Magnachip Semiconductor LLC (MX)

[eastunder]

SEOUL, South Korea and SAN JOSE, Calif., May 5, 2016 /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 first quarter ended March 31, 2016.

Revenue for the first quarter of 2016, a typically seasonally soft quarter, was $148.1 million, a 2.8% decline compared to $152.4 million for the fourth quarter of 2015, and down 10.2% compared to $164.9 million for the first quarter of 2015. Revenue was better-than-expected despite the closure of MagnaChip's legacy 6" semiconductor fab during the first quarter because of the strength in demand serviced by the company's 8" fabs. Foundry Services revenue in the first quarter of 2016 was $60.0 million and Standard Products Group revenue was $88.0 million.

Gross profit was $34.2 million, or 23.1% as a percent of revenue for the first quarter of 2016. This compared with gross profit of $29.9 million, or 19.6%, for the fourth quarter of 2015 and $35.0 million, or 21.2%, for the first quarter of 2015. Foundry gross profit was 23.8% and Standard Products Group gross profit was 23.6% in the first quarter of 2016.

Net income, on a GAAP basis, for the first quarter of 2016 totaled $8.1 million, or $0.23 per basic and diluted share, compared to net income of $22.9 million, or $0.66 per basic and diluted share in the fourth quarter of 2015 and a net loss of $20.0 million or $0.59 per basic share, for the first quarter of 2015. Net income in the first quarter of 2016 included a restructuring gain of $7.8 million from the sale of the Company's legacy 6" fab equipment, and a net foreign currency gain of $8.2 million, almost all of which is non-cash.

"Revenue in the first quarter exceeded our prior guidance, fueled by a 42% sequential increase in total sales for our AMOLED display drivers ICs, primarily for smartphones," said YJ Kim, Chief Executive Officer of MagnaChip. Mr. Kim added, "MagnaChip is well positioned to benefit from the growing adoption of AMOLED technology in a range of mobile and wearable devices such as smartphones, tablets, smartwatches and virtual reality headsets, as well as in large displays for high-end televisions."

Chief Financial Officer Jonathan Kim said, "As part of MagnaChip's focus on managing costs, we closed a legacy 6" fab in the first quarter." Mr. Kim added, "While we continue to explore opportunities to further control spending and strengthen our balance sheet, we also are devoting considerable attention and financial resources to support revenue growth and a gradual recovery in our business that we expect over the course of this year."

Adjusted Net Loss, a non-GAAP measurement, for the first quarter of 2016 totaled $2.8 million, or $0.08 per basic share, compared to Adjusted Net Income, also a non-GAAP measurement, of $5.2 million, or $0.15 per basic and diluted share, in the fourth quarter of 2015 and Adjusted Net Loss of $9.6 million, or $0.28 per basic share, for the first quarter of 2015.

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 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. A reconciliation of GAAP results to non-GAAP results is included following the financial statements.

Cash and cash equivalents totaled $73.5 million at the end of the first quarter, essentially flat compared with the fourth quarter when excluding the one-time effects in the fourth quarter of pre-paid deposits for the sale of our 6" fab equipment and prepayments received for end-of-life products related to the 6" fab.


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