MACOM Technology Solutions Holdings, Inc. (NASDAQ: MTSI)
(“MACOM”), a leading supplier of high-performance RF, microwave,
millimeterwave and lightwave semiconductor products, today
announced its financial results for its fiscal first quarter ended
December 30, 2016.
First Quarter Fiscal Year 2017 GAAP Results
- Revenue was $151.8 million, an increase
of 31.1%, compared to $115.8 million in the previous year fiscal
first quarter and a decrease of 0.6% compared to $152.7 million in
the prior fiscal quarter;
- Gross profit was $78.5 million, an
increase of 30.1%, compared to $60.3 million in the previous year
fiscal first quarter and a decrease of 4.0% compared to $81.8
million in the prior fiscal quarter;
- Gross margin was 51.7%, compared to
52.1% in the previous year fiscal first quarter and 53.6% in the
prior fiscal quarter;
- Operating income was $10.5 million,
compared to $0.2 million in the previous year fiscal first quarter
and$10.1 million in the prior fiscal quarter; and
- Net loss from continuing operations was
$2.2 million, resulting in $0.04 loss per diluted share, compared
to a net loss from continuing operations of $16.8 million, or $0.32
loss per diluted share, in the previous year fiscal first quarter
and net income from continuing operations of $3.9 million, or $0.07
income per diluted share, in the prior fiscal quarter.
First Quarter Fiscal Year 2017 Adjusted Non-GAAP
Results
- Adjusted gross margin was 57.2%,
compared to 58.7% in the previous year fiscal first quarter and
58.5% in the prior fiscal quarter;
- Adjusted operating income was $41.0
million, or 27.0% of revenue, compared to $27.7 million, or 23.9%
of revenue, in the previous year fiscal first quarter and $38.3
million, or 25.1% of revenue, in the prior fiscal quarter;
- Adjusted net income was $31.8 million,
or $0.57 per diluted share, compared to adjusted net income of
$21.8 million, or $0.40 per diluted share, in the previous year
fiscal first quarter and adjusted net income of $30.1 million, or
$0.54 per diluted share, in the prior fiscal quarter; and
- Adjusted EBITDA was $48.4 million,
compared to $33.5 million for the previous year fiscal first
quarter and$44.9 million for the prior fiscal quarter.
Management Commentary
John Croteau, MACOM's President and Chief Executive Officer,
stated, "Top line revenue for the quarter was effectively flat
sequentially due to expected seasonality across our businesses.
Networks and Multi-market were up year on year 31% and 48%,
respectively. Aerospace and Defense grew sequentially due to
strength in MMICs, and was up 20% year on year.
“The merits of diversification across our Optical businesses
were apparent during the quarter as a substantial correction in PON
was offset by strength in Metro, Long Haul, and Data Centers.”
Mr. Croteau concluded, “I am proud to announce the completion of
the AppliedMicro transaction. Its leadership in MACsec and 100G to
400G single-Lambda PAM4 positions MACOM as a preferred supplier to
major Enterprise and Cloud Data Center providers, many of whom are
actively moving forward with the technologies this year.”
Business Outlook
For the fiscal second quarter ending March 31, 2017,
including the partial quarter results of our recently closed
AppliedMicro acquisition, MACOM expects revenue to be in the range
of $180 million to $186 million. Adjusted gross margin is expected
to be between 58% and 61%, and adjusted earnings per share between
$0.59 and $0.63, on an anticipated 64.0 million fully diluted
shares outstanding.
Conference Call
MACOM will host a conference call on Tuesday, January 31,
2017 at 5:00 p.m. Eastern Time to discuss its fiscal first quarter
2017 financial results and business outlook. Investors and analysts
may join the conference call by dialing 1-877-837-3908 and
providing the passcode 46453715.
International callers may join the teleconference by dialing
+1-973-872-3000 and entering the same confirmation code at the
prompt. A telephone replay of the call will be made available
beginning two hours after the call and will remain available for 5
business days. The replay number is 1-855-859-2056 with a passcode
of 46453715. International callers should dial +1-404-537-3406 and
enter the same passcode at the prompt.
