ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
Large Accelerated Filer |
☐ | ☒ | ||||
Non-Accelerated Filer |
☐ | Smaller Reporting Company | ||||
Emerging growth company |
Page |
||||||||
Item 1. | 2 | |||||||
Item 1A. | 19 | |||||||
Item 1B. | 38 | |||||||
Item 1C. | 38 | |||||||
Item 2. | 40 | |||||||
Item 3. | 40 | |||||||
Item 4. | 40 | |||||||
Item 5. | 41 | |||||||
Item 6. | 43 | |||||||
Item 7. | 43 | |||||||
Item 7A. | 61 | |||||||
Item 8. | 63 | |||||||
Item 9. | 103 | |||||||
Item 9A. | 103 | |||||||
Item 9B. | 104 | |||||||
Item 9C. | 104 | |||||||
Item 10. | 105 | |||||||
Item 11. | 105 | |||||||
Item 12. | 105 | |||||||
Item 13. | 105 | |||||||
Item 14. | 105 | |||||||
Item 15. | 106 | |||||||
Item 16. | 110 | |||||||
111 |
• | Broad Offering of Differentiated Products with Advanced System-Level Features and Functions. |
• | Fast Time-to-Market |
• | Ability to Deliver Cost Competitive Solutions. |
• | Focus on Delivering Highly Energy-Efficient Products. run-time, environmentally friendly and energy-efficient consumer electronic products. In addition, there is an increasing regulatory focus on reducing energy consumption of consumer electronic products. As a result of a global focus on more environmentally friendly products, our customers are seeking analog and mixed-signal semiconductor suppliers that have the technological expertise to deliver solutions that satisfy these ever increasing regulatory and consumer power efficiency demands. |
• | Advanced Analog and Mixed-Signal Semiconductor Technology. |
• | Established Relationships and Close Collaboration with Leading Global Electronics Companies. |
• | Longstanding Presence in Asia and Proximity to Global Electronics Devices Supply Chain. |
• | Broad Portfolio of Product Offerings Targeting Large, High-Growth Markets. |
• | Highly Efficient Manufacturing Capabilities. low-cost operating structure and improve our operational efficiency. We believe the location of our primary manufacturing and research and development facilities in Asia and the relatively low need for ongoing capital expenditures provide us with a number of cost advantages. Since 2007, we design and manufacture OLED display driver ICs in our internal manufacturing facilities. As we expanded our design capabilities to products that require lower geometries unavailable at our existing manufacturing facilities, we began outsourcing manufacturing of certain OLED display driver ICs to external 12-inch foundries starting in the second half of 2015 and we started outsourcing 8-inch wafer |
for OLED TV ICs after the sale of our fabrication facility located in Cheongju, Korea in 2020. This additional source of manufacturing is an increasingly important part of our supply chain management. By outsourcing manufacturing of OLED products to external foundries, we are able to adapt dynamically to changing customer requirements and address growing markets without substantial capital investments by us. |
• | Increase Business with Existing Customers. design-win rates. We seek to increase our customer penetration by more closely aligning our product roadmap with those of our key customers and take advantage of our broad product portfolio, our deep knowledge of customer needs and existing relationships to sell more existing and new products. |
• | Broaden Our Customer Base. |
• | Drive Execution Excellence. |
• | Return on Capital Investments and Cash Flow Generation. in-house manufacturing facility and external foundry to address a broad portfolio of power products while we seek to maximize return on capital investments and our cash flow generation. We intend to keep our capital expenditures relatively low by maintaining our focus on specialty process technologies that do not require substantial investment in frequent upgrades to the latest manufacturing equipment. However, from time to time, we make special investments to enhance our manufacturing capabilities by investing in new equipment and expanding our facility, which we expect will have a positive impact on our future new product development and revenue, particularly during the period of global shortage of capacity. |
• | Resolution and Number of Channels. |
• | Color Depth. TFT-LCD panels, 262 thousand colors are supported by 6-bit source drivers; 16 million colors are supported by 8-bit source drivers; and 1 billion colors are supported by 10-bit source drivers. |
• | Operational Voltage. |
• | Gamma Curve. |
• | Driver Interface. mini-low voltage differential signaling (m-LVDS), unified standard interface (USI) and mobile industry processor interface (“MIPI”). |
• | Package Type. |
• | Large Display Solutions. |
Product |
Key Features |
Applications | ||
TFT-LCD Source Drivers |
• 480 to 1,542 output channels • 6-bit (262 thousand colors), 8-bit (16 million colors), 10-bit (1 billion colors)• Output voltage ranging from 9V to 18V • Low power consumption and low EMI • COF package types • EPI, m-LVDS, USI interface technologies |
• LCD/LED TVs • Notebooks • LCD/LED monitors • Automotive | ||
TFT-LCD Gate Drivers |
• 272 to 960 output channels • Output voltage ranging from 30V to 45V • COF and COG package types |
• Tablet PCs • LCD/LED TVs • Notebooks • Automotive | ||
Timing Controllers |
• Wide range of resolutions • EPI, m-LVDS, MIPI, USI-T interface technologies• Input voltage ranging from 1.6V to 3.6V |
• Tablet PCs • Public information display | ||
OLED Source Drivers |
• 960 output channels • 10 bit (1 billion colors) • Output voltage: 18V • COF package type • EPI interface technology |
• OLED TVs | ||
Micro LED Drivers |
• 480 to 552 output channels (3 Mux) • 10 bit (1 billion colors) • Output voltage: max 18V • COF package type • USI interface technology |
• Micro LED TVs |
Product |
Key Features |
Applications | ||
OLED |
• Resolutions of HD720, WXGA, FHD, FHD+, QHD and QHD+ • Aspect ratio from 16:9 to 21:9 • Color depth of 1 billion • MIPI, eRVDS interface • Logic-based OTP • Image enhancement IP • Display data compression IP |
• Smartphones • Game consoles • Digital still cameras • Tablet PCs • Virtual reality headsets • Automotive | ||
LTPS |
• Resolutions of VGA, WSVGA, WVGA and DVGA • Color depth of 16 million • MDDI, MIPI interface • Logic-based OTP • Separated gamma control |
• Smartphones • Digital still cameras | ||
a-Si TFT |
• Resolutions of WQVGA and HVGA • Color depth of 16 million • RSDS, MDDI, MIPI interface • CABC • Separated gamma control |
• Mobile phones • Digital still cameras • Automotive |
• | MOSFETs. low-voltage from 12V to 30V, medium-voltage from 40V to 200V, high-voltage planar MOSFETs, 200V through 650V, and super junction MOSFETs, 250V through 900V. |
• | IGBTs. |
• | AC-DC/DC-DC AC-DC/DC-DC set-top boxes and display modules. We expect our AC-DC/DC-DC |
• | LED Drivers. |
• | Regulators. |
• | SSD PMICs. |
• | Logic PMICs. (T-CON) of OLED display panel with multi-channel power block (boost converter, buck converter, Op-Amps and positive/negative LDOs.) |
Product |
Key Features |
Applications | ||
Low Voltage MOSFET |
• Voltage options of 12V-30V • Advanced Trench MOSFET Process • High cell density • Advanced packages to enable reduction of PCB mounting area |
• Smartphones, mobile phones, and wearable devices • Tablet PCs, Notebooks • Desktop PCs, Servers • LCD/LED TVs • Industrial applications • Automotive | ||
Medium Voltage MOSFET |
• Voltage options of 40V-200V • Advanced Trench MOSFET Process • High cell density |
• e-Bikes and Motor controls• Battery Management Systems • Power tools and Servers |
Product |
Key Features |
Applications | ||
