MagnaChip Reports Fourth Quarter 2016 Financial Results

 

Fourth Quarter and Recent Company Highlights

  • MagnaChip Selected as "2016 Best Supplier" by LG Display. The award is the highest possible level of recognition presented to a supplier by LG Display for delivering outstanding product quality.
  • MagnaChip Priced Upsized Offering of 5.00% Exchangeable Senior Notes after the initial purchasers exercised an over-allotment option. The offering totaled $86.25 million aggregate principal amount of notes, taking into account the over-allotment option exercised by the initial purchasers.     
  • MagnaChip Announces Cost Competitive 0.13 micron Slim Flash Process Technology  
  • MagnaChip to Offer 0.13 micron EEPROM-based RF-CMOS technology  
  • MagnaChip Offers 0.35 micron 700V Ultra High Voltage Process Technology  

Business Outlook
For the first quarter of 2017, MagnaChip anticipates:

  • Revenue to be in the range of $157 million to $163 million, a sequential decline of 9.7% to 13%, reflecting both a typical first quarter seasonal decline and the timing of new AMOLED products previously described during our last earnings call in October 2016.  The first quarter revenue outlook represents year-on-year growth as compared to total revenue of $148.1 million in the first quarter of 2016. 
  • Gross profit is anticipated to be in the range of 24% to 26%, about flat with Q4 2016, and above the 23.1% gross profit margin in the first quarter of 2016.  

Conference Call
MagnaChip will hold a conference call on Feb. 10 at 8 a.m. ET to discuss the fourth quarter 2016 financial results. The conference call will be webcast live and is also available by dialing toll-free at 1-844-536-5472. International call-in participants can dial toll-free at 1-614-999-9318. The conference ID number is 58406105. Participants are encouraged to initiate their calls at least 10 minutes in advance of the 8 a.m. ET start time to ensure a timely connection. The webcast and earnings release will be accessible at www.magnachip.com.

A replay of the conference call will be available the same day and will run for 72 hours. The replay dial-in numbers are 1-404-537-3406 or toll-free at 1-855-859-2056.  The access code is 58406105.

About MagnaChip Semiconductor Corporation
MagnaChip is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high-volume consumer, communication, industrial and computing applications. The Company's Standard Products Group and Foundry Services Group provide a broad range of standard products and manufacturing services to customers worldwide.  MagnaChip, with a 30-year operating history, owns a portfolio of more than 3,400 registered and pending patents, 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.

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 future operating and financial performance, including fourth quarter 2016 revenue and gross profit expectations. 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 February 22, 2016 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.

 

CONTACTS:




In the United States:

Bruce Entin

Investor Relations

Tel. +1-408-625-1262

Email Contact



In Korea:

Chankeun Park

Director, Public Relations

Tel. +82-2-6903-3195

Email Contact

 

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of US dollars, except share data)

(Unaudited)





Three Months Ended



Year Ended




December 31,

2016



September 30,

2016



December 31,

2015



December 31,

2016



December 31,

2015


Net sales


$

180,462



$

192,296



$

152,430



$

687,969



$

633,712


Cost of sales



134,373




153,157




122,528




531,743




498,848


Gross profit



46,089




39,139




29,902




156,226




134,864


Gross profit %



25.5

%



20.4

%



19.6

%



22.7

%



21.3

%

Operating expenses





















Selling, general and administrative expenses



23,112




20,082




18,653




89,094




94,378


Research and development expenses



17,748




18,439




18,879




72,180




83,420


Restructuring gain












(7,785)





Total operating expenses



40,860




38,521




37,532




153,489




177,798


Operating income (loss)



5,229




618




(7,630)




2,737




(42,934)


Interest expense



(4,053)




(4,055)




(4,081)




(16,238)




(16,268)


Foreign currency gain (loss), net



(49,628)




33,174




17,080




(15,360)




(42,531)


Other income, net



561




887




617




2,990




1,779


Income (loss) before income tax expenses



(47,891)




30,624




5,986




(25,871)




(99,954)


Income tax expenses (benefits)



1,899




758




(16,868)




3,744




(15,087)


Net income (loss)


$

(49,790)



$

29,866



$

22,854



$

(29,615)



$

(84,867)


Earnings (loss) per common share :





















- Basic


$

(1.42)



$

0.86



$

0.66



$

(0.85)



$

(2.47)


- Diluted


$

(1.42)



$

0.85



$

0.66



$

(0.85)



$

(2.47)


Weighted average number of shares—Basic



35,068,330




34,849,805




34,698,777




34,833,967




34,380,517


Weighted average number of shares—Diluted



35,068,330




35,302,706




34,713,034




34,833,967




34,380,517































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