SEOUL, South Korea--(BUSINESS WIRE)--Magnachip Semiconductor Corporation (NYSE: MX) ("Magnachip" or the "Company") today announced financial results for the third quarter 2024.
YJ Kim, Magnachip's CEO, commented, "Our Q3 revenue was at the high-end of guidance driven by broad-based growth in our Standard Product businesses, which is comprised of our MSS and PAS businesses. Standard Product revenue increased 25.9% sequentially and 24% year-over-year. Our discrete Power business benefited from leaner inventory in distribution channels as well as new product designs wins resulting in better-than-seasonal growth. In MSS, the strong sequential growth was due to increased demand for products targeted for China smartphone OEMs, automotive displays, and OLED IT."
YJ Kim added, "Looking ahead, we expect our Standard Product business revenue in Q4 will modestly decline sequentially, which is better than typical seasonality experienced in past years. We reiterate our full-year guidance for double-digit growth in both MSS and PAS businesses in 2024."
Q3 2024 Financial Highlights
In thousands of U.S. dollars, except share data | ||||||||||||||||||
GAAP | ||||||||||||||||||
Q3 2024 | Q2 2024 | Q/Q change | Q3 2023 | Y/Y change | ||||||||||||||
Consolidated Revenues | 66,460 | 53,171 | up | 25.0 | % | 61,245 | up | 8.5 | % | |||||||||
Standard Products Business | 64,020 | 50,835 | up | 25.9 | % | 51,619 | up | 24.0 | % | |||||||||
Mixed-Signal Solutions | 16,446 | 11,595 | up | 41.8 | % | 10,644 | up | 54.5 | % | |||||||||
Power Analog Solutions | 47,574 | 39,240 | up | 21.2 | % | 40,975 | up | 16.1 | % | |||||||||
Transitional Fab 3 foundry services(1) | 2,440 | 2,336 | up | 4.5 | % | 9,626 | down | 74.7 | % | |||||||||
Consolidated Gross Profit Margin | 23.3 | % | 21.8 | % | up | 1.5 | %pts | 23.6 | % | down | 0.3 | %pts | ||||||
Standard Products Business | 24.4 | % | 23.1 | % | up | 1.3 | %pts | 28.7 | % | down | 4.3 | %pts | ||||||
Mixed-Signal Solutions | 38.7 | % | 34.6 | % | up | 4.1 | %pts | 28.8 | % | up | 9.9 | %pts | ||||||
Power Analog Solutions | 19.4 | % | 19.7 | % | down | 0.3 | %pts | 28.6 | % | down | 9.2 | %pts | ||||||
Operating Loss | (11,003 | ) | (12,824 | ) | up | n/a | (9,235 | ) | down | n/a | ||||||||
Net Loss | (9,617 | ) | (12,997 | ) | up | n/a | (5,165 | ) | down | n/a | ||||||||
Basic Loss per Common Share | (0.26 | ) | (0.34 | ) | up | n/a | (0.13 | ) | down | n/a | ||||||||
Diluted Loss per Common Share | (0.26 | ) | (0.34 | ) | up | n/a | (0.13 | ) | down | n/a | ||||||||
In thousands of U.S. dollars, except share data | ||||||||||||||||||
Non-GAAP(2) | ||||||||||||||||||
Q3 2024 | Q2 2024 | Q/Q change | Q3 2023 | Y/Y change | ||||||||||||||
Adjusted Operating Loss | (9,026 | ) | (11,608 | ) | up | n/a | (7,064 | ) | down | n/a | ||||||||
Adjusted EBITDA | (4,949 | ) | (7,569 | ) | up | n/a | (2,735 | ) | down | n/a | ||||||||
Adjusted Net Loss | (12,797 | ) | (8,134 | ) | down | n/a | (1,591 | ) | down | n/a | ||||||||
Adjusted Loss per Common Share-Diluted | (0.34 | ) | (0.21 | ) | down | n/a | (0.04 | ) | down | n/a | ||||||||
___________ | ||
| (1) | Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, we provided transitional foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi, Korea, known as "Fab 3" ("Transitional Fab 3 Foundry Services"). The contractual obligation to provide the Transitional Fab 3 Foundry Services ended August 31, 2023, and we are winding down these foundry services and have begun to convert portions of the idle capacity to PAS products during the second half of 2024. Because these foundry services during the wind-down period are still provided to the same buyer by us using our Fab 3 based on mutually agreed terms and conditions, we will continue to report our revenue from providing these foundry services and related cost of sales within the Transitional Fab 3 Foundry Services line in our consolidated statement of operations until such wind down is completed. 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 MSS and PAS businesses. | |
| (2) | 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 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. | |
Q4 and Full-year 2024 Financial Guidance
Beginning in Q1 of 2024, the Company began reporting results under its newly organized businesses: MSS (Mixed-Signal Solutions) and PAS (Power Analog Solutions). While actual results may vary, Magnachip currently expects the following:
For Q4 2024:
- Consolidated revenue to be in the range of $59.0 to $64.0 million, including approximately $2.0 million of Transitional Foundry Services.