• High system efficiency • Advanced packages to enable reduction of PCB mounting area |
• Energy Storage System • Other computing applications (Tablet PCs, Notebooks, Desktops) • Consumer applications (TV) • Industrial applications • Automotive | |||
High Voltage MOSFET |
• Voltage options of 200V-650V • R2FET (rapid recovery) option to shorten reverse diode recovery time • Zener diode option for MOSFET protection for abnormal input • Advanced Planar MOSFET Process • Advanced packages to enable reduction of PCB mounting area |
• Adaptors for tablet PC/mobile phone/smartphone • Power supplies • Lighting (ballast, HID, LED) • Industrial applications • LCD/LEDTVs • Automotive | ||
Super Junction MOSFET |
• Voltage options of 250V-900V • Low R DS(ON) • Epi stack process • Zener diode option for MOSFET protection for abnormal input • Advanced SJ MOSFET process • Advanced packages to enable reduction of PCB mounting area • Low power loss by high speed switching |
• LCD/LED/UHD TVs • Lightings applications (ballast, HID, LED) • Smartphones • Power supplies • Servers and Telecom powers • Industrial applications • EV charging station • On board charger | ||
IGBTs |
• Voltage options of 650V/1200V • Field Stop Trench IGBT • Current options from 15A to 100A |
• Automotive • Solar inverters • Industrial applications • Consumer appliances | ||
AC-DC/DC-DC |
• Wide control range for high power application (>150W) • Advanced BCDMOS process • High Precision Voltage Reference • Very low startup current consumption • Fast load and line regulation • Accurate output voltage • OCP, SCP and thermal protections |
• LCD/LED/UHD TVs • Power supplies • Smartphones • Mobile phones • Notebooks • Set-top boxes |
Product |
Key Features |
Applications | ||
LED Backlighting Drivers |
• High efficiency, wide input voltage range • Advanced BCDMOS process • OCP, SCP, OVP and UVLO protections • Accurate LED current control and multi-channel matching • Programmable current limit, boost up frequency |
• Tablet PCs • Notebooks • Smartphones • LED/UHD TVs • LED monitors | ||
Digital Controlled LED Driver |
• Multi-channel constant current control • 12Bit gray scale with SPI |
• Digital signage | ||
LED Lighting Drivers |
• High efficiency, wide input voltage range • Simple solutions with external components fully integrated • Advanced high voltage BCDMOS process • Accurate LED current control and high power factor and low THB |
• AC and DC LED lighting | ||
Regulators |
• Single and multi-regulators • Low Noise Output regulators • Wide range of input voltage and various output current • CMOS and BCDMOS processes • LDO (Low Drop Out — Linear Regulator) |
• Smartphones and Mobile phones • Notebooks • Computing applications | ||
SSD PMIC |
• High current buck • PFM function • High frequency switching • High efficiency • High integration technology • Small QFN package |
• Computing applications | ||
Logic PMIC |
• High current boost • Integrated pass transistor • LDO • 3channel high current buck • Negative Charge Pump • 2channel buffer Op-Amp. • Tiny Wafer Level CSP |
• Notebooks • Tablet PCs |
Name |
Age |
Position | ||||
Young-Joon (YJ) Kim |
59 | Director and Chief Executive Officer | ||||
Shin Young Park |
43 | Chief Financial Officer | ||||
Theodore Kim |
54 | Chief Compliance Officer, General Counsel and Secretary | ||||
Woung Moo Lee |
61 | General Manager of Mixed-Signal Solutions | ||||
Chan Ho Park |
60 | Co-General Manager of Power Analog Solutions |
• | We manufacture our products based on our estimates of customer demand, and if our estimates are incorrect, our financial results could be negatively impacted. |
• | A significant portion of our sales comes from a relatively limited number of customers, the loss of which could adversely affect our financial results. |
• | The average selling prices of our semiconductor products have at times declined rapidly and will likely do so in the future, which could harm our revenue and gross profit. |
• | We are subject to risks associated with currency fluctuations, and changes in the exchange rates of applicable currencies could impact our results of operations. |
• | Global shortages in manufacturing capacities could interrupt or negatively affect our operations, increase cost to manufacture and negatively impact our results of operations. |
• | Expanded trade restrictions may limit our ability to sell to certain customers. |
• | Recent changes in international trade policy and the imposition and threats of international tariffs, including tariffs applied to goods traded between the United States and China, could materially and adversely affect our business and results of operations. |
• | Our Korean subsidiary has been designated as a regulated business under Korean environmental law, and such designation could have an adverse effect on our financial position and results of operations. |
• | Our compliance with the Serious Accidents Punishment Act (the “SAPA”) could require significant expenditures and management time and expose us to liability for violations. |
• | Our business depends on international customers, suppliers and operations in Asia, and as a result we are subject to regulatory, operational, financial and political risks, which could adversely affect our financial results. |
• | We cannot guarantee that our share repurchase program will be successfully consummated, or that it will enhance shareholder value, and share repurchases could affect the price of our common stock. |
• | Provisions in our charter documents and Delaware Law may make it difficult for a third party to acquire us and could depress the price of our common stock. |
• | We have not historically paid dividends and do not currently have any dividend or distribution policy, and therefore, investors may need to rely on sales of their common stock as the only way to realize any future gains on their investments. |
• | our ability to offer cost-effective and high quality products and services on a timely basis using our technologies; |
• | our ability to accurately identify and respond to emerging technological trends and demand for product features and performance characteristics; |
• | our ability to continue to rapidly introduce new products that are accepted by the market; |
• | our ability to adopt or adapt to emerging industry standards; |
• | the number and nature of our competitors and competitiveness of their products and services in a given market; |
• | entrance of new competitors into our markets; |
• | our ability to enter the highly competitive power management market; and |
• | our ability to supply power products to our customers reliably through our own fabrication facility. |
• | pay substantial damages or indemnify customers or licensees for damages they may suffer if the products they purchase from us or the technology they license from us violate the intellectual property rights of others; |
• | stop our manufacture, use, sale or importation of the accused products; |
• | redesign, reengineer or rebrand our products, if feasible; |
• | expend significant resources to develop or acquire non-infringing technologies; |
• | discontinue processes; or |
• | obtain licenses to a third party’s intellectual property. |
• | their earnings; |
• | covenants contained in agreements to which we or our subsidiaries are or may become subject; |
• | business and tax considerations; and |
• | applicable law, including any restrictions under Korean law that may be imposed on our Korean subsidiary that would restrict its ability to make payments on intercompany loans from our Dutch subsidiary. |
