First Quarter and Recent Company Highlights
MagnaChip:
- Priced the upsized offering of 5.00% Exchangeable Senior Notes after the initial purchasers exercised an over-allotment option. The offering totaled $86.25 million aggregate principal amount of notes, taking into account the over-allotment option exercised by the initial purchasers
- Announced it now offers a 0.35 micron 700V Ultra High Voltage process technology with process simplification that reduces manufacturing time and cost. This Ultra High Voltage (UHV) process is ideal for manufacturing AC-DC converter ICs and LED driver ICs.
- Unveiled a new 0.18 micron RFSOI process with enhanced switching performance to reduce manufacturing cost and time-to-market, while also providing competitive and superior performance for antenna switches used in mobile and Internet of Things (IoT) devices for wireless connectivity
- Announced it will host its annual Foundry Technology Symposium in Santa Clara, California, on June 7 to showcase its analog and mixed signal technology offerings and services
Business Outlook
For the second quarter of 2017, MagnaChip anticipates:
- Revenue to be in the range of $162 million to $168 million, or up sequentially nearly 4% at the high end of the projected range as compared with Q1, and compared to $167.1 million in the second quarter of 2016.
- Gross profit is anticipated to be in the range of 25% to 27%, as compared to 25.7% in the first quarter of 2017, and as compared to 22% in the second quarter of 2016.
Conference Call
MagnaChip will hold a conference call on May 3 at 5 p.m. ET to discuss the first quarter 2017 financial results. The conference call will be webcast live and is also available by dialing toll-free at 1-844-536-5472. International call-in participants can dial at 1-614-999-9318. The conference ID number is 8267197. Participants are encouraged to initiate their calls at least 10 minutes in advance of the 8 a.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 8267197.
About MagnaChip Semiconductor Corporation
MagnaChip is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, industrial and automotive applications. The Company's Standard Products Group and Foundry Services Group provide a broad range of standard products and manufacturing services to customers worldwide. MagnaChip, with a 30-year operating history, owns a portfolio of approximately 3,400 registered and pending patents, and has extensive engineering, design and manufacturing process expertise. For more information, please visit
www.magnachip.com. Information on or accessible through, MagnaChip's website is not a part of, and is not incorporated into, this release.
Safe Harbor for Forward-Looking Statements
Information in this release regarding MagnaChip's forecasts, business outlook, expectations and beliefs are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include statements about our future operating and financial performance, including second quarter 2017 revenue and gross profit expectations. All forward-looking statements included in this release are based upon information available to MagnaChip as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include general economic conditions, the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new products and technologies, ability to ramp new products into volume production, industry wide shifts in supply and demand for semiconductor products, industry and/or company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets and the impact of foreign exchange rates, unanticipated costs and expenses or the inability to identify expenses which can be eliminated, compliance with U.S. and international trade and export laws and regulations by us and our distributors, and other risks detailed from time to time in MagnaChip's filings with the SEC, including our Form 10-K filed on February 21, 2017 and subsequent registration statements, amendments or other reports that we may file from time to time with the SEC and/or make available on our website. MagnaChip assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise.
