Qorvo® (Nasdaq:QRVO), a leading provider of innovative RF solutions
that connect the world, today announced financial results for the
Company’s fiscal 2020 fourth quarter, ended March 28,
2020. On a GAAP basis, revenue for Qorvo’s fiscal 2020 fourth
quarter was $788 million, gross margin was 42.6%, operating income
was $102 million and diluted earnings per share was $0.43. On
a non-GAAP basis, gross margin was 49.6%, operating income was $210
million and diluted earnings per share was $1.57.
Bob Bruggeworth, president and chief executive officer of Qorvo,
said, “Qorvo delivered a strong quarter under challenging
circumstances, and I couldn’t be more proud of how our team is
responding. We are operating well, focused on keeping our
employees, partners and communities healthy, while supporting
customers and advancing technology. Our technologies and
operations are more important than ever as we support global
deployments in 5G handsets and infrastructure, defense, Wi-Fi 6 and
IoT.”
Strategic Highlights
- Enabled sub-6 GHz 5G network deployments with the ramp of GaN
power amplifiers and small signal solutions
- Accelerated Wi-Fi 6 shipments and secured cable amplifier
design wins to support increased data to the home
- Enjoyed growth in data centers, computing and gaming consoles
with differentiated programmable power management solutions
- Sampled broadband 100-watt (27-31 GHz) and 130-watt (32-38 GHz)
millimeter wave power amplifiers, expanding portfolio of GaN-based
solid state amplifiers for defense applications
- Supported the Samsung® Galaxy S20 platform with a broad set of
high performance and highly integrated advanced 4G and 5G
components
- Supplied a leading smartphone manufacturer with complete main
path (LB, MHB and UHB integrated solutions) as well as Wi-Fi FEM,
switches and tuners for flagship 5G smartphone
- Expanded position in UHB solutions at leading Android
smartphone manufacturers and across all 5G chipset solutions
- Completed the acquisition of Custom MMIC, expanding leadership
in GaAs and GaN RF solutions for defense and aerospace
applications
- Completed the acquisition of Decawave, positioning Qorvo as a
leading provider of ultra-wide-band (UWB) system solutions for
proximity awareness, secure payments and secure access in
smartphones, automotive and IoT
- Introduced high sensitivity point-of-care diagnostic test
platform, utilizing acoustic resonator technology, for veterinary
applications
Financial Commentary and Outlook
Mark Murphy, chief financial officer of Qorvo, said, “Qorvo’s
revenue, gross margin, and cash flow performance demonstrate how
well we are operating in a challenging environment. While our
June quarter guidance reflects the ongoing demand and supply
effects of COVID-19, we are encouraged by continued growth in 5G
handsets and infrastructure, and we remain confident in the
long-term growth drivers of our business.”
Qorvo currently believes the demand environment in its end
markets supports the following expectations for the June 2020
quarter:
- Quarterly revenue in the range of $710 million to $750
million
- Non-GAAP gross margin of approximately 47.5%
- Non-GAAP diluted earnings per share of $1.13 at the midpoint of
guidance
Qorvo’s actual quarterly results may differ from these
expectations and projections, and such differences may be
material.
Selected Financial Information
The following tables set forth selected GAAP and non-GAAP
financial information for Qorvo for the periods indicated.
See the more detailed financial information for Qorvo, including
reconciliations of GAAP and non-GAAP financial information,
attached.
|
|
SELECTED GAAP RESULTS |
|
|
(Unaudited) |
|
|
(In millions, except for percentages and EPS) |
|
|
For the quarter ended March 28, 2020 |
|
For the quarter ended December 28, 2019 |
|
Change vs. Q3 FY 2020 |
Revenue |
$ |
787.8 |
|
$ |
869.1 |
|
$ |
(81.3 |
) |
Gross profit |
$ |
335.8 |
|
$ |
368.1 |
|
$ |
(32.3 |
) |
Gross margin |
|
42.6 |
% |
|
42.4 |
% |
|
0.2ppt |
|
Operating expenses |
$ |
233.6 |
|
$ |
215.0 |
|
$ |
18.6 |
|
Operating income |
$ |
102.2 |
|
$ |
153.1 |
|
$ |
(50.9 |
) |
Net income |
$ |
50.4 |
|
$ |
161.4 |
|
$ |
(111.0 |
) |
Weighted average diluted
shares |
|
117.8 |
|
|
118.5 |
|
|
(0.7 |
) |
Diluted EPS |
$ |
0.43 |
|
$ |
1.36 |
|
$ |
(0.93 |
) |
|
|
SELECTED NON-GAAP RESULTS1 |
|
|
(Unaudited) |
|
|
(In millions, except for percentages and EPS) |
|
|
