c/o Magnachip Semiconductor, Ltd. false 0001325702 0001325702 2024-10-30 2024-10-30

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 30, 2024

 

 

Magnachip Semiconductor Corporation

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware   001-34791   83-0406195

(State or Other Jurisdiction

of Incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

 

c/o Magnachip Semiconductor, Ltd.

15F, 76 Jikji-daero 436beon-gil, Heungdeok-gu

Cheongju-si, Chungcheongbuk-do, 28581, Republic of Korea

   Not Applicable
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: +82 (2) 6903-3000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading
Symbol

  

Name of each exchange

on which registered

Common Stock, par value $0.01 per share   MX   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02.

Results of Operations and Financial Condition.

Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for Magnachip Semiconductor Corporation and its consolidated subsidiaries for the third quarter ended September 30, 2024, as presented in a press release dated October 30, 2024.

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

The following exhibit is furnished as part of this report:

 

Exhibit

 No. 

   

Description

99.1    Press release for Magnachip Semiconductor Corporation dated October 30, 2024, announcing the results for the third quarter ended September 30, 2024.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    MAGNACHIP SEMICONDUCTOR CORPORATION
Dated: October 30, 2024     By:  

/s/ Theodore Kim

      Theodore Kim
      Chief Compliance Officer, General Counsel and Secretary

Exhibit 99.1

 

LOGO

Magnachip Reports Results for Third Quarter 2024

Financial Highlights

 

  •  

Q3 consolidated revenue was $66.5 million, at the high-end of guidance range of $61.5-66.5 million.

 

  •  

Q3 standard product business revenue was up 25.9% sequentially.

 

  •  

Q3 consolidated gross profit margin of 23.3% was in-line with the mid-point of guidance range of 22.5-24.5%.

 

  •  

Q3 standard product business gross profit margin was 24.4%, up 1.3 percentage points sequentially.

 

  •  

Ended Q3 with cash of $121.1 million; and an additional non-redeemable short-term financial investment of $30 million.

 

  •  

Repurchased approximately 0.5 million shares for aggregate purchase price of $2.5 million during the quarter.

Operational Highlights

 

  •  

Broad-based sequential revenue growth in our PAS business was driven by leaner distribution channels and better-than-typical seasonality. Relative strength was more evident in industrial, computing, and consumer applications. Automotive continues to show strength with additional design wins in Japan and China.

 

  •  

Started initial DDIC production and shipments for a premium smartphone model from a leading China OEM.

 

  •  

Received a purchase order from a second leading China smartphone OEM and commenced shipments in October 2024.

 

  •  

Began sampling our 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.

 

  •  

Power IC revenue increased sequentially, driven primarily by demand for LCD TVs and OLED IT in tablets and notebooks.

SEOUL, South Korea, October 30, 2024 – Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the third quarter 2024.

YJ Kim, Magnachip’s CEO, commented, “Our Q3 revenue was at the high-end of guidance driven by broad-based growth in our Standard Product businesses, which is comprised of our MSS and PAS businesses. Standard Product revenue increased 25.9% sequentially and 24% year-over-year. Our discrete Power business benefited from leaner inventory in distribution channels as well as new product designs wins resulting in better-than-seasonal growth. In MSS, the strong sequential growth was due to increased demand for products targeted for China smartphone OEMs, automotive displays, and OLED IT.”

YJ Kim added, “Looking ahead, we expect our Standard Product business revenue in Q4 will modestly decline sequentially, which is better than typical seasonality experienced in past years. We reiterate our full-year guidance for double-digit growth in both MSS and PAS businesses in 2024.”