• | actual or anticipated variations in our results of operations from quarter to quarter or year to year; |
• | announcements by us or our competitors of significant agreements, technological innovations or strategic alliances; |
• | changes in recommendations or estimates by any securities analysts who follow our securities; |
• | addition or loss of significant customers; |
• | recruitment or departure of key personnel; |
• | changes in economic performance or market valuations of competing companies in our industry; |
• | price and volume fluctuations in the overall stock market; |
• | market conditions in our industry, end markets and the economy as a whole; |
• | subsequent sales of stock and other financings; and |
• | litigation, legislation, regulation or technological developments that adversely affect our business. |
• | authorize our Board of Directors to issue, without stockholder approval, preferred stock with such terms as the Board of Directors may determine; |
• | prohibit action by written consent of our stockholders; |
• | prohibit any person other than our Board of Directors, the chairman of our Board of Directors, our Chief Executive Officer or holders of at least 25% of the voting power of all then outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors to call a special meeting of our stockholders; and |
• | specify advance notice requirements for stockholder proposals and director nominations. |
• | the transaction is approved by the board of directors before the date the interested stockholder attained that status; |
• | upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or |
• | on or after such date, the business combination is approved by the board of directors and authorized at a meeting of stockholders, and not by written consent, by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder. |
• | any merger or consolidation involving the corporation and the interested stockholder; |
• | any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; |
• | subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
• | any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or |
• | the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
• | Compliance with industry standards and regulatory frameworks |
• | Ongoing Evaluation and Assessment of Systems and Procedure |
• | Cross-Collaboration and Coordination |
• | Third-Party Service Providers |
• | Cyber Incident Response Plan |
• | Security Awareness Training for Personnel |
• | Review of Third-Party Risks |
* | The stock performance included in this graph is not necessarily indicative of future stock performance. |
Company/Index |
Base Period 12/31/2018 |
12/31/2019 | 12/31/2020 | 12/31/2021 | 12/30/2022 | 12/29/2023 | ||||||||||||||||||
Magnachip Semiconductor Corporation |
100 | 186.96 | 217.71 | 337.68 | 151.21 | 120.77 | ||||||||||||||||||
S&P 500 Index |
100 | 129.96 | 149.83 | 190.13 | 153.16 | 190.27 | ||||||||||||||||||
Philadelphia Semiconductor Index |
100 | 160.12 | 242.00 | 341.61 | 219.20 | 361.46 |
Period |
Total Number of Shares Purchased(1) |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) |
Approximate dollar value of Shares that may yet be Purchased under the Plans or Programs (in thousands)(2) |
||||||||||||
October 2023 |
904,977 | $ | 7.78 | 904,977 | $ | 37,594 | ||||||||||
November 2023 |
153,699 | $ | 7.53 | 153,699 | $ | 36,437 | ||||||||||
December 2023(1) |
72,595 | $ | 7.50 | — | $ | 36,437 | ||||||||||
Total |
1,131,271 | $ | 7.73 | 1,058,676 | $ | 36,437 | ||||||||||
(1) | Includes 72,595 shares withheld to satisfy tax withholding obligations in connection with the vesting of restricted stock units issued under our equity incentive plans. |
(2) | On July 19, 2023, the Company’s Board of Directors authorized a new $50 million stock buyback program. Purchases have been and will be made in the open market or through privately negotiated transactions, depending upon market conditions and other factors. In connection with the repurchase program, the Company established a stock trading plan with Needham & Company, LLC in accordance with Rule 10b5-1 under the Exchange Act. |
• | we believe that Adjusted EBITDA, by eliminating the impact of a number of items that we do not consider to be indicative of our core ongoing operating performance, provides a more comparable measure of our operating performance from period-to-period |
• | we believe that Adjusted EBITDA is commonly requested and used by securities analysts, investors and other interested parties in the evaluation of a company as an enterprise level performance measure that |
eliminates the effects of financing, income taxes and the accounting effects of capital spending, as well as other one time or recurring items described above; and |
• | we believe that Adjusted EBITDA is useful for investors, among other reasons, to assess a company’s period-to-period |
• | for planning purposes, including the preparation of our annual operating budget; |
• | to evaluate the effectiveness of our enterprise level business strategies; |
• | in communications with our Board of Directors concerning our consolidated financial performance; and |
• | in certain of our compensation plans as a performance measure for determining incentive compensation payments. |
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
|||||||
(Dollars in millions) |
||||||||
Net loss |
$ | (36.6 | ) | $ | (8.0 | ) | ||
Interest income |
(10.4 | ) | (6.0 | ) | ||||
Interest expense |
0.8 | 1.2 | ||||||
Income tax expense (benefit) |
(10.9 | ) | 5.2 | |||||
Depreciation and amortization |
16.7 | 15.0 | ||||||
EBITDA |
$ | (40.5 | ) | $ | 7.3 | |||
Adjustments: |
||||||||
Equity-based compensation expense(a) |
7.2 | 6.0 | ||||||
Foreign currency loss (gain), net(b) |
(0.5 | ) | 3.0 | |||||
Derivative valuation loss (gain), net(c) |
0.3 | (0.1 | ) | |||||
Early termination and other charges, net(d) |
9.3 | 3.3 | ||||||
Adjusted EBITDA |
$ | (24.2 | ) | $ | 19.5 | |||
(a) | This adjustment eliminates the impact of non-cash equity-based compensation expenses. Although we expect to incur non-cash equity-based compensation expenses in the future, these expenses do not generally require cash settlement, and, therefore, are not used by us to assess the profitability of our operations. We believe that analysts and investors will find it helpful to review our operating performance without the effects of these non-cash expenses as supplemental information. |
(b) | This adjustment mainly eliminates the impact of non-cash foreign currency translation associated with intercompany debt obligations and foreign currency denominated receivables and payables, as well as the cash impact of foreign currency transaction gains or losses on collection of such receivables and payment of such payables. Although we expect to incur foreign currency translation gains or losses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these primarily non-cash gains or losses, which we cannot control. Additionally, we believe the isolation of this adjustment provides investors with enhanced comparability to prior and future periods of our operating performance results. |
(c) | This adjustment eliminates the impact of gain or loss recognized in income on derivatives, which represents derivatives value changes excluded from the risk being hedged. We enter into derivative transactions to mitigate foreign exchange risks. As our derivative transactions are limited to a certain portion of our expected cash flows denominated in U.S. dollars, and we do not enter into derivative transactions for trading or speculative purposes, we do not believe that these charges or gains are indicative of our core operating performance. |
