MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA FROM CONTINUING OPERATIONS AND ADJUSTED LOSS FROM CONTINUING OPERATIONS
(In thousands of U.S. dollars, except share data)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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September 30,
2026 |
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June 30,
2026 |
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September 30,
2025 |
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September 30,
2026 |
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September 30,
2025 |
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Loss from continuing operations |
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$ |
(13,286 |
) |
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$ |
(7,601 |
) |
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$ |
(10,609 |
) |
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$ |
(25,584 |
) |
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$ |
(5,457 |
) |
Adjustments: |
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Interest income |
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(893 |
) |
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(949 |
) |
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(1,255 |
) |
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(2,905 |
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(4,117 |
) |
Interest expense |
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317 |
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320 |
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469 |
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1,010 |
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1,265 |
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Income tax expense (benefit), net |
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4,871 |
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(1,986 |
) |
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(4,170 |
) |
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977 |
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(8,709 |
) |
Depreciation and amortization |
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2,943 |
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2,750 |
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3,204 |
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8,570 |
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9,561 |
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EBITDA – continuing operations |
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(6,048 |
) |
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(7,466 |
) |
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(12,361 |
) |
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(17,932 |
) |
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(7,457 |
) |
Equity-based compensation expense |
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2,366 |
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1,019 |
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123 |
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4,028 |
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1,967 |
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Foreign currency loss (gain), net |
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(1,811 |
) |
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526 |
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4,280 |
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(1,170 |
) |
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(6,112 |
) |
Derivative valuation loss (gain), net |
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76 |
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(279 |
) |
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— |
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(183 |
) |
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51 |
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Early termination and other charges |
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1,921 |
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1,981 |
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3,994 |
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3,902 |
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4,840 |
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Adjusted EBITDA – continuing operations |
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$ |
(3,496 |
) |
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$ |
(4,219 |
) |
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$ |
(3,964 |
) |
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$ |
(11,355 |
) |
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$ |
(6,711 |
) |
Loss from continuing operations |
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$ |
(13,286 |
) |
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$ |
(7,601 |
) |
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$ |
(10,609 |
) |
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$ |
(25,584 |
) |
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$ |
(5,457 |
) |
Adjustments: |
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Equity-based compensation expense |
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2,366 |
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1,019 |
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123 |
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4,028 |
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1,967 |
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Foreign currency loss (gain), net |
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(1,811 |
) |
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526 |
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4,280 |
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(1,170 |
) |
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(6,112 |
) |
Derivative valuation loss (gain), net |
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76 |
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(279 |
) |
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— |
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(183 |
) |
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51 |
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Early termination and other charges |
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1,921 |
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1,981 |
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3,994 |
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3,902 |
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4,840 |
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Income tax effect on non-GAAP adjustments |
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2 |
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(547 |
) |
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1,822 |
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(699 |
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(441 |
) |
Adjusted Loss – continuing operations |
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$ |
(10,732 |
) |
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$ |
(4,901 |
) |
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$ |
(390 |
) |
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$ |
(19,706 |
) |
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$ |
(5,152 |
) |
Adjusted Loss – continuing operations per common share— |
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- Basic |
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$ |
(0.29 |
) |
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$ |
(0.13 |
) |
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$ |
(0.01 |
) |
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$ |
(0.54 |
) |
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$ |
(0.14 |
) |
- Diluted |
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$ |
(0.29 |
) |
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$ |
(0.13 |
) |
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$ |
(0.01 |
) |
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$ |
(0.54 |
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$ |
(0.14 |
) |
Weighted average number of shares – basic |
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36,649,278 |
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36,454,812 |
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35,934,406 |
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36,504,776 |
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36,298,491 |
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Weighted average number of shares – diluted |
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36,649,278 |
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36,454,812 |
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35,934,406 |
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36,504,776 |
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36,298,491 |
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We present Adjusted EBITDA from continuing operations and Adjusted Loss from continuing operations as supplemental measures of our performance. We define Adjusted EBITDA from continuing operations for the periods indicated as EBITDA – continuing operations (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 – continuing operations for the periods indicated is defined as loss from continuing operations before interest income, interest expense, income tax expense (benefit), net and depreciation and amortization.
We prepare Adjusted Loss from continuing operations by adjusting loss from continuing operations 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 Loss from continuing operations is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Loss from continuing operations for the periods as loss from continuing operations, 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 three months ended September 30, 2026, we recorded $1,921 thousand of other charges in our consolidated statement of operations, consisting of $601 thousand in tax-related charges and $1,320 thousand of costs associated with the electrical substation upgrade in our Gumi fabrication facility. For the nine months ended September 30, 2026, we recorded $3,902 thousand of other charges, which also included a $1,095 thousand customer goodwill payment related to a certain product, and $886 thousand of one-time employee incentives recorded in the first half of 2026.
For the three months ended September 30, 2025, we recorded $2,599 thousand of termination-related charges in connection with the voluntary resignation program and $1,395 thousand of certain executive separation benefits in our consolidated statement of operations. For the nine months ended September 30, 2025, we recorded $4,840 thousand of other charges, which also included $350 thousand of certain executive separation benefits and $496 thousand of one-time employee incentives recorded in the first half of 2025.
