74

)

$

(0.60

)

Diluted loss per common share—

$

(0.34

)

 

(0.40

)

$

(0.09

)

$

(0.74

)

$

(0.60

)

Weighted average number of shares—

 

 

 

 

 

Basic

 

38,174,920

 

 

38,544,781

 

 

41,741,310

 

 

38,359,851

 

 

42,561,514

 

Diluted

 

38,174,920

 

 

38,544,781

 

 

41,741,310

 

 

38,359,851

 

 

42,561,514

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share data) (Unaudited)

 

 

June 30,

2024

December 31,

2023

Assets

 

 

Current assets

 

 

Cash and cash equivalents

$

132,467

 

$

158,092

 

Short-term financial instruments

 

30,000

 

 

—

 

Accounts receivable, net

 

31,175

 

 

32,641

 

Inventories, net

 

34,783

 

 

32,733

 

Other receivables

 

3,977

 

 

4,295

 

Prepaid expenses

 

8,548

 

 

7,390

 

Hedge collateral

 

1,600

 

 

1,000

 

Other current assets

 

11,653

 

 

9,283

 

Total current assets

 

254,203

 

 

245,434

 

Property, plant and equipment, net

 

88,330

 

 

100,122

 

Operating lease right-of-use assets

 

4,181

 

 

4,639

 

Intangible assets, net

 

1,320

 

 

1,537

 

Long-term prepaid expenses

 

8,085

 

 

5,736

 

Deferred income taxes

 

44,578

 

 

50,836

 

Other non-current assets

 

11,998

 

 

12,187

 

Total assets

$

412,695

 

$

420,491

 

Liabilities and Stockholders’ Equity

 

 

Current liabilities

 

 

Accounts payable

$

25,575

 

$

24,443

 

Other accounts payable

 

8,383

 

 

5,292

 

Accrued expenses

 

9,199

 

 

10,457

 

Accrued income taxes

 

1,422

 

 

1,496

 

Operating lease liabilities

 

1,805

 

 

1,914

 

Other current liabilities

 

4,168

 

 

3,286

 

Total current liabilities

 

50,552

 

 

46,888

 

Long-term borrowing

 

28,794

 

 

—

 

Accrued severance benefits, net

 

15,759

 

 

16,020

 

Non-current operating lease liabilities

 

2,514

 

 

2,897

 

Other non-current liabilities

 

9,228

 

 

10,088

 

Total liabilities

 

106,847

 

 

75,893

 

Commitments and contingencies

 

 

Stockholders’ equity

 

 

Common stock, $0.01 par value, 150,000,000 shares authorized, 57,015,569 shares issued and 37,799,482 outstanding at June 30, 2024 and 56,971,394 shares issued and 38,852,742 outstanding at December 31, 2023

 

569

 

 

569

 

Additional paid-in capital

 

275,329

 

 

273,256

 

Retained earnings

 

270,470

 

 

298,884

 

Treasury stock, 19,216,087 shares at June 30, 2024 and 18,118,652 shares at December 31, 2023, respectively

 

(219,949

)

 

(213,454

)

Accumulated other comprehensive loss

 

(20,571

)

 

(14,657

)

Total stockholders’ equity

 

305,848

 

 

344,598

 

Total liabilities and stockholders’ equity

$

412,695

 

$

420,491

 

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, 2024

June 30, 2024

June 30, 2023

Cash flows from operating activities

 

 

 

Net loss

$

(12,997

)

$

(28,414

)

$

(25,417

)

Adjustments to reconcile net loss to net cash provided by operating activities

 

 

 

Depreciation and amortization

 

4,016

 

 

8,115

 

 

8,502

 

Provision for severance benefits

 

1,565

 

 

2,970

 

 

4,091

 

Loss on foreign currency, net

 

6,622

 

 

16,848

 

 

9,117

 

Provision for inventory reserves

 

(77

)

 

(1,024

)

 

1,121

 

