8-K
MAGNACHIP SEMICONDUCTOR Corp (MX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 12, 2025
Magnachip Semiconductor Corporation
(Exact name of Registrant as specified in its charter)
| Delaware | 001-34791 | 83-0406195 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (IRS Employer<br><br>Identification No.) |
| c/o Magnachip Semiconductor, Ltd.<br><br>15F, 76 Jikji-daero 436beon-gil, Heungdeok-gu<br><br>Cheongju-si, Chungcheongbuk-do, 28581, Republic of Korea | Not Applicable | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: +82 (2) 6903-3000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br>Symbol | Name of each exchange<br><br>on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | MX | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
|---|
Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for Magnachip Semiconductor Corporation and its consolidated subsidiaries for the first quarter ended March 31, 2025, as presented in a press release dated May 12, 2025.
The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits. |
| --- | --- |
The following exhibit is furnished as part of this report:
| Exhibit<br><br>No. | Description |
|---|---|
| 99.1 | Press release for Magnachip Semiconductor Corporation dated May 12, 2025, announcing the results for the first quarter ended March 31, 2025. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MAGNACHIP SEMICONDUCTOR CORPORATION | ||
|---|---|---|
| Dated: May 12, 2025 | By: | /s/ Theodore Kim |
| Theodore Kim | ||
| Chief Compliance Officer, General Counsel and Secretary |
EX-99.1
Exhibit 99.1
Magnachip Reports Results for First Quarter 2025
Q1 Results Summary
| • | Consolidated revenue from continuing operations (which includes Power Analog Solutions (“PAS”) and<br>Power IC (“PIC”) businesses) of $44.7 million was in line with the mid-point of our guidance range of $42.0 to $47.0 million. Excluding Transitional Foundry Services, revenue from<br>continuing operations increased 12.1% year-over-year. |
|---|---|
| • | Consolidated gross profit margin from continuing operations of 20.9% was above the<br>high-end of our guidance range of 18.5% to 20.5%. |
| --- | --- |
| • | Repurchased approximately 0.3 million shares for an aggregate purchase price of $1.1 million during the<br>quarter and ended Q1 with cash of $132.7 million. |
| --- | --- |
| • | Announced the shutdown of Display business, which is now classified as discontinued operations from Q1 2025.<br> |
| --- | --- |
Q1 2025 Highlights
| • | Q1 was the fourth consecutive quarter of year-over-year growth from continuing operations primarily driven by<br>Power Analog Solutions (PAS) growth in Communications, as well as strength in Power IC. |
|---|---|
| • | PAS revenue from the Communication market was up 64% year-over-year. |
| --- | --- |
| • | Power IC (PIC) business increased 44.1% year-over-year in Q1 driven by strength for both TV-LED and OLED power ICs. |
| --- | --- |
| • | Released 27 new-generation PAS products that are ready for commercial<br>sampling. |
| --- | --- |
| • | We had 50 design-wins in Q1, up 13.6% from the 44 wins achieved in the year ago quarter. The design-wins include<br>both our new generation Gen 6 Super Junction products and low-voltage Gen 8 MOSFETs, as well as our prior generation medium-voltage and Super Junction products. |
| --- | --- |
SEOUL, South Korea, May 12, 2025 – Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the first quarter 2025.
YJ Kim, Magnachip’s CEO, said, “We delivered our fourth consecutive quarter of year-over-year growth from continuing operations, fueled by strong design-wins and momentum in Power Analog Solutions (PAS) and Power IC (PIC). In Q1 alone, we released 27 new-generation PAS products that are fully qualified and ready for commercial sampling, with design-wins spanning the Industrial, Automotive, Consumer, and Communication markets. We currently plan to launch a total of more than 40 new-generation PAS products in 2025 and approximately 55 more in 2026. These innovations not only open new revenue opportunities but are also expected to drive higher gross margins over time. While we remain mindful of geopolitical and macroeconomic uncertainties, we currently forecast sequential and year-over-year growth in revenue for continuing operations of PAS and PIC businesses in Q2.”
YJ Kim added, “Through our 3-3-3 strategy—targeting $300 million in annual revenue, a 30% gross margin, and a three-year execution horizon—we are aligning our product roadmap, R&D investments, and operational priorities to drive structural improvements and sustainable profitability.”