For the quarter ended March 28, 2020 |
|
For the quarter ended December 28, 2019 |
|
Change vs. Q3 FY 2020 |
Gross profit |
$ |
390.9 |
|
$ |
428.1 |
|
$ |
(37.2 |
) |
Gross margin |
|
49.6 |
% |
|
49.3 |
% |
|
0.3ppt |
Operating expenses |
$ |
181.0 |
|
$ |
175.6 |
|
$ |
5.4 |
|
Operating income |
$ |
209.9 |
|
$ |
252.4 |
|
$ |
(42.5 |
) |
Net income |
$ |
185.3 |
|
$ |
220.8 |
|
$ |
(35.5 |
) |
Weighted average diluted
shares |
|
117.8 |
|
|
118.5 |
|
|
(0.7 |
) |
Diluted EPS |
$ |
1.57 |
|
$ |
1.86 |
|
$ |
(0.29 |
) |
|
|
SELECTED GAAP RESULTS |
|
|
(Unaudited) |
|
|
(In millions, except for percentages and EPS) |
|
|
For the quarter ended March 28, 2020 |
|
For the quarter ended March 30, 2019 |
|
Change vs. Q4 FY 2019 |
Revenue |
$ |
787.8 |
|
$ |
680.9 |
|
$ |
106.9 |
|
Gross profit |
$ |
335.8 |
|
$ |
266.6 |
|
$ |
69.2 |
|
Gross margin |
|
42.6 |
% |
|
39.2 |
% |
|
3.4ppt |
Operating expenses |
$ |
233.6 |
|
$ |
202.5 |
|
$ |
31.1 |
|
Operating income |
$ |
102.2 |
|
$ |
64.0 |
|
$ |
38.2 |
|
Net income |
$ |
50.4 |
|
$ |
61.5 |
|
$ |
(11.1 |
) |
Weighted average diluted
shares |
|
117.8 |
|
|
124.1 |
|
|
(6.3 |
) |
Diluted EPS |
$ |
0.43 |
|
$ |
0.50 |
|
$ |
(0.07 |
) |
|
|
SELECTED NON-GAAP RESULTS1 |
|
|
(Unaudited) |
|
|
(In millions, except for percentages and EPS) |
|
|
For the quarter ended March 28, 2020 |
|
For the quarter ended March 30, 2019 |
|
Change vs. Q4 FY 2019 |
Gross profit |
$ |
390.9 |
|
$ |
328.2 |
|
$ |
62.7 |
|
Gross margin |
|
49.6 |
% |
|
48.2 |
% |
|
1.4ppt |
Operating expenses |
$ |
181.0 |
|
$ |
160.8 |
|
$ |
20.2 |
|
Operating income |
$ |
209.9 |
|
$ |
167.4 |
|
$ |
42.5 |
|
Net income |
$ |
185.3 |
|
$ |
150.9 |
|
$ |
34.4 |
|
Weighted average diluted
shares |
|
117.8 |
|
|
124.1 |
|
|
(6.3 |
) |
Diluted EPS |
$ |
1.57 |
|
$ |
1.22 |
|
$ |
0.35 |
|
1Excludes stock-based compensation, amortization of intangibles,
restructuring related charges, acquisition and integration related
costs, start-up costs, asset impairment and accelerated
depreciation, (gain) loss on assets, loss on debt extinguishment,
gain on consolidation of investment, impairment on investment,
other expense (income) and an adjustment of income taxes.
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in
accordance with United States (U.S.) generally accepted accounting
principles (GAAP), this earnings release contains some or all of
the following non-GAAP financial measures: (i) non-GAAP revenue,
(ii) non-GAAP gross profit and gross margin, (iii) non-GAAP
operating income and operating margin, (iv) non-GAAP net income,
(v) non-GAAP net income per diluted share, (vi) non-GAAP operating
expenses (research and development; selling, general and
administrative), (vii) free cash flow, (viii) EBITDA, (ix) non-GAAP
return on invested capital (ROIC), and (x) net debt or positive net
cash. Each of these non-GAAP financial measures is either
adjusted from GAAP results to exclude certain expenses or derived
from multiple GAAP measures, which are outlined in the
“Reconciliation of GAAP to Non-GAAP Financial Measures” tables,
attached, and the "Additional Selected Non-GAAP Financial Measures
and Reconciliations” tables, attached.
In managing Qorvo's business on a consolidated basis, management
develops an annual operating plan, which is approved by our Board
of Directors, using non-GAAP financial measures. In
developing and monitoring performance against this plan, management
considers the actual or potential impacts on these non-GAAP
financial measures from actions taken to reduce costs with the goal
of increasing gross margin and operating margin. In addition,
management relies upon these non-GAAP financial measures to assess
whether research and development efforts are at an appropriate
level, and when making decisions about product spending,
administrative budgets, and other operating expenses. Also,
we believe that non-GAAP financial measures provide useful
supplemental information to investors and enable investors to
analyze the results of operations in the same way as
management. We have chosen to provide this supplemental
information to enable investors to perform additional comparisons
of our operating results, to assess our liquidity and capital
position and to analyze financial performance excluding the effect
of expenses unrelated to operations, certain non-cash expenses and
stock-based compensation expense, which may obscure trends in
Qorvo's underlying performance.