Additionally, this conference call will be broadcast live over
the Internet and can be accessed by all interested parties in the
Investors section of MACOM's website at http://www.macom.com. To
listen to the live call, please go to the Investors section of
MACOM's website and click on the conference call link at least
fifteen minutes prior to the start of the conference call. For
those unable to participate during the live broadcast, a replay
will be available shortly after the call and will remain available
for approximately 30 days.
About MACOM
MACOM enables a better-connected and safer world by delivering
breakthrough semiconductor technologies for optical, wireless and
satellite networks that satisfy society’s insatiable demand for
information.
Today, MACOM powers the infrastructure that millions of lives
and livelihoods depend on every minute to communicate, transact
business, travel, stay informed and be entertained. Our technology
increases the speed and coverage of the mobile Internet and enables
fiber optic networks to carry previously unimaginable volumes of
traffic to businesses, homes and datacenters.
Keeping us all safe, MACOM technology enables next-generation
radars for air traffic control and weather forecasting, as well as
mission success on the modern networked battlefield.
MACOM is the partner of choice to the world’s leading
communications infrastructure, aerospace and defense companies,
helping solve their most complex challenges in areas including
network capacity, signal coverage, energy efficiency and field
reliability, through its best-in-class team and broad portfolio of
RF, microwave, millimeterwave and lightwave semiconductor
products.
MACOM is a pillar of the semiconductor industry, thriving for
more than 60 years of daring to change the world for the better,
through bold technological strokes that deliver true competitive
advantage to customers and superior value to investors.
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, and related logos are trademarks of
MACOM. All other trademarks are the property of their respective
owners. For more information about MACOM, please
visit www.macom.com follow @MACOMtweets on
Twitter, join MACOM on LinkedIn, or visit the
MACOM YouTube Channel.
Special Note Regarding Forward-Looking Statements
This press release and our commentary in our conference call
held today each contain 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, the integration and future
performance of AppliedMicro’s business, our GaN strategy, our
execution on that strategy, expectations for customer orders and
customer conversion from LDMOS to GaN, expectations for adoption of
MACsec and 100G to 400G single-Lambda PAM4 by major Enterprise and
Cloud Data Center providers, expectations for our high performance
MMIC products, growth in our A&D or Multi-Market businesses in
fiscal year 2017, the sustainability of our optical growth
aspirations, the expected outcome of our ongoing litigation against
Infineon and any other 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 the potential that the expected rollout of 5G network
upgrades, fiber-to-the-home network technology or other new optical
or other network technology deployments in China, Japan and other
geographies fails to occur, occurs more slowly than we expect or
does not result in the amount or type of new business we
anticipate, lower than expected demand in the optical network
infrastructure market or any or all of our primary end markets or
from Huawei, Cisco or any or all of our large OEM customers based
on seasonal effects, regulatory action or inaction, macro-economic
weakness or otherwise, the potential for greater than expected
pricing pressure and average selling price erosion based on
attempts to win or maintain market share, competitive factors,
technology shifts or otherwise, 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, 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, greater than expected dilutive
effect on earnings of our equity issuances, outstanding
indebtedness and related interest expense and other costs, 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, 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 MACsec, single-Lambda PAM4, MMICs, Active Antennas, SPAR
tiles, GaN, InP lasers or other solutions offered by us, failures
or delays in porting and qualifying GaN or InP process technology
to our fabrication facilities or third party facilities and
achieving anticipated manufacturing economies of scale, lower than
expected utilization and absorption in our manufacturing
facilities, lack of success or slower than expected success in our
new product development or new product introduction efforts, loss
of key personnel to competitors or otherwise, failure of any
announced transaction to close in accordance with its terms,
failure to successfully integrate acquired companies, technologies
or products or realize synergies associated with acquisitions, the
potential that we will experience difficulties in managing the
personnel and operations associated with our acquisitions, loss of
