Magnachip Reports Results for Fourth Quarter and Full-Year 2022
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Magnachip Reports Results for Fourth Quarter and Full-Year 2022

SEOUL, South Korea, Feb. 16, 2023 — (PRNewswire) — Magnachip Semiconductor Corporation (NYSE: MX) ("Magnachip" or the "Company") today announced financial results for the fourth quarter and full-year 2022.

YJ Kim, Magnachip's chief executive officer commented, "We closed the fourth quarter with $61.0 million revenue, near the high-end of our guidance range. Q4 results continued to reflect the impact of severe wafer shortages and inventory correction in our Display business and deteriorating consumer demand in our Power Solutions business. Despite the challenges of this past year, we stayed focused and achieved milestones that set the foundation for recovery in 2023. In Display, we expanded our OLED business into international markets by winning a new tier one panel customer outside of Korea and strengthened our global supply chain by qualifying two additional foundries. Further, in Q4, we successfully qualified two OLED projects with our two leading panel customers and expect to begin shipping at the end of this quarter. In Power Solutions, we achieved a record year with 2022 revenue up 1.2% despite the slowdown in the 2nd half due to macro weakness. Further, our Power Solutions business won a record 209 design-in/wins, more than double compared to previous years."

YJ continued, "Looking ahead, we continue to expect the first half of 2023 to be impacted by inventory corrections and broader macro weakness, but we believe the reopening of China should eventually lead to an improvement in their economy and consumer demand, which will help both our businesses. We expect a recovery in Display revenue in the second half of 2023 as we ramp shipments of our four design-in projects with our two leading panel customers.  For Power, we anticipate on maintaining our momentum of design wins and premium tier product mix. As channel inventories are consumed and the broader economy recovers, we expect to see a rebound in Power revenue."

Q4 and 2022 Financial Highlights 







In thousands of U.S. dollars, except share data




GAAP




Q4 2022


Q3 2022


Q/Q change


Q4 2021


Y/Y change


Revenues

















Standard Products Business

















Display Solutions



7,556


6,355


up


18.9 %


41,298


down


81.7 %


Power Solutions



46,271


56,416


down


18.0 %


58,212


down


20.5 %


Transitional Fab 3 foundry services(1)



7,163


8,428


down


15.0 %


10,825


down


33.8 %


Gross Profit Margin



26.4 %


24.2


up


2.2% pts


35.0 %


down


 8.6%pts


Operating Income (Loss)



(10,117)


(10,008)


down


     n/a


63,870


down


n/a


Net Income (Loss)



2,971


(17,195)


up


     n/a


53,611


down


94.5 %


Basic Earnings (Loss) per Common Share



0.07


(0.38)


up


     n/a


1.16


down


94.0 %


Diluted Earnings (Loss) per Common Share



0.07


(0.38)


up


     n/a


1.12


down


93.8 %







In thousands of U.S. dollars, except share data




Non-GAAP(3)




Q4 2022


Q3 2022


Q/Q change


Q4 2021


Y/Y change


Adjusted Operating Income (Loss)



(8,567)


(6,646)


down


n/a


14,421


down


n/a


Adjusted EBITDA



(4,768)


(2,995)


down


n/a


18,144


down


n/a


Adjusted Net Income (Loss)



(15,848)


1,097


down


n/a


13,699


down


n/a


Adjusted Earnings (Loss) per Common Share—Diluted



(0.36)


0.02


down


n/a


0.29


down


n/a


 







In thousands of U.S dollars, except share data







GAAP







2022



2021


Y/Y Change

Revenues



















Standard Products Business



















Display Solutions





71,432


205,322


down

65.2 %

Power Solutions





230,464

227,777


up

1.2 %

Transitional Fab 3 foundry services(1)





35,762



41,131


down

13.1 %

Gross Profit Margin







30.0 %


32.4 %


down

2.4% pts

Operating Income (Loss)(2)





(5,244)