Shinyoung Park, Magnachip’s CFO, said, “In Q1, Magnachip achieved 12.1% year-over-year revenue growth from continuing operations and increased gross margin to 20.9%, up from 17.6% a year ago on an equivalent basis and exceeding the high-end of guidance. We expect to realize significant cost savings from the shutdown of our Display business, resulting in a 30% to 35% reduction in annualized operating expenses. Our balance sheet remains strong, and we are focused on prudent capital allocation as we transition to a more efficient, growth-oriented business model. This structural shift is creating a foundation for sustainable profitability and positions us to create long-term value for shareholders.”
Q1 2025 Financial Highlights
| In thousands of U.S. dollars, except share data | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP^(1)^ | |||||||||||||||
| Q1 2025 | Q4 2024^(1)^ | Q/Q change | Q1 2024^(1)^ | Y/Y change | |||||||||||
| Consolidated Revenues | 44,722 | 51,153 | down | 12.6 | % | 43,438 | up | 3.0 | % | ||||||
| Power solutions business | 44,722 | 48,858 | down | 8.5 | % | 39,912 | up | 12.1 | % | ||||||
| Power Analog Solutions | 39,857 | 43,455 | down | 8.3 | % | 36,535 | up | 9.1 | % | ||||||
| Power IC | 4,865 | 5,403 | down | 10.0 | % | 3,377 | up | 44.1 | % | ||||||
| Transitional Fab 3 foundry<br>services^(2)^ | — | 2,295 | n/a | — | 3,526 | n/a | — | ||||||||
| Consolidated Gross Profit Margin | 20.9 | % | 21.7 | % | down | 0.8 | %pts | 14.6 | % | up | 6.3 | %pts | |||
| Power solutions business | 20.9 | % | 23.2 | % | down | 2.3 | %pts | 17.6 | % | up | 3.3 | %pts | |||
| Power Analog Solutions | 17.8 | % | 20.5 | % | down | 2.7 | %pts | 15.4 | % | up | 2.4 | %pts | |||
| Power IC | 46.5 | % | 44.9 | % | up | 1.6 | %pts | 41.8 | % | up | 4.7 | %pts | |||
| Transitional Fab 3 foundry<br>services^(2)^ | — | (11.0 | )% | n/a | — | (19.4 | )% | n/a | — | ||||||
| Operating Loss | (6,288 | ) | (7,837 | ) | up | n/a | (9,391 | ) | up | n/a | |||||
| Loss from continuing operations | (5,082 | ) | (8,732 | ) | up | n/a | (14,284 | ) | up | n/a | |||||
| Basic Loss per Common Share | (0.14 | ) | (0.24 | ) | up | n/a | (0.37 | ) | up | n/a | |||||
| Diluted Loss per Common Share | (0.14 | ) | (0.24 | ) | up | n/a | (0.37 | ) | up | n/a | |||||
| In thousands of U.S. dollars, except share data | |||||||||||||||
| Non-GAAP^(1)(3)^ | |||||||||||||||
| Q1 2025 | Q4 2024^(1)^ | Q/Q change | Q1 2024^(1)^ | Y/Y change | |||||||||||
| Adjusted Operating Loss | (5,420 | ) | (4,468 | ) | down | n/a | (8,563 | ) | up | n/a | |||||
| Adjusted EBITDA | (2,073 | ) | (466 | ) | down | n/a | (4,803 | ) | up | n/a | |||||
| Adjusted Income (Loss) | (3,815 | ) | 4,634 | down | n/a | (9,836 | ) | up | n/a | ||||||
| Adjusted Earnings (Loss) per Common Share—Diluted | (0.10 | ) | 0.12 | down | n/a | (0.26 | ) | up | n/a | ||||||
| (1) | GAAP and non-GAAP metrics summarized herein do not include any amounts<br>relating to the Display business, which has been classified as discontinued operations from Q1 2025, and we have reclassified certain prior year amounts to conform to the current year’s presentation. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, we provided<br>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<br>Transitional Fab 3 Foundry Services ended August 31, 2023, and we had wound down these foundry services by the end of 2024. Because these foundry services during the wind-down period had still been provided to the same buyer by us using our Fab<br>3 based on mutually agreed terms and conditions, we continued 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<br>such wind down was completed. Management believes that disclosing revenue of Transitional Fab 3 Foundry Services separately from the Power solutions business allows investors to better understand the results of our core PAS and Power IC businesses.<br> | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | Management believes that non-GAAP financial measures, when viewed in<br>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<br>non-GAAP financial measures have limitations and should not be considered as a substitute for net loss or as a better indicator of our operating performance than measures that are presented in accordance with<br>GAAP. A reconciliation of historical GAAP results to non-GAAP results is included in this press release. | ||||||||||||||