(d) | For the year ended December 31, 2023, this adjustment eliminates the termination related charges of $8.4 million in connection with the voluntary resignation program (the “2023 Voluntary Resignation Program”) that we offered and paid to certain employees during the first half of 2023 and $0.8 million of one-time employee incentives. For the year ended December 31, 2022, this adjustment eliminates $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, which was 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. As these adjustments meaningfully impacted our operating results and are not expected to represent an ongoing operating expense or income to us, we believe our operating performance results are more usefully compared if these adjustments are excluded. |
• | Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; |
• | Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; |
• | Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; |
• | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often need to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; |
• | Adjusted EBITDA does not consider the potentially dilutive impact of issuing equity-based compensation to our management team and employees; |
• | Adjusted EBITDA does not reflect the costs of holding certain assets and liabilities in foreign currencies; and |
• | other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
|||||||
(Dollars in millions) |
||||||||
Operating loss |
$ | (57.6 | ) | $ | (5.2 | ) | ||
Adjustments: |
||||||||
Equity-based compensation expense(a) |
7.2 | 6.0 | ||||||
Early termination and other charges, net(b) |
9.3 | 3.3 | ||||||
Adjusted Operating Income (Loss) |
$ | (41.2 | ) | $ | 4.1 | |||
(a) | This adjustment eliminates the impact of non-cash equity-based compensation expenses. Although we expect to incur non-cash equity-based compensation expenses in the future, these expenses do not generally require cash settlement, and, therefore, are not used by us to assess the profitability of our operations. We believe that analysts and investors will find it helpful to review our operating performance without the effects of these non-cash expenses as supplemental information. |
(b) | For the year ended December 31, 2023, this adjustment eliminates the termination related charges of $8.4 million in connection with the 2023 Voluntary Resignation Program that we offered and paid to certain employees during the first half of 2023 and $0.8 million of one-time employee incentives. For the year ended December 31, 2022, this adjustment eliminates $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, which was 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. As these adjustments meaningfully impacted our operating results and are not expected to represent an ongoing operating expense or income to us, we believe our operating performance results are more usefully compared if these adjustments are excluded. |
• | we use Adjusted Net Income (Loss) (including on a per share basis) in communications with our Board of Directors concerning our consolidated financial performance without the impact of non-cash expenses and the other items as we discussed below since we believe that it is a more consistent measure of our core operating results from period to period; and |
• | we believe that reporting Adjusted Net Income (Loss) (including on a per share basis) is useful to readers in evaluating our core operating results because it eliminates the effects of non-cash expenses as well as the other items we discuss below, such as foreign currency gains and losses, which are out of our control and can vary significantly from period to period. |
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
|||||||
(Dollars in millions, except per share data) |
||||||||
Net loss |
$ | (36.6 | ) | $ | (8.0 | ) | ||
Adjustments: |
||||||||
Equity-based compensation expense(a) |
7.2 | 6.0 | ||||||
Foreign currency loss (gain), net(b) |
(0.5 | ) | 3.0 | |||||
Derivative valuation loss (gain), net(c) |
0.3 | (0.1 | ) | |||||
Early termination and other charges, net(d) |
9.3 | 3.3 | ||||||
Income tax effect on non-GAAP adjustments(e) |
(2.2 | ) | 4.6 | |||||
Adjusted Net Income (Loss) |
$ | (22.5 | ) | $ | 8.8 | |||
Reported loss per share—basic |
$ | (0.89 | ) | $ | (0.18 | ) | ||
Reported loss per share—diluted |
$ | (0.89 | ) | $ | (0.18 | ) | ||
Weighted average number of shares—basic |
41,013,069 | 44,850,791 | ||||||
Weighted average number of shares—diluted |
41,013,069 | 44,850,791 | ||||||
Adjusted earnings (loss) per share—basic |
$ | (0.55 | ) | $ | 0.20 | |||
Adjusted earnings (loss) per share—diluted |
$ | (0.55 | ) | $ | 0.19 | |||
Weighted average number of shares—basic |
41,013,069 | 44,850,791 | ||||||
Weighted average number of shares—diluted |
41,013,069 | 45,795,559 |
(a) | This adjustment eliminates the impact of non-cash equity-based compensation expenses. Although we expect to incur non-cash equity-based compensation expenses in the future, these expenses do not generally require cash settlement, and, therefore, are not used by us to assess the profitability of our operations. We believe that analysts and investors will find it helpful to review our operating performance without the effects of these non-cash expenses as supplemental information. |
(b) | This adjustment mainly eliminates the impact of non-cash foreign currency translation associated with intercompany debt obligations and foreign currency denominated receivables and payables, as well as the cash impact of foreign currency transaction gains or losses on collection of such receivables and payment of such payables. Although we expect to incur foreign currency translation gains or losses in the future, we believe that analysts and investors will find it helpful to review our operating performance without the effects of these primarily non-cash gains or losses, which we cannot control. Additionally, we believe the isolation of this adjustment provides investors with enhanced comparability to prior and future periods of our operating performance results. |
(c) | This adjustment eliminates the impact of gain or loss recognized in income on derivatives, which represents derivatives value changes excluded from the risk being hedged. We enter into derivative transactions to mitigate foreign exchange risks. As our derivative transactions are limited to a certain portion of our expected cash flows denominated in U.S. dollars, and we do not enter into derivative transactions for trading |
or speculative purposes, we do not believe that these charges or gains are indicative of our core operating performance. |
(d) | For the year ended December 31, 2023, this adjustment eliminates the termination related charges of $8.4 million in connection with the 2023 Voluntary Resignation Program that we offered and paid to certain employees during the first half of 2023 and $0.8 million of one-time employee incentives. For the year ended December 31, 2022, this adjustment eliminates $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, which was 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. As these adjustments meaningfully impacted our operating results and are not expected to represent an ongoing operating expense or income to us, we believe our operating performance results are more usefully compared if these adjustments are excluded. |