83,407


down

n/a

Net Income (Loss)





(8,036)



56,708


down

n/a

Basic Earnings (Loss) per Common Share





(0.18)



1.26


down

n/a

Diluted Earnings (Loss) per Common Share





(0.18)



1.21


down

n/a

 



In thousands of U.S dollars, except share data






Non-GAAP(3)








2022


2021


Y/Y Change

Adjusted Operating Income


4,091


56,135


down

92.7 %

Adjusted EBITDA

19,517


70,701


down

72.4 %

Adjusted Net Income

8,752


50,152


down

82.5 %

Adjusted Earnings per Common Share—Diluted



0.19


1.07


down

82.2 %






(1)

Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, and for a period of up to three years, we will provide transitional foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi ("Transitional Fab 3 Foundry Services"). Management believes that disclosing revenue of Transitional Fab 3 Foundry Services separately from the standard products business allows investors to better understand the results of our core standard products display solutions and power solutions business lines.

(2)

For the year ended December 31, 2021, operating income of $83.4 million included net gain of $35.5 million that represented $70.2 million income from the recognition of a reverse termination fee, net of professional service fees and expenses of $34.7 million incurred in connection with the contemplated merger transaction.

(3)

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 our business and operations and assist in evaluating our core operating performance. However, such non-GAAP financial measures have limitations and should not be considered as a substitute for net income (loss) 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 in this press release.

Financial Guidance

The Company's near-term outlook is being challenged by previous OLED wafer allocation constraints that impacted 2nd half 2022 design-in projects and ongoing inventory correction in smartphones and other consumer end markets driven by weakening consumer demand. Q1 is also typically the Company's seasonally slowest quarter following holiday shipments and is impacted by slower activity around the Chinese New Year.

In response to the industry-wide slowdown and inventory correction, the Company has reduced production at its Fab 3. As a result, the Company expects Q1'23 gross profit margin will be further impacted by lower utilization as well as higher manufacturing input costs such as electricity and wages. The Company currently expects gross profit margin to recover as volume and utilization improves in the 2nd half of 2023.

While actual results may vary, Magnachip currently expects the following for Q1'23:

Q4 2022 Earnings Conference Call

Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Thursday, February 16, 2023, to discuss its financial results. In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this event including the dial-in numbers, a PIN number, and an e-mail with detailed instructions to join the conference call. A live and archived webcast of the conference call and a copy of earnings release will be accessible from the 'Investors' section of the Company's website at www.magnachip.com.

Online registration:  https://register.vevent.com/register/BI7b1cf7d40d2f43489a0d4fc290ea1ea2

Safe Harbor for Forward-Looking Statements

Information in this release 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. These statements include expectations about estimated historical or future operating results and financial performance, outlook and business plans, including first quarter 2023 revenue and gross profit margin expectations, and the impact of market conditions associated with inflation and rising interest rates, the COVID-19 pandemic or the emergence of various variants of the virus, geopolitical conflict between Russia and Ukraine, and escalated trade tensions and supply constraints on Magnachip's first quarter 2023 and future operating results. All forward-looking statements included in this release are based upon information available to Magnachip as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include, among others: the impact of changes in macroeconomic and/or general economic conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest; the COVID-19 pandemic or the emergence of various variants of the virus or other outbreaks of disease, and governmental lock-downs or other measures implemented in response thereto, and the Russia-Ukraine conflict; manufacturing capacity constraints or supply chain disruptions that may impact our ability to deliver our products or affect the price of components, which may lead to an increase in our costs, as well as impacting demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely design acceptance by our customers; timely introduction of new products and technologies; ability to ramp new products into volume production; industry wide shifts in supply and demand for semiconductor products; industry and/or company overcapacity; effective and cost efficient utilization of manufacturing capacity; financial stability in foreign markets and the impact of foreign exchange rates; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors, including those related to the Russia-Ukraine conflict; change or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, including the COVID-19 pandemic or the emergence of various variants of the virus; other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip's products, including uncertainties regarding the impacts of the COVID-19 pandemic or the emergence of various variants of the virus that may result in factory closures, reduced workforces, scarcity of raw materials and goods produced in infected areas, as well as reduced consumer and business spending affecting demand for Magnachip's products due to government and private sector mandatory business closures, travel restrictions or the like to prevent the spread of disease; and other risks detailed from time to time in Magnachip's filings with the U.S. Securities and Exchange Commission (the "SEC"), including our Form 10-K filed on February 23, 2022 and subsequent registration statements, amendments or other reports that we may file from time to time with the SEC and/or make available on our website. Magnachip assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise.

