Revenue for the three months ended March 30, 2008 was $203.1 million, compared to $151.8 million in the first quarter of 2007.
Gross margin was $47.9 million or 23.6% of revenue for the quarter ended March 30, 2008, compared to $14.9 million or 9.8% of revenue for the first quarter of 2007.
Operating expenses for the first quarter of 2008 were $54.7 million or 26.9% of revenue, compared to $57.8 million or 38.1% of revenue for the first quarter of 2007.
Operating loss was $6.8 million during the current quarter, compared to an operating loss of $42.9 million in the prior year quarter.
Net interest expense for the first quarter of 2008 was $15.7 million, compared to $14.4 million in the first quarter of 2007.
Net loss for the three months ended March 30, 2008 was $67.9 million, compared to a net loss of $67.0 million in the first quarter of 2007. The net loss results were negatively impacted by a foreign currency loss of $42.9 million in the first quarter of 2008, compared to a foreign currency loss of $7.4 million in the first quarter of 2007. A substantial portion of this net foreign currency loss resulted from a non-cash translation loss recorded for intercompany borrowings at our Korea subsidiary that are denominated in U.S. dollars.
Sang Park, Chairman and CEO of MagnaChip Semiconductor, commented, "We continued to make progress in 2008 vs. 2007, with an increase in revenues of 33.8% vs. the first quarter of 2007. During the quarter, we began sampling our new line of power management products as part of an overall strategy to leverage our analog and mixed signal technology platform to expand our market opportunities. We expanded our image solutions business to new end markets and increased our account penetration in our display solutions business. In our Semiconductor Manufacturing Services business, we strengthened our specialty technology portfolio and achieved a design win at a recognized leader in the microcontroller market. Our product pipeline is strong, and our design win activity is at an all-time high as we enter into the second quarter."
Robert Krakauer, President and CFO of MagnaChip Semiconductor, said, "We continued to make progress in the first quarter of 2008. Our gross margin and operating profit improved year over year, as we focused on maintaining our cost competitiveness. Though some of our markets are slower than expected, we believe we are well-positioned for continued performance improvement throughout 2008."
Investor Conference Call / Webcast Details
MagnaChip will report full results for the first quarter 2008 on Thursday, April 24, 2008 at 10:00 a.m. in New York (11:00 p.m., Thursday, April 24, 2008 in Seoul). The conference call will be available at www.magnachip.com and by telephone at +1-(877) 407-0784 (domestic) or +1-(201) 689-8560 (International). A replay of the call will be available in two hours after the call through midnight on Thursday, May 1, 2008 in New York (1 p.m. on Friday, May 2, 2008 in Seoul) at www.magnachip.com and by telephone at +1-(201) 612-7415. The account number to access the replay is 3055 and the conference ID number is 279852, respectively.
About MagnaChip Semiconductor
Headquartered in Seoul, South Korea, MagnaChip Semiconductor is a leading, Asia-based designer and manufacturer of analog and mixed-signal semiconductor products for high volume consumer applications, such as mobile phones, digital televisions, flat panel displays, notebook computers, mobile multimedia devices and digital cameras. The Company has a broad range of analog and mixed-signal semiconductor technology, supported by its 28-year operating history, large portfolio of registered and pending patents and extensive engineering and manufacturing process expertise. For more information, visit www.magnachip.com.
Certain statements contained in this press release contain forward-looking statements regarding MagnaChip Semiconductor's operations, economic performance and financial condition. Although MagnaChip Semiconductor believes that the expectations reflected in these statements are reasonable, no assurance can be given that such expectations will prove to have been correct as a result of many factors, including those described in our annual report on Form 10-K for the year ended December 31, 2007, which was filed with the Securities and Exchange Commission on March 31, 2008.