(e) | For the years ended December 31, 2023 and 2022, income tax effect on non-GAAP adjustments were calculated by calculating the tax expense (benefit) of each jurisdiction with or without the non-GAAP adjustments. For the year ended December 31, 2023, this adjustment eliminates the income tax effect on non-GAAP adjustments of negative $2.2 million, which mainly related to our Korean subsidiary. For the year ended December 31, 2022, income tax effect on non-GAAP adjustments related to our Korean subsidiary and the U.S. parent entity were $6.2 million and negative $1.7 million, respectively. |
• | Adjusted Net Income (Loss) does not reflect changes in, or cash requirements for, our working capital needs; |
• | Adjusted Net Income (Loss) does not consider the potentially dilutive impact of issuing equity-based compensation to our management team and employees; |
• | Adjusted Net Income (Loss) does not reflect the costs of holding certain assets and liabilities in foreign currencies; and |
• | other companies in our industry may calculate Adjusted Net Income (Loss) differently than we do, limiting its usefulness as a comparative measure. |
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
|||||||||||||||||||
Amount |
% of Total revenues |
Amount |
% of Total revenues |
Change Amount |
||||||||||||||||
(Dollars in millions) |
||||||||||||||||||||
Revenues |
||||||||||||||||||||
Net sales—standard products business |
$ | 195.7 | 85.1 | % | $ | 301.9 | 89.4 | % | $ | (106.2 | ) | |||||||||
Net sales—transitional Fab 3 foundry services |
34.4 | 14.9 | 35.8 | 10.6 | (1.4 | ) | ||||||||||||||
Total revenues |
230.1 | 100.0 | 337.7 | 100.0 | (107.6 | ) | ||||||||||||||
Cost of sales |
||||||||||||||||||||
Cost of sales—standard products business |
143.8 | 62.5 | 202.3 | 59.9 | (58.6 | ) | ||||||||||||||
Cost of sales—transitional Fab 3 foundry services |
34.6 | 15.1 | 34.0 | 10.1 | 0.6 | |||||||||||||||
Total cost of sales |
178.4 | 77.6 | 236.4 | 70.0 | (58.0 | ) | ||||||||||||||
Gross profit |
51.6 | 22.4 | 101.3 | 30.0 | (49.6 | ) | ||||||||||||||
Selling, general and administrative expenses |
48.5 | 21.1 | 50.9 | 15.1 | (2.4 | ) | ||||||||||||||
Research and development expenses |
51.6 | 22.4 | 52.3 | 15.5 | (0.8 | ) | ||||||||||||||
Early termination and other charges, net |
9.3 | 4.0 | 3.3 | 1.0 | 6.0 | |||||||||||||||
Operating loss |
(57.6 | ) | (25.1 | ) | (5.2 | ) | (1.6 | ) | (52.4 | ) | ||||||||||
Interest income |
10.4 | 4.5 | 6.0 | 1.8 | 4.5 | |||||||||||||||
Interest expense |
(0.8 | ) | (0.4 | ) | (1.2 | ) | (0.3 | ) | 0.3 | |||||||||||
Foreign currency gain (loss), net |
0.5 | 0.2 | (3.0 | ) | (0.9 | ) | 3.5 | |||||||||||||
Others, net |
0.0 | 0.0 | 0.6 | 0.2 | (0.5 | ) | ||||||||||||||
10.1 | 4.4 | 2.4 | 0.7 | 7.7 | ||||||||||||||||
Loss before income tax expense (benefit) |
(47.6 | ) | (20.7 | ) | (2.9 | ) | (0.9 | ) | (44.7 | ) | ||||||||||
Income tax expense (benefit) |
(10.9 | ) | (4.8 | ) | 5.2 | 1.5 | (16.1 | ) | ||||||||||||
Net loss |
$ | (36.6 | ) | (15.9 | )% | $ | (8.0 | ) | (2.4 | )% | $ | (28.6 | ) | |||||||
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
|||||||||||||||||||
Amount |
% of Total revenues |
Amount |
% of Total revenues |
Change Amount |
||||||||||||||||
(Dollars in millions) |
||||||||||||||||||||
Revenues |
||||||||||||||||||||
Net sales—standard products business |
||||||||||||||||||||
Display Solutions |
32.1 | 14.0 | 71.4 | 21.2 | (39.3 | ) | ||||||||||||||
Power Solutions |
163.6 | 71.1 | 230.5 | 68.3 | (66.9 | ) | ||||||||||||||
Total standard products business |
195.7 | 85.1 | 301.9 | 89.4 | (106.2 | ) | ||||||||||||||
Net sales—transitional Fab 3 foundry services |
34.4 | 14.9 | 35.8 | 10.6 | (1.4 | ) | ||||||||||||||
Total revenues |
$ | 230.1 | 100.0 | % | $ | 337.7 | 100.0 | % | $ | (107.6 | ) | |||||||||
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
|||||||||||||||||||
Amount |
% of Net Sales |
Amount |
% of Net Sales |
Change Amount |
||||||||||||||||
(Dollars in millions) |
||||||||||||||||||||
Gross Profit |
||||||||||||||||||||
Gross profit—standard products business |
51.9 | 26.5 | 99.5 | 33.0 | (47.6 | ) | ||||||||||||||
Gross profit—transitional Fab 3 foundry services |
(0.3 | ) | (0.8 | ) | 1.7 | 4.8 | (2.0 | ) | ||||||||||||
Total gross profit |
$ | 51.6 | 22.4 | % | $ | 101.3 | 30.0 | % | $ | (49.6 | ) | |||||||||
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
|||||||||||||||||||
Amount |
% of Net Sales – standard products business |
Amount |
% of Net Sales – standard products business |
Change Amount |
||||||||||||||||
(Dollars in millions) |
||||||||||||||||||||
Korea |
$ | 66.8 | 34.1 | % | $ | 105.3 | 34.9 | % | $ | (38.5 | ) | |||||||||
Asia Pacific (other than Korea) |
119.2 | 60.9 | 179.6 | 59.5 | (60.3 | ) | ||||||||||||||
United States |
2.8 | 1.4 | 10.4 | 3.4 | (7.5 | ) | ||||||||||||||
Europe |
6.8 | 3.5 | 6.7 | 2.2 | 0.1 | |||||||||||||||
$ | 195.7 | 100.0 | % | $ | 301.9 | 100.0 | % | $ | (131.2 | ) | ||||||||||
6 4 |
||||
6 7 |
||||
6 8 |
||||
6 9 |
||||
70 |
||||
71 |
||||
7 2 |
/s/ |
March 8 , 2024 |
December 31, |
||||||||
2023 |
2022 |
|||||||
(In thousands of U.S. dollars, except share data) |
||||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net |
||||||||
Inventories, net |
||||||||
Other receivables |
||||||||
Prepaid expenses |
||||||||
Hedge collateral (Note 9) |
||||||||
Other current assets (Note 1) |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Property, plant and equipment, net |
||||||||
Operating lease right-of-use |
||||||||
Intangible assets, net |
||||||||
Long-term prepaid expenses |
||||||||
Deferred income taxes (Note 16) |
||||||||
Other non-current assets |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Other accounts payable |
||||||||
Accrued expenses |
||||||||
Accrued income taxes |
||||||||
Operating lease liabilities |
||||||||
Other current liabilities (Note 1) |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Accrued severance benefits, net |
||||||||
Non-current operating lease liabilities |
||||||||
Other non-current liabilities |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
|
|
|||||
Commitments and contingencies |
||||||||
Stockholders’ equity |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Retained earnings |
||||||||
Treasury stock, |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
|
|
|
|
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
(In thousands of U.S. dollars, except share data) |
||||||||||||
Revenues: |
||||||||||||
Net sales—standard products business |
$ | $ | $ | |||||||||
Net sales—transitional Fab 3 foundry services |
||||||||||||
|
|
|
|
|
|
|||||||
Total revenues |
||||||||||||
Cost of sales: |
||||||||||||
Cost of sales—standard products business |
||||||||||||
Cost of sales—transitional Fab 3 foundry services |
||||||||||||
|
|
|
|
|
|
|||||||
Total cost of sales |
||||||||||||
|
|
|
|
|
|
|||||||
Gross profit |
||||||||||||
Operating expenses: |
||||||||||||
Selling, general and administrative expenses |
||||||||||||
Research and development expenses |
||||||||||||
Merger-related income, net |
( |
) | ||||||||||
Early termination and other charges, net |
||||||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
||||||||||||
|
|
|
|
|
|
|||||||
Operating income (loss): |
( |
) | ( |
) | ||||||||
Interest income |
||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Foreign currency gain (loss), net |
( |
) | ( |
) | ||||||||
Other income, net |
||||||||||||
|
|
|
|
|
|
|||||||
Income (loss) before income tax expense (benefit) |
( |
) | ( |
) | ||||||||
Income tax expense (benefit) |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | ( |
) | $ | ( |
) | $ | |||||
|
|
|
|
|
|
|||||||
Earnings (loss) per common share— |
||||||||||||
