MTSI MACOM Technology Solutions Holdings Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K/A

(Amendment No. 1)

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 28, 2015

 

 

M/A-COM Technology Solutions Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-35451		27-0306875
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

100 Chelmsford Street Lowell, Massachusetts		01851
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (978) 656-2500

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Explanatory Note

This Current Report on Form 8-K/A amends the Current Report on Form 8-K furnished by M/A-COM Technology Solutions Holdings, Inc. (the “Company”) on April 28, 2015 (the “Original Form 8-K”).

 

Item 2.02.

Results of Operations and Financial Condition.

On April 28, 2015, the Company issued a press release reporting its results of operations for the fiscal quarter ended April 3, 2015, and furnished such press release as an exhibit to the Original Form 8-K. On May 13, 2015, the Company issued a press release to revise its financial results for the fiscal quarter ended April 3, 2015 due to the write down of the Company’s minority equity investment in a private company based on new information received by the Company subsequent to the Original Form 8-K but prior to the filing of its Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2015. A copy of the press release is furnished as Exhibit 99.1 to this report.

 

Item 9.01.

Financial Statements and Exhibits.

 

Exhibit Number		Description
99.1		Press Release, dated May 13, 2015.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

						M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
		Dated: May 13, 2015				By:		/s/ Robert J. McMullan
								Robert J. McMullan
								Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press Release, dated May 13, 2015.

Exhibit 99.1

 

MACOM Reports Revised GAAP Loss Per Share of $0.15 for its Fiscal Second Quarter;

Non-GAAP EPS of $0.41 Unchanged

LOWELL, MA, May 13, 2015—M/A-COM Technology Solutions Holdings, Inc. (NASDAQ: MTSI) (“MACOM”), a leading supplier of high-performance analog RF, microwave, millimeterwave and photonic semiconductor products, today announced a revision to its financial results for its fiscal second quarter ended April 3, 2015, as originally reported on April 28, 2015.

In May 2015, subsequent to MACOM’s April 28, 2015 fiscal second quarter 2015 earnings press release but prior to the filing of its Quarterly Report on Form 10-Q for the fiscal second quarter ended April 3, 2015, MACOM received notice that a private company in which it held a minority equity investment was sold to a third party and the proceeds MACOM would receive at closing would be less than the carrying value previously reported on MACOM’s consolidated financial statements in the April 28, 2015 earnings release. As required under U.S. generally accepted accounting principles (GAAP), MACOM wrote-down the investment to the estimated net proceeds that MACOM will receive from the sale, and recorded a charge of $3.5 million to other income (expense), resulting in an increase of its net loss per diluted share of $0.05, or $0.15 and $0.28 net loss per diluted share for the three and six months ended April 3, 2015, respectively.

This non-cash, non-operating charge did not affect MACOM’s previously reported non-GAAP earnings per share of $0.41 in the fiscal second quarter of 2015. A reconciliation between revised GAAP and non-GAAP financial data is included in the supplemental financial data attached to this press release. The revised financial statements reflecting the impairment of the minority equity investment are also attached to this press release.

About MACOM

M/A-COM Technology Solutions Holdings, Inc. (www.macom.com) is a leading supplier of high-performance analog RF, microwave, millimeterwave and photonic semiconductor products that enable next-generation internet and modern battlefield applications. Recognized for its broad catalog portfolio of technologies and products, MACOM serves diverse markets, including high speed optical, satellite, radar, wired and wireless networks, automotive, industrial, medical, and mobile devices. A pillar of the semiconductor industry, we thrive on more than 60 years of solving our customers’ most complex problems, serving as a true partner for applications ranging from RF to Light.

Headquartered in Lowell, Massachusetts, MACOM is certified to the ISO9001 international quality standard and ISO14001 environmental management standard. MACOM has design centers and sales offices throughout North America, Europe, Asia and Australia.

MACOM, M/A-COM, M/A-COM Technology Solutions, M/A-COM Tech, Partners in RF & Microwave, The First Name in Microwave and related logos are trademarks of MACOM. All other trademarks are the property of their respective owners.

