Magnachip Reports Results for Fourth Quarter and Full-Year 2022

We present Adjusted Operating Income (Loss) as a supplemental measure of our performance. We define Adjusted Operating Income (Loss) for the periods indicated as operating income (loss) adjusted to exclude (i) Equity-based compensation expense (ii) Inventory reserve related to Huawei impact of downstream trade restrictions (iii) Merger-related income, net and (iv) Other charges, net.

 For the year ended December 31, 2022, Other charges, net includes $2.8 million of one-time employee incentives and professional service fees and expenses of $1.0 million, incurred in connection with certain strategic evaluations, both of which were offset in part by a $0.5 million gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi. For the year ended December 31, 2021, Other charges, net includes $3.4 million of non-recurring professional service fees and expenses incurred in connection with the regulatory requests, partially offset by $1.4 million gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi (which was closed during the year ended December 31, 2018).

For the year ended December 31, 2021, we recorded in our consolidated statement of operations net gain of $35.5 million that represented income of $70.2 million from the recognition of a reverse termination fee, net of professional service fees and expenses of $34.7 million incurred in connection with the contemplated merger transaction of the Company that was terminated in December 2021. 

 

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








Three Months Ended 



Year Ended 



December 31,
2022


September 30,
2022


December 31,
2021



December 31,
2022


December 31,
2021


Net income (loss)   

$           2,971


$        (17,195)


$            53,611



$        (8,036)


$           56,708

Adjustments:











Interest income            

(2,420)


(1,784)


(858)



(5,980)


(2,609)

Interest expense           

269


278


132



1,157


1,371

Income tax expense (benefit)       

6,513


(3,942)


11,221



5,157


17,261

Depreciation and amortization     

3,775


3,623


3,663



15,000


14,239












EBITDA

11,108


(19,020)


67,769



7,298


86,970

Equity-based compensation expense           

1,550


861


1,648



6,037


7,704

Foreign currency loss (gain), net 

(17,492)


12,809


(147)



3,019


11,853

Derivative valuation loss (gain), net            

66


(146)


(29)



(135)


(123)

Inventory reserve related to Huawei impact of downstream trade restrictions 



(379)




(1,460)

Merger-related income, net



(49,369)




(35,527)

Other charges, net        


2,501


(1,349)



3,298


1,284












Adjusted EBITDA

$          (4,768)


$          (2,995)


$            18,144



$        19,517


$           70,701























Net income (loss)   

$            2,971


$        (17,195 )


$            53,611



$        (8,036)


$           56,708

Adjustments:           











Equity-based compensation expense           

1,550


861


1,648



6,037


7,704

Foreign currency loss (gain), net 

(17,492)


12,809


(147)



3,019


11,853

Derivative valuation loss (gain), net            

66


(146 )


(29)



(135)


(123)

Inventory reserve related to Huawei impact of downstream trade restrictions 



(379)




(1,460)

Merger-related income, net



(49,369)




(35,527)

Other charges, net        


2,501


(1,349)



3,298


1,284

Income tax effect on non-GAAP adjustments               

(2,943)


2,267


9,713



4,569


9,713












Adjusted Net Income (Loss)

$         (15,848)


$            1,097


$            13,699



$          8,752


$           50,152












Adjusted Net Income (Loss) per common share—











- Basic         

$             (0.36)


$              0.02


$               0.30



$            0.20


$               1.12

- Diluted

$             (0.36)


$              0.02


$               0.29



$            0.19


$               1.07

Weighted average number of shares – basic

44,054,275


44,865,266


46,369,520



44,850,791


44,879,412

Weighted average number of shares – diluted

44,054,275


45,747,255


47,691,816



45,795,559


47,709,373














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