Basic |
$ | ( |
) | $ | ( |
) | $ | |||||
Diluted |
$ | ( |
) | $ | ( |
) | $ | |||||
Weighted average number of shares— |
||||||||||||
Basic |
||||||||||||
Diluted |
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
(In thousands of U.S. dollars) |
||||||||||||
Net income (loss) |
$ | ( |
) | $ | ( |
) | $ | |||||
|
|
|
|
|
|
|||||||
Other comprehensive income (loss) |
||||||||||||
Foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | ||||||
Derivative adjustments |
||||||||||||
Fair valuation of derivatives |
( |
) | ( |
) | ( |
) | ||||||
Reclassification adjustment for loss (gain) on derivatives included in net income (loss) |
||||||||||||
|
|
|
|
|
|
|||||||
Total other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total comprehensive income (loss) |
$ | ( |
) | $ | ( |
) | $ | |||||
|
|
|
|
|
|
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Total |
|||||||||||||||||||||||
(In thousands of U.S. dollars, except share data) |
Shares |
Amount |
||||||||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Stock-based compensation |
— | — | — | — | — | |||||||||||||||||||||||
Exchange of exchangeable senior note |
— | — | — | |||||||||||||||||||||||||
Exercise of stock options |
— | — | — | |||||||||||||||||||||||||
Settlement of restricted stock units |
( |
) | — | — | — | — | ||||||||||||||||||||||
Accelerated stock repurchase |
( |
) | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||
Acquisition of treasury stock |
( |
) | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||
Other comprehensive loss, net |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Stock-based compensation |
— | — | — | — | — | |||||||||||||||||||||||
Exercise of stock options |
— | — | — | |||||||||||||||||||||||||
Settlement of restricted stock units |
( |
) | — | — | — | ( |
) | |||||||||||||||||||||
Accelerated stock repurchase |
( |
) | — | — | ( |
) | — | — | ||||||||||||||||||||
Acquisition of treasury stock |
( |
) | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||
Other comprehensive loss, net |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2022 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Stock-based compensation |
— | — | — | — | — | |||||||||||||||||||||||
Exercise of stock options |
— | — | — | |||||||||||||||||||||||||
Settlement of restricted stock units |
( |
) | — | — | — | ( |
) | |||||||||||||||||||||
Acquisition of treasury stock |
( |
) | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||
Other comprehensive loss, net |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2023 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
(In thousands of U.S. dollars) |
||||||||||||
Cash flows from operating activities |
||||||||||||
Net income (loss) |
$ | ( |
) | $ | ( |
) | $ | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |
||||||||||||
Depreciation and amortization |
||||||||||||
Provision for severance benefits |
||||||||||||
Amortization of debt issuance costs and original issue discount |
— | — | ||||||||||
Loss on foreign currency, net |
||||||||||||
Provision for inventory reserves |
||||||||||||
Stock-based compensation |
||||||||||||
Deferred income taxes |
( |
) | ||||||||||
Other, net |
( |
) | ||||||||||
Changes in operating assets and liabilities |
||||||||||||
Accounts receivable, net |
||||||||||||
Inventories |
( |
) | ( |
) | ||||||||
Other receivables |
( |
) | ||||||||||
Prepaid expenses |
||||||||||||
Other current assets |
( |
) | ||||||||||
Accounts payable |
( |
) | ( |
) | ||||||||
Other accounts payable |
( |
) | ( |
) | ( |
) | ||||||
Accrued expenses |
( |
) | ||||||||||
Accrued income taxes |
( |
) | ( |
) | ( |
) | ||||||
Deferred revenue |
( |
) | ( |
) | ||||||||
Other current liabilities |
( |
) | ( |
) | ||||||||
Other non-current liabilities |
( |
) | ( |
) | ||||||||
Contributions to severance insurance deposit accounts |
( |
) | ( |
) | ( |
) | ||||||
Payment of severance benefits |
( |
) | ( |
) | ( |
) | ||||||
Other, net |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
( |
) | ||||||||||
Cash flows from investing activities |
||||||||||||
Proceeds from settlement of hedge collateral |
||||||||||||
Payment of hedge collateral |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from disposal of property, plant and equipment |
||||||||||||
Purchase of property, plant and equipment |
( |
) | ( |
) | ( |
) | ||||||
Payment for intellectual property registration |
( |
) | ( |
) | ( |
) | ||||||
Collection of guarantee deposits |
||||||||||||
Payment of guarantee deposits |
( |
) | ( |
) | ( |
) | ||||||
Other, net |
— | — | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
Cash flows from financing activities |
||||||||||||
Proceeds from exercise of stock options |
||||||||||||
Acquisition of treasury stock |
( |
) | ( |
) | ( |
) | ||||||
Acquisition of stock under accelerated stock repurchase agreement |
— | — | ( |
) | ||||||||
Payment under accelerated stock repurchase agreement |
— | — | ( |
) | ||||||||
Repayment of financing related to water treatment facility arrangement |
( |
) | ( |
) | ( |
) | ||||||
Others |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash used in financing activities |
( |
) | ( |
) | ( |
) | ||||||
Effect of exchange rates on cash and cash equivalents |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net decrease in cash and cash equivalents |
( |
) | ( |
) | ( |
) | ||||||
Cash and cash equivalents at beginning of period |
||||||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at end of period |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Supplemental cash flow information |
||||||||||||
Cash paid for interest |
$ | — | $ | — | $ | |||||||
Cash paid for income taxes, net |
$ | $ | $ | |||||||||
Non-cash investing and financing activities |
||||||||||||
Property, plant and equipment additions in other accounts payable |
$ | $ | $ | |||||||||
Acquisition of treasury stock to satisfy the tax withholding obligations in connection with equity-based compensation |
$ | $ | $ | |||||||||
Unsettled common stock repurchases |
$ | — | $ | $ | — | |||||||
Exchange of exchangeable senior notes into common stock |
$ | — | $ | — | $ |
Buildings |
||||
Building related structures |
||||
Machinery and equipment |
||||
Others |
Carrying Value December 31, 2023 |
Fair Value Measurement December 31, 2023 |
Quoted Prices in Active Markets for Identical Liability (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||||||
Assets: |
||||||||||||||||||||
(other current assets) |
$ | $ | — | $ | — | |||||||||||||||
Liabilities: |
||||||||||||||||||||
(other current liabilities) |
$ | $ | — | $ | — |
Carrying Value December 31, 2022 |
Fair Value Measurement December 31, 2022 |
Quoted Prices in Active Markets for Identical Liability (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||||||
Liabilities: |
||||||||||||||||||||
(other current liabilities) |
$ | $ | — | $ | — |
December 31, |
||||||||
2023 |
2022 |
|||||||
Accounts receivable |
$ | $ | ||||||
Notes receivable |
||||||||
Less: |
||||||||
Allowance for credit losses |
( |
) | ( |
) | ||||
Sales return reserves |
( |
) | ( |
) | ||||
Accounts receivable, net |
$ | $ | ||||||
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Beginning balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Provision |
— | — | ( |
) | ||||||||
Write off |
— | — | ||||||||||
Translation adjustments |
||||||||||||
Ending balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Beginning balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Reversal (provision) |
( |
) | ( |
) | ( |
) | ||||||
Usage |
— | — | — | |||||||||