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Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements based on MACOM management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among others, information concerning our stated business outlook and future results of operations, our statements regarding having the right strategy, addressing the right secular growth drivers, with the correct technology, intellectual property and leadership team to assure long term success, and any statements regarding future trends, business strategies, competitive position, industry conditions, acquisitions and market opportunities. Forward-looking statements include all statements that are not historical facts and generally may be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” or similar expressions and the negatives of those terms.

Forward-looking statements contained in this press release reflect MACOM’s current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause those events or our actual activities or results to differ materially from those expressed in any forward-looking statement. Although MACOM believes that the expectations reflected in the forward-looking statements are reasonable, it cannot and does not guarantee future events, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including greater than expected dilutive effect on earnings of our equity issuances, outstanding indebtedness and related interest expense and other costs, lower than expected demand in any or all of our four primary end markets or from any of our large OEM customers based on seasonal effects, macro-economic weakness or otherwise, our failure to realize the expected economies of scale, lowered production cost and other anticipated benefits of our previously announced GaN intellectual property licensing program or InP laser production capacity expansion program, the potential for defense spending cuts, program delays, cancellations or sequestration, failures or delays by any customer in winning business or to make purchases from us in support of such business, lack of adoption or delayed adoption by customers and industries we serve of GaN, InP lasers or other solutions offered by us, failures or delays in porting and qualifying GaN or InP process technology to our Lowell, MA fabrication facility or third party facilities, lower than expected utilization and absorption in our manufacturing facilities, lack of success or slower than expected success in our new product development efforts, loss of business due to competitive factors, product or technology obsolescence, customer program shifts or otherwise, lower than anticipated or slower than expected customer acceptance of our new product introductions, the potential for a shift in the mix of products sold in any period toward lower-margin products or a shift in the geographical mix of our revenues, the potential for increased pricing pressure based on competitive factors, technology shifts or otherwise, the impact of any executed or abandoned acquisition, divestiture, joint venture, financing or restructuring activity, the impact of supply shortages or other disruptions in our internal or outsourced supply chain, the impact of changes in export, environmental or other laws applicable to us, the relative success of our cost-savings initiatives, the potential for inventory obsolescence and related write-offs, the expense, business disruption or other impact of any current or future investigations, administrative actions, litigation or enforcement proceedings we may be involved in, the potential loss of access to any in-licensed intellectual property or inability to license technology we may require on reasonable terms, and the impact of any claims of intellectual property infringement or misappropriation, which could require us to pay substantial damages for infringement, expend significant resources in prosecuting or defending such matters or developing non-infringing technology, incur material liability for royalty or license payments, or prevent us from selling certain of our products, as well as those factors described in “Risk Factors” in MACOM’s filings with the Securities and Exchange Commission (SEC), including its Quarterly Report on Form 10-Q for the second fiscal quarter ended April 3, 2015 as filed with the SEC on May 13, 2015. MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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Non-GAAP Financial Measures

In addition to GAAP reporting, MACOM provides investors with non-GAAP financial information, including revenue, gross margin, operating margin, operating income, net income, earnings per share, EBITDA and other data calculated on a non-GAAP basis. This non-GAAP information excludes the operations of Nitronex prior to the date of acquisition, discontinued operations, the impact of fair value accounting in merger and acquisitions (M&A) of businesses, M&A costs, including acquisition and related integration costs, certain cost savings from synergies expected from M&A activities, income and expenses from transition services related to M&A activities, expected amortization of acquisition-related intangibles, share-based and other non-cash compensation expense, certain cash compensation, restructuring charges, litigation settlement and costs, changes in the carrying values of assets and liabilities measured at fair value, contingent consideration, amortization of debt discounts and issuance costs, other non-cash expenses, earn-out costs, exited leased facility costs and certain income tax items. Management does not believe that the excluded items are reflective of MACOM’s underlying performance. The exclusion of these and other similar items from MACOM’s non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual. These and other similar items are also excluded from EBITDA, which is non-GAAP earnings before interest, income taxes, depreciation and amortization. MACOM believes this non-GAAP financial information provides additional insight into MACOM’s on-going performance and has, therefore, chosen to provide this information to investors for a consistent basis of comparison and to help them evaluate the results of MACOM’s on-going operations and enable more meaningful period to period comparisons. These non-GAAP measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial data attached to this press release.