| --- | --- |
Q2 and Full-year 2025 Financial Guidance
Beginning Q1 2025, the Company has become a pure-play Power company, with the display business classified as discontinued operations and reported separately from continuing operations, which will include PAS and Power IC business lines. While actual results may vary, Magnachip currently expects the following:
For Q2 2025:
| • | Consolidated revenue from continuing operations (which includes PAS and Power IC businesses) to be in the range<br>of $45 to $49 million, up 5.2% sequentially and up 6.6% year-over-year at the mid-point. This compares with equivalent revenue of $44.7 million in Q1 2025 and $44.1 million in Q2 2024.<br> |
|---|---|
| • | Consolidated gross profit margin from continuing operations to be in the range of 19.5% to 21.5%. This compares<br>with equivalent gross profit margin of 20.9% in Q1 2025 and 22.5% in Q2 2024. |
| --- | --- |
For the full-year 2025, we currently reiterate
| • | Consolidated revenue from continuing operations to grow mid-to-high single digit year-over-year as compared with equivalent revenue of $185.8 million in 2024. |
|---|---|
| • | Consolidated gross profit margin from continuing operations between 19.5% to 21.5%, reflecting the fact that we<br>have completed the wind down of Transitional Foundry Services and new generation power products will just begin production in the second half 2025. The equivalent gross profit margin was 21.5% in 2024. |
| --- | --- |
Q1 2025 Earnings Conference Call
Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Monday, May 12, 2025, 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-conf.media-server.com/register/BIeaa8b9af1cc64fa4a8f5e1951afc70ab
Safe Harbor for Forward-Looking Statements
Information in this press 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 second quarter and full year 2025 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, geopolitical conflicts including between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and global macroeconomic conditions resulting from trade and tariff actions instituted between the U.S. and other countries on Magnachip’s future operating results and financial performance. 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 recent trade and tariff actions announced by the U.S. globally and the related retaliatory tariffs and disruptions in supply chains and global trade as a result thereof, inflation, potential recessions or other deteriorations, economic instability or civil unrest; geopolitical conflicts, including between Russia-Ukraine and between Israel-Hamas and sustained military action and conflict in the Red Sea; 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; 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 March 14, 2025, 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 power semiconductor platform solutions for various applications, including industrial, automotive, communication, consumer and computing. The Company provides a broad range of standard products to customers worldwide. Magnachip, with about 45 years of operating history, owns a portfolio of approximately 1,000 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.
CONTACT:
Steven C. Pelayo, CFA
The Blueshirt Group
Tel. +1 (360) 808-5154
steven@blueshirtgroup.co
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data)
(Unaudited)
| Three Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| March 31,2025 | December 31,2024^(1)^ | March 31,2024^(1)^ | |||||||
| Revenues: | |||||||||
| Net sales – Power solutions business | $ | 44,722 | $ | 48,858 | $ | 39,912 | |||
| Net sales – Transitional Fab 3 foundry services | — | 2,295 | 3,526 | ||||||
| Total revenues | 44,722 | 51,153 | 43,438 | ||||||
| Cost of sales: | |||||||||
| Cost of sales – Power solutions business | 35,360 | 37,530 | 32,868 | ||||||
| Cost of sales – Transitional Fab 3 foundry services | — | 2,547 | 4,211 | ||||||
| Total cost of sales | 35,360 | 40,077 | 37,079 | ||||||
| Gross profit | 9,362 | 11,076 | 6,359 | ||||||
| Gross profit as a percentage of Power solutions business net sales | 20.9 | % | 23.2 | % | 17.6 | % | |||
