Magnachip Reports Results for Fourth Quarter and Full-Year 2023

Announces successful design-wins with Smartphone Chinese OEMs

 

Financial Highlights

  • Q4 revenue of $50.8 million was near the low-end of our guidance range.
  • Q4 gross profit margin was 22.7%, near the low-end of our guidance range.
  • Ended Q4 with no debt and cash of $158.1 million.
  • Repurchased approximately $8.2 million of stock during the quarter.
  • Full-year revenue of $230.1 million decreased 31.9% YoY.
  • Full-year gross profit margin was 22.4%, down 760 bps YoY.

 

Operational Highlights

  • Secured 1st design-win and began initial shipment in Q4 for first generation OLED DDIC for after-service market.
  • Secured 2nd design-win following quarter close with leading Chinese smartphone OEM for spring launch.
  • Entered into strategic commercial partnership with Chinese watch solution provider to collaborate on OLED smartwatch display market.
  • Display and Power business separation and entity restructuring completed effective with the start of 2024; New businesses MSS (Mixed-Signal Solutions) and PAS (Power-Analog Solutions)*

 

SEOUL, South Korea–(BUSINESS WIRE)–Feb. 28, 2024– Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the fourth quarter and full-year 2023.

YJ Kim, Magnachip’s Chief Executive Officer commented, “As we reflect on the past year and look ahead, we’re shaping our future with the transformation of our business. First, we have shifted our Display business to be laser-focused on the burgeoning OLED market in China and our efforts there are already showing promising results. We now have two design-wins and a dedicated team on the ground to help build on this momentum. Additionally, we are working to optimize our Gumi Fab to transition from lower-margin Transitional Foundry Services to higher-margin Power products. Finally, we’ve restructured our company to streamline operations, enhance shareholder value and increase transparency for our investors with the completion of our legal separation of historical Display and Power businesses into MSS and PAS.”

YJ continued, “Looking ahead, for full year 2024, we currently expect double-digit revenue growth in both the newly organized MSS and PAS businesses. We currently expect total consolidated company revenue for full year 2024 to remain relatively flat to slightly up due to the phase-out of Transitional Foundry Services. We also anticipate PAS gross margin to be challenged during the transition period while we convert the Transitional Foundry Services capacity to Power capacity, but we are committed to navigating this period with a clear focus on long-term value creation for shareholders.”
____________
*MSS consists of historical Display and Power IC business, which is operated by Magnachip Mixed-Signal, Ltd., a limited liability company incorporated in Korea. PAS business is operated by Magnachip Semiconductor, Ltd., the existing limited liability company incorporated in Korea.

 

Q4 and 2023 Financial Highlights

In thousands of U.S. dollars, except share data

GAAP

Q4 2023

Q3 2023

Q/Q change

Q4 2022

Y/Y change

Revenues

Standard Products Business

Display Solutions

5,232

6,404

down

18.3

%

7,556

down

30.8

%

Power Solutions

35,950

45,215

down

20.5

%

46,271

down

22.3

%

Transitional Fab 3 foundry services(1)

9,640

9,626

up

0.1

%

7,163

up

34.6

%

Gross Profit Margin

22.7

%

23.6

%

down

0.9

%pts

26.4

%

down

3.7

%pts

Operating Loss

(15,935

)

(9,235

)

down

n/a

(10,117

)

down

n/a

Net Income (Loss)

(6,040

)

(5,165

)

down

n/a

2,971

down

n/a

Basic Earnings (Loss) per Common Share

(0.16

)

(0.13

)

down

n/a

0.07

down

n/a

Diluted Earnings (Loss) per Common Share

(0.16

)

(0.13

)

down

n/a

0.07

down

n/a

In thousands of U.S. dollars, except share data

Non-GAAP(2)

Q4 2023

Q3 2023

Q/Q change

Q4 2022

Y/Y change

Adjusted Operating Loss

(14,095

)

(7,064

)

down

n/a

(8,567

)

down

n/a

Adjusted EBITDA

(9,972

)

(2,735

)

down

n/a

(4,768

)

down

n/a

Adjusted Net Loss

(8,044

)

(1,591

)

down

n/a

(15,848

)

up

n/a

Adjusted Loss per Common Share—Diluted

(0.21

)

