MagnaChip Reports Fourth Quarter and Full Year 2011 Financial Results

- Power Solutions Full Year 2011 Revenue Grew 61.6% Year-over-Year

(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 quarter and year ended December 31, 2011.

Revenue for the fourth quarter of 2011 was $180.8 million, a 9.8% decrease compared to $200.4 million for the third quarter of 2011, and a 3.2% decrease compared to $186.8 million for the fourth quarter of 2010. For the full year 2011, revenue was $772.8 million compared to $770.4 million for 2010, a 0.3% increase.

Gross profit was $51.5 million or 28.5%, as a percent of revenue, for the fourth quarter of 2011. This compares to gross profit of $60.1 million or 30.0% for the third quarter of 2011 and $60.4 million or 32.3% for the fourth quarter of 2010. For the full year 2011, gross profit was $234.3 million or 30.3% compared to $243.6 million or 31.6% for 2010.

"I am very pleased that for the fourth consecutive quarter we again met our quarterly revenue guidance in what has been a challenging year for the semiconductor industry.  Our successful track record is a result of outstanding relationships with major blue chip customers and a growing list of design-wins targeted at high-growth, high-margin applications," said Sang Park, MagnaChip's Chairman and Chief Executive Officer.  "Smartphones, tablet PCs, AMOLED displays and Ultrabooks are some examples of growth drivers for MagnaChip in 2012 as well as our rapidly expanding customer base and new product introductions for the power solutions segment. In addition, our recent announcement of the Dawin Electronics Co. Ltd. acquisition strengthens our competitive position in the fast growing IGBT power module business. Looking ahead, we believe there are indications that the first quarter of 2012 could be the bottom of our revenue downturn based on the strength of orders for new products coming from our smartphone and tablet PC customers. Our goal is to grow the business, deliver solid financial performance and to enhance shareholder value in the years to come."

Net income, on a GAAP basis, for the fourth quarter of 2011 totaled $23.7 million or $0.61 per diluted share. This compares to net loss of $56.0 million or $1.43 per diluted share for the third quarter of 2011 and a net income of $12.3 million or $0.31 per diluted share for the fourth quarter of 2010. For the full year 2011, net income was $21.8 million or $0.55 per diluted share compared to $74.1 million or $1.89 per diluted share for 2010. Net income for 2011 was impacted primarily by a foreign currency loss of $11.6 million compared to a foreign currency gain of $14.7 million for 2010, as well as a special expense for IPO incentive payments of $12.1 million made in 2011. The net foreign currency exposure was primarily related to non-cash translation gains or losses for intercompany balances that were denominated in U.S. dollars.

Adjusted net income, a non-GAAP measurement, for the fourth quarter of 2011 totaled $10.0 million or $0.26 per diluted share compared to $18.2 million or $0.46 per diluted share for the third quarter of 2011 and $17.4 million or $0.44 per diluted share for the fourth quarter of 2010. For the full year 2011, adjusted net income was $66.4 million or $1.67 per diluted share compared to $89.2 million or $2.28 per diluted share for 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'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 restricted cash) totaled $168.9 million at the end of the fourth quarter of 2011, an increase of $0.2 million from the end of the prior quarter. Cash provided from operations totaled approximately $18.3 million for the fourth quarter of 2011.

Revenue by Segment


In thousands of US dollars

Three Months Ended

Year Ended


December 31,
2011

September 30,
2011

December 31,
2010

December 31,
2011

December 31,
2010

Semiconductor Manufacturing Services

$    67,973

$      81,571

$    97,261

$    338,268

$    405,197

Display Solutions

90,045

91,767

70,581

338,995

305,884

Power Solutions

22,039

26,358

18,398

92,547

57,273

Other

769

709

532

3,021

2,051

Total Revenue

$     180,826

$     200,405

$     186,772

$     772,831

$     770,405





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