Magnachip Semiconductor Corporation (NYSE:MX) Q1 2023 Earnings Conference Call May 3, 2023 7:30 PM ET Company Participants Yujia Zhai - Investor Relations, The Blueshirt Group YJ Kim - Chief Executive Officer Conference Call Participants Nick Doyle - Needham Operator Good day, and thank you for standing by. Welcome to the First Quarter 2023 Magnachip Semiconductor Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After this conference presentation, there will be ...

1 This presentation also includes references to certain non-GAAP financial measures. 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 and assist in evaluating our core operating performance. However, such non-GAAP financial measures may have limitations and should not be considered as a substitute for net income (loss) or as a better indicator of o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-34791 Magnachip Semiconductor Corporation (Exact name of registrant as specified in its charter) Delaware 83-040619 ...

Forward-Looking Statements This presentation also includes references to certain non-GAAP financial measures. 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 and assist in evaluating our core operating performance. However, such non-GAAP financial measures may have limitations and should not be considered as a substitute for net income (loss) or a ...

Magnachip Semiconductor Corporation (NYSE:MX) Q4 2022 Earnings Conference Call February 16, 2023 5:00 PM ET Company Participants Yujia Zhai – The Blueshirt Group YJ Kim – Chief Executive Officer Shinyoung Park – Chief Financial Officer Conference Call Participants Martin Yang – Oppenheimer Nick Doyle – Needham Operator Good day and welcome to Magnachip's Fourth Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a qu ...