business due to competitive factors, product or technology
obsolescence, customer program shifts or otherwise, 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 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, as well as those factors described
in "Risk Factors" in MACOM's filings with the Securities and
Exchange Commission (SEC), including its Annual Report on Form 10-K
for the fiscal year ended September 30, 2016 filed on November 17,
2016, the Registration Statement on Form S-4 filed on December 21,
2016 and Amendment No. 1 to the Registration Statement on Form S-4
filed on January 18, 2017 and those factors described in “Risk
Factors” in AppliedMicro’s filings with the SEC, including its
Annual Report on Form 10-K for the fiscal year ended March 31, 2016
filed on May 20, 2016, its Quarterly Report on 10-Q for the quarter
ended June 30, 2016 filed on August 3, 2016 and its Quarterly
Report on 10-Q for the quarter ended September 30, 2016 filed on
November 2, 2016. MACOM undertakes no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
Discussion Regarding the Use of Historical and
Forward-Looking Non-GAAP Financial Measures
In addition to GAAP reporting, MACOM provides investors with
financial measures that have not been calculated in accordance with
United States Generally Accepted Accounting Principles ("GAAP"),
such as: non-GAAP gross profit and gross margin, non-GAAP income
from operations and operating margin, non-GAAP net income, non-GAAP
diluted earnings per share, adjusted EBITDA, and Free Cash Flow.
From time to time in this release or elsewhere, we may
alternatively refer to such non-GAAP measures as “adjusted”
measures. This non-GAAP information excludes the effect, where
applicable, of discontinued operations, intangible amortization
expense, share-based compensation costs, impairment and
restructuring charges, changes in common stock warrant liability,
financing and litigation costs, acquisition and integration related
costs, other costs and the tax effect of each adjustment. The
non-GAAP information includes consulting agreement related income
associated with the Automotive divestiture.
Management believes that these excluded items are not reflective
of our underlying performance. Management uses these non-GAAP
financial measures to; evaluate our ongoing operating performance
and compare it against prior periods, make operating decisions,
forecast future periods, evaluate potential acquisitions, compare
our operating performance against peer companies and assess certain
compensation programs. The exclusion of these and other similar
items from our non-GAAP financial results should not be interpreted
as implying that these items are non-recurring, infrequent or
unusual. We believe this non-GAAP financial information provides
additional insight into our ongoing performance and have therefore
chosen to provide this information to investors for a more
consistent basis of comparison and to help them evaluate the
results of our ongoing 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. We have not provided a reconciliation with respect to any
forward-looking non-GAAP financial data presented because we do not
have and cannot reliably estimate certain key inputs required to
calculate the most comparable GAAP financial data, such as the
future price per share of our common stock for purposes of
calculating the value of our common stock warrant liability, future
acquisition costs, the possibility and impact of any litigation
costs, changes in our GAAP effective tax rate, and impairment
charges. We believe these unknown inputs are likely to have a
significant impact on any estimate of the comparable GAAP financial
data.
Investors are cautioned against placing undue reliance on these
non-GAAP financial measures and are urged to review and consider
carefully the adjustments made by management to the most directly
comparable GAAP financial measures to arrive at these non-GAAP
financial measures. Non-GAAP financial measures may have limited
value as analytical tools because they may exclude certain expenses
that some investors consider important in evaluating our operating
performance or ongoing business performance. Further, non-GAAP
financial measures may have limited value for purposes of drawing
comparisons between companies because different companies may
calculate similarly titled non-GAAP financial measures in different
ways because non-GAAP measures are not based on any comprehensive
set of accounting rules or principles.
Additional information and management’s assessment regarding why
certain items are excluded from our Non-GAAP measures are
summarized below:
Amortization Expense - is related to acquired intangible assets
which are based upon valuation methodologies, and are generally
amortized over the expected life of the intangible asset at the
time of acquisition, which may result in amortization amounts that
vary over time. The expense is not considered by management in
making operating decisions, and the expense is non-cash.
