YJ Kim, Magnachip's Chief Executive Officer commented, "Our Q3 results were in-line with our guidance. In our Display business, we have completed the qualification of two DDI chips at our new tier 1 panel maker and are going through the qualification process with two smartphone makers. We are now working on additional Driver ICs that cover broader segments of the smartphone market to include mass market smartphones in addition to the premium models. Despite near-term market challenges, our outlook for long-term growth remains positive. Our confidence is driven by our strong belief that our display products offer distinct competitive advantages that position us well for success in the rapidly growing OLED market in Asia."
YJ continued, "In our Power business, our product portfolio is getting stronger as we continue to focus on rolling out next-generation power products to maintain our momentum of design-in/wins. Looking ahead, amid heightened global geopolitical and macroeconomic uncertainty, we expect demand to remain soft, driven by normal Q4 seasonality and inventory correction in industrial end markets."
Q3 2023 Financial Highlights | ||||||||||||||||||||||||||||
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| In thousands of U.S. dollars, except share data |
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| GAAP |
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| Q3 2023 |
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| Q2 2023 |
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| Q/Q change |
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| Q3 2022 |
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| Y/Y change |
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Revenues |
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Standard Products Business |
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| Display Solutions |
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| 6,404 |
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| 9,657 |
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| down |
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| 33.7 | % |
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| 6,355 |
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| up |
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| 0.8 | % |
| Power Solutions |
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| 45,215 |
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| 41,718 |
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| up |
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| 8.4 | % |
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| 56,416 |
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| down |
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| 19.9 | % |
| Transitional Fab 3 foundry services (1) |
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| 9,626 |
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| 9,604 |
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| up |
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| 0.2 | % |
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| 8,428 |
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| up |
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| 14.2 | % |
| Gross Profit Margin |
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| 23.6 | % |
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| 22.2 | % |
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| up |
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| 1.4 | %pts |
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| 24.2 | % |
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| down |
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| 0.6 | %pts |
| Operating Loss |
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| (9,235) |
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| (10,656) |
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| up |
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| n/a |
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| (10,008) |
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| up |
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| n/a |
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| Net Loss |
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| (5,165) |
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| (3,947) |
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| down |
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| n/a |
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| (17,195) |
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| up |
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| n/a |
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| Basic Loss per Common Share |
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| (0.13) |
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| (0.09) |
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| down |
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| n/a |
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| (0.38) |
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| up |
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| n/a |
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| Diluted Loss per Common Share |
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| (0.13) |
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| (0.09) |
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| down |
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| n/a |
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| (0.38) |
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| up |
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| n/a |
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| In thousands of U.S. dollars, except share data |
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| Non-GAAP (2) |
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| Q3 2023 |
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| Q2 2023 |
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| Q/Q change |
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| Q3 2022 |
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| Y/Y change |
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| Adjusted Operating Loss |
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| (7,064) |
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| (7,762) |
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| up |
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| n/a |
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| (6,646) |
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| down |
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| n/a |
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| Adjusted EBITDA |
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| (2,735) |
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| (3,594) |
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| up |
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| n/a |
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| (2,995) |
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| up |
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| n/a |
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| Adjusted Net Income (Loss) |
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| (1,591) |
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| (2,472) |
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| up |
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| n/a |
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| 1,097 |
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| down |
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| n/a |
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| Adjusted Earnings (Loss) per Common Share—Diluted |
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| (0.04) |
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| (0.06) |
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| up |
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| n/a |
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| 0.02 |
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| down |
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| n/a |
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| ___________ | |
| (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 planning to wind down these foundry services and convert portions of the idle capacity to Power Solutions standard 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 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 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 income (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. |