Stock-based compensation

 

1,216

 

 

2,116

 

 

3,212

 

Deferred income tax assets

 

1.845

 

 

3,158

 

 

27

 

Other, net

 

163

 

 

426

 

 

423

 

Changes in operating assets and liabilities

 

 

 

Accounts receivable, net

 

(1,636

)

 

(235

)

 

(342

)

Inventories

 

(4,250

)

 

(3,449

)

 

4,911

 

Other receivables

 

986

 

 

601

 

 

4,407

 

Prepaid expenses

 

2,922

 

 

3,827

 

 

4,073

 

Other current assets

 

(3,262

)

 

(2,931

)

 

(3,678

)

Accounts payable

 

1,381

 

 

1,944

 

 

2,880

 

Other accounts payable

 

(1,420

)

 

(6,676

)

 

(6,488

)

Accrued expenses

 

1,618

 

 

(427

)

 

1,104

 

Accrued income taxes

 

(184

)

 

(17

)

 

(2,972

)

Other current liabilities

 

840

 

 

453

 

 

(471

)

Other non-current liabilities

 

378

 

 

(246

)

 

(214

)

Payment of severance benefits

 

(478

)

 

(1,362

)

 

(5,728

)

Other, net

 

(360

)

 

(761

)

 

(487

)

Net cash used in operating activities

 

(1,112

)

 

(5,084

)

 

(1,929

)

Cash flows from investing activities

 

 

 

Proceeds from settlement of hedge collateral

 

—

 

 

—

 

 

3,335

 

Payment of hedge collateral

 

(612

)

 

(612

)

 

(2,586

)

Purchase of property, plant and equipment

 

(898

)

 

(1,566

)

 

(1,518

)

Payment for intellectual property registration

 

(118

)

 

(178

)

 

(163

)

Collection of guarantee deposits

 

5

 

 

1,138

 

 

1,445

 

Payment of guarantee deposits

 

(36

)

 

(1,910

)

 

(6,907

)

Increase in short-term financial instruments

 

(30,000

)

 

(30,000

)

 

—

 

Other, net

 

(1

)

 

0

 

 

—

 

Net cash used in investing activities

 

(31,660

)

 

(33,128

)

 

(6,394

)

Cash flows from financing activities

 

 

 

Proceeds from long-term borrowings

 

—

 

 

30,059

 

 

—

 

Proceeds from exercise of stock options

 

—

 

 

—

 

 

27

 

Acquisition of treasury stock

 

(2,200

)

 

(6,859

)

 

(36,840

)

Repayment of financing related to water treatment facility arrangement

 

(117

)

 

(238

)

 

(248

)

Repayment of principal portion of finance lease liabilities

 

(34

)

 

(69

)

 

(46

)

Net cash provided by (used in) financing activities

 

(2,351

)

 

22,893

 

 

(37,107

)

Effect of exchange rates on cash and cash equivalents

 

(4,012

)

 

(10,306

)

 

(7,093

)

Net decrease in cash and cash equivalents

 

(39,135

)

 

(25,625

)

 

(52,523

)

Cash and cash equivalents

 

 

 

Beginning of the period

 

171,602

 

 

158,092

 

 

225,477

 

End of the period

$

132,467

 

$

132,467

 

$

172,954

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES RECONCILIATION OF OPERATING LOSS TO ADJUSTED OPERATING LOSS (In thousands of U.S. dollars) (Unaudited)

 

Three Months Ended

Six Months Ended

 

June 30, 2024

March 31, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Operating loss

$

(12,824

)

$

(13,459

)

$

(10,656

)

$

(26,283

)

$

(32,474

)

Adjustments:

Equity-based compensation expense

 

1,216

 

 

900

 

2,092

 

 

2,116

 

 

3,212

 

Early termination and other charges

 

—

 

 

—

 

802

 

 

—

 

 

9,251

 

Adjusted Operating Income Loss

$

(11,608

)

$

(12,559

)

$

(7,762

)

$

(24,167

)

$

(20,011

)

We present Adjusted Operating Loss as a supplemental measure of our performance. We define Adjusted Operating Loss for the periods indicated as operating loss adjusted to exclude (i) Equity-based compensation expense and (ii) Early termination and other charges.