Translation adjustments |
( |
) | ||||||||||
Ending balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) |
December 31, |
||||||||
2023 |
2022 |
|||||||
Finished goods |
$ | $ | ||||||
Semi-finished goods and work-in-process |
||||||||
Raw materials |
||||||||
Materials in-transit |
||||||||
Less: inventory reserve |
( |
) | ( |
) | ||||
Inventories, net |
$ | $ | ||||||
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Beginning balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Change in reserve |
||||||||||||
Inventory reserve charged to costs of sales |
( |
) | ( |
) | ( |
) | ||||||
Sale of previously reserved inventory |
||||||||||||
( |
) | ( |
) | ( |
) | |||||||
Write off |
||||||||||||
Translation adjustments |
||||||||||||
Ending balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
December 31, |
||||||||
2023 |
2022 |
|||||||
Buildings and related structures |
$ | $ | ||||||
Machinery and equipment |
||||||||
Finance lease right-of-use |
||||||||
Others |
||||||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
Land |
||||||||
Construction in progress |
||||||||
Property, plant and equipment, net |
$ | $ | ||||||
December 31, 2023 |
||||||||||||
Gross amount |
Accumulated amortization |
Net amount |
||||||||||
Intellectual property assets |
$ | $ | ( |
) | $ | |||||||
Intangible assets |
$ | $ | ( |
) | $ | |||||||
December 31, 2022 |
||||||||||||
Gross amount |
Accumulated amortization |
Net amount |
||||||||||
Intellectual property assets |
$ | $ | ( |
) | $ | |||||||
Intangible assets |
$ | $ | ( |
) | $ | |||||||
December 31, |
||||||||||
Leases |
Classification |
2023 |
2022 |
|||||||
Assets |
||||||||||
Operating lease |
Operating lease right-of-use |
$ | $ | |||||||
Finance lease |
||||||||||
Total lease assets |
$ | $ | ||||||||
Liabilities |
||||||||||
Current |
||||||||||
Operating |
Operating lease liabilities | $ | $ | |||||||
Finance |
||||||||||
Non-current |
||||||||||
Operating |
Non-current operating lease liabilities |
|||||||||
Finance |
||||||||||
Total lease liabilities |
$ | $ | ||||||||
December 31, |
||||||||
2023 |
2022 |
|||||||
Weighted average remaining lease term |
||||||||
Operating leases |
||||||||
Finance leases |
||||||||
Weighted average discount rate |
||||||||
Operating leases |
% | % | ||||||
Finance leases |
% | % |
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Operating lease cost |
$ | $ | $ | |||||||||
Finance lease cost |
||||||||||||
Amortization of right-of-use |
||||||||||||
Interest on lease liabilities |
||||||||||||
Total lease cost |
$ | $ | $ | |||||||||
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Cash paid for amounts included in the measurement of lease liabilities |
||||||||||||
Operating cash flows from operating leases |
$ | $ | $ | |||||||||
Operating cash flows from finance leases |
||||||||||||
Financing cash flows from finance leases |
Operating Leases |
Leases |
|||||||
2024 |
$ | $ | ||||||
2025 |
||||||||
2026 |
||||||||
2027 |
||||||||
Total future lease payments |
||||||||
Less: Imputed interest |
( |
) | ( |
) | ||||
Present value of future payments |
$ | $ | ||||||
December 31, |
||||||||
2023 |
2022 |
|||||||
Payroll, benefits and related taxes, excluding severance benefits |
$ | $ | ||||||
Withholding tax attributable to intercompany interest income |
||||||||
Outside service fees |
||||||||
Others |
||||||||
|
|
|
|
|||||
Accrued expenses |
$ | $ | ||||||
|
|
|
|
Date of transaction |
Type of derivative |
Total notional amount |
Month of settlement | |||||||
|
$ | |||||||||
|
$ |
Date of transaction |
Type of derivative |
Total notional amount |
Month of settlement | |||||||
|
$ | |||||||||
|
$ | |||||||||
|
$ |
Derivatives designated as hedging instruments: |
December 31, |
|||||||||||
2023 |
2022 |
|||||||||||
Asset Derivatives: |
||||||||||||
Zero cost collars |
Other current assets | $ | $ | |||||||||
Liability Derivatives: |
||||||||||||
Zero cost collars |
Other current liabilities | $ | $ |
As of December 31, 2023 |
Gross amounts of recognized assets/liabilities |
Gross amounts offset in the balance sheets |
Net amounts of assets/liabilities presented in the balance sheets |
Gross amounts not offset in the balance sheets |
Net amount |
|||||||||||||||||||
Financial instruments |
Cash collateral pledged |
|||||||||||||||||||||||
Asset Derivatives: |
||||||||||||||||||||||||
Zero cost collars |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Liability Derivatives: |
||||||||||||||||||||||||
Zero cost collars |
$ | $ | $ | $ | $ | $ |
As of December 31, 2022 |
Gross amounts of recognized liabilities |
Gross amounts offset in the balance sheets |
Net amounts of liabilities presented in the balance sheets |
Gross amounts not offset in the balance sheets |
Net amount |
|||||||||||||||||||
Financial instruments |
Cash collateral pledged |
|||||||||||||||||||||||
Liability Derivatives: |
||||||||||||||||||||||||
Zero cost collars |
$ | $ | $ | $ | $ | ( |
) | $ |
Derivatives in ASC 815 Cash Flow Hedging Relationships |
Amount of Loss Recognized in AOCI on Derivatives |
Location/Amount of Loss Reclassified from AOCI Into Statement of Operations |
Location/Amount of Gain (Loss) Recognized in Statement of Operations on Derivatives |
|||||||||||||||||||||||||||||
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||||||||||||||
Zero cost collars |
$ | ( |
) | $ | ( |
) | Net sales | $ | ( |
) | $ | ( |
) | Other income, net | $ | ( |
) | $ |
December 31, |
||||||||
Counterparty |
2023 |
2022 |
||||||
SC |
$ | $ | ||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Beginning balance |
$ | $ | ||||||
Provisions |
||||||||
Severance payments |
( |
) | ( |
) | ||||
Translation adjustments |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Less: Cumulative contributions to severance insurance deposit accounts |
( |
) | ( |
) | ||||
The National Pension Fund |
( |
) | ( |
) | ||||
Group severance insurance plan |
( |
) | ||||||
|
|
|
|
|||||
Accrued severance benefits, net |
$ | $ | ||||||
|
|
|
|
Severance Benefit |
||||
2024 |
$ | |||
2025 |
||||
2026 |
||||
2027 |
||||
2028 |
||||
2029 – 2033 |
Number of Restricted Stock Units |
Weighted Average Grant-Date Fair Value of Restricted Stock Units |
|||||||
Outstanding at January 1, 2023 |
$ | |||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Outstanding at December 31, 2023 |
$ | |||||||
Number of Options |
Weighted Average Exercise Price of Stock Options |
Aggregate Intrinsic Value of Stock Options |
Weighted Average Remaining Contractual Life of Stock Options |
|||||||||||||
Outstanding at January 1, 2023 |
$ | $ | ||||||||||||||
Expired |
( |
) | — | — | ||||||||||||
Exercised |
( |
) | $ | — | ||||||||||||
Outstanding at December 31, 2023 |
$ | $ | ||||||||||||||
Vested and Exercisable at December 31, 2023 |
$ | $ | ||||||||||||||
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Income (loss) before income tax expense (benefit) |
||||||||||||
Domestic |
$ | $ | ( |
) | $ | |||||||
Foreign |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|||||||
Current income tax expense (benefit) |
||||||||||||
Domestic |
||||||||||||
Foreign |
||||||||||||
Uncertain tax position liability (foreign) |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
Deferred income tax expense (benefit) |
||||||||||||
Domestic |
( |
) | ( |
) | ||||||||
Foreign |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
( |
) | |||||||||||
|
|
|
|
|
|
|||||||
Total income tax expense (benefit) |
$ | ( |
) | $ | $ | |||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Provision computed at statutory rates |
$ | ( |
) | $ | ( |
) | $ | |||||