(0.04

)

down

n/a

(0.36

)

up

n/a

In thousands of U.S dollars, except share data

GAAP

2023

2022

Y/Y Change

Revenues

Standard Products Business

Display Solutions

32,134

71,432

down

55.0

%

Power Solutions

163,556

230,464

down

29.0

%

Transitional Fab 3 foundry services(1)

34,361

35,762

down

3.9

%

Gross Profit Margin

22.4

%

30.0

%

down

7.6

pts

Operating Loss

(57,644

)

(5,244

)

down

n/a

Net Loss

(36,622

)

(8,036

)

down

n/a

Basic Loss per Common Share

(0.89

)

(0.18

)

down

n/a

Diluted Loss per Common Share

(0.89

)

(0.18

)

down

n/a

In thousands of U.S dollars, except share data

Non-GAAP(2)

2023

2022

Y/Y Change

Adjusted Operating Income (Loss)

(41,170

)

4,091

down

n/a

Adjusted EBITDA

(24,174

)

19,517

down

n/a

Adjusted Net Income (Loss)

(22,474

)

8,752

down

n/a

Adjusted Earnings (Loss) per Common Share—Diluted

(0.55

)

0.19

down

n/a

___________

 

(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 PAS 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.

 

Q1 and 2024 Financial Guidance

Beginning in Q1, the Company will begin reporting results under its newly organized businesses: MSS (Mixed-Signal Solutions) and PAS (Power-Analog Solutions). While actual results may vary, Magnachip currently expects the following:

 

For Q1 2024:

  • Consolidated revenue to be in the range of $46 to $51 million, including approximately $3 million of Transitional Foundry Services.
    • MSS revenue to be in the range of $8 to $10 million. This compares with MSS equivalent revenue of $8.6 million in Q4 2023.
    • PAS revenue to be in the range of $35 to $38 million. This compares with PAS equivalent revenue of $32.6 million in Q4 2023.
  • Consolidated gross profit margin to be in the range of 17% to 20%.
    • MSS gross profit margin to be in the range of 40% to 43%, which includes the positive impact of expected one-time non-recurring engineering revenue. This compares with MSS equivalent gross profit margin of 41.3% in Q4 2023, which also included one-time non-recurring engineering revenue.
    • PAS gross profit margin to be in the range of 15% to 18% due primarily to the expected decline in Transitional Foundry Services revenue. This compares with PAS equivalent gross profit margin of 18.0% in Q4 2023.

 

For the full-year 2024:

  • MSS revenue to grow double digits year-over-year as compared with MSS equivalent revenue of $44.4 million in 2023.
  • PAS revenue to grow double digits year-over-year as compared with PAS equivalent revenue of $151.3 million in 2023.
  • Consolidated revenue flat-to-up-slightly year-over-year as recovery in MSS and PAS is offset by the phase-out of Transitional Foundry Services.
  • Consolidated gross profit margin between 17% to 20% due to idle capacity expected from the phase-out of Transitional Foundry Services. This compares with the consolidated gross profit margin of 22.4% in 2023.

 

Q4 2023 Earnings Conference Call

Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, February 28, 2024, to discuss its financial results. In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this event including the dial-in numbers, a PIN number, and an e-mail with detailed instructions to join the conference call. A live and archived webcast of the conference call and a copy of earnings release will be accessible from the ‘Investors’ section of the Company’s website at www.magnachip.com.

 

Online registration: https://register.vevent.com/register/BI736feb7bc081454c8d811cbbeb6b92dc

 

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 expectations about estimated historical or future operating results and financial performance, outlook and business plans, including first quarter and full year 2024 revenue and gross profit margin expectations, future growth and revenue opportunities from new and existing products and customers, the timing and extent of future revenue contributions by our products and businesses, and the impact of market conditions associated with inflation and higher interest rates, remaining effects from the COVID-19 pandemic, geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and trade tensions between the U.S. and China, on Magnachip’s first quarter and full year 2024 and future operating results. 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, among others: the impact of changes in macroeconomic conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest; remaining effects from the COVID-19 pandemic, the geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and trade tensions between the U.S. and China; manufacturing capacity constraints or supply chain disruptions that may impact our ability to deliver our products or affect the price of components, which may lead to an increase in our costs and impact demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely acceptance of our designs by customers; timely introduction of new products and technologies; our ability to ramp new products into volume production; industry-wide shifts in supply and demand for semiconductor products; overcapacity within the industry or at Magnachip; 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 that can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors; change to or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, including the remaining effects of the COVID-19 pandemic; other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip’s products; and other risks detailed from time to time in Magnachip’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including our Form 10-K filed on February 22, 2023, 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.

