Magnachip Reports Results for Second Quarter 2024

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

)


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