Change in statutory tax rates |
( |
) | ||||||||||
Difference in foreign tax rates |
||||||||||||
Permanent differences |
||||||||||||
Derivative assets adjustment |
( |
) | ( |
) | ( |
) | ||||||
TPECs, hybrid and other interest |
( |
) | ( |
) | ( |
) | ||||||
Equity-based compensation |
( |
) | ( |
) | ( |
) | ||||||
Permanent foreign currency gain (loss) |
( |
) | ||||||||||
Penalty |
||||||||||||
GILTI |
— | |||||||||||
Intercompany debt restructuring |
— | |||||||||||
Other permanent differences |
( |
) | ||||||||||
Withholding tax |
( |
) | ||||||||||
State net operating loss write off |
— | — | ||||||||||
Change in valuation allowance |
( |
) | ( |
) | ( |
) | ||||||
Tax credits claimed |
( |
) | ( |
) | ( |
) | ||||||
Uncertain tax positions liability |
( |
) | ( |
) | ( |
) | ||||||
Change in net operating loss carry-forwards |
( |
) | ||||||||||
Foreign local taxes |
||||||||||||
Others |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Income tax expense (benefit) |
$ | ( |
) | $ | $ | |||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Deferred tax assets |
||||||||
Inventory reserves |
$ | $ | ||||||
Accrued expenses |
||||||||
Property, plant and equipment |
||||||||
Accumulated severance benefits |
||||||||
Operating lease right-of-use |
||||||||
Foreign currency translation loss |
||||||||
NOL carry-forwards |
||||||||
Tax credit carry-forwards |
||||||||
Other long-term payable |
||||||||
Interest expense deduction limitation |
||||||||
Derivative liabilities |
||||||||
Others |
||||||||
Total deferred tax assets |
||||||||
Less: Valuation allowance |
( |
) | ( |
) | ||||
Deferred tax liabilities |
||||||||
Prepaid expense |
||||||||
Severance benefit deposits |
||||||||
Operating lease right-of-use |
||||||||
Foreign currency translation gain |
||||||||
Others |
||||||||
Total deferred tax liabilities |
||||||||
Net deferred tax assets |
$ | $ | ||||||
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Beginning balance |
$ | $ | $ | |||||||||
Reductions |
( |
) | ( |
) | ( |
) | ||||||
Translation adjustments |
( |
) | ( |
) | ||||||||
Ending balance |
$ | $ | $ | |||||||||
Year Ended December 31, |
||||||||||||
2023 |
2022 |
20210 |
||||||||||
NOL carry-forwards |
$ | $ | $ |
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Unrecognized tax benefits, balance at the beginning |
$ | $ | $ | |||||||||
Additions based on tax positions related to the current year |
||||||||||||
Lapse of statute of limitations |
( |
) | ( |
) | ( |
) | ||||||
Translation adjustments |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Unrecognized tax benefits, balance at the ending |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Revenues |
||||||||||||
Standard products business |
||||||||||||
Display Solutions |
$ | $ | $ | |||||||||
Power Solutions |
||||||||||||
|
|
|
|
|
|
|||||||
Total standard products business |
||||||||||||
Transitional Fab 3 foundry services |
||||||||||||
|
|
|
|
|
|
|||||||
Total revenues |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Gross Profit |
||||||||||||
Standard products business |
$ | $ | $ | |||||||||
Transitional Fab 3 foundry services |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total gross profit |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Korea |
$ | $ | $ | |||||||||
Asia Pacific (other than Korea) |
||||||||||||
United States |
||||||||||||
Europe |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
Foreign currency translation adjustments |
$ | ( |
) | $ | ( |
) | ||
Derivative adjustments |
( |
) | ||||||
|
|
|
|
|||||
Total |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
Year Ended December 31, 2023 |
Foreign currency translation adjustments |
Derivative adjustments |
Total |
|||||||||
Beginning balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
|||||||
Other comprehensive loss before reclassifications |
( |
) | ( |
) | ( |
) | ||||||
Amounts reclassified from accumulated other comprehensive loss |
||||||||||||
|
|
|
|
|
|
|||||||
Net current-period other comprehensive income (loss) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Ending balance |
$ | ( |
) | $ | $ | ( |
) | |||||
|
|
|
|
|
|
Year Ended December 31, 2022 |
Foreign currency translation adjustments |
Derivative adjustments |
Total |
|||||||||
Beginning balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
|||||||
Other comprehensive loss before reclassifications |
( |
) | ( |
) | ( |
) | ||||||
Amounts reclassified from accumulated other comprehensive loss |
||||||||||||
|
|
|
|
|
|
|||||||
Net current-period other comprehensive income (loss) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Ending balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
Year Ended December 31, 2021 |
Foreign currency translation adjustments |
Derivative adjustments |
Total |
|||||||||
Beginning balance |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Other comprehensive loss before reclassifications |
( |
) | ( |
) | ( |
) | ||||||
Amounts reclassified from accumulated other comprehensive loss |
||||||||||||
|
|
|
|
|
|
|||||||
Net current-period other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Ending balance |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
(In thousands of U.S. dollars, except share data) |
||||||||||||
Basic earnings (loss) per share |
||||||||||||
Net income (loss) |
$ | ( |
) | $ | ( |
) | $ | |||||
|
|
|
|
|
|
|||||||
Basic weighted average common stock outstanding |
||||||||||||
Basic earnings (loss) per common share |
$ | ( |
) | $ | ( |
) | $ | |||||
Diluted earnings (loss) per share |
||||||||||||
Net income (loss) |
$ | ( |
) | $ | ( |
) | $ | |||||
Add back: Interest expense on |
||||||||||||
|
|
|
|
|
|
|||||||
Net income (loss) allocated to common stockholders |
$ | ( |
) | $ | ( |
) | $ | |||||
|
|
|
|
|
|
|||||||
Basic weighted average common stock outstanding |
||||||||||||
Net effect of dilutive equity awards |
||||||||||||
Net effect of assumed conversion of |
||||||||||||
|
|
|
|
|
|
|||||||
Diluted weighted average common stock outstanding |
||||||||||||
Diluted earnings (loss) per common share |
$ | ( |
) | $ | ( |
) | $ |
Year Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Options |
||||||||||||
Restricted Stock Units |
1. | Financial Statements |
2. | Financial Statement Schedules |
3. | Exhibits |
Exhibit No. |
Exhibit Description | |
10.33* |
||
10.34* |
||
10.35* |
||
10.36 |
||
21.1# |
||
23.1# |
||
31.1# |
||
31.2# |
||
32.1† |
||
32.2† |
||
97.1*# |
||
101.INS# |
Inline XBRL Instance Document | |
101.SCH# |
Inline XBRL Taxonomy Extension Schema Document | |
101.CAL# |
Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF# |
Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB# |
Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE# |
Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* |
Management contract, compensatory plan or arrangement |
# |
Filed herewith |
† |
Furnished herewith |
By: |
/s/ Young-Joon Kim | |||
Name: |
Young-Joon Kim | |||
Title: |
Chief Executive Officer and Director | |||
Date: |
March 8, 2024 |
Date | ||
/s/ Young-Joon Kim |
March 8, 2024 | |
Young-Joon Kim, Chief Executive Officer and Director (Principal Executive Officer) |
||
/s/ Shin Young Park |
March 8, 2024 | |
Shin Young Park, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
||
/s/ Ilbok Lee |
March 8, 2024 | |
Ilbok Lee, Director |
||
/s/ Camillo Martino |
March 8, 2024 | |
Camillo Martino, Non-Executive Chairman of the Board of Directors |
||
/s/ Gilbert Nathan |
March 8, 2024 | |
Gilbert Nathan, Director |
||
/s/ Liz Chung |
March 8, 2024 | |
Liz Chung, Director |