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M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per share data)

 

		Three Months Ended												Six Months Ended
		April 3,				January 2,				April 4,				April 3,				April 4,
		2015				2015				2014				2015				2014
		(Revised)												(Revised)
Revenue		$	124,885			$	114,864			$	107,827			$	239,749			$	191,981
Cost of revenue			70,878				60,663				80,964				131,541				129,396
Gross profit			54,007				54,201				26,863				108,208				62,585
Operating expenses:
Research and development			21,061				19,474				20,347				40,535				32,777
Selling, general and administrative			29,227				25,599				24,504				54,826				43,887
Restructuring charges			413				—				2,635				413				15,725
Total operating expenses			50,701				45,073				47,486				95,774				92,389
Income (loss) from operations			3,306				9,128				(20,623	)			12,434				(29,804	)
Other income (expense):
Warrant liability expense			(5,609	)			(10,608	)			(4,066	)			(16,217	)			(2,784	)
Interest expense			(4,723	)			(4,723	)			(1,622	)			(9,446	)			(2,208	)
Other income (expense)			(1,376	)			375				1,009				(1,001	)			1,087
Total other expense			(11,708	)			(14,956	)			(4,679	)			(26,664	)			(3,905	)
Loss before income taxes			(8,402	)			(5,828	)			(25,302	)			(14,230	)			(33,709	)
Income tax provision (benefit)			(865	)			478				(5,680	)			(387	)			(7,271	)
Loss from continuing operations			(7,537	)			(6,306	)			(19,622	)			(13,843	)			(26,438	)
Loss from discontinued operations			—				—				(2,500	)			—				(4,605	)
Net loss		$	(7,537	)		$	(6,306	)		$	(22,122	)		$	(13,843	)		$	(31,043	)
Net loss per share:
Basic:
Loss from continuing operations		$	(0.15	)		$	(0.13	)		$	(0.42	)		$	(0.28	)		$	(0.57	)
Loss from discontinued operations			—				—				(0.05	)			—				(0.10	)
Loss per share—basic		$	(0.15	)		$	(0.13	)		$	(0.47	)		$	(0.28	)		$	(0.67	)
Diluted:
Loss from continuing operations		$	(0.15	)		$	(0.13	)		$	(0.42	)		$	(0.28	)		$	(0.57	)
Loss from discontinued operations			—				—				(0.05	)			—				(0.10	)
Loss per share—diluted		$	(0.15	)		$	(0.13	)		$	(0.47	)		$	(0.28	)		$	(0.67	)
Shares:
Basic			50,593				47,606				46,808				49,100				46,656
Diluted			50,593				47,606				46,808				49,100				46,656

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M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(unaudited and in thousands, except per share data)

 