We believe that these non-GAAP financial measures offer an
additional view of Qorvo's operations that, when coupled with the
GAAP results and the reconciliations to corresponding GAAP
financial measures, provide a more complete understanding of
Qorvo's results of operations and the factors and trends affecting
Qorvo's business. However, these non-GAAP financial measures
should be considered as a supplement to, and not as a substitute
for, or superior to, the corresponding measures calculated in
accordance with GAAP.
Our rationale for using these non-GAAP financial measures, as
well as their impact on the presentation of Qorvo's operations, are
outlined below:
Non-GAAP gross profit and gross margin. Non-GAAP gross
profit and gross margin exclude stock-based compensation expense,
amortization of intangible assets, accelerated depreciation,
restructuring related charges and certain non-cash expenses.
We believe that exclusion of these costs in presenting non-GAAP
gross profit and gross margin gives management and investors a more
effective means of evaluating Qorvo's historical performance and
projected costs and the potential for realizing cost
efficiencies. We believe that the majority of Qorvo's
purchased intangibles are not relevant to analyzing current
operations because they generally represent costs incurred by the
acquired company to build value prior to acquisition, and thus are
effectively part of transaction costs rather than ongoing costs of
operating Qorvo's business. In this regard, we note that (i)
once the intangibles are fully amortized, the intangibles will not
be replaced with cash costs and therefore, the exclusion of these
costs provides management and investors with better visibility into
the actual costs required to generate revenues over time, and (ii)
although we set the amortization expense based on useful life of
the various assets at the time of the transaction, we cannot
influence the timing and amount of the future amortization expense
recognition once the lives are established. Similarly,
we believe that presentation of non-GAAP gross profit and gross
margin and other non-GAAP financial measures that exclude the
impact of stock-based compensation expense assists management and
investors in evaluating the period-over-period performance of
Qorvo's ongoing operations because (i) the expenses are non-cash in
nature, and (ii) although the size of the grants is within our
control, the amount of expense varies depending on factors such as
short-term fluctuations in stock price volatility and prevailing
interest rates, which can be unrelated to the operational
performance of Qorvo during the period in which the expense is
incurred and generally are outside the control of management.
Moreover, we believe that the exclusion of stock-based compensation
expense in presenting non-GAAP gross profit and gross margin and
other non-GAAP financial measures is useful to investors to
understand the impact of the expensing of stock-based compensation
to Qorvo's gross profit and gross margins and other financial
measures in comparison to prior periods. We also believe that
the adjustments to profit and margin related to accelerated
depreciation, restructuring related charges and certain non-cash
expenses do not constitute part of Qorvo's ongoing operations and
therefore the exclusion of these items provides management and
investors with better visibility into the actual revenue and actual
costs required to generate revenues over time and gives management
and investors a more effective means of evaluating our historical
and projected performance. We believe disclosure of non-GAAP
gross profit and gross margin has economic substance because the
excluded expenses do not represent continuing cash expenditures
and, as described above, we have little control over the timing and
amount of the expenses in question.
Non-GAAP operating income and operating margin. Non-GAAP
operating income and operating margin exclude stock-based
compensation expense, amortization of intangible assets,
restructuring related charges, acquisition and integration related
costs, (gain) loss on assets, asset impairment and accelerated
depreciation, start-up costs and certain non-cash expenses.
We believe that presentation of a measure of operating income and
operating margin that excludes amortization of intangible assets
and stock-based compensation expense is useful to both management
and investors for the same reasons as described above with respect
to our use of non-GAAP gross profit and gross margin. We
believe that restructuring related charges, acquisition and
integration related costs, (gain) loss on assets, asset impairment
and accelerated depreciation, start-up costs and certain non-cash
expenses do not constitute part of Qorvo's ongoing operations and
therefore, the exclusion of these costs provides management and
investors with better visibility into the actual costs required to
generate revenues over time and gives management and investors a
more effective means of evaluating our historical and projected
performance. We believe disclosure of non-GAAP operating
income and operating margin has economic substance because the
excluded expenses are either unrelated to ongoing operations or do
not represent current cash expenditures.
Non-GAAP net income and non-GAAP net income per diluted
share. Non-GAAP net income and non-GAAP net income per
diluted share exclude the effects of stock-based compensation
expense, amortization of intangible assets, restructuring related
charges, acquisition and integration related costs, (gain) loss on
assets, asset impairment and accelerated depreciation, start-up
costs, certain non-cash expenses, gain on consolidation of
investment, impairment on investment, loss on debt extinguishment,
other expense (income) and also reflect an adjustment of income
taxes. The income tax adjustment primarily represents the use
of research and development tax credit carryforwards, deferred tax
expense (benefit) items not affecting taxes payable, adjustments
related to the deemed and actual repatriation of historical foreign
earnings, non-cash expense (benefit) related to uncertain tax
positions and other items unrelated to the current fiscal year or
that are not indicative of our ongoing business operations.
We believe that presentation of measures of net income and net
income per diluted share that exclude these items is useful to both
management and investors for the reasons described above with
respect to non-GAAP gross profit and gross margin and non-GAