MagnaChip Reports Second Quarter 2011 Financial Results

- Revenue of $204 Million up 8% Sequentially and 5% Year-over-Year

(PRNewswire) — MagnaChip Semiconductor Corporation (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, 2011.

Revenue for the second quarter of 2011 was $203.7 million, an 8.4% increase compared to $187.9 million for the first quarter of 2011, and a 4.6% increase compared to $194.7 million for the second quarter of 2010.

Gross profit was $66.2 million or 32.5%, as a percent of revenue, for the second quarter of 2011. This compares to gross profit of $56.5 million or 30.1% for the first quarter of 2011 and $64.5 million or 33.1% for the second quarter of 2010.

"I am very pleased that revenue for our three business segments grew during the quarter and that gross profit expanded as a result of strong execution by our sales and manufacturing organizations," said Sang Park, MagnaChip's Chairman and Chief Executive Officer. "Not only did our Power Solutions segment grow 16 percent sequentially, but our Display Solutions segment posted double-digit revenue growth this quarter as well. Additionally, our Foundry business was up 5% over the March quarter despite overall market softness as reported by several foundry providers. I am very encouraged by the traction of our new products, which has increased the design-win activity for both our Power Segment and Foundry Services. This better positions us strategically for growth in the coming years."

Net income, on a GAAP basis, for the second quarter of 2011 totaled $31.6 million or $0.78 per diluted share. This compares to net income of $22.5 million or $0.57 per diluted share for the first quarter of 2011 and a net loss of $30.7 million or $0.81 per diluted share for the second quarter of 2010.

Adjusted net income, a non-GAAP measurement, for the second quarter of 2011 totaled $22.5 million or $0.56 per diluted share compared to $15.7 million or $0.40 per diluted share for the first quarter of 2011 and $25.7 million or $0.68 per diluted share for the second quarter of 2010.

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 Semiconductor Corporation'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 short-term investments) totaled $177.8 million at the end of the second quarter of 2011, a decrease of $16.4 million from the end of the prior quarter due to a cash payment of $38.2 million related to the $35 million repurchase of senior notes during the quarter. Cash provided from operations totaled approximately $48.3 million for the second quarter of 2011.

Revenue by Segment

In thousands of US dollars

Three Months Ended


June 30, 2011

March 31, 2011

June 30, 2010

Semiconductor Manufacturing Services

$      96,458

$        92,266

$      101,564

Display Solutions

82,719

74,464

80,584

Power Solutions

23,739

20,412

12,040

Other

763

779

512

Total Revenue

$     203,679

$      187,921

$     194,700




Second Quarter and Recent Company Highlights

  • Reduced the Company's Outstanding Senior Notes from $250M to $215M by Repurchasing and Retiring $35M of Principal.
  • Began Wafer Production for ELMOS' 0.35um Automotive Semiconductor Products.
  • Delivered Working Samples of an LED Lighting Product targeted for the Fast Growing LED Market.
  • Developed a High Voltage IGBT Power Module for Industrial and Consumer Appliance Applications.  

Non-GAAP Metrics

Adjusted EBITDA excludes charges related to depreciation and amortization, interest expense, net, income tax expense, restructuring and impairment activities, stock-based compensation expense, foreign currency loss (gain), net, derivative valuation loss (gain), net, special expense for the IPO employee incentive payment, and loss on early extinguishment of senior notes. Adjusted net income (loss) excludes charges related to restructuring and impairment, stock-based compensation expense, amortization of intangible assets associated with continuing operations, foreign currency loss (gain), net, derivative valuation loss (gain), net, special expense for the IPO employee incentive payment, and loss on early extinguishment of senior notes. A reconciliation of GAAP results to non-GAAP results is included following the financial statements below.

About MagnaChip Semiconductor Corporation

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