Share-Based and Non-cash Compensation Expense - includes share
based compensation including awards that are equity and liability
classified on our balance sheet as well as non-cash compensation
expense primarily associated with amounts due to employees of an
acquired business that were placed in escrow at the time of the
acquisition and amortized as expense over a 2-year period. Share
Based Compensation expense is partially outside of our control due
to factors such as stock price volatility and interest rates, which
may be unrelated to our operating performance during the period in
which the expense is incurred. It is an expense based upon
valuation methodologies and assumptions that vary over time, and
the amount of the expense can vary significantly between companies
due to factors that can be outside of their control. Share-based
and Non-Cash Compensation Expense amounts are not considered by
management in making operating decisions.
Impairment Charges - includes expenses associated with our
strategic decision to exit a product line and end programs with a
license and technology transfer as well as certain related fixed
assets and inventory. We believe these charges are one-time in
nature and are not correlated to future business operations and
including such charges does not reflect our ongoing operations.
Restructuring Charges - includes amounts primarily associated
with approved plans to reduce staffing and manufacturing or
administrative footprints. We believe these amounts are not
correlated to future business operations and including such charges
does not reflect our ongoing operations.
Warrant Liability Expenses/Gains - are associated with
mark-to-market fair value adjustments which are largely based on
the value of our common stock, which may vary from period to period
due to factors such as stock price volatility. We believe these
amounts are not correlated to future business operations and
including such charges does not reflect our ongoing operations.
Non Cash Interest, Net - includes amounts associated with the
amortization of certain fees associated with the establishment of
our Credit Agreement and Term Loans that are being amortized over
the life of the agreement. We believe these amounts are non-cash in
nature and not correlated to future business operations and
including such charges does not reflect our ongoing operations.
Litigation Costs - includes gains, losses and expenses related
to the resolution of other-than-ordinary-course threatened and
actually filed lawsuits and other-than-ordinary-course contractual
disputes and legal matters. We exclude these gains and losses
because they are not considered by management in making operating
decisions. We believe such gains, losses and expenses do not
necessarily reflect the performance of our ongoing operations for
the period in which such charges are recognized and the amount of
such gains or losses and expenses can vary significantly between
companies and make comparisons less reliable.
Acquisition and Integration Related Costs - includes such items
as professional fees incurred in connection with pre-acquisition
and integration specific activities, post-acquisition employee
retention amounts, contingent consideration adjustments, severance
and other amounts accrued or paid to terminated employees of
acquired businesses, costs including salaries incurred which are
not expected to have a continuing contribution to operations or are
expected to have a diminishing contribution during the integration
period and the amortization of the fair market step-up value of
acquired inventory and fixed assets. We believe the exclusion of
these items is useful in providing management a basis to evaluate
ongoing operating activities and strategic decision making.
Discontinued Operations excluding consulting income - includes
the profit and loss amounts of discontinued operations, with the
exception of consulting income associated with a consulting
agreement we entered into at the time of our Automotive business
divestiture. We believe excluding gains and losses associated with
historically divested businesses from our net income provides
management with a comparable basis to our current ongoing operating
activities. We do not exclude the consulting agreement income
classified as discontinued operations because management views this
income as part of our ongoing operations and correlated with future
operations.
Other - historical amounts primarily include transaction
expenses incurred as part of our Credit Agreement Amendment in the
fourth fiscal quarter of 2016. We believe these amounts are not
correlated to future business operations and including such charges
does not reflect our ongoing operations.
Tax Effect of Non-GAAP Adjustments - adjustments to arrive at an
estimate of our Adjusted Non-GAAP cash tax rate associated with our
Adjusted Non-GAAP income over a period of time. These adjustments
have resulted in an estimated Adjusted Non-GAAP cash tax rate of
12% and 15% for our fiscal years 2017 and 2016, respectively. We
believe it is beneficial for our management to review Adjusted
Non-GAAP cash tax rate on a consistent basis over periods of time.