Q3 2024 Financial Highlights

 

     In thousands of U.S. dollars, except share data  
     GAAP  
     Q3 2024     Q2 2024     Q/Q change     Q3 2023     Y/Y change  

Consolidated Revenues

      66,460       53,171     up      25.0 %      61,245     up      8.5 % 

Standard Products Business

      64,020       50,835     up      25.9 %      51,619     up      24.0 % 

Mixed-Signal Solutions

      16,446       11,595     up      41.8 %      10,644     up      54.5 % 

Power Analog Solutions

      47,574       39,240     up      21.2 %      40,975     up      16.1 % 

Transitional Fab 3 foundry services(1)

      2,440       2,336     up      4.5 %      9,626     down      74.7 % 

Consolidated Gross Profit Margin

      23.3 %      21.8 %    up      1.5 %pts      23.6 %    down      0.3 %pts 

Standard Products Business

      24.4 %      23.1 %    up      1.3 %pts     28.7 %    down      4.3 %pts

Mixed-Signal Solutions

      38.7 %      34.6 %    up      4.1 %pts     28.8 %    up      9.9 %pts

Power Analog Solutions

      19.4 %      19.7 %    down      0.3 %pts     28.6 %    down      9.2 %pts

Operating Loss

      (11,003 )      (12,824 )    up      n/a       (9,235 )    down      n/a  

Net Loss

      (9,617 )      (12,997 )    up      n/a       (5,165 )    down      n/a  

Basic Loss per Common Share

      (0.26 )      (0.34 )    up      n/a       (0.13 )    down      n/a  

Diluted Loss per Common Share

      (0.26 )      (0.34 )    up      n/a       (0.13 )    down      n/a  

LOGO

 

     In thousands of U.S. dollars, except share data  
     Non-GAAP(2)  
     Q3 2024     Q2 2024     Q/Q change      Q3 2023     Y/Y change  

Adjusted Operating Loss

      (9,026 )      (11,608 )    up      n/a        (7,064 )    down      n/a  

Adjusted EBITDA

      (4,949 )      (7,569 )    up      n/a        (2,735 )    down      n/a  

Adjusted Net Loss

      (12,797 )      (8,134 )    down      n/a        (1,591 )    down      n/a  

Adjusted Loss per Common Share—Diluted

      (0.34 )      (0.21 )    down      n/a        (0.04 )    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 have begun to convert portions of the idle capacity to PAS products during 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.

Q4 and Full-year 2024 Financial Guidance

Beginning in Q1 of 2024, 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 Q4 2024:

 

  •  

Consolidated revenue to be in the range of $59.0 to $64.0 million, including approximately $2.0 million of Transitional Foundry Services.

 

  •  

MSS revenue to be in the range of $15 to $17 million, down 2.7% sequentially but up 87% year-over-year at the mid-point. This compares with MSS revenue of $16.4 million in Q3 2024 and MSS equivalent revenue of $8.6 million in Q4 2023.

 

  •  

PAS revenue to be in the range of $42 to $45 million, down 8.6% sequentially but up 33.3% year-over-year at the mid-point. This compares with PAS revenue of $47.6 million in Q3 2024 and PAS equivalent revenue of $32.6 million in Q4 2023.

 

  •  

Consolidated gross profit margin to be in the range of 21.5% to 23.5%.

 

  •  

MSS gross profit margin to be in the range of 37.5% to 40.5%. This compares with MSS gross profit margin of 38.7% in Q3 2024 and MSS equivalent gross profit margin of 41.3% in Q4 2023.

 

  •  

PAS gross profit margin to be in the range of 17% to 19%. This compares with PAS gross profit margin of 19.4% in Q3 2024 and PAS equivalent gross profit margin of 18.1% in Q4 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 throughout 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 throughout the year.

 

  •  

Transitional Foundry Services revenue will be wound down by the end of 2024, as expected. We expect any remaining amounts to be immaterial beyond Q4 2024.

 

  •  

Consolidated revenue flattish, as compared to our prior expectation of flattish-to-slightly down.

 

  •  

Consolidated gross profit margin between 21% to 22%, as compared to our prior expectation of 19% to 22%. This compares with the consolidated gross profit margin of 22.4% in 2023.

LOGO

 

Q3 2024 Earnings Conference Call

Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, October 30, 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/BId4ac9a385dd74e4f813c5964a3ac6546

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 fourth 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 fourth 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.