 

About Magnachip Semiconductor

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communication, Internet of Things (“IoT”), consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, 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.

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share data)

(Unaudited)

Three Months Ended

Year Ended

December 31,
2023

September 30,
2023

December 31,
2022

December 31,
2023

December 31,
2022

Revenues:

Net sales – standard products business

$

41,182

$

51,619

$

53,827

$

195,690

$

301,896

Net sales – transitional Fab 3 foundry services

9,640

9,626

7,163

34,361

35,762

Total revenues

50,822

61,245

60,990

230,051

337,658

Cost of sales:

Cost of sales – standard products business

31,754

36,829

37,150

143,762

202,347

Cost of sales – transitional Fab 3 foundry services

7,541

9,935

7,742

34,649

34,047

Total cost of sales

39,295

46,764

44,892

178,411

236,394

Gross profit

11,527

14,481

16,098

51,640

101,264

Gross profit as a percentage of standard products business net sales

22.9

%

28.7

%

31.0

%

26.5

%

33.0

%

Gross profit as a percentage of total revenues

22.7

%

23.6

%

26.4

%

22.4

%

30.0

%

Operating expenses:

Selling, general and administrative expenses

12,079

12,089

12,562

48,470

50,872

Research and development expenses

15,383

11,627

13,653

51,563

52,338

Early termination and other charges, net

9,251

3,298

Total operating expenses

27,462

23,716

26,215

109,284

106,508

Operating loss

(15,935

)

(9,235

)

(10,117

)

(57,644

)

(5,244

)

Interest income

2,519

2,382

2,420

10,435

5,980

Interest expense

(183

)

(189

)

(269

)

(828

)

(1,157

)

Foreign currency gain (loss), net

5,241

(2,583

)

17,492

465

(3,019

)

Other income (loss), net

(42

)

87

(42

)

13

561

Loss before income tax expense (benefit)

(8,400

)

(9,538

)

9,484

(47,559

)

(2,879

)

Income tax expense (benefit)

(2,360

)

(4,373

)

6,513

(10,937

)

5,157

Net income (loss)

$

(6,040

)

$

(5,165

)

$

2,971

$

(36,622

)

$

(8,036

)

Basic earnings (loss) per common share—

$

(0.16

)

$

(0.13

)

$

0.07

$

(0.89

)

$

(0.18

)

Diluted earnings (loss) per common share—

$

(0.16

)

$

(0.13

)

$

0.07

$

(0.89

)

$

(0.18

)

Weighted average number of shares—

Basic

38,834,451

40,145,290

44,054,275

41,013,069

44,850,791

Diluted

38,834,451

40,145,290

44,731,683

41,013,069

44,850,791

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share data)

(Unaudited)

December 31,
2023

December 31,
2022

Assets

Current assets

Cash and cash equivalents

$

158,092

$

225,477

Accounts receivable, net

32,641

35,380

Inventories, net

32,733

39,883

Other receivables

4,295

7,847

Prepaid expenses

7,390

10,560

Hedge collateral

1,000

2,940

Other current assets

9,283

15,766

Total current assets

245,434

337,853

Property, plant and equipment, net

100,122

110,747

Operating lease right-of-use assets

4,639

5,265

Intangible assets, net

1,537

1,930

Long-term prepaid expenses

5,736

10,939

Deferred income taxes

50,836

38,324

Other non-current assets

12,187

11,587

Total assets

$

420,491

$

516,645

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

24,443

$

17,998

Other accounts payable

5,292

9,702

Accrued expenses

10,457

9,688

Accrued income taxes

1,496

3,154

Operating lease liabilities

1,914

1,397

Other current liabilities

3,286

5,306

Total current liabilities

46,888

47,245

Accrued severance benefits, net

16,020

23,121

Non-current operating lease liabilities

2,897

4,091

Other non-current liabilities

10,088

14,035

Total liabilities

75,893

88,492

Commitments and contingencies

Stockholders’ equity

Common stock, $0.01 par value, 150,000,000 shares authorized, 56,971,394 shares issued and 38,852,742 outstanding at December 31, 2023 and 56,432,449 shares issued and 43,824,575 outstanding at December 31, 2022

569

564

Additional paid-in capital

273,256

266,058

Retained earnings

298,884

335,506

Treasury stock, 18,118,652 shares at December 31, 2023 and 12,607,874 shares at December 31, 2022, respectively

(213,454

)

(161,422

)

Accumulated other comprehensive loss

(14,657

)

(12,553

)

Total stockholders’ equity

344,598

428,153

Total liabilities and stockholders’ equity

$

420,491

$

516,645

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

Three Months

Ended

Year Ended

December 31,
2023

December 31,
2023

December 31,
2022

Cash flows from operating activities

Net loss

$

(6,040

)

$

(36,622

)

$

(8,036

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Depreciation and amortization

4,101

16,684

15,000

Provision for severance benefits

(25

)

5,333

6,289

Loss (gain) on foreign currency, net

(11,159

)

3,373

19,729

Provision for inventory reserves

850

3,885

9,574

Stock-based compensation

1,840

7,223

6,037

Deferred income taxes

(13,493

)

(13,405

)

278

Other, net

165

757

664

Changes in operating assets and liabilities

Accounts receivable, net

8,318

1,909

10,276

Inventories

(1,265

)

2,370

(12,626

)

Other receivables

(1,146

)

3,847

18,146

Prepaid expenses

3,155

8,808

8,923

Other current assets

15,992

8,048

(13,073

)

Accounts payable

1,086

7,152

(16,325

)

Other accounts payable

(2,196

)

(8,934

)

(9,410

)

Accrued expenses

(126

)

493

(7,228

)

Accrued income taxes

1,445

(1,569

)

(8,400

)

Deferred revenue

782

85

(1,261

)

Other current liabilities

(65

)

(109

)

(645

)

Other non-current liabilities

41

(238

)

749

Contributions to severance insurance deposit accounts

(4,278

)

(5,101

)

(7,899

)

Payment of severance benefits

(799

)

(6,982

)

(6,012

)

Other, net

(3

)

(21

)

415

Net cash provided by (used in) operating activities

(2,820

)

(3,014

)

5,165

Cash flows from investing activities

Proceeds from settlement of hedge collateral

2,334

5,669

15,232

Payment of hedge collateral

(600

)

(3,754

)

(15,282

)

Proceeds from disposal of property, plant and equipment

550

Purchase of property, plant and equipment

(4,675

)

(6,955

)

(23,394

)

Payment for intellectual property registration

(33

)

(263

)

(390

)

Collection of guarantee deposits

4,984

737

Payment of guarantee deposits

(62

)

(7,338

)

(2,381

)

Net cash used in investing activities

(3,036

)

(7,657

)

(24,928

)

Cash flows from financing activities

Proceeds from exercise of stock options

27

1,786

Acquisition of treasury stock

(8,695

)

(51,782

)

(13,960

)

Repayment of financing related to water treatment facility arrangement

(122

)

(493

)

(500

)

Others

(22

)

(91

)

(70

)

Net cash used in financing activities

(8,839

)

(52,339

)

(12,744

)

Effect of exchange rates on cash and cash equivalents

6,143

(4,375

)

(21,563

)

Net decrease in cash and cash equivalents

(8,552

)

(67,385

)

(54,070

)

Cash and cash equivalents

Beginning of the period

166,644

225,477

279,547

End of the period

$

158,092

$

158,092

$

225,477

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF OPERATING LOSS TO ADJUSTED OPERATING INCOME (LOSS)

(In thousands of U.S. dollars)

(Unaudited)

Three Months Ended

Year Ended

December 31,
2023

September 30,
2023

December 31,
2022

December 31,
2023

December 31,
2022

Operating loss

$

(15,935

)

$

(9,235

)

$

(10,117

)

$

(57,644

)

$

(5,244

)

Adjustments:

Equity-based compensation expense

1,840

2,171

1,550

7,223

6,037

Early termination and other charges, net

9,251

3,298

Adjusted Operating Income (Loss)

$

(14,095

)

$

(7,064

)

$

(8,567

)

$

(41,170

)

$

4,091

 

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 loss adjusted to exclude (i) Equity-based compensation expense and (ii) Early termination and other charges, net.