Certain items including many of the items noted above may have a
significant impact on our US GAAP tax expense and associated tax
rate during a specific period of time.
Adjusted EBITDA - is a calculation that adds depreciation
expense and consulting agreement income to our Adjusted Non-GAAP
Income from Operations. Adjusted EBITDA is a measure that
management reviews and utilizes for operational analysis purposes.
We believe competitors and others in the financial industry utilize
this Non-GAAP measure for analysis purposes.
Free Cash Flow - is a calculation that starts with cash flow
from operating activities and reduces this amount by our capital
expenditures in the applicable period. Free Cash Flow is a measure
that management reviews and utilizes for cash flow analysis
purposes. We believe competitors and others in the financial
industry utilize this Non-GAAP measure for analyzing a company's
cash flow.
MACOM TECHNOLOGY SOLUTIONS HOLDINGS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited and in thousands, except per share
data)
Three Months Ended
December 30,2016
September 30,2016
January 1,2016
Revenue $ 151,752 $ 152,697 $ 115,774 Cost of revenue 73,257
70,893 55,456 Gross profit 78,495 81,804
60,318 Operating expenses: Research and development
30,174 30,109 25,322 Selling, general and administrative 36,496
40,265 34,686 Restructuring charges 1,287 1,365 157
Total operating expenses
67,957 71,739 60,165 Income from operations
10,538 10,065 153 Other income (expense):
Warrant liability expense (4,823 ) (12,691 ) (14,878 ) Interest
expense, net (7,350 ) (5,310 ) (4,346 ) Other (expense) income, net
(4 ) 5 100 Total other expense (12,177 ) (17,996 )
(19,124 ) Loss before income taxes (1,639 ) (7,931 ) (18,971
) Income tax expense (benefit) 532 (11,804 ) (2,201 ) (Loss)
income from continuing operations (2,171 ) 3,873 (16,770 ) Income
from discontinued operations 1,206 1,228 1,199
Net (loss) income $ (965 ) $ 5,101 $ (15,571 )
Net
(loss) income per share: Basic: (Loss) income from continuing
operations $ (0.04 ) $ 0.07 $ (0.32 ) Income from discontinued
operations 0.02 0.02 0.02 (Loss) income per
share - basic $ (0.02 ) $ 0.10 $ (0.29 ) Diluted:
(Loss) income from continuing operations $ (0.04 ) $ 0.07 $ (0.32 )
Income from discontinued operations 0.02 0.02 0.02
(Loss) income per share - diluted $ (0.02 ) $ 0.09 $
(0.29 ) Shares - Basic 53,737 53,676 53,015
Shares - Diluted 53,737 55,285 53,015
MACOM TECHNOLOGY SOLUTIONS HOLDINGS,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS(unaudited and
in thousands)
December 30,2016
September 30,2016
ASSETS Current assets: Cash and cash equivalents $ 353,917 $
332,977 Short term investments 23,750 23,776 Accounts receivable,
net 112,245 108,331 Inventories 115,219 114,935 Income tax
receivable 21,025 21,607 Prepaids and other current assets 15,619
11,318 Total current assets 641,775 612,944 Property and
equipment, net 101,845 99,167 Goodwill and intangible assets, net
359,015 379,626 Deferred income taxes 88,565 89,606 Other long-term
assets 5,495 7,208 TOTAL ASSETS $ 1,196,695 $
1,188,551 LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Current portion of lease payable $ 1,047 $ 1,152