		Three Months Ended
		April 3, 2015								January 2, 2015								April 4, 2014
		(Revised)
		Amount								Amount								Amount
Revenue—GAAP		$	124,885							$	114,864							$	107,827
Nitronex prior to acquisition			—								—								(362	)
Revenue—Non-GAAP		$	124,885							$	114,864							$	107,465
		Amount				% Revenue				Amount				% Revenue				Amount				% Revenue
Gross Profit—GAAP		$	54,007				43.2	%		$	54,201				47.2	%		$	26,863				24.9	%
Nitronex prior to acquisition			—				—				—				—				16				0.1
Amortization expense			7,347				5.9				5,359				4.7				6,262				5.8
Non-cash compensation expense			599				0.5				354				0.3				426				0.4
Equity-based compensation			179				0.1				58				0.1				30				—
Acquisition FMV step-up			3,538				2.8				835				0.7				18,003				16.8
Third-party engineering costs			305				0.2				924				0.8				570				0.5
Integration costs and synergy savings			356				0.3				(4	)			—				822				0.8
Gross Profit—non-GAAP		$	66,331				53.1	%		$	61,727				53.7	%		$	52,992				49.3	%
Research and Development—GAAP		$	21,061				16.9	%		$	19,474				17.0	%		$	20,347				18.9	%
Nitronex prior to acquisition			—				—				—				—				(438	)			(0.5	)
Non-cash compensation expense			(1,620	)			(1.3	)			(1,038	)			(0.9	)			(728	)			(0.7	)
Equity-based compensation			(669	)			(0.5	)			(519	)			(0.5	)			(137	)			(0.1	)
Acquisition FMV step-up			(204	)			(0.2	)			(204	)			(0.2	)			(183	)			(0.2	)
Integration costs and synergy savings			(137	)			(0.1	)			(171	)			(0.1	)			(2,414	)			(2.2	)
Third-party engineering costs			305				0.2				924				0.8				570				0.5
Research and Development—non-GAAP		$	18,736				15.0	%		$	18,466				16.1	%		$	17,017				15.8	%
Selling, General and Administrative—GAAP		$	29,227				23.4	%		$	25,599				22.3	%		$	24,504				22.7	%
Nitronex prior to acquisition			—				—				—				—				(191	)			(0.4	)
Amortization expense			(3,096	)			(2.5	)			(1,053	)			(0.9	)			(476	)			(0.4	)
Non-cash compensation expense			(7,578	)			(6.1	)			(2,405	)			(2.1	)			(2,136	)			(2.0	)
Equity-based compensation			(501	)			(0.4	)			(317	)			(0.3	)			(214	)			(0.2	)
Acquisition FMV step-up			(28	)			—				(28	)			—				(21	)			—
Litigation costs			(971	)			(0.8	)			(717	)			(0.6	)			(440	)			(0.4	)
Transaction expenses			530				0.4				(4,636	)			(4.0	)			(250	)			(0.2	)