LOGO

 

CONTACT:

Steven C. Pelayo, CFA

The Blueshirt Group

Tel. +1 (360) 808-5154

steven@blueshirtgroup.co

LOGO

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30,
2024		     June 30,
2024		     September 30,
2023		     September 30,
2024		     September 30,
2023		  

Revenues:

           

Net sales – standard products business

    $ 64,020     $ 50,835     $ 51,619     $ 160,396     $ 154,508  

Net sales – transitional Fab 3 foundry services

      2,440       2,336       9,626       8,302       24,721  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      66,460       53,171       61,245       168,698       179,229  

Cost of sales:

           

Cost of sales – standard products business

      48,400       39,113       36,829       123,401       112,008  

Cost of sales – transitional Fab 3 foundry services

      2,599       2,457       9,935       9,267       27,108  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total cost of sales

      50,999       41,570       46,764       132,668       139,116  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

      15,461       11,601       14,481       36,030       40,113  

Gross profit as a percentage of standard products business net sales

      24.4 %      23.1 %      28.7 %      23.1 %      27.5 % 

Gross profit as a percentage of total revenues

      23.3 %      21.8 %      23.6 %      21.4 %      22.4 % 

Operating expenses:

           

Selling, general and administrative expenses

      12,091       11,734       12,089       35,089       36,391  

Research and development expenses

      14,373       12,691       11,627       38,227       36,180  

Early termination and other charges

      —        —        —        —        9,251  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total operating expenses

      26,464       24,425       23,716       73,316       81,822  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating loss

      (11,003 )      (12,824 )      (9,235 )      (37,286 )      (41,709 ) 

Interest income

      2,051       2,228       2,382       6,492       7,916  

Interest expense

      (574 )      (554 )      (189 )      (1,366 )      (645 ) 

Foreign currency gain (loss), net

      5,066       (3,557 )      (2,583 )      (3,492 )      (4,776 ) 

Other income (loss), net

      (31 )      108       87       121       55  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loss before income tax expense (benefit)

      (4,491 )      (14,599 )      (9,538 )      (35,531 )      (39,159 ) 

Income tax expense (benefit)

      5,126       (1,602 )      (4,373 )      2,500       (8,577 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net loss

    $ (9,617 )    $ (12,997 )    $ (5,165 )    $ (38,031 )    $ (30,582 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Basic loss per common share—

    $ (0.26 )    $ (0.34 )    $ (0.13 )    $ (1.00 )    $ (0.73 ) 

Diluted loss per common share—

    $ (0.26 )    $ (0.34 )    $ (0.13 )    $ (1.00 )    $ (0.73 ) 

Weighted average number of shares—

           

Basic

      37,468,849       38,174,920       40,145,290       38,060,682       41,747,255  

Diluted

      37,468,849       38,174,920       40,145,290       38,060,682       41,747,255  

LOGO

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

 

     September 30,
2024		     December 31,
2023		  

Assets

     

Current assets

     

Cash and cash equivalents

    $ 121,095     $ 158,092  

Short-term financial instruments

      30,000       —   

Accounts receivable, net

      28,693       32,641  

Inventories, net

      36,127       32,733  

Other receivables

      5,301       4,295  

Prepaid expenses

      11,614       7,390  

Hedge collateral

      1,000       1,000  

Other current assets

      8,208       9,283  
  

 

 

    

 

 

  

Total current assets

      242,038       245,434  

Property, plant and equipment, net

      92,383       100,122  

Operating lease right-of-use assets

      3,810       4,639  

Intangible assets, net

      1,353       1,537  

Long-term prepaid expenses

      615       5,736  

Deferred income taxes

      46,643       50,836  

Other non-current assets

      24,513       12,187  
  

 

 

    

 

 

  

Total assets

    $ 411,355     $ 420,491  
  

 

 

    

 

 

  

Liabilities and Stockholders’ Equity

     

Current liabilities

     

Accounts payable

    $ 24,644     $ 24,443  

Other accounts payable

      11,768       5,292  

Accrued expenses

      9,133       10,457  

Accrued income taxes

      32       1,496  

Operating lease liabilities

      1,754       1,914  

Other current liabilities

      3,005       3,286  
  

 

 

    

 

 

  

Total current liabilities

      50,336       46,888  
  

 

 

    

 

 

  

Long-term borrowing

      30,312       —   

Accrued severance benefits, net

      17,347       16,020  

Non-current operating lease liabilities

      2,191       2,897  

Other non-current liabilities

      11,596       10,088  
  

 

 

    

 

 

  

Total liabilities

      111,782       75,893  
  

 

 

    

 

 

  

Commitments and contingencies

     