About Magnachip Semiconductor 

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip's website is not a part of, and is not incorporated into, this release.

CONTACT:

Yujia Zhai
The Blueshirt Group
Tel. (860) 214-0809
Email Contact

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data)
(Unaudited)



Three Months Ended 


Year Ended


December 31,
2022


September 30,
2022


December 31,
2021


December 31,
2022


December 31,
2021

Revenues:                               










Net sales – standard products business       

$         53,827


$         62,771


$         99,510


$       301,896


$       433,099

Net sales – transitional Fab 3 foundry services               

7,163


8,428


10,825


35,762


41,131











Total revenues   

60,990


71,199


110,335


337,658


474,230

Cost of sales:          










Cost of sales – standard products business 

37,150


45,497


62,206


202,347


283,503

Cost of sales – transitional Fab 3 foundry services

7,742


8,477


9,525


34,047


37,184











Total cost of sales             

44,892


53,974


71,731


236,394


320,687











Gross profit            

16,098


17,225


38,604


101,264


153,543

Gross profit as a percentage of standard products business net sales              

31.0 %


27.5 %


37.5 %


33.0 %


34.5 %

Gross profit as a percentage of total revenues        

26.4 %


24.2 %


35.0 %


30.0 %


32.4 %

Operating expenses:










Selling, general and administrative expenses               

12,562


11,411


13,255


50,872


52,440

Research and development expenses           

13,653


13,321


12,197


52,338


51,212

Merger-related income, net          



(49,369 )



(35,527 )

Other charges, net        


2,501


(1,349 )


3,298


2,011











Total operating expenses (income)    

26,215


27,233


(25,266 )


106,508


70,136











Operating income (loss)         

(10,117)


(10,008)


63,870


(5,244)


83,407

Interest income            

2,420


1,784


858


5,980


2,609

Interest expense           

(269)


(278)


(132 )


(1,157)


(1,371 )

Foreign currency gain (loss), net 

17,492


(12,809)


147


(3,019)


(11,853 )

Other income, net        

(42)


174


89


561


1,177











Income (loss) before income tax expense (benefit)

9,484


(21,137)


64,832


(2,879)


73,969

Income tax expense (benefit)

6,513


(3,942)


11,221


5,157


17,261











Net income (loss)   

$           2,971


$       (17,195)


$         53,611


$         (8,036)


$         56,708











Basic earnings (loss) per common share—

$             0.07


$           (0.38)


$             1.16


$           (0.18)


$             1.26

Diluted earnings (loss) per common share—

$             0.07


$           (0.38)


$             1.12


$           (0.18)


$             1.21

Weighted average number of shares—










Basic            

44,054,275


44,865,266


46,369,520


44,850,791


44,879,412

Diluted                                      

44,731,683


44,865,266


47,691,816


44,850,791


47,709,373

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
(Unaudited)






December 31,
2022


December 31,
2021


(In thousands of U.S. dollars, except share data)

Assets




Current assets




Cash and cash equivalents

$                 225,477


$                   279,547

Accounts receivable, net

35,380


50,954

Inventories, net

39,883


39,370

Other receivables

7,847


25,895

Prepaid expenses

10,560


7,675

Hedge collateral

2,940


3,060

Other current assets

15,766


2,619





Total current assets

337,853


409,120

Property, plant and equipment, net

110,747


107,882

Operating lease right-of-use assets

5,265


4,275

Intangible assets, net

1,930


2,377

Long-term prepaid expenses

10,939


8,243

Deferred income taxes

38,324


41,095

Other non-current assets

11,587


10,662





Total assets

$                 516,645


$                   583,654





Liabilities and Stockholders' Equity




Current liabilities




Accounts payable

$                   17,998


$                     37,593

Other accounts payable

9,702


6,289

Accrued expenses

9,688


20,071

Accrued income taxes

3,154


11,823

Operating lease liabilities

1,397


2,323

Other current liabilities

5,306


7,382





Total current liabilities

47,245


85,481

Accrued severance benefits, net

23,121


33,064

Non-current operating lease liabilities

4,091


1,952

Other non-current liabilities

14,035


10,395





Total liabilities

88,492


130,892





Commitments and contingencies




Stockholders' equity




Common stock, $0.01 par value, 150,000,000 shares authorized, 56,432,449 shares issued and 43,824,575 outstanding at December 31, 2022 and 55,905,320 shares issued and 45,659,304 outstanding at December 31, 2021

564


559

Additional paid-in capital

266,058


241,197

Retained earnings

335,506


343,542

Treasury stock, 12,607,874 shares at December 31, 2022 and 10,246,016 shares at December 31, 2021, respectively

(161,422)


(130,306 )

Accumulated other comprehensive loss

(12,553)


(2,230 )





Total stockholders' equity

428,153


452,762





Total liabilities and stockholders' equity

$                 516,645


$                   583,654





 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(Unaudited)












Three Months

Ended 


Year Ended




December 31,
2022


December 31,
2022


December 31,
2021


Cash flows from operating activities







Net income (loss)   

$           2,971


$      (8,036)


$       56,708


Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities







Depreciation and amortization     

3,775


15,000


14,239


Provision for severance benefits  

1,126


6,289


8,282


Amortization of debt issuance costs and original issue discount 



261


Loss (gain) on foreign currency, net            

(46,606)


19,729


32,432


Provision for inventory reserves 

1,844


9,574


2,244


Stock-based compensation          

1,550


6,037


7,704


Deferred income tax assets

56


278


918


Other, net     

255


664


(613)


Changes in operating assets and liabilities







Accounts receivable, net              

2,471


10,276


7,505


Inventories   

582


(12,626)


(5,939)


Other receivables         

1,031


18,146


(21,538)


Other current assets     

9,967


(4,150)


12,397


Accounts payable        

(1,533)


(16,325)


(11,437)


Other accounts payable

(3,195)


(9,410)


(7,798 )


Accrued expenses        

(13,094)


(7,228)


4,637


Accrued income taxes  

3,083


(8,400)


(1)


Deferred revenue

(47)


(1,261)


(131)


Other current liabilities

(276)


(645)


1,445


Other non-current liabilities         

226


749


(1,398 )


Contributions to severance insurance deposit accounts

(7,662)


(7,899)


(5,688)


Payment of severance benefits     

(1,831)


(6,012)


(6,679)


Other, net     

228


415


193









Net cash provided by (used in) operating activities     

(45,079)


5,165


87,743


Cash flows from investing activities







Proceeds from settlement of hedge collateral               

12,427


15,232


5,214


Payment of hedge collateral


(15,282)


(3,349 )


Proceeds from disposal of property, plant and equipment


550


1,446


Purchase of property, plant and equipment  

(11,582)


(23,394)


(32,212 )


Payment for intellectual property registration              

(89)


(390)


(614 )


Collection of guarantee deposits  



3,192


Payment of guarantee deposits    

(306)


(2,381)


(5,001 )


Other, net     

495


737


(114 )









Net cash provided by (used in) investing activities

945


(24,928)


(31,438 )


Cash flows from financing activities







Proceeds from exercise of stock options     


1,786


4,279


Acquisition of treasury stock       

(8,895)


(13,960)


(1,653 )


Acquisition of stock under accelerated stock repurchase agreement



(20,073)


Payment under accelerated stock repurchase agreement



(17,427)


Repayment of financing related to water treatment facility arrangement      

(119)


(500)


(563 )


Others

(20)


(70)


(107)









Net cash used in financing activities       

(9,034)


(12,744)


(35,544 )


Effect of exchange rates on cash and cash equivalents           

27,814


(21,563)


(21,154 )









Net decrease in cash and cash equivalents              

(25,354)


(54,070)


(393 )


Cash and cash equivalents







Beginning of the period          

250,831


279,547


279,940









End of the period    

$       225,477


$    225,477


$   279,547























 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS)
(In thousands of U.S. dollars)
(Unaudited)




Three Months Ended



Year Ended




December 31,
2022



September 30,
2022



December 31,
2021



December 31,
2022



December 31,
2021


Operating income (loss)


$

(10,117)



$

(10,008)



$

63,870



$

(5,244)



$

83,407


Adjustments:





















Equity-based compensation expense



1,550




861




1,648




6,037




7,704


Inventory reserve related to Huawei impact of downstream trade restrictions









(379)







(1,460)


Merger-related income, net









(49,369)







(35,527)


Other charges, net






2,501




(1,349)




3,298




2,011























Adjusted Operating Income (Loss)


$

(8,567)



$

(6,646)



$

14,421



$

4,091



$

56,135















































We present Adjusted Operating Income (Loss) as a supplemental measure of our performance. We define Adjusted Operating Income (Loss) for the periods indicated as operating income (loss) adjusted to exclude (i) Equity-based compensation expense (ii) Inventory reserve related to Huawei impact of downstream trade restrictions (iii) Merger-related income, net and (iv) Other charges, net.

 For the year ended December 31, 2022, Other charges, net includes $2.8 million of one-time employee incentives and professional service fees and expenses of $1.0 million, incurred in connection with certain strategic evaluations, both of which were offset in part by a $0.5 million gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi. For the year ended December 31, 2021, Other charges, net includes $3.4 million of non-recurring professional service fees and expenses incurred in connection with the regulatory requests, partially offset by $1.4 million gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi (which was closed during the year ended December 31, 2018).

For the year ended December 31, 2021, we recorded in our consolidated statement of operations net gain of $35.5 million that represented income of $70.2 million from the recognition of a reverse termination fee, net of professional service fees and expenses of $34.7 million incurred in connection with the contemplated merger transaction of the Company that was terminated in December 2021. 

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS)
(In thousands of U.S. dollars, except share data)
(Unaudited)








Three Months Ended 



Year Ended 



December 31,
2022


September 30,
2022


December 31,
2021



December 31,
2022


December 31,
2021


Net income (loss)   

$           2,971


$        (17,195)


$            53,611



$        (8,036)


$           56,708

Adjustments:











Interest income            

(2,420)


(1,784)


(858)



(5,980)


(2,609)

Interest expense           

269


278


132



1,157


1,371

Income tax expense (benefit)       

6,513


(3,942)


11,221



5,157


17,261

Depreciation and amortization     

3,775


3,623


3,663



15,000


14,239












EBITDA

11,108


(19,020)


67,769



7,298


86,970

Equity-based compensation expense           

1,550


861


1,648



6,037


7,704

Foreign currency loss (gain), net 

(17,492)


12,809


(147)



3,019


11,853

Derivative valuation loss (gain), net            

66


(146)


(29)



(135)


(123)

Inventory reserve related to Huawei impact of downstream trade restrictions 



(379)




(1,460)

Merger-related income, net



(49,369)




(35,527)

Other charges, net        


2,501


(1,349)



3,298


1,284












Adjusted EBITDA

$          (4,768)