For the six months ended June 30, 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.

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND ADJUSTED NET LOSS (In thousands of U.S. dollars, except share data) (Unaudited)

 

Three Months Ended

Six Months Ended

 

June 30, 2024

March 31, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Net loss

$

(12,997

)

$

(15,417

)

$

(3,947

)

$

(28,414

)

$

(25,417

)

Adjustments:

 

 

 

 

 

Interest income

 

(2,228

)

 

(2,213

)

 

(2,692

)

 

(4,441

)

 

(5,534

)

Interest expense

 

554

 

 

238

 

 

200

 

 

792

 

 

456

 

Income tax benefit

 

(1,602

)

 

(1,024

)

 

(2,977

)

 

(2,626

)

 

(4,204

)

Depreciation and amortization

 

4,016

 

 

4,099

 

 

4,145

 

 

8,115

 

 

8,502

 

EBITDA

 

(12,257

)

 

(14,317

)

 

(5,271

)

 

(26,574

)

 

(26,197

)

Equity-based compensation expense

 

1,216

 

 

900

 

 

2,092

 

 

2,116

 

 

3,212

 

Foreign currency loss (gain), net

 

3,557

 

 

5,001

 

 

(1,237

)

 

8,558

 

 

2,193

 

Derivative valuation loss (gain), net

 

(85

)

 

(25

)

 

20

 

 

(110

)

 

74

 

Early termination and other charges

 

—

 

 

—

 

 

802

 

 

—

 

 

9,251

 

Adjusted EBITDA

$

(7,569

)

$

(8,441

)

$

(3,594

)

$

(16,010

)

$

(11,467

)

Net loss

$

(12,997

)

$

(15,417

)

$

(3,947

)

$

(28,414

)

$

(25,417

)

Adjustments:

 

 

 

 

 

Equity-based compensation expense

 

1,216

 

 

900

 

 

2,092

 

 

2,116

 

 

3,212

 

Foreign currency loss (gain), net

 

3,557

 

 

5,001

 

 

(1,237

)

 

8,558

 

 

2,193

 

Derivative valuation loss (gain), net

 

(85

)

 

(25

)

 

20

 

 

(110

)

 

74

 

Early termination and other charges

 

—

 

 

—

 

 

802

 

 

—

 

 

9,251

 

Income tax effect on non-GAAP adjustments

 

175

 

 

(1,343

)

 

(202

)

 

(1,168

)

 

(2,152

)

Adjusted Net Loss

$

(8,134

)

$

(10,884

)

$

(2,472

)

$

(19,018

)

$

(12,839

)

Adjusted Net Loss per common share—

 

 

 

 

 

- Basic

$

(0.21

)

$

(0.28

)

$

(0.06

)

$

(0.50

)

$

(0.30

)

- Diluted

$

(0.21

)

$

(0.28

)

$

(0.06

)

$

(0.50

)

$

(0.30

)

Weighted average number of shares – basic

 

38,174,920

 

 

38,544,781

 

 

41,741,310

 

 

38,359,851

 

 

42,561,514

 

Weighted average number of shares – diluted

 

38,174,920

 

 

38,544,781

 

 

41,741,310

 

 

38,359,851

 

 

42,561,514

 

We present Adjusted EBITDA and Adjusted Net 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 loss before interest income, interest expense, income tax benefit and depreciation and amortization.

We prepare Adjusted Net Loss by adjusting net 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 Loss is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Loss for the periods as net 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 six months ended June 30, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731545229/en/

Steven C. Pelayo, CFA The Blueshirt Group Tel. +1 (360) 808-5154 steven@blueshirtgroup.co