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Integration costs and synergy savings			(282	)			(0.2	)			(296	)			(0.3	)			(6,178	)			(5.4	)
Selling, General and Administrative—non-GAAP		$	17,301				13.9	%		$	16,147				14.1	%		$	14,598				13.6	%
Total operating expenses—GAAP		$	50,701				40.6	%		$	45,073				39.2	%		$	47,486				44.0	%
Nitronex prior to acquisition			—				—				—				—				(629	)			(0.6	)
Amortization expense			(3,096	)			(2.5	)			(1,053	)			(0.9	)			(476	)			(0.4	)
Non-cash compensation expense			(9,198	)			(7.4	)			(3,443	)			(3.0	)			(2,864	)			(2.7	)
Equity-based compensation			(1,170	)			(0.9	)			(836	)			(0.7	)			(351	)			(0.3	)
Acquisition FMV step-up			(232	)			(0.2	)			(232	)			(0.2	)			(204	)			(0.2	)
Restructuring charges			(413	)			(0.3	)			—				—				(2,635	)			(2.5	)
Integration costs and synergy savings			(419	)			(0.3	)			(467	)			(0.4	)			(8,592	)			(8.0	)
Litigation costs			(971	)			(0.8	)			(717	)			(0.6	)			(440	)			(0.4	)
Transaction expenses			530				0.4				(4,636	)			(4.0	)			(250	)			(0.2	)
Third-party engineering			305				0.2				924				0.8				570				0.5
Total operating expenses—non-GAAP		$	36,037				28.9	%		$	34,613				30.1	%		$	31,615				29.4	%
Income (loss) from operations—GAAP		$	3,306				2.6	%		$	9,128				7.9	%		$	(20,623	)			(19.1	)%
Nitronex prior to acquisition			—				—				—				—				645				0.8
Amortization expense			10,446				8.4				6,412				5.6				6,738				6.3
Non-cash compensation expense			9,797				7.8				3,797				3.3				3,290				3.1
Equity-based compensation			1,349				1.1				894				0.8				381				0.4
Restructuring charges			413				0.3				—				—				2,635				2.5
Acquisition FMV step-up			3,770				3.0				1,067				0.8				18,207				16.9
Litigation costs			971				0.8				717				0.6				440				0.4
Transaction expenses			(530	)			(0.4	)			4,636				4.0				250				0.2
Integration costs and synergy savings			772				0.6				463				0.6				9,414				8.8
Income from operations—non-GAAP		$	30,294				24.3	%		$	27,114				23.6	%		$	21,377				19.9	%
Net loss—GAAP		$	(7,537	)			(6.0	)%		$	(6,306	)			(5.5	)%		$	(22,122	)			(20.5	)%
Nitronex prior to acquisition			—				—				—				—				645				0.6
Amortization expense			8,566				6.9				5,258				4.6				5,155				4.8
Non-cash compensation expense			8,309				6.7				3,113				2.7				2,517				2.3
Equity-based compensation			1,107				0.9				733				0.6				291				0.3
Impairment of minority investment			2,230				1.8				—				—				—				—
Contingent consideration			(1,640	)			(1.3	)			—				—				—				—
Restructuring charges			339				0.3				—				—				2,016				1.9
Warrant liability expense			5,609				4.5				10,608				9.2				4,066				3.8
Non-cash interest expense			330				0.3				360				0.3				91				0.1
Acquisition FMV step-up			3,092				2.5				875				0.8				13,061				12.2
Litigation costs			797				0.6				588				0.5				337				0.3
Integration costs and synergy savings			633				0.5				380				0.3				7,201				6.7
Transaction expenses			(435	)			(0.3	)			3,420				3.0				191				0.2
Transition services for divested business			(102	)			(0.1	)			(308	)			(0.3	)			(741	)			(0.7	)

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Discontinued operations			—				—				—				—				2,500				2.3
Net income—non-GAAP		$	21,298				17.1	%		$	18,721				16.3	%		$	15,208				14.2	%
Income from operations—non-GAAP		$	30,294							$	27,114							$	21,377
Depreciation expense			3,759								3,453								3,367
Other income, net			—								—								40
EBITDA		$	34,053							$	30,567							$	24,784
Interest expense- GAAP		$	4,723							$	4,723							$	1,622
Non-cash interest expense			(403	)							(439	)							(119	)
Interest expense- non-GAAP		$	4,320							$	4,284							$	1,503
		Three Months Ended
		April 3, 2015								January 2, 2015								April 4, 2014
		(Revised)
		Amount				Income (loss) per diluted share				Amount				Income (loss) per diluted share				Amount				Income (loss) per diluted share
Net loss—GAAP		$	(7,537	)		$	(0.15	)		$	(6,306	)		$	(0.13	)		$	(22,122	)		$	(0.47	)
Net income—non-GAAP		$	21,298			$	0.41			$	18,721			$	0.38			$	15,208			$	0.32
Diluted shares—GAAP			50,593								47,606								46,808
Incremental stock options, warrants, restricted stock and units			1,908								1,599								1,406
Diluted shares—non-GAAP			52,501								49,206								48,214

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M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(unaudited and in thousands, except per share data)

 