$          (2,995)


$            18,144



$        19,517


$           70,701























Net income (loss)   

$            2,971


$        (17,195 )


$            53,611



$        (8,036)


$           56,708

Adjustments:          











Equity-based compensation expense           

1,550


861


1,648



6,037


7,704

Foreign currency loss (gain), net 

(17,492)


12,809


(147)



3,019


11,853

Derivative valuation loss (gain), net            

66


(146 )


(29)



(135)


(123)

Inventory reserve related to Huawei impact of downstream trade restrictions 



(379)




(1,460)

Merger-related income, net



(49,369)




(35,527)

Other charges, net        


2,501


(1,349)



3,298


1,284

Income tax effect on non-GAAP adjustments               

(2,943)


2,267


9,713



4,569


9,713












Adjusted Net Income (Loss)

$         (15,848)


$            1,097


$            13,699



$          8,752


$           50,152












Adjusted Net Income (Loss) per common share—











- Basic         

$             (0.36)


$              0.02


$               0.30



$            0.20


$               1.12

- Diluted

$             (0.36)


$              0.02


$               0.29



$            0.19


$               1.07

Weighted average number of shares – basic

44,054,275


44,865,266


46,369,520



44,850,791


44,879,412

Weighted average number of shares – diluted

44,054,275


45,747,255


47,691,816



45,795,559


47,709,373













We present Adjusted EBITDA and Adjusted Net Income (Loss) as supplemental measures of our performance. We define Adjusted EBITDA for the periods indicated as EBITDA (as defined below), adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign loss (gain), net, (iii) Derivative valuation loss (gain), net, (iv) Inventory reserve related to Huawei impact of downstream trade restrictions, (v) Merger-related income, net and (vi) Other charges, net. EBITDA for the periods indicated is defined as net income (loss) before interest income, interest expense, income tax expense (benefit) and depreciation and amortization.

We prepare Adjusted Net Income (Loss) by adjusting net income (loss) to eliminate the impact of a number of non-cash expenses and other items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance. We believe that Adjusted Net Income (Loss) is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Income (Loss) for the periods as net income (loss), adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign loss (gain), net, (iii) Derivative valuation loss (gain), net, (iv) Inventory reserve related to Huawei impact of downstream trade restrictions, (v) Merger-related income, net, (vi) Other charges, net and (vii) Income tax effect on non-GAAP adjustments.

For the year ended December 31, 2022, Other charges, net includes $2.8 million of one-time employee incentives and professional service fees and expenses of $1.0 million, incurred in connection with certain strategic evaluations, both of which were offset in part by a $0.5 million gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi. For the year ended December 31, 2021, Other charges, net includes $3.4 million of non-recurring professional service fees and expenses incurred in connection with the regulatory requests, partially offset by $1.4 million gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi (which was closed during the year ended December 31, 2018) and $0.7 million legal settlement gain related to certain expenses incurred in prior periods in connection with our legacy Fab 4 (which was sold during the year ended December 31, 2020) and awarded in the third quarter of 2021.

For the year ended December 31, 2021, we recorded in our consolidated statement of operations net gain of $35.5 million that represented income of $70.2 million from the recognition of a reverse termination fee, net of professional service fees and expenses of $34.7 million incurred in connection with the contemplated merger transaction of the Company that was terminated in December 2021.

For the quarter and year ended December 31, 2021, the adjustment for GAAP and cash tax expense difference in connection with the release of valuation allowances will no longer be an adjustment included in the Company's non-GAAP financial measure. As such, Adjusted Net Income and Adjusted Net Income per Common Share for Q4 2021 and for the full year 2021 presented here have been recast to reflect the removal of this adjustment in accordance with Securities and Exchange Commission guidance.

 

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SOURCE Magnachip Semiconductor Corporation

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Company Name: Magnachip Semiconductor Corporation
Financial data for Magnachip Semiconductor Corporation