Current portion of long-term debt obligations 6,051 6,051 Accounts
payable, accrued liabilities and other 79,965 84,947 Total
current liabilities 87,063 92,150 Lease payable, less current
portion 14,147 2,463 Long-term debt obligations, less current
portion 572,963 573,882 Common stock warrant liability 43,076
38,253 Deferred income taxes 9,564 11,765 Other long-term
liabilities 6,923 7,254 Total liabilities 733,736 725,767
Stockholders' equity 462,959 462,784 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,196,695 $ 1,188,551
MACOM TECHNOLOGY SOLUTIONS HOLDINGS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(unaudited and in thousands)
Three Months Ended
December 30,2016
January 1,2016
CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (965 ) $
(15,571 ) Adjustments to reconcile loss to net operating cash
31,711 39,334 Change in operating assets and liabilities (10,339 )
(8,249 ) Net cash provided by operating activities 20,407
15,514 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of
businesses, net 875 (85,517 ) Purchases, sales and maturities of
investments (80 ) 9,543 Proceeds from sale of assets 104 —
Purchases of property and equipment (4,942 ) (6,230 ) Acquisition
of intellectual property — (476 ) Net cash used in investing
activities (4,043 ) (82,680 ) CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from corporate facility financing obligation 4,250 —
Payments of notes payable and assumed debt (1,801 ) (9,606 )
Proceeds from stock option exercises and employee stock purchases
2,600 2,817 Repurchase of common stock — (339 ) Other financing
activities (38 ) — Net cash provided by (used in) financing
activities 5,011 (7,128 ) EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (435 ) (210 ) NET CHANGE IN CASH AND CASH
EQUIVALENTS 20,940 (74,504 ) CASH AND CASH EQUIVALENTS — Beginning
of period 332,977 122,312 CASH AND CASH EQUIVALENTS —
End of period $ 353,917 $ 47,808
MACOM TECHNOLOGY SOLUTIONS HOLDINGS,
INC.RECONCILIATION OF GAAP TO NON-GAAP RESULTS(unaudited
and in thousands, except per share data)
Three Months Ended December 30, 2016
September 30, 2016 January 1,
2016 Amount % Revenue
Amount % Revenue
Amount % Revenue Gross profit - GAAP $
78,495 51.7 $ 81,804 53.6 $ 60,318
52.1 Amortization expense 6,001 4.0 6,366 4.2 7,167
6.2 Share-based and non-cash compensation 794 0.5 628 0.4 542 0.5
Acquisition and integration related costs 1,546
1.0 542 0.4
(68 ) (0.1 ) Adjusted gross profit
(NonGAAP) $ 86,836 57.2 $
89,340 58.5 $ 67,959
58.7
Three Months Ended December 30, 2016
September 30, 2016 January 1,
2016 Amount % Revenue
Amount % Revenue
Amount % Revenue Operating expenses -
GAAP $ 67,957 44.8 $ 71,739 47.0 $ 60,165 52.0 Amortization expense
(6,467 ) (4.3 ) (6,498 ) (4.3 ) (4,423 ) (3.8 ) Share-based and
non-cash compensation (9,291 ) (6.1 ) (9,099 ) (6.0 ) (10,881 )
(9.4 ) Impairment and restructuring charges (1,287 ) (0.8 ) (1,365
) (0.9 ) (157 ) (0.1 ) Litigation costs (264 ) (0.2 ) (1,037 ) (0.7
) (108 ) (0.1 ) Acquisition and integration related costs (4,768 )
(3.1 ) (2,146 ) (1.4 ) (4,315 ) (3.7 ) Other —
— (573 ) (0.4 ) —
— Adjusted operating expenses (NonGAAP)
$ 45,880 30.2 $ 51,021
33.4 $ 40,281
34.8
Three Months Ended December 30, 2016
