MagnaChip Reports Second Quarter 2012 Financial Results
– Q2 Revenue Increased 14.5% Sequentially Driven By Strong Growth From Power Solutions (33.4%) and Foundry (34.6%) Revenue
– Gross Margin Expanded 280 Basis Points to 31.0% in Q2
– Expects Q3 Revenue to Increase 7% to 11% and Gross Margin to Increase 100 to 200 Basis Points on a Sequential Basis
SEOUL, South Korea and CUPERTINO, Calif., Aug. 2, 2012 /PRNewswire/ — MagnaChip Semiconductor Corporation (“MagnaChip”) (NYSE: MX), a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products, today announced financial results for the second quarter ended June 30, 2012.
Revenue for the second quarter of 2012 was $202.6 million, a 14.5% increase compared to $177.0 million for the first quarter of 2012, and a 0.5% decrease compared to $203.7 million for the second quarter of 2011.
Gross margin was $62.9 million or 31.0%, as a percent of revenue, for the second quarter of 2012. This compares to gross margin of $49.9 million or 28.2% for the first quarter of 2012 and $66.2 million or 32.5% for the second quarter of 2011.
“I am very pleased that the second quarter represented our sixth consecutive quarter of meeting revenue and gross margin guidance in what is being described as a challenging macro environment. Our foundry services and power solutions segments saw greater than anticipated order strength and revenue growth during the quarter,” said Sang Park, MagnaChip Chairman and CEO. “This is possible because of our alignment with strategic customers in high growth markets – including the leading smart phone and tablet PC makers. During the last three years, we have made solid progress shifting our customer base and refocusing our product portfolio. Our direct and indirect revenue from the top two smart phone/tablet PC makers has almost tripled in the first half of this year compared to the first half of 2010.”
Net income, on a GAAP basis, for the second quarter of 2012 totaled $4.3 million or $0.12 per diluted share. This compares to net income of $15.3 million or $0.40 per diluted share for the first quarter of 2012 and net income of $31.6 million or $0.78 per diluted share for the second quarter of 2011. Net income was impacted primarily by a foreign currency loss of $10.6 million during the quarter which was primarily related to non-cash translation losses for intercompany balances that were denominated in U.S. dollars.
Adjusted net income, a non-GAAP measurement, for the second quarter of 2012 totaled $17.9 million or $0.48 per diluted share compared to $6.5 million or $0.17 per diluted share for the first quarter of 2012 and $22.5 million or $0.56 per diluted share for the second quarter of 2011.
Management believes that non-GAAP financial measures, when viewed in conjunction with GAAP results, can provide a more meaningful understanding of the factors and trends affecting MagnaChip’s business and operations. However, such non-GAAP financial measures have limitations and should not be considered as a substitute for net income or as a better indicator of our operating performance than measures that are presented in accordance with GAAP.
Combined cash balances (cash and cash equivalents plus restricted cash) totaled $161.0 million at the end of the second quarter of 2012, an increase of $0.4 million from the end of the prior quarter. Cash provided from operations totaled approximately $26.7 million for the second quarter of 2012.
Revenue by Segment
In thousands of US dollars Three Months Ended
||June 30, 2012
||March 31, 2012
||June 30, 2011
Second Quarter and Recent Company Highlights
– Sixth Consecutive Quarter of Achieving Financial Guidance.
– Factory Utilization Increased to More than 90% in the Second Quarter.
– Achieved GAAP EPS of $0.12 Per Diluted Share and Adjusted EPS of $0.48.
– Completed Successful Secondary Offering of 7 Million Shares of Common Stock in May.
– Repurchased 539 Thousand Shares under MagnaChip’s Stock Repurchase Program Announced October 11, 2011.
Business Outlook For the third quarter of 2012, MagnaChip expects:
– Revenue to increase 7% to 11% to $217 million to $225 million on a sequential basis.
– Gross margin to increase 100 to 200 basis points to 32.0% to 33.0% sequentially.
Adjusted EBITDA excludes charges related to depreciation and amortization, interest expense, net, income tax expense, restructuring and impairment charges, stock-based compensation expense, foreign currency loss (gain), net, derivative valuation gain, net, secondary offering expense, and loss on early extinguishment of senior notes. Adjusted net income (loss) excludes charges related to restructuring and impairment charges, stock-based compensation expense, amortization of intangible assets associated with continuing operations, foreign currency loss (gain), net, derivative valuation gain, net, secondary offering expense, and loss on early extinguishment of senior notes. A reconciliation of GAAP results to non-GAAP results is included following the financial statements.
About MagnaChip Semiconductor Corporation
Headquartered in South Korea, MagnaChip is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high-volume consumer applications. MagnaChip believes it has one of the broadest and deepest ranges of analog and mixed-signal semiconductor platforms in the industry, supported by its 30-year operating history, a large portfolio of registered and pending patents, and extensive engineering 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 ability to capitalize on improving market dynamics and future operating and financial performance including third quarter 2012 revenue and gross profit. 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 March 8, 2012 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.
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