CONTACT: In Korea: In the U.S.: Mi-Jeong Han, PR Manager Joseph Villalta at The Ruth Group Tel: 82-2-6903-3195 Tel: +646-536-7003 email@example.com firstname.lastname@example.org MagnaChip Semiconductor Condensed Consolidated Statements of Operations (In thousands of U.S. Dollars, except per unit data) (Unaudited) Three Months Ended March 30, April 1, 2008 2007 Net sales $203,052 $151,783 Cost of sales 155,186 136,860 Gross profit 47,866 14,923 Operating expenses: Selling, general and administrative 19,224 22,729 Research and development 36,347 35,118 Restructuring and impairment charges (875) - Operating loss (6,830) (42,924)
Other income (expenses):
Interest expenses, net (15,695) (14,416) Foreign currency loss, net (42,864) (7,391) Loss before income taxes (65,389) (64,731) Income tax expenses 2,508 2,251 Net loss $(67,897) $(66,982) Dividends accrued on preferred units 3,118 2,870 Net loss attributable to common units $(71,015) $(69,852)
Net loss per common unit
Basic and Diluted $(1.35) $(1.32)
Common units used in per common unit
calculation: Basic and Diluted
(in thousands) 52,580 52,721
Key Ratios & Information:
Gross Margin 23.6% 9.8% Operating Expenses as a % of Revenue 26.9% 38.1% Operating Margin (3.4)% (28.3)% Depreciation & Amortization Expense 21,277 43,942
Capital Expenditures 10,070 8,348
Reconciliation of US GAAP Gross Profit, Operating Income (Loss) and Net Income (Loss) to
Non-US GAAP Gross Profit, Operating Income (Loss) and Net Income (Loss) (In thousands of US Dollars) (Unaudited)
Use of Non-US GAAP Financial Information
To supplement our condensed consolidated financial statements presented on a US GAAP basis, MagnaChip Semiconductor uses non-US GAAP measures of gross profit, operating income (loss) and net income (loss), that are US GAAP gross profit, operating income (loss) and net income (loss) adjusted to exclude certain costs, expenses or gains, referred to as special items. Non-US GAAP adjusted gross profit; operating income (loss) and net income (loss) measure give an indication of our baseline performance before other charges that are considered by management to be outside of our core operating results. In addition, our non-US GAAP adjusted measure of gross profit, operating income (loss) and net income (loss) are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information should not be considered in isolation or as a substitute for gross profit, operating income (loss) and net income (loss) prepared in accordance with generally accepted accounting principles in the United States of America.
Three Months Ended Three Months Ended March 30, 2008 April 1, 2007 Operat- Operat- Gross ing Net Gross ing Net Profit Income Income Profit Income Income (Loss) (Loss) (Loss) (Loss) US GAAP Amounts $47,866 $(6,830) $(67,897) $14,923 $(42,924) $(66,982) Special items (1) Restructuring and impairment charges - (875) (875) - - - Non-US GAAP Profit $47,866 $(7,705) $(68,772) $14,923 $(42,924) $(66,982) Adjusted Gross Margin 23.6% 9.8% Adjusted Operating Expense - % of Revenue 27.4% 38.1% Adjusted Operating Margin (3.8%) (28.3%)
Non-US GAAP adjusted condensed consolidated statements of operations are intended to present the Company's operating results, excluding special items. The special items excluded for the three months ended March 30, 2008 are as follows:
(1) Unused restructuring charges recorded in the second quarter 2007 under SFAS 144 MagnaChip Semiconductor Condensed Consolidated Balance Sheets (In thousands of US Dollars) (Unaudited) March 30, December 31, 2008 2007 Assets Current assets Cash and cash equivalents $53,476 $64,345 Accounts receivable, net 147,275 123,789 Inventories, net 64,925 75,867 Other current assets 24,796 16,722 Total current assets 290,472 280,723 Property, plant and equipment, net 260,978 279,669 Goodwill and intangible assets, net 92,522 104,725 Other non-current assets 49,971 42,766 Total assets $693,943 $707,883 Liabilities & Unitholders' Equity Current liabilities Accounts and other payable $143,392 $120,638 Short-term borrowings 80,000 80,000 Other current liabilities 28,924 24,477 Total current liabilities 252,316 225,115 Long-term borrowings 750,000 750,000 Other non-current liabilities 86,994 80,842 Total liabilities 1,089,310 1,055,957 Redeemable convertible preferred units 132,523 129,405 Unitholders' equity (527,890) (477,479) Total liabilities, redeemable convertible preferred units and unitholders' equity $693,943 $707,883 MagnaChip Semiconductor Condensed Consolidated Statements of Cash Flows (In thousands of US Dollars) (Unaudited) Three Months Ended March 30, April 1, 2008 2007 Cash flows from operating activities Net loss $(67,897) $(66,982) Adjustments to reconcile net loss to net cash provided by (used in) operating activities Depreciation and amortization 21,277 43,942 Provision for severance benefits 3,734 4,182 Gain(loss) on foreign currency 43,276 7,849 translation, net Changes in accounts and other receivable (24,708) (4,667) Changes in inventories 7,072 (12,183) Changes in accounts and other payable 16,089 (2,996) Changes in accrued expenses 6,563 11,410 Other (8,912) (753) Net cash used in operating activities (3,506) (20,198) Cash flows from investing activities Capital expenditures (10,070) (8,348) Other 3,373 (538) Net cash used in investing activities (6,697) (8,886) Cash flows from financing activities Exercise of unit options 28 - Repurchase of common units (68) - Proceeds from short-term borrowings 90,000 - Repayment of short-term borrowings (90,000) - Net cash used in financing activities (40) - Effect of exchange rates on cash and cash equivalents (626) (825) Net increase decrease in cash and cash equivalents (10,869) (29,909) Cash and cash equivalents Beginning of the period 64,345 89,173 End of the period $53,476 $59,264
Web site: http://www.magnachip.com//