Stockholders’ equity

     

Common stock, $0.01 par value, 150,000,000 shares authorized, 57,032,206 shares issued and 37,292,044 outstanding at September 30, 2024 and 56,971,394 shares issued and 38,852,742 outstanding at December 31, 2023

      569       569  

Additional paid-in capital

      277,306       273,256  

Retained earnings

      260,853       298,884  

Treasury stock, 19,740,162 shares at September 30, 2024 and 18,118,652 shares at December 31, 2023, respectively

      (222,503 )      (213,454 ) 

Accumulated other comprehensive loss

      (16,652 )      (14,657 ) 
  

 

 

    

 

 

  

Total stockholders’ equity

      299,573       344,598  
  

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 411,355     $ 420,491  
  

 

 

    

 

 

  

LOGO

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

 

     Three Months
Ended		     Nine Months
Ended		  
     September 30,
2024		     September 30,
2024		     September 30,
2023		  

Cash flows from operating activities

       

Net loss

    $ (9,617 )    $ (38,031 )    $ (30,582 ) 

Adjustments to reconcile net loss to net cash used in operating activities

       

Depreciation and amortization

      4,056       12,171       12,583  

Provision for severance benefits

      1,582       4,552       5,358  

Loss (gain) on foreign currency, net

      (10,708 )      6,140       14,532  

Provision for inventory reserves

      (591 )      (1,615 )      3,035  

Stock-based compensation

      1,977       4,093       5,383  

Deferred income taxes

      (47 )      3,111       88  

Others, net

      126       552       592  

Changes in operating assets and liabilities

       

Accounts receivable, net

      3,795       3,560       (6,409 ) 

Inventories

      1,084       (2,365 )      3,635  

Other receivables

      (1,631 )      (1,030 )      4,993  

Prepaid expenses

      1,818       5,645       5,653  

Other current assets

      4,086       1,155       (7,944 ) 

Accounts payable

      (1,325 )      619       6,066  

Other accounts payable

      (3,521 )      (10,197 )      (6,738 ) 

Accrued expenses

      (912 )      (1,339 )      619  

Accrued income taxes

      (1,442 )      (1,459 )      (3,014 ) 

Other current liabilities

      (693 )      (240 )      (741 ) 

Other non-current liabilities

      (99 )      (345 )      (279 ) 

Payment of severance benefits

      (527 )      (1,889 )      (6,183 ) 

Others, net

      (316 )      (1,077 )      (841 ) 
  

 

 

    

 

 

    

 

 

  

Net cash used in operating activities

      (12,905 )      (17,989 )      (194 ) 

Cash flows from investing activities

       

Proceeds from settlement of hedge collateral

      627       627       3,335  

Payment of hedge collateral

      —        (612 )      (3,154 ) 

Purchase of property, plant and equipment

      (2,609 )      (4,175 )      (2,280 ) 

Payment for intellectual property registration

      (85 )      (263 )      (230 ) 

Collection of guarantee deposits

      15       1,153       4,984  

Payment of guarantee deposits

      (180 )      (2,090 )      (7,276 ) 

Increase in short-term financial instruments

      —        (30,000 )      —   

Others, net

      (37 )      (37 )      —   
  

 

 

    

 

 

    

 

 

  

Net cash used in investing activities

      (2,269 )      (35,397 )      (4,621 ) 

Cash flows from financing activities

       

Proceeds from long-term borrowing

      —        30,059       —   

Proceeds from exercise of stock options

      —        —        27  

Acquisition of treasury stock

      (2,648 )      (9,507 )      (43,087 ) 

Repayment of financing related to water treatment facility arrangement

      (119 )      (357 )      (371 ) 

Repayment of principal portion of finance lease liabilities

      (35 )      (104 )      (69 ) 
  

 

 

    

 

 

    

 

 

  

Net cash provided by (used in) financing activities

      (2,802 )      20,091       (43,500 ) 

Effect of exchange rates on cash and cash equivalents

      6,604       (3,702 )      (10,518 ) 
  

 

 

    

 

 

    

 

 

  

Net decrease in cash and cash equivalents

      (11,372 )      (36,997 )      (58,833 ) 

Cash and cash equivalents

       