For the year ended December 31, 2023, Early termination and other charges includes $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023 and $802 thousand of one-time employee incentives.

For the year ended December 31, 2022, Early termination and other charges, net includes $2,821 thousand of one-time employee incentives and professional service fees and expenses of $1,014 thousand, incurred in connection with certain strategic evaluations, both of which were offset in part by a $537 thousand gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi.

 

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,
2023

September 30,
2023

December 31,
2022

December 31,
2023

December 31,
2022

Net Income (Loss)

$

(6,040

)

$

(5,165

)

$

2,971

$

(36,622

)

$

(8,036

)

Adjustments:

Interest income

(2,519

)

(2,382

)

(2,420

)

(10,435

)

(5,980

)

Interest expense

183

189

269

828

1,157

Income tax expense (benefit)

(2,360

)

(4,373

)

6,513

(10,937

)

5,157

Depreciation and amortization

4,101

4,081

3,775

16,684

15,000

EBITDA

(6,635

)

(7,650

)

11,108

(40,482

)

7,298

Equity-based compensation expense

1,840

2,171

1,550

7,223

6,037

Foreign currency loss (gain), net

(5,241

)

2,583

(17,492

)

(465

)

3,019

Derivative valuation loss (gain), net

64

161

66

299

(135

)

Early termination and other charges, net

9,251

3,298

Adjusted EBITDA

$

(9,972

)

$

(2,735

)

$

(4,768

)

$

(24,174

)

$

19,517

Net Income (Loss)

$

(6,040

)

$

(5,165

)

$

2,971

$

(36,622

)

$

(8,036

)

Adjustments:

Equity-based compensation expense

1,840

2,171

1,550

7,223

6,037

Foreign currency loss (gain), net

(5,241

)

2,583

(17,492

)

(465

)

3,019

Derivative valuation loss (gain), net

64

161

66

299

(135

)

Early termination and other charges, net

9,251

3,298

Income tax effect on non-GAAP adjustments

1,333

(1,341

)

(2,943

)

(2,160

)

4,569

Adjusted Net Income (Loss)

$

(8,044

)

$

(1,591

)

$

(15,848

)

$

(22,474

)

$

8,752

Adjusted Net Income (Loss) per common share—

– Basic

$

(0.21

)

$

(0.04

)

$

(0.36

)

$

(0.55

)

$

0.20

– Diluted

$

(0.21

)

$

(0.04

)

$

(0.36

)

$

(0.55

)

$

0.19

Weighted average number of shares – basic

38,834,451

40,145,290

44,054,275

41,013,069

44,850,791

Weighted average number of shares – diluted

38,834,451

40,145,290

44,054,275

41,013,069

45,795,559

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) Equity-based compensation expense, (ii) Foreign currency loss (gain), net, (iii) Derivative valuation loss (gain), net and (iv) Early termination and other charges, net. EBITDA for the periods indicated is defined as net income (loss) before interest income, interest expense, income tax expense (benefit) 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) Equity-based compensation expense, (ii) Foreign currency loss (gain), net, (iii) Derivative valuation loss (gain), net, (iv) Early termination and other charges, net and (v) Income tax effect on non-GAAP adjustments.

For the year ended December 31, 2023, Early termination and other charges includes $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023 and $802 thousand of one-time employee incentives.

For the year ended December 31, 2022, Early termination and other charges, net includes $2,821 thousand of one-time employee incentives and professional service fees and expenses of $1,014 thousand, incurred in connection with certain strategic evaluations, both of which were offset in part by a $537 thousand gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi.

 

Steven Pelayo
The Blueshirt Group
Tel. +1 (360) 808-5154
steven@blueshirtgroup.co

 

Source: Magnachip Semiconductor Corporation