| Gross profit as a percentage of total revenues | 20.9 | % | 21.7 | % | 14.6 | % | |||
| Operating expenses: | |||||||||
| Selling, general and administrative expenses | 9,714 | 10,388 | 9,540 | ||||||
| Research and development expenses | 5,936 | 6,936 | 6,210 | ||||||
| Other charges | — | 1,589 | — | ||||||
| Total operating expenses | 15,650 | 18,913 | 15,750 | ||||||
| Operating loss | (6,288 | ) | (7,837 | ) | (9,391 | ) | |||
| Interest income | 1,545 | ) | 2,143 | 2,141 | ) | ||||
| Interest expense | (449 | ) | (474 | ) | (185 | ) | |||
| Foreign currency loss, net | (405 | ) | (13,265 | ) | (4,988 | ) | |||
| Other income, net | 114 | 364 | 44 | ||||||
| Loss from continuing operations before income tax expense (benefit) | (5,483 | ) | (19,069 | ) | (12,379 | ) | |||
| Income tax expense (benefit), net | (401 | ) | (10,337 | ) | 1,905 | ||||
| Loss from continuing operations | (5,082 | ) | (8,732 | ) | (14,284 | ) | |||
| Loss from discontinued operations, net of tax | (3,796 | ) | (7,545 | ) | (1,133 | ) | |||
| Net loss | $ | (8,878 | ) | $ | (16,277 | ) | $ | (15,417 | ) |
| Basic loss per common share— | |||||||||
| Continuing operations | $ | (0.14 | ) | $ | (0.24 | ) | $ | (0.37 | ) |
| Discontinuing operations | (0.10 | ) | (0.20 | ) | (0.03 | ) | |||
| Total | $ | (0.24 | ) | $ | (0.44 | ) | $ | (0.40 | ) |
| Diluted loss per common share— | |||||||||
| Continuing operations | $ | (0.14 | ) | $ | (0.24 | ) | $ | (0.37 | ) |
| Discontinuing operations | (0.10 | ) | (0.20 | ) | (0.03 | ) | |||
| Total | $ | (0.24 | ) | $ | (0.44 | ) | $ | (0.40 | ) |
| Weighted average number of shares— | |||||||||
| Basic | 36,887,841 | 36,921,300 | 38,544,781 | ||||||
| Diluted | 36,887,841 | 36,921,300 | 38,544,781 | ||||||
| (1) | We have reclassified prior period financial information to conform to the current year presentation that<br>reflects the classification of the Display business as discontinued operations from Q1 2025. | ||||||||
| --- | --- |
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
(Unaudited)
| December 31,<br>2024 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | 132,654 | $ | 138,610 | ||
| Accounts receivable, net | 28,270 | 28,402 | |||
| Inventories, net | 32,633 | 30,535 | |||
| Other receivables | 5,229 | 4,444 | |||
| Prepaid expenses | 10,591 | 10,379 | |||
| Hedge collateral | 2,080 | 2,080 | |||
| Other current assets | 4,017 | 4,779 | |||
| Total current assets | 215,474 | 219,229 | |||
| Property, plant and equipment, net | 80,289 | 81,463 | |||
| Operating lease<br>right-of-use assets | 3,602 | 3,107 | |||
| Intangible assets, net | 500 | 507 | |||
| Long-term prepaid expenses, net | 177 | 165 | |||
| Deferred income taxes | 53,435 | 52,889 | |||
| Other non-current assets | 20,390 | 21,956 | |||
| Total assets | 373,867 | $ | 379,316 | ||
| Liabilities and Stockholders’ Equity | |||||
| Current liabilities | |||||
| Accounts payable | 24,483 | $ | 21,642 | ||
| Other accounts payable | 10,522 | 10,764 | |||
| Accrued expenses | 8,796 | 8,648 | |||
| Accrued income taxes | 52 | 56 | |||
| Operating lease liabilities | 1,693 | 1,393 | |||
| Other current liabilities | 2,241 | 3,765 | |||
| Total current liabilities | 47,787 | 46,268 | |||
| Long-term borrowing | 27,276 | 27,211 | |||
| Accrued severance benefits, net | 18,041 | 17,094 | |||
| Non-current operating lease liabilities | 1,881 | 1,823 | |||
| Other non-current liabilities | 9,681 | 10,123 | |||
| Total liabilities | 104,666 | 102,519 | |||
| Commitments and contingencies | |||||
| Stockholders’ equity | |||||
| Common stock, 0.01 par value, 150,000,000 shares authorized, 57,571,469 shares issued and<br>36,675,789 outstanding at March 31, 2025 and 57,498,507 shares issued and 36,912,118 outstanding at December 31, 2024 | 575 | 574 | |||
| Additional paid-in capital | 280,452 | 279,423 | |||
| Retained earnings | 235,698 | 244,576 | |||
| Treasury stock, 20,895,680 shares at March 31, 2025 and 20,586,389 shares at<br>December 31, 2024, respectively | (227,047 | ) | (225,883 | ) | |
| Accumulated other comprehensive loss | (20,477 | ) | (21,893 | ) | |
| Total stockholders’ equity | 269,201 | 276,797 | |||
| Total liabilities and stockholders’ equity | 373,867 | $ | 379,316 |
All values are in US Dollars.