		Six Months Ended
		April 3, 2015 (Revised)								April 4, 2014
		Amount								Amount
Revenue—GAAP		$	239,749							$	191,981
Nitronex prior to acquisition			—								(1,048	)
Revenue—non-GAAP		$	239,749							$	190,933
		Amount				% Revenue				Amount				% Revenue
Gross Profit—GAAP		$	108,208				45.1	%		$	62,585				32.6	%
Nitronex prior to acquisition			—				—				959				0.5
Amortization expense			12,706				5.3				7,509				3.9
Non-cash compensation expense			953				0.4				709				0.4
Equity-based compensation			237				0.1				30				—
Acquisition FMV step-up			4,373				1.8				18,539				9.7
Integration costs and synergy savings			352				0.1				961				0.5
Third-party engineering costs			1,229				0.5				570				0.3
Gross Profit—non-GAAP		$	128,058				53.4	%		$	91,862				48.1	%
Research and Development—GAAP		$	40,535				16.9	%		$	32,777				17.1	%
Nitronex prior to acquisition			—				—				(1,423	)			(0.8	)
Non-cash compensation expense			(2,658	)			(1.1	)			(1,212	)			(0.6	)
Equity-based compensation			(1,188	)			(0.5	)			(137	)			(0.1	)
Acquisition FMV step-up			(408	)			(0.2	)			(255	)			(0.1	)
Integration costs and synergy savings			(308	)			(0.1	)			(2,450	)			(1.3	)
Third-party engineering costs			1,229				0.5				570				0.3
Research and Development—non-GAAP		$	37,202				15.5	%		$	27,870				14.6	%
Selling, General and Administrative—GAAP		$	54,826				22.9	%		$	43,887				22.9	%
Nitronex prior to acquisition			—				—				(685	)			(0.5	)
Amortization expense			(4,149	)			(1.7	)			(842	)			(0.4	)
Non-cash compensation expense			(9,983	)			(4.2	)			(3,214	)			(1.7	)
Equity-based compensation			(818	)			(0.3	)			(214	)			(0.1	)
Acquisition FMV step-up			(56	)			—				(32	)			—
Integration costs and synergy savings			(578	)			(0.2	)			(6,593	)			(3.5	)
Litigation costs			(1,688	)			(0.7	)			(1,404	)			(0.7	)
Transaction expenses			(4,106	)			(1.7	)			(4,472	)			(2.3	)
Selling, General and Administrative—non-GAAP		$	33,448				14.0	%		$	26,431				13.8	%

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Total operating expenses—GAAP		$	95,774				39.9	%		$	92,389				48.1	%
Nitronex prior to acquisition			—				—				(2,108	)			(1.2	)
Amortization expense			(4,149	)			(1.7	)			(842	)			(0.4	)
Non-cash compensation expense			(12,641	)			(5.3	)			(4,426	)			(2.3	)
Equity-based compensation			(2,006	)			(0.8	)			(351	)			(0.2	)
Acquisition FMV step-up			(464	)			(0.2	)			(287	)			(0.2	)
Contingent consideration and earn-out costs			—				—				—				—
Restructuring charges			(413	)			(0.2	)			(15,725	)			(8.2	)
Integration costs and synergy savings			(886	)			(0.4	)			(9,043	)			(4.7	)
Litigation costs			(1,688	)			(0.7	)			(1,404	)			(0.7	)
Transaction expenses			(4,106	)			(1.7	)			(4,472	)			(2.3	)
Third-party engineering			1,229				0.5				570				0.3
Total operating expenses—non-GAAP		$	70,650				29.5	%		$	54,301				28.4	%
Income (loss) from operations—GAAP		$	12,434				5.2	%			(29,804	)			(15.5	)%
Nitronex prior to Acquisition			—				—				3,067				1.8
Amortization expense			16,858				7.0				8,351				4.4
Non-cash compensation expense			13,594				5.7				5,135				2.7
Equity-based compensation			2,243				0.9				381				0.2
Contingent consideration and earn-out costs			—				—				—				—
Restructuring charges			413				0.2				15,725				8.2
Acquisition FMV step-up			4,837				2.0				18,826				9.9
Integration costs and synergy savings			1,235				0.5				10,004				5.2
Litigation costs			1,688				0.7				1,404				0.7
Transaction expenses			4,106				1.7				4,472				2.3
Income from operations—non-GAAP		$	57,408				23.9	%		$	37,561				19.7	%
Net loss—GAAP		$	(13,843	)			(5.8	)%		$	(31,043	)			(16.2	)%
Nitronex prior to acquisition			—				—				3,067				1.2
Amortization expense			13,824				5.8				6,389				3.3
Non-cash compensation expense			11,148				4.6				3,928				2.1
Equity-based compensation			1,840				0.8				291				0.2
Impairment of minority investment			2,230				0.9				—				—
Contingent consideration			(1,640	)			(0.7	)			—				—
Restructuring charges			339				0.1				12,030				6.3
Warrant liability expense			16,217				6.8				2,784				1.5
Non-cash interest expense			689				0.3				182				0.1
Acquisition FMV step-up			3,966				1.7				13,535				7.1
Integration costs and synergy savings			1,012				0.4				7,652				4.0
Litigation costs			1,385				0.6				1,074				0.6
Transaction expenses			3,261				1.4				3,537				1.9
Transition services for divested business			(409	)			(0.2	)			(741	)			(0.4	)
Discontinued operations			—				—				4,605				2.4
Net income—non-GAAP		$	40,019				16.7	%		$	27,290				14.3	%