|
CONTACTS: |
|
|
In the United States: Bruce Entin Investor Relations Tel. +1-408-625-1262 |
In Korea: Chankeun Park Director, Public Relations Tel. +82-2-6903-3195 |
|
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES | ||||||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
|
(In thousands of US dollars, except share data) | ||||||||||||
|
(Unaudited) | ||||||||||||
|
| ||||||||||||
|
|
|
Three Months Ended |
| |||||||||
|
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
|
March 31, 2016 |
| |||
|
Net sales |
|
$ |
161,710 |
|
|
$ |
180,462 |
|
|
$ |
148,105 |
|
|
Cost of sales |
|
|
120,140 |
|
|
|
134,373 |
|
|
|
113,856 |
|
|
Gross profit |
|
|
41,570 |
|
|
|
46,089 |
|
|
|
34,249 |
|
|
Gross profit % |
|
|
25.7 |
% |
|
|
25.5 |
% |
|
|
23.1 |
% |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
23,148 |
|
|
|
23,112 |
|
|
|
19,952 |
|
|
Research and development expenses |
|
|
17,958 |
|
|
|
17,748 |
|
|
|
17,815 |
|
|
Restructuring gain and other |
|
|
(17,010) |
|
|
|
— |
|
|
|
(7,785) |
|
|
Early termination charges |
|
|
11,107 |
|
|
|
— |
|
|
|
— |
|
|
Total operating expenses |
|
|
35,203 |
|
|
|
40,860 |
|
|
|
29,982 |
|
|
Operating income |
|
|
6,367 |
|
|
|
5,229 |
|
|
|
4,267 |
|
|
Interest expense |
|
|
(5,173) |
|
|
|
(4,053) |
|
|
|
(4,057) |
|
|
Foreign currency gain (loss), net |
|
|
41,786 |
|
|
|
(49,628) |
|
|
|
8,195 |
|
|
Other income, net |
|
|
1,611 |
|
|
|
561 |
|
|
|
535 |
|
|
Income (loss) before income tax expenses |
|
|
44,591 |
|
|
|
(47,891) |
|
|
|
8,940 |
|
|
Income tax expenses |
|
|
853 |
|
|
|
1,899 |
|
|
|
815 |
|
|
Net income (loss) |
|
$ |
43,738 |
|
|
$ |
(49,790) |
|
|
$ |
8,125 |
|
|
Earnings (loss) per common share : |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic |
|
$ |
1.30 |
|
|
$ |
(1.42) |
|
|
$ |
0.23 |
|
|
- Diluted |
|
$ |
1.05 |
|
|
$ |
(1.42) |
|
|
$ |
0.23 |
|
|
Weighted average number of shares - Basic |
|
|
33,662,297 |
|
|
|
35,068,330 |
|
|
|
34,698,904 |
|
|
Weighted average number of shares - Diluted |
|
|
42,892,044 |
|
|
|
35,068,330 |
|
|
|
34,918,568 |
|
|
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES | |||||||||||||
|
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED NET INCOME | |||||||||||||
|
(In thousands of US dollars, except share data) | |||||||||||||
|
(Unaudited) | |||||||||||||
|
| |||||||||||||
|
|
|
Three Months Ended |
|
| |||||||||
|
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
|
March 31, 2016 |
|
| |||
|
Net income (loss) |
|
$ |
43,738 |
|
|
$ |
(49,790) |
|
|
$ |
8,125 |
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
4,976 |
|
|
|
3,987 |
|
|
|
3,999 |
|
|
|
Income tax expenses |
|
|
853 |
|
|
|
1,899 |
|
|
|
815 |
|
|
|
Depreciation and amortization |
|
|
6,758 |
|
|
|
6,625 |
|
|
|
6,024 |
|
|
|
EBITDA |
|
|
56,325 |
|
|
|
(37,279) |
|
|
|
18,963 |
|
|
|
Restructuring gain and other, net |
|
|
(17,010) |
|
|
|
— |
|
|
|
(6,832) |
|
|
|
Early termination charges |
|
|
11,107 |
|
|
|
— |
|
|
|
— |
|
|
|
Equity-based compensation expense |
|
|
830 |
|
|
|
877 |
|
|
|
536 |
|
|
|
Foreign currency loss (gain), net |
|
|
(41,786) |
|
|
|
49,627 |
|
|
|
(8,195) |
|
|
|
Derivative valuation loss (gain), net |
|
|
(637) |
|
|
|
273 |
|
|
|
(42) |
|
|
|
Restatement related expenses |
|
|
4,259 |
|
|
|
597 |
|
|
|
3,592 |
|
|
|
Adjusted EBITDA |
|
$ |
13,088 |
|
|
$ |
14,095 |
|
|
$ |
8,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
43,738 |
|
|
$ |
(49,790) |
|
|
$ |
8,125 |
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring gain and other, net |
|
|
(17,010) |
|
|
|
— |
|
|
|
(6,832) |
|
|
|
Early termination charges |
|
|
11,107 |
|
|
|
— |
|
|
|
— |
|
|
|
Equity-based compensation expense |
|
|
830 |
|
|
|
877 |
|
|
|
536 |
|
|
|
Foreign currency loss (gain), net |
|
|
(41,786) |
|
|
|
49,627 |
|
|
|
(8,195) |
|
|
|
Derivative valuation loss (gain), net |
|
|
(637) |
|
|
|
273 |
|
|
|
(42) |
|
|
|
Restatement related expenses |
|
|
4,259 |
|
|
|
597 |
|
|
|
3,592 |
|
|
|
Adjusted Net Income (Loss) |
|
$ |
501 |
|
|
$ |
1,584 |
|
|
$ |
(2,816) |
|
|
|
Adjusted Net Income (Loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic |
|
$ |
0.01 |
|
|
$ |
0.05 |
|
|
$ |
(0.08) |
|
|
|
- Diluted |
|
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
(0.08) |
|
|
|
Weighted average number of shares – Basic |
|
|
33,662,297 |
|
|
|
35,068,330 |
|
|
|
34,698,904 |
|
|
|
Weighted average number of shares – Diluted |
|
|
34,301,291 |
|
|
|
35,503,993 |
|
|
|
34,698,904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) restructuring gain and other, net, (ii) early termination charges, (iii) equity-based compensation expense, (iv) foreign currency loss (gain), net, (v) derivative valuation loss (gain), net and (vi) restatement related expenses. EBITDA for the periods indicated is defined as net income (loss) before interest expense, net, income tax expenses and depreciation and amortization. We prepare Adjusted Net Income (Loss) by adjusting net income (loss) to eliminate the impact of a number of non-cash expenses and other items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance. We believe that Adjusted Net Income (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 net income (loss), adjusted to exclude (i) restructuring gain and other, net, (ii) early termination charges, (iii) equity-based compensation expense, (iv) foreign currency loss (gain), net, (v) derivative valuation loss (gain), net, and (vi) restatement related expenses. | |||||||||||||
|
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES | ||
|
CONSOLIDATED BALANCE SHEETS | ||
|
(In thousands of US dollars, except share data) | ||
|
(Unaudited) | ||
|
| ||
|
|
March 31, 2017 |
December 31, 2016 |
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ 132,627 |
$ 83,355 |
|
Restricted cash |
— |
18,251 |
|
Accounts receivable, net |
81,700 |
61,775 |
|
Inventories, net |
60,969 |
57,048 |
|
Other receivables |
6,639 |
5,864 |
|
Prepaid expenses |
12,492 |
8,137 |
|
Hedge collateral |
5,400 |
3,150 |
|
Other current assets |
5,282 |
5,113 |
|
Total current assets |
305,109 |
242,693 |
|
Property, plant and equipment, net |
190,699 |
179,793 |
|
Intangible assets, net |
3,407 |
3,085 |
|
Long-term prepaid expenses |
10,115 |
9,556 |
|
Deferred income tax assets |
188 |
193 |
|
Other non-current assets |
5,213 |
6,632 |
|
Total assets |
$ 514,731 |
$ 441,952 |
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ 55,814 |
$ 51,509 |
|
Other accounts payable |
9,463 |
12,272 |
|
Accrued expenses |
55,688 |
60,365 |
|
Deferred revenue |
11,924 |
11,092 |
|
Deposits received |
271 |
16,549 |
|
Other current liabilities |
894 |
1,654 |
|
Total current liabilities |
134,054 |
153,441 |
|
Long-term borrowings, net |
301,875 |
221,082 |
|
Accrued severance benefits, net |
139,948 |
129,225 |
|
Other non-current liabilities |
9,430 |
10,318 |
|
Total liabilities |
585,307 |
514,066 |
|
|
|
|
|
Stockholders' equity |
|
|
|
Common stock, $0.01 par value, 150,000,000 shares authorized, 41,927,897 shares issued and
|
419 |
416 |
|
Additional paid-in capital |
132,705 |
130,189 |
|
Accumulated deficit |
(82,087) |
(125,825) |
|
Treasury stock, 8,374,209 shares at March 31, 2017 and 6,578,765 shares at December 31, 2016 |
(102,319) |
(90,918) |
|