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(Unaudited)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31,2025 | March 31,2024 | |||||
| Cash flows from operating activities | ||||||
| Net loss | $ | (8,878 | ) | $ | (15,417 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||
| Depreciation and amortization | 3,273 | 4,099 | ||||
| Provision for severance benefits | 1,514 | 1,405 | ||||
| Loss (gain) on foreign currency, net | (35 | ) | 10,226 | |||
| Provision (reversal) for inventory reserves | 1,208 | (947 | ) | |||
| Stock-based compensation | 1,030 | 900 | ||||
| Deferred income tax assets | (415 | ) | 1,313 | |||
| Other, net | 225 | 263 | ||||
| Changes in operating assets and liabilities | ||||||
| Accounts receivable, net | 635 | 1,401 | ||||
| Inventories | (3,259 | ) | 801 | |||
| Other receivables | (811 | ) | (385 | ) | ||
| Other current assets | 970 | 331 | ||||
| Prepaid expenses | 1,233 | 905 | ||||
| Accounts payable | 2,542 | 563 | ||||
| Other accounts payable | (2,622 | ) | (5,256 | ) | ||
| Accrued expenses | (111 | ) | (2,045 | ) | ||
| Accrued income taxes | (6 | ) | 167 | |||
| Other current liabilities | (901 | ) | (387 | ) | ||
| Other non-current liabilities | 354 | (624 | ) | |||
| Payment of severance benefits | (325 | ) | (884 | ) | ||
| Other, net | (290 | ) | (401 | ) | ||
| Net cash used in operating activities | (4,669 | ) | (3,972 | ) | ||
| Cash flows from investing activities | ||||||
| Purchase of property, plant and equipment | (208 | ) | (668 | ) | ||
| Payment for intellectual property registration | (63 | ) | (60 | ) | ||
| Collection of guarantee deposits | 21 | 1,133 | ||||
| Payment of guarantee deposits | (139 | ) | (1,874 | ) | ||
| Other, net | — | 1 | ||||
| Net cash used in investing activities | (389 | ) | (1,468 | ) | ||
| Cash flows from financing activities | ||||||
| Proceeds from long-term borrowing | — | 30,059 | ||||
| Acquisition of treasury stock | (1,306 | ) | (4,659 | ) | ||
| Repayment of financing related to water treatment facility arrangement | (111 | ) | (121 | ) | ||
| Repayment of principal portion of finance lease liabilities | (38 | ) | (35 | ) | ||
| Net cash provided by (used in) financing activities | (1,455 | ) | 25,244 | |||
| Effect of exchange rates on cash and cash equivalents | 557 | (6,294 | ) | |||
| Net increase (decrease) in cash and cash equivalents | (5,956 | ) | 13,510 | |||
| Cash and cash equivalents | ||||||
| Beginning of the period | 138,610 | 158,092 | ||||
| End of the period | $ | 132,654 | $ | 171,602 |
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF OPERATING LOSS FROM CONTINUING OPERATIONS TO ADJUSTED OPERATING LOSS FROM CONTINUING OPERATIONS
(In thousands of U.S. dollars)
(Unaudited)
| Three Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| March 31,2025 | December 31,2024^(1)^ | March 31,2024^(1)^ | |||||||
| Operating loss– continuing operations | $ | (6,288 | ) | $ | (7,837 | ) | $ | (9,391 | ) |
| Adjustments: | |||||||||
| Equity-based compensation expense | 868 | 1,780 | 828 | ||||||
| Other charges | — | 1,589 | — | ||||||
| Adjusted Operating Loss– continuing operations | $ | (5,420 | ) | $ | (4,468 | ) | $ | (8,563 | ) |
| (1) | We have reclassified prior period financial information to conform to the current year presentation that<br>reflects the classification of the Display business as discontinued operations from Q1 2025. | ||||||||
| --- | --- |
We present Adjusted Operating Loss from continuing operations as a supplemental measure of our performance. We define Adjusted Operating Loss from continuing operations for the periods indicated as operating loss from continuing operations adjusted to exclude (i) Equity-based compensation expense and (ii) Other charges.
For the three months ended December 31, 2024, we recorded in our consolidated statement of operations $1,589 thousand of one-time cumulative financial impact in connection with certain employee benefits.
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA FROM CONTINUING OPERATIONS AND ADJUSTED INCOME (LOSS) FROM CONTINUINGOPERATIONS
(In thousands of U.S. dollars, except share data)
(Unaudited)
| Three Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| March 31,2025 | December 31,2024^(1)^ | March 31,2024^(1)^ | |||||||
| Loss from continuing operations | $ | (5,082 | ) | $ | (8,732 | ) | $ | (14,284 | ) |
| Adjustments: | |||||||||
| Interest income | (1,545 | ) | (2,143 | ) | (2,141 | ) | |||
| Interest expense | 449 | 474 | 185 | ||||||
| Income tax expense (benefit), net | (401 | ) | (10,337 | ) | 1,905 | ||||
| Depreciation and amortization | 3,262 | 3,657 | 3,741 | ||||||
| EBITDA – continuing operations | (3,317 | ) | (17,081 | ) | (10,594 | ) | |||
| Equity-based compensation expense | 868 | 1,780 | 828 | ||||||
| Foreign currency loss, net | 405 | 13,265 | 4,988 | ||||||
| Derivative valuation gain, net | (29 | ) | (19 | ) | (25 | ) | |||
| Other charges | — | 1,589 | — | ||||||
| Adjusted EBITDA – continuing operations | $ | (2,073 | ) | $ | (466 | ) | $ | (4,803 | ) |
| Loss from continuing operations | $ | (5,082 | ) | $ | (8,732 | ) | $ | (14,284 | ) |
| Adjustments: | |||||||||
| Equity-based compensation expense | 868 | 1,780 | 828 | ||||||
| Foreign currency loss, net | 405 | 13,265 | 4,988 | ||||||
| Derivative valuation gain, net | (29 | ) | (19 | ) | (25 | ) | |||
| Other charges | — | 1,589 | — | ||||||
| Income tax effect<br>on non-GAAP adjustments | 23 | (3,249 | ) | (1,343 | ) | ||||
| Adjusted Income (Loss) – continuing operations | $ | (3,815 | ) | $ | 4,634 | $ | (9,836 | ) | |
| Adjusted Income (Loss) – continuing operations per common share— | |||||||||
| - Basic | $ | (0.10 | ) | $ | 0.13 | $ | (0.26 | ) | |
| - Diluted | $ | (0.10 | ) | $ | 0.12 | $ | (0.26 | ) | |
| Weighted average number of shares – basic | 36,887,841 | 36,921,300 | 38,544,781 | ||||||
| Weighted average number of shares – diluted | 36,887,841 | 37,738,210 | 38,544,781 | ||||||
| (1) | We have reclassified prior period financial information to conform to the current year presentation that<br>reflects the classification of the Display business as discontinued operations from Q1 2025. | ||||||||
| --- | --- |
We present Adjusted EBITDA from continuing operations and Adjusted Income (Loss) from continuing operations as supplemental measures of our performance. We define Adjusted EBITDA from continuing operations for the periods indicated as EBITDA – continuing operations (as defined below), adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss, net, (iii) Derivative valuation gain, net and (iv) Other charges. EBITDA – continuing operations for the periods indicated is defined as loss from continuing operations before interest income, interest expense, income tax expense (benefit), net and depreciation and amortization.
We prepare Adjusted Income (Loss) from continuing operations by adjusting loss from continuing operations 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 Income (Loss) from continuing operations is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Income (Loss) from continuing operations for the periods as net loss, adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss, net, (iii) Derivative valuation gain, net, (iv) Other charges and (v) Income tax effect on non-GAAP adjustments.
For the three months ended December 31, 2024, we recorded in our consolidated statement of operations $1,589 thousand of one-time cumulative financial impact in connection with certain employee benefits.