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		Amount				Income (loss) per diluted share				Amount				Income per diluted share
Net loss—GAAP		$	(13,843	)		$	(0.28	)		$	(31,043	)		$	(0.67	)
Net income—non-GAAP		$	40,019			$	0.79			$	27,290			$	0.57
Diluted shares—GAAP			49,100								46,656
Incremental stock options, warrants, restricted stock and units			1,814								1,412
Diluted shares—non-GAAP			50,914								48,068

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M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)

 

		April 3,				October 3,
		2015				2014
		(Revised)
ASSETS
Current assets:
Cash and cash equivalents		$	73,970			$	173,895
Accounts receivable, net			89,350				75,156
Inventories			84,077				73,572
Deferred income taxes and other			61,343				50,726
Total current assets			308,740				373,349
Property and equipment, net			65,352				50,357
Goodwill and intangible assets, net			357,900				153,417
Deferred income taxes and other			68,257				105,111
TOTAL ASSETS		$	800,249			$	682,234
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt		$	4,062			$	3,478
Accounts payable, accrued liabilities and other			63,844				64,910
Deferred revenue			267				17,258
Total current liabilities			68,173				85,646
Long-term debt, less current portion			342,335				343,178
Common stock warrant liability			32,018				15,801
Deferred income taxes and other			8,028				9,042
Total liabilities			450,554				453,667
Commitments and contingencies
Stockholders’ equity			349,695				228,567
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	800,249			$	682,234

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M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

 

		Six Months Ended
		April 3,				April 4,
		2015				2014
		(Revised)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(13,843	)		$	(31,043	)
Non-cash adjustments			57,481				43,029
Change in operating assets and liabilities			(27,620	)			(16,270	)
Net cash from operating activities			16,018				(4,284	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of businesses, net			(222,955	)			(258,108	)
Sale of a business			—				8,627
Strategic investments			(250	)			—
Purchases of property and equipment			(14,036	)			(5,994	)
Acquisition of intellectual property			(1,587	)			(4,096	)
Net cash used in investing activities			(238,828	)			(259,571	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of term notes payable			—				245,000
Payment of debt			(2,982	)			(34,952	)
Capital contributions			—				3,200
Proceeds from stock offering, net			127,959				—
Proceeds from revolving credit facility			100,000				—
Payments on revolving credit facility			(100,000	)			—
Financing activities			(2,092	)			3,258
Net cash from financing activities			122,885				216,506
NET CHANGE IN CASH AND CASH EQUIVALENTS			(99,925	)			(47,349	)
CASH AND CASH EQUIVALENTS — Beginning of period			173,895				110,488
CASH AND CASH EQUIVALENTS — End of period		$	73,970			$	63,139

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* * *

Company Contact:

M/A-COM Technology Solutions Holdings, Inc.

Robert J. McMullan

Senior Vice President and Chief Financial Officer

P: 978-656-2753

E: bob.mcmullan@macom.com

Investor Relations Contact:

Shelton Group

Leanne K. Sievers

EVP, Investor Relations

P: 949-224-3874

E: lsievers@sheltongroup.com