Beginning of the period

      132,467       158,092       225,477  
  

 

 

    

 

 

    

 

 

  

End of the period

    $ 121,095     $ 121,095     $ 166,644  
  

 

 

    

 

 

    

 

 

  

LOGO

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF OPERATING LOSS TO ADJUSTED OPERATING LOSS

(In thousands of U.S. dollars)

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30,
2024		     June 30,
2024		     September 30,
2023		     September 30,
2024		     September 30,
2023		  

Operating loss

    $ (11,003 )    $ (12,824 )    $ (9,235 )    $ (37,286 )    $ (41,709 ) 

Adjustments:

           

Equity-based compensation expense

      1,977       1,216       2,171       4,093       5,383  

Early termination and other charges

      —        —        —        —        9,251  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted Operating Income Loss

    $ (9,026 )    $ (11,608 )    $ (7,064 )    $ (33,193 )    $ (27,075 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

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 nine months ended September 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. During the same period, we also recorded $802 thousand of one-time employee incentives.

LOGO

 

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      Nine Months Ended  
     September 30,
2024		      June 30,
2024		      September 30,
2023		      September 30,
2024		      September 30,
2023		  

Net loss

    $ (9,617)      $ (12,997)      $ (5,165)      $ (38,031)      $ (30,582)  

Adjustments:

               

Interest income

      (2,051)        (2,228)        (2,382)        (6,492)        (7,916)  

Interest expense

      574        554        189        1,366        645  

Income tax expense (benefit)

      5,126        (1,602)        (4,373)        2,500        (8,577)  

Depreciation and amortization

      4,056        4,016        4,081        12,171        12,583  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

EBITDA

      (1,912)        (12,257)        (7,650)        (28,486)        (33,847)  

Equity-based compensation expense

      1,977        1,216        2,171        4,093        5,383  

Foreign currency loss (gain), net

      (5,066)        3,557        2,583        3,492        4,776  

Derivative valuation loss (gain), net

      52        (85)        161        (58)        235  

Early termination and other charges

      —         —         —         —         9,251  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

    $ (4,949)      $ (7,569)      $ (2,735)      $ (20,959)      $ (14,202)  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net loss

    $ (9,617)      $ (12,997)      $ (5,165)      $ (38,031)      $ (30,582)  

Adjustments:

               

Equity-based compensation expense

      1,977        1,216        2,171        4,093        5,383  

Foreign currency loss (gain), net

      (5,066)        3,557        2,583        3,492        4,776  

Derivative valuation loss (gain), net

      52        (85)        161        (58)        235  

Early termination and other charges

      —         —         —         —          9,251  

Income tax effect on non-GAAP adjustments

      (143)        175        (1,341)        (1,311)        (3,493)  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Net Loss

    $ (12,797)      $ (8,134)      $ (1,591)      $ (31,815)      $ (14,430)  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted Net Loss per common share—

               

- Basic

    $ (0.34)      $ (0.21)      $ (0.04)      $ (0.84)      $ (0.35)  

- Diluted

    $ (0.34)      $ (0.21)      $ (0.04)      $ (0.84)      $ (0.35)  

Weighted average number of shares – basic

      37,468,849        38,174,920        40,145,290        38,060,682        41,747,255  

Weighted average number of shares – diluted

      37,468,849        38,174,920        40,145,290        38,060,682        41,747,255  

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 expense (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 nine months ended September 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. During the same period, we also recorded $802 thousand of one-time employee incentives.

v3.24.3
Document and Entity Information
Oct. 30, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 30, 2024
Entity Registrant Name Magnachip Semiconductor Corporation
Entity Incorporation State Country Code DE
Entity File Number 001-34791
Entity Tax Identification Number 83-0406195
Entity Address Address Line 1 c/o Magnachip Semiconductor, Ltd.
Entity Address Address Line 2 15F, 76 Jikji-daero 436beon-gil, Heungdeok-gu
Entity Address Address Line 3 Cheongju-si
Entity Address City Or Town Chungcheongbuk-do
Entity Address Postal Zip Code 28581
Entity Address Country KR
Country Region 82
City Area Code 2
Local Phone Number 6903-3000
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock, par value $0.01 per share
Trading Symbol MX
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001325702
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