- MSS revenue to be in the range of $15 to $17 million, down 2.7% sequentially but up 87% year-over-year at the mid-point. This compares with MSS revenue of $16.4 million in Q3 2024 and MSS equivalent revenue of $8.6 million in Q4 2023.
- PAS revenue to be in the range of $42 to $45 million, down 8.6% sequentially but up 33.3% year-over-year at the mid-point. This compares with PAS revenue of $47.6 million in Q3 2024 and PAS equivalent revenue of $32.6 million in Q4 2023.
- Consolidated gross profit margin to be in the range of 21.5% to 23.5%.
- MSS gross profit margin to be in the range of 37.5% to 40.5%. This compares with MSS gross profit margin of 38.7% in Q3 2024 and MSS equivalent gross profit margin of 41.3% in Q4 2023.
- PAS gross profit margin to be in the range of 17% to 19%. This compares with PAS gross profit margin of 19.4% in Q3 2024 and PAS equivalent gross profit margin of 18.1% in Q4 2023.
For the full-year 2024, we currently expect:
- MSS revenue to grow double digits year-over-year as compared with MSS equivalent revenue of $44.4 million in 2023, consistent with what we communicated throughout the year.
- PAS revenue to grow double digits year-over-year as compared with PAS equivalent revenue of $151.3 million in 2023, consistent with what we communicated throughout the year.
- Transitional Foundry Services revenue will be wound down by the end of 2024, as expected. We expect any remaining amounts to be immaterial beyond Q4 2024.
- Consolidated revenue flattish, as compared to our prior expectation of flattish-to-slightly down.
- Consolidated gross profit margin between 21% to 22%, as compared to our prior expectation of 19% to 22%. This compares with the consolidated gross profit margin of 22.4% in 2023.
Q3 2024 Earnings Conference Call
Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, October 30, 2024, 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/BId4ac9a385dd74e4f813c5964a3ac6546
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 fourth quarter and full year 2024 revenue and gross profit margin expectations, future growth and revenue opportunities from new and existing products and customers, the timing and extent of future revenue contributions by our products and businesses, and the impact of market conditions associated with inflation and higher interest rates, geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and trade tensions between the U.S. and China, on Magnachip's fourth quarter and full year 2024 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 conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest; the geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and trade tensions between the U.S. and China; 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 and impact demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely acceptance of our designs by customers; timely introduction of new products and technologies; our ability to ramp new products into volume production; industry-wide shifts in supply and demand for semiconductor products; overcapacity within the industry or at Magnachip; 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 that can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors; change to or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip's products; 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 March 8, 2024, 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 communication, Internet of Things ("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 1,050 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.