PART I [Item 1. Interim Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Interim%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Magnachip's unaudited interim consolidated financial statements for Q3 and 9M 2022 reveal significant revenue decline and a net loss Consolidated Balance Sheet Highlights (in thousands of U.S. dollars) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$536,208** | **$583,654** | | Cash and cash equivalents | $250,831 | $279,547 | | Total current assets | $379,036 | $409,120 | | **Total Liabilities** | **$122,993** | **$130,892** | | Total current liabilities | $74,359 | $85,481 | | **Total Stockholders' Equity** | **$413,215** | **$452,762** | Consolidated Statements of Operations Highlights (in thousands of U.S. dollars) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $71,199 | $127,000 | $276,668 | $363,895 | | Gross profit | $17,225 | $46,587 | $85,166 | $114,939 | | Operating income (loss) | $(10,008) | $20,001 | $4,873 | $19,537 | | Net income (loss) | $(17,195) | $10,768 | $(11,007) | $3,097 | Consolidated Statements of Cash Flows Highlights (in thousands of U.S. dollars) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $50,244 | $30,016 | | Net cash used in investing activities | $(25,873) | $(14,443) | | Net cash (used in) provided by financing activities | $(3,710) | $1,791 | | **Net decrease in cash and cash equivalents** | **$(28,716)** | **$(3,639)** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail business segments, customer concentration, foreign currency hedging, stock repurchases, and merger termination fee - The company designs and manufactures analog and mixed-signal semiconductor solutions, with business divided into **Display Solutions** and **Power Solutions**[24](index=24&type=chunk)[25](index=25&type=chunk) Revenues by Business Line (in thousands of U.S. dollars) | Business Line | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Display Solutions | $6,355 | $58,528 | $63,876 | $164,024 | | Power Solutions | $56,416 | $58,887 | $184,193 | $169,565 | | **Total standard products** | **$62,771** | **$117,415** | **$248,069** | **$333,589** | | Transitional Fab 3 foundry | $8,428 | $9,585 | $28,599 | $30,306 | - For the nine months ended Sep 30, 2022, the top ten customers accounted for **70%** of standard products business net sales, with two customers representing **20.6%** and **13.9%** of net sales, respectively[65](index=65&type=chunk)[66](index=66&type=chunk) - The Board of Directors expanded the stock repurchase program from **$75 million** to **$87.5 million**, with **324,643 shares** repurchased for **$3.6 million** in September 2022[74](index=74&type=chunk) - The merger agreement with an affiliate of Wise Road Capital was terminated, resulting in a remaining termination fee receivable of **$1.8 million** as of September 30, 2022[80](index=80&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2022 revenue decline, resilient Power Solutions, industry trends, non-GAAP measures, and sufficient liquidity [Overview and Industry Trends](index=26&type=section&id=Overview%20and%20Industry%20Trends) Magnachip's hybrid manufacturing strategy faces industry shifts to weaker demand and inventory oversupply, impacting revenue due to OLED wafer shortages - The company's business lines are **Display Solutions** (drivers for LCD, OLED, Micro LED) and **Power Solutions** (MOSFETs, IGBTs, PMICs)[96](index=96&type=chunk)[97](index=97&type=chunk) - The company uses a **balanced manufacturing strategy**, combining internal capacity with outsourcing to external 12-inch and 8-inch foundries for advanced OLED ICs[105](index=105&type=chunk)[106](index=106&type=chunk) - Global macroeconomic conditions, including China's COVID-19 lockdowns and higher inflation, have led to **weaker end-market demand** and an **oversupply of inventory**[113](index=113&type=chunk) - Revenues were **severely impacted** by persisting **supply shortages**, particularly for **28nm 12-inch OLED wafers**[111](index=111&type=chunk) [Explanation and Reconciliation of Non-U.S. GAAP Measures](index=30&type=section&id=Explanation%20and%20Reconciliation%20of%20Non-U%2ES%2E%20GAAP%20Measures) This section defines and reconciles non-GAAP measures like Adjusted EBITDA, Operating Income, and Net Income, used to assess core performance Reconciliation of Net Income (Loss) to Adjusted EBITDA (in millions) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(17.2) | $10.8 | $(11.0) | $3.1 | | **Adjusted EBITDA** | **$(3.0)** | **$26.4** | **$24.3** | **$52.6** | Reconciliation of Operating Income (Loss) to Adjusted Operating Income (Loss) (in millions) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Operating income (loss) | $(10.0) | $20.0 | $4.9 | $19.5 | | **Adjusted Operating Income (Loss)** | **$(6.6)** | **$22.7** | **$12.7** | **$41.7** | Reconciliation of Net Income (Loss) to Adjusted Net Income (in millions) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(17.2) | $10.8 | $(11.0) | $3.1 | | **Adjusted Net Income** | **$1.1** | **$20.1** | **$24.6** | **$36.5** | [Results of Operations – Comparison of Three Months Ended September 30, 2022 and 2021](index=38&type=section&id=Results%20of%20Operations%20%E2%80%93%20Comparison%20of%20Three%20Months%20Ended%20September%2030%2C%202022%20and%202021) Q3 2022 total revenues fell **43.9%** to **$71.2 million** due to Display Solutions, leading to a **63.0%** gross profit drop and net loss Q3 2022 vs Q3 2021 Performance Summary (in millions) | Metric | Q3 2022 | Q3 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $71.2 | $127.0 | -43.9% | | Standard Products Revenue | $62.8 | $117.4 | -46.5% | | Gross Profit | $17.2 | $46.6 | -63.0% | | Gross Margin | 24.2% | 36.7% | -12.5 p.p. | | Operating Income (Loss) | $(10.0) | $20.0 | N/A | | Net Income (Loss) | $(17.2) | $10.8 | N/A | - The **significant decrease in Display Solutions sales** was primarily due to lower revenue from **mobile OLED display driver ICs**, caused by a **slowdown in the Chinese smartphone market** and a **lack of secured 28nm 12-inch wafer capacity**[154](index=154&type=chunk) - The **decrease in gross margin** was mainly due to **inventory reserves** and **scrap costs** for 12-inch display products and a **lower utilization rate** of the internal fabrication facility[157](index=157&type=chunk) [Results of Operations – Comparison of Nine Months Ended September 30, 2022 and 2021](index=43&type=section&id=Results%20of%20Operations%20%E2%80%93%20Comparison%20of%20Nine%20Months%20Ended%20September%2030%2C%202022%20and%202021) 9M 2022 total revenues decreased **24.0%** to **$276.7 million** due to Display Solutions, resulting in a **25.9%** gross profit drop and net loss 9M 2022 vs 9M 2021 Performance Summary (in millions) | Metric | 9M 2022 | 9M 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $276.7 | $363.9 | -24.0% | | Standard Products Revenue | $248.1 | $333.6 | -25.6% | | Gross Profit | $85.2 | $114.9 | -25.9% | | Gross Margin | 30.8% | 31.6% | -0.8 p.p. | | Operating Income | $4.9 | $19.5 | -74.9% | | Net Income (Loss) | $(11.0) | $3.1 | N/A | - The **decrease in standard products revenue** was driven by a **significant drop in Display Solutions**, while **Power Solutions revenue grew** due to **strong demand for MOSFETs and IGBTs**[178](index=178&type=chunk) - The **decrease in operating income** was primarily due to a **$29.8 million decrease in gross profit**, partially offset by a **$13.8 million decrease in Merger-related costs** which were present in 2021[190](index=190&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) As of Sep 30, 2022, the company held **$250.8 million** in cash, with working capital at **$304.7 million**, and management deems liquidity sufficient - As of September 30, 2022, cash and cash equivalents were **$241.3 million**, with **96%** held by the Korean subsidiary[202](index=202&type=chunk) - Working capital **decreased by $19.0 million** since December 31, 2021, primarily due to a decrease in cash and other receivables[203](index=203&type=chunk) Cash Flow Summary for Nine Months Ended Sep 30, 2022 (in millions) | Category | Amount | | :--- | :--- | | Cash from Operating Activities | $50.2 | | Cash used in Investing Activities | $(25.9) | | Cash used in Financing Activities | $(3.7) | - Capital expenditures for the nine months ended September 30, 2022, were **$11.8 million**, a **decrease of 11.6%** from the prior year[208](index=208&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is foreign currency exposure, mainly USD-KRW fluctuations, partially mitigated by derivative contracts - The company is primarily exposed to market risk from **foreign currency exchange rate fluctuations**, mainly the **Korean won versus the U.S. dollar**[213](index=213&type=chunk)[214](index=214&type=chunk) - A **10% devaluation** of the Korean won against the U.S. dollar would have resulted in a **$1.2 million decrease** in the value of financial instruments and cash balances as of September 30, 2022[214](index=214&type=chunk) - The company utilizes **foreign currency zero cost collar contracts** to **mitigate** a portion of the impact of U.S. dollar-Korean won exchange rate fluctuations[145](index=145&type=chunk)[215](index=215&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of Sep 30, 2022, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2022[217](index=217&type=chunk) - There were **no material changes** in the company's internal control over financial reporting during the third quarter of 2022[218](index=218&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the 2021 Form 10-K for legal proceedings, indicating no material updates in the current quarter - For a discussion of legal proceedings, the report refers to "Part I: Item 3. Legal Proceedings" of the company's 2021 Form 10-K[220](index=220&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the 2021 Form 10-K and prior Form 10-Q are reported - There have been **no material changes** to the risk factors disclosed in the company's 2021 Form 10-K and the prior Form 10-Q[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details stock repurchase activities, including **324,643 shares** repurchased for **$3.6 million** and an expanded program to **$87.5 million** Common Stock Repurchases in Q3 2022 | Period | Total Shares Purchased | Average Price Paid per Share | Value of Shares Remaining for Purchase (in thousands) | | :--- | :--- | :--- | :--- | | July 2022 | — | — | — | | August 2022 | — | — | — | | September 2022 | 324,643 | $11.21 | $46,362 | - On August 31, 2022, the Board of Directors authorized an **expansion** of the stock repurchase program from **$75 million** to **$87.5 million**[226](index=226&type=chunk) [Item 3. Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable, indicating no defaults upon senior securities during the reporting period - Not applicable[227](index=227&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable, as the company's operations do not involve mine safety - Not applicable[228](index=228&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) There is no other information to report for this item - None[229](index=229&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements, certifications, and XBRL data files - The report includes exhibits such as management compensation agreements, amendments to key contracts, CEO/CFO certifications, and XBRL interactive data files[230](index=230&type=chunk)

Magnachip Semiconductor (NYSE: MX) Q3 2022 Earnings Materials November 2, 2022 1 Forward-Looking Statements 2 Information in this presentation 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. All forward-looking statements included or incorporated by reference in this presentation, including expectations about estimated historical or futur ...

Magnachip Semiconductor Corporation (NYSE:MX) Q3 2022 Earnings Conference Call November 2, 2022 5:00 PM ET Company Participants Yujia Zhai - The Blueshirt Group YJ Kim - Chief Executive Officer Shinyoung Park - Chief Financial Officer Conference Call Participants Martin Yang - Oppenheimer Suji De Silva - ROTH Capital Operator Hello and thank you for standing by. Welcome to the Q3 2022 Magnachip Semiconductor Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Afte ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-34791 Magnachip Semiconductor Corporation (Exact name of registrant as specified in its charter) Delaware 83-0406195 (S ...

Magnachip Semiconductor Corporation (NYSE:MX) Q2 2022 Earnings Conference Call August 8, 2022 5:00 PM ET Company Participants Yujia Zhai - The Blueshirt Group YJ Kim - Chief Executive Officer Shinyoung Park - Chief Financial Officer Conference Call Participants Suji Desilva - ROTH capital Raji Gill - Needham & Company Operator Good day, and thank you for standing by. Welcome to the Q2 2022 Magnachip Semiconductor Corporation Earnings Call. At this time, all participants are in a listen-only mode. After the ...