Accumulated other comprehensive income (loss) |
(19,294) |
14,024 |
|
Total stockholders' deficit |
(70,576) |
(72,114) |
|
Total liabilities and stockholders' equity |
$ 514,731 |
$ 441,952 |
|
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES | ||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
|
(In thousands of US dollars) | ||||||||
|
(Unaudited) | ||||||||
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
| |||||
|
|
|
March 31, 2017 |
|
|
March 31, 2016 |
| ||
|
Cash flows from operating activities |
| |||||||
|
Net income |
|
$ |
43,738 |
|
|
$ |
8,125 |
|
|
Adjustments to reconcile net income to net cash used in operating activities |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
6,758 |
|
|
|
6,024 |
|
|
Provision for severance benefits |
|
|
7,386 |
|
|
|
5,771 |
|
|
Amortization of debt issuance costs and original issue discount |
|
|
446 |
|
|
|
173 |
|
|
Gain on foreign currency, net |
|
|
(49,059) |
|
|
|
(8,857) |
|
|
Restructuring gain and other |
|
|
(17,010) |
|
|
|
(7,785) |
|
|
Stock-based compensation |
|
|
830 |
|
|
|
536 |
|
|
Other |
|
|
1,185 |
|
|
|
(10) |
|
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
(15,734) |
|
|
|
7,716 |
|
|
Inventories, net |
|
|
1,077 |
|
|
|
(11,946) |
|
|
Other receivables |
|
|
1,467 |
|
|
|
(326) |
|
|
Other current assets |
|
|
(1,155) |
|
|
|
(1,559) |
|
|
Accounts payable |
|
|
1,814 |
|
|
|
4,920 |
|
|
Other accounts payable |
|
|
(3,499) |
|
|
|
(3,748) |
|
|
Accrued expenses |
|
|
(7,128) |
|
|
|
(3,729) |
|
|
Deferred revenue |
|
|
(73) |
|
|
|
(9,777) |
|
|
Other current liabilities |
|
|
(212) |
|
|
|
828 |
|
|
Other non-current liabilities |
|
|
(62) |
|
|
|
(325) |
|
|
Payment of severance benefits |
|
|
(7,524) |
|
|
|
(4,098) |
|
|
Other |
|
|
(116) |
|
|
|
(114) |
|
|
Net cash used in operating activities |
|
|
(36,871) |
|
|
|
(18,181) |
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Proceeds from disposal of plant, property and equipment |
|
|
18,206 |
|
|
|
— |
|
|
Purchase of plant, property and equipment |
|
|
(5,368) |
|
|
|
(4,288) |
|
|
Payment for intellectual property registration |
|
|
(216) |
|
|
|
(237) |
|
|
Collection of guarantee deposits |
|
|
295 |
|
|
|
374 |
|
|
Proceeds from settlement of hedge collateral |
|
|
2,164 |
|
|
|
3,993 |
|
|
Payment of hedge collateral |
|
|
(4,452) |
|
|
|
— |
|
|
Payment of guarantee deposits |
|
|
(41) |
|
|
|
(14) |
|
|
Other |
|
|
20 |
|
|
|
10 |
|
|
Net cash provided by (used in) investing activities |
|
|
10,608 |
|
|
|
(162) |
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Proceeds from issuance of senior notes |
|
|
86,250 |
|
|
|
— |
|
|
Payment of debt issuance costs |
|
|
(5,902) |
|
|
|
— |
|
|
Proceeds from issuance of common stock |
|
|
1,689 |
|
|
|
— |
|
|
Acquisition of treasury stock |
|
|
(11,401) |
|
|
|
— |
|
|
Net cash provided by financing activities |
|
|
70,636 |
|
|
|
— |
|
|
Effect of exchange rates on cash and cash equivalents |
|
|
4,899 |
|
|
|
988 |
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
49,272 |
|
|
|
(17,355) |
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
Beginning of the period |
|
|
83,355 |
|
|
|
90,882 |
|
|
End of the period |
|
$ |
132,627 |
|
|
$ |
73,527 |
|
|
|
|
| ||||||
|
Non-cash operating activities |
|
|
|
|
|
|
|
|
|
Insurance proceeds in restricted cash reclassified from other receivables |
|
$ |
— |
|
|
$ |
(29,571) |
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/magnachip-reports-first-quarter-2017-financial-results-300450361.html
SOURCE MagnaChip Semiconductor Corporation
| Contact: |
| MagnaChip Semiconductor Corporation
Web: http://www.magnachip.com |