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of U.S. dollars, except share data) (Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30,
| June 30,
| September 30,
| September 30,
| September 30,
| ||||||||||||||||
Revenues: | ||||||||||||||||||||
Net sales - standard products business | $ | 64,020 | $ | 50,835 | $ | 51,619 | $ | 160,396 | $ | 154,508 | ||||||||||
Net sales - transitional Fab 3 foundry services | 2,440 | 2,336 | 9,626 | 8,302 | 24,721 | |||||||||||||||
Total revenues | 66,460 | 53,171 | 61,245 | 168,698 | 179,229 | |||||||||||||||
Cost of sales: | ||||||||||||||||||||
Cost of sales - standard products business | 48,400 | 39,113 | 36,829 | 123,401 | 112,008 | |||||||||||||||
Cost of sales - transitional Fab 3 foundry services | 2,599 | 2,457 | 9,935 | 9,267 | 27,108 | |||||||||||||||
Total cost of sales | 50,999 | 41,570 | 46,764 | 132,668 | 139,116 | |||||||||||||||
Gross profit | 15,461 | 11,601 | 14,481 | 36,030 | 40,113 | |||||||||||||||
Gross profit as a percentage of standard products business net sales | 24.4% | 23.1% | 28.7% | 23.1% | 27.5% | |||||||||||||||
Gross profit as a percentage of total revenues | 23.3% | 21.8% | 23.6% | 21.4% | 22.4% | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling, general and administrative expenses | 12,091 | 11,734 | 12,089 | 35,089 | 36,391 | |||||||||||||||
Research and development expenses | 14,373 | 12,691 | 11,627 | 38,227 | 36,180 | |||||||||||||||
Early termination and other charges | - | - | - | - | 9,251 | |||||||||||||||
Total operating expenses | 26,464 | 24,425 | 23,716 | 73,316 | 81,822 | |||||||||||||||
Operating loss | (11,003 | ) | (12,824 | ) | (9,235 | ) | (37,286 | ) | (41,709 | ) | ||||||||||
Interest income | 2,051 | 2,228 | 2,382 | 6,492 | 7,916 | |||||||||||||||
Interest expense | (574 | ) | (554 | ) | (189 | ) | (1,366 | ) | (645 | ) | ||||||||||
Foreign currency gain (loss), net | 5,066 | (3,557 | ) | (2,583 | ) | (3,492 | ) | (4,776 | ) | |||||||||||
Other income (loss), net | (31 | ) | 108 | 87 | 121 | 55 | ||||||||||||||
Loss before income tax expense (benefit) | (4,491 | ) | (14,599 | ) | (9,538 | ) | (35,531 | ) | (39,159 | ) | ||||||||||
Income tax expense (benefit) | 5,126 | (1,602 | ) | (4,373 | ) | 2,500 | (8,577 | ) | ||||||||||||
Net loss | $ | (9,617 | ) | $ | (12,997 | ) | $ | (5,165 | ) | $ | (38,031 | ) | $ | (30,582 | ) | |||||
Basic loss per common share- | $ | (0.26 | ) | $ | (0.34 | ) | $ | (0.13 | ) | $ | (1.00 | ) | $ | (0.73 | ) | |||||
Diluted loss per common share- | $ | (0.26 | ) | $ | (0.34 | ) | $ | (0.13 | ) | $ | (1.00 | ) | $ | (0.73 | ) | |||||
Weighted average number of shares- | ||||||||||||||||||||
Basic | 37,468,849 | 38,174,920 | 40,145,290 | 38,060,682 | 41,747,255 | |||||||||||||||
Diluted | 37,468,849 | 38,174,920 | 40,145,290 | 38,060,682 | 41,747,255 | |||||||||||||||
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars, except share data) (Unaudited) | ||||||||||
September 30,
| December 31,
| |||||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 121,095 | $ | 158,092 | ||||||
Short-term financial instruments | 30,000 | - | ||||||||
Accounts receivable, net | 28,693 | 32,641 | ||||||||
Inventories, net | 36,127 | 32,733 | ||||||||
Other receivables | 5,301 | 4,295 | ||||||||
Prepaid expenses | 11,614 | 7,390 | ||||||||
Hedge collateral | 1,000 | 1,000 | ||||||||