September 30, 2016 January 1,
2016 Amount % Revenue
Amount % Revenue
Amount % Revenue Income (loss) from
operations - GAAP $ 10,538 6.9 $ 10,065 6.6 $ 153 0.1 Amortization
expense 12,468 8.2 12,864 8.4 11,590 10.0 Share-based and non-cash
compensation 10,085 6.6 9,727 6.4 11,423 9.9 Impairment and
restructuring charges 1,287 0.8 1,365 0.9 157 0.1 Litigation costs
264 0.2 1,037 0.7 108 0.1 Acquisition and integration related costs
6,314 4.2 2,688 1.8 4,247 3.7 Other — —
573 0.4 —
— Adjusted income from operations
(NonGAAP) $ 40,956 27.0 $
38,319 25.1 $ 27,678
23.9 Depreciation expense 5,535
3.6 4,689 3.1 3,903 3.4 Consulting income 1,875
1.2 1,880 1.2
1,954 1.7 Adjusted
EBITDA $ 48,366 31.9 $
44,888 29.4 $ 33,535
29.0
Three Months Ended December 30, 2016
September 30, 2016 January 1,
2016 Amount % Revenue
Amount % Revenue
Amount % Revenue Net (loss) income -
GAAP $ (965 ) (0.6 ) $ 5,101 3.3 $ (15,571 ) (13.4 ) Amortization
expense 12,468 8.2 12,864 8.4 11,590 10.0 Share-based and non-cash
compensation 10,085 6.6 9,727 6.4 11,423 9.9 Impairment and
restructuring charges 1,287 0.8 1,365 0.9 157 0.1 Warrant liability
expense 4,823 3.2 12,691 8.3 14,879 12.9 Non-cash interest, net 702
0.5 503 0.3 398 0.3 Litigation costs 263 0.2 1,037 0.7 108 0.1
Acquisition and integration related costs 6,314 4.2 2,688 1.8 4,227
3.7 Discontinued operations, excluding consulting income 669 0.4
647 0.4 676 0.6 Other — — 573 0.4 — — Tax effect of non-GAAP
adjustments (3,810 ) (2.5 ) (17,114 )
(11.2 ) (6,054 ) (5.2 )
Adjusted net income (NonGAAP) $ 31,836 21.0
$ 30,082 19.7
$ 21,833 18.9
Three Months Ended
December 30, 2016 September 30, 2016
January 1, 2016
Net Income(Loss)
Income (loss)per
dilutedshare
Net Income(Loss)
Income (loss)
per dilutedshare
Net Income(Loss)
Income (loss)per
dilutedshare
Net (loss) income - diluted $ (965 ) $ (0.02 )
$ 5,101 $ 0.09 $
(15,571 ) $ (0.29 ) Adjusted (NonGAAP) $ 31,836
$ 0.57 $ 30,082
$ 0.54 $ 21,833
$ 0.40
Three Months Ended December
30, 2016 September 30, 2016
January 1, 2016 Shares
Shares
Shares Diluted shares - GAAP 53,737
55,285 53,015 Incremental shares 1,875
— 1,997
Adjusted diluted shares (NonGAAP)
55,612 55,285
55,012
Three
Months Ended December 30, 2016
September 30, 2016 January 1, 2016
Amount % Revenue
Amount % Revenue
Amount % Revenue Interest expense, net
- GAAP $ 7,350 4.8 $ 5,310 3.5 $ 4,346 3.8 Non-cash interest
expense (702 ) (0.5 ) (503 )
(0.3 ) (398 ) (0.3 ) Adjusted
Interest Expense (NonGAAP) $ 6,648 4.4
$ 4,807 3.1
$ 3,948 3.4
Three Months Ended December 30,
2016 September 30, 2016
January 1, 2016 Amount % Revenue
Amount % Revenue
Amount % Revenue Cash flow from
operations $ 20,407 13.4 $ 24,885 16.3 $ 15,514 13.4 Capital
expenditures (4,942 ) (3.3 ) (7,226 )
(4.7 ) (6,706 ) (5.8 )
Free cash flow $ 15,465 10.2
$ 17,659 11.6 $
8,808 7.6
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170131006127/en/
Company Contact:MACOM Technology Solutions Holdings,
Inc.Stephen Ferranti, 978-656-2977Vice President of Investor
Relationsstephen.ferranti@macom.comorInvestor Relations
Contact:Shelton GroupLeanne K. Sievers, 949-224-3874EVP,
Investor Relationslsievers@sheltongroup.com
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