Other current assets | 8,208 | 9,283 | ||||||||
Total current assets | 242,038 | 245,434 | ||||||||
Property, plant and equipment, net | 92,383 | 100,122 | ||||||||
Operating lease right-of-use assets | 3,810 | 4,639 | ||||||||
Intangible assets, net | 1,353 | 1,537 | ||||||||
Long-term prepaid expenses | 615 | 5,736 | ||||||||
Deferred income taxes | 46,643 | 50,836 | ||||||||
Other non-current assets | 24,513 | 12,187 | ||||||||
Total assets | $ | 411,355 | $ | 420,491 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities | ||||||||||
Accounts payable | $ | 24,644 | $ | 24,443 | ||||||
Other accounts payable | 11,768 | 5,292 | ||||||||
Accrued expenses | 9,133 | 10,457 | ||||||||
Accrued income taxes | 32 | 1,496 | ||||||||
Operating lease liabilities | 1,754 | 1,914 | ||||||||
Other current liabilities | 3,005 | 3,286 | ||||||||
Total current liabilities | 50,336 | 46,888 | ||||||||
Long-term borrowing | 30,312 | - | ||||||||
Accrued severance benefits, net | 17,347 | 16,020 | ||||||||
Non-current operating lease liabilities | 2,191 | 2,897 | ||||||||
Other non-current liabilities | 11,596 | 10,088 | ||||||||
Total liabilities | 111,782 | 75,893 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity | ||||||||||
Common stock, $0.01 par value, 150,000,000 shares authorized, 57,032,206 shares issued and 37,292,044 outstanding at September 30, 2024 and 56,971,394 shares issued and 38,852,742 outstanding at December 31, 2023 | 569 | 569 | ||||||||
Additional paid-in capital | 277,306 | 273,256 | ||||||||
Retained earnings | 260,853 | 298,884 | ||||||||
Treasury stock, 19,740,162 shares at September 30, 2024 and 18,118,652 shares at December 31, 2023, respectively | (222,503 | ) | (213,454 | ) | ||||||
Accumulated other comprehensive loss | (16,652 | ) | (14,657 | ) | ||||||
Total stockholders' equity | 299,573 | 344,598 | ||||||||
Total liabilities and stockholders' equity | $ | 411,355 | $ | 420,491 | ||||||
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) (Unaudited) | ||||||||||||||||
Three Months
| Nine Months
| |||||||||||||||
September 30,
| September 30,
| September 30,
| ||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net loss | $ | (9,617 | ) | $ | (38,031 | ) | $ | (30,582 | ) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||||||||||
Depreciation and amortization | 4,056 | 12,171 | 12,583 | |||||||||||||
Provision for severance benefits | 1,582 | 4,552 | 5,358 | |||||||||||||
Loss (gain) on foreign currency, net | (10,708 | ) | 6,140 | 14,532 | ||||||||||||
Provision for inventory reserves | (591 | ) | (1,615 | ) | 3,035 | |||||||||||
Stock-based compensation | 1,977 | 4,093 | 5,383 | |||||||||||||
Deferred income taxes | (47 | ) | 3,111 | 88 | ||||||||||||
Others, net | 126 | 552 | 592 | |||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||
Accounts receivable, net | 3,795 | 3,560 | (6,409 | ) | ||||||||||||
Inventories | 1,084 | (2,365 | ) | 3,635 | ||||||||||||
Other receivables | (1,631 | ) | (1,030 | ) | 4,993 | |||||||||||
Prepaid expenses | 1,818 | 5,645 | 5,653 | |||||||||||||
Other current assets | 4,086 | 1,155 | (7,944 | ) | ||||||||||||
Accounts payable | (1,325 | ) | 619 | 6,066 | ||||||||||||
Other accounts payable | (3,521 | ) | (10,197 | ) | (6,738 | ) | ||||||||||
Accrued expenses | (912 | ) | (1,339 | ) | 619 | |||||||||||
Accrued income taxes | (1,442 | ) | (1,459 | ) | (3,014 | ) | ||||||||||
Other current liabilities | (693 | ) | (240 | ) | (741 | ) | ||||||||||
Other non-current liabilities | (99 | ) | (345 | ) | (279 | ) | ||||||||||
Payment of severance benefits | (527 | ) | (1,889 | ) | (6,183 | ) | ||||||||||
Others, net | (316 | ) | (1,077 | ) | (841 | ) | ||||||||||
Net cash used in operating activities | (12,905 | ) | (17,989 | ) | (194 | ) | ||||||||||
Cash flows from investing activities | ||||||||||||||||
Proceeds from settlement of hedge collateral | 627 | 627 | 3,335 | |||||||||||||
Payment of hedge collateral | - | (612 | ) | (3,154 | ) | |||||||||||
Purchase of property, plant and equipment | (2,609 | ) | (4,175 | ) | (2,280 | ) | ||||||||||
Payment for intellectual property registration | (85 | ) | (263 | ) | (230 | ) | ||||||||||
Collection of guarantee deposits | 15 | 1,153 | 4,984 | |||||||||||||
Payment of guarantee deposits | (180 | ) | (2,090 | ) | (7,276 | ) | ||||||||||
Increase in short-term financial instruments | - | (30,000 | ) | - | ||||||||||||
Others, net | (37 | ) | (37 | ) | - | |||||||||||
Net cash used in investing activities | (2,269 | ) | (35,397 | ) | (4,621 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||
Proceeds from long-term borrowing | - | 30,059 | - | |||||||||||||
Proceeds from exercise of stock options | - | - | 27 | |||||||||||||
Acquisition of treasury stock | (2,648 | ) | (9,507 | ) | (43,087 | ) | ||||||||||
Repayment of financing related to water treatment facility arrangement | (119 | ) | (357 | ) | (371 | ) | ||||||||||
Repayment of principal portion of finance lease liabilities | (35 | ) | (104 | ) | (69 | ) | ||||||||||
Net cash provided by (used in) financing activities | (2,802 | ) | 20,091 | (43,500 | ) | |||||||||||
Effect of exchange rates on cash and cash equivalents | 6,604 | (3,702 | ) | (10,518 | ) | |||||||||||
Net decrease in cash and cash equivalents | (11,372 | ) | (36,997 | ) | (58,833 | ) | ||||||||||
Cash and cash equivalents | ||||||||||||||||
Beginning of the period | 132,467 | 158,092 | 225,477 | |||||||||||||
End of the period | $ | 121,095 | $ | 121,095 | $ | 166,644 | ||||||||||
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES RECONCILIATION OF OPERATING LOSS TO ADJUSTED OPERATING LOSS (In thousands of U.S. dollars) (Unaudited) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30,
| June 30,
| September 30,
| September 30,
| September 30,
| ||||||||||||||||||
Operating loss | $ | (11,003 | ) | $ | (12,824 | ) | $ | (9,235 | ) | $ | (37,286 | ) | $ | (41,709 | ) | |||||||
Adjustments: | ||||||||||||||||||||||
Equity-based compensation expense | 1,977 | 1,216 | 2,171 | 4,093 | 5,383 | |||||||||||||||||
Early termination and other charges | - | - | - | - | 9,251 | |||||||||||||||||
Adjusted Operating Income Loss | $ | (9,026 | ) | $ | (11,608 | ) | $ | (7,064 | ) | $ | (33,193 | ) | $ | (27,075 | ) | |||||||
We present Adjusted Operating Loss as a supplemental measure of our performance. We define Adjusted Operating Loss for the periods indicated as operating loss adjusted to exclude (i) Equity-based compensation expense and (ii) Early termination and other charges.
For the nine months ended September 30, 2023, we recorded in our consolidated statement of operations $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023. During the same period, we also recorded $802 thousand of one-time employee incentives.
MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND ADJUSTED NET LOSS (In thousands of U.S. dollars, except share data) (Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30,
| June 30,
| September 30,
| September 30,
| September 30,
| ||||||||||||||||
Net loss | $ | (9,617 | ) | $ | (12,997 | ) | $ | (5,165 | ) | $ | (38,031 | ) | $ | (30,582 | ) | |||||
Adjustments: | ||||||||||||||||||||
Interest income | (2,051 | ) | (2,228 | ) | (2,382 | ) | (6,492 | ) | (7,916 | ) | ||||||||||
Interest expense | 574 | 554 | 189 | 1,366 | 645 | |||||||||||||||
Income tax expense (benefit) | 5,126 | (1,602 | ) | (4,373 | ) | 2,500 | (8,577 | ) | ||||||||||||
Depreciation and amortization | 4,056 | 4,016 | 4,081 | 12,171 | 12,583 | |||||||||||||||
EBITDA | (1,912 | ) | (12,257 | ) | (7,650 | ) | (28,486 | ) | (33,847 | ) | ||||||||||
Equity-based compensation expense | 1,977 | 1,216 | 2,171 | 4,093 | 5,383 | |||||||||||||||
Foreign currency loss (gain), net | (5,066 | ) | 3,557 | 2,583 | 3,492 | 4,776 | ||||||||||||||
Derivative valuation loss (gain), net | 52 | (85 | ) | 161 | (58 | ) | 235 | |||||||||||||
Early termination and other charges | - | - | - | - | 9,251 | |||||||||||||||
Adjusted EBITDA | $ | (4,949 | ) | $ | (7,569 | ) | $ | (2,735 | ) | $ | (20,959 | ) | $ | (14,202 | ) | |||||
Net loss | $ | (9,617 | ) | $ | (12,997 | ) | $ | (5,165 | ) | $ | (38,031 | ) | $ | (30,582 | ) | |||||
Adjustments: | ||||||||||||||||||||
Equity-based compensation expense | 1,977 | 1,216 | 2,171 | 4,093 | 5,383 | |||||||||||||||
Foreign currency loss (gain), net | (5,066 | ) | 3,557 | 2,583 | 3,492 | 4,776 | ||||||||||||||
Derivative valuation loss (gain), net | 52 | (85 | ) | 161 | (58 | ) | 235 | |||||||||||||
Early termination and other charges | - | - | - | - | 9,251 | |||||||||||||||
Income tax effect on non-GAAP adjustments | (143 | ) | 175 | (1,341 | ) | (1,311 | ) | (3,493 | ) | |||||||||||
Adjusted Net Loss | $ | (12,797 | ) | $ | (8,134 | ) | $ | (1,591 | ) | $ | (31,815 | ) | $ | (14,430 | ) | |||||
Adjusted Net Loss per common share- | ||||||||||||||||||||
- Basic | $ | (0.34 | ) | $ | (0.21 | ) | $ | (0.04 | ) | $ | (0.84 | ) | $ | (0.35 | ) | |||||
- Diluted | $ | (0.34 | ) | $ | (0.21 | ) | $ | (0.04 | ) | $ | (0.84 | ) | $ | (0.35 | ) | |||||
Weighted average number of shares - basic | 37,468,849 | 38,174,920 | 40,145,290 | 38,060,682 | 41,747,255 | |||||||||||||||
Weighted average number of shares - diluted | 37,468,849 | 38,174,920 | 40,145,290 | 38,060,682 | 41,747,255 | |||||||||||||||
We present Adjusted EBITDA and Adjusted Net 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 currency loss (gain), net, (iii) Derivative valuation loss (gain), net and (iv) Early termination and other charges. EBITDA for the periods indicated is defined as net loss before interest income, interest expense, income tax expense (benefit) and depreciation and amortization.
We prepare Adjusted Net Loss by adjusting net 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 Loss is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Loss for the periods as net loss, adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss (gain), net, (iii) Derivative valuation loss (gain), net, (iv) Early termination and other charges and (v) Income tax effect on non-GAAP adjustments.
For the nine months ended September 30, 2023, we recorded in our consolidated statement of operations $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023. During the same period, we also recorded $802 thousand of one-time employee incentives.
Contacts
Steven C. Pelayo, CFA
The Blueshirt Group
Tel. +1 (360) 808-5154
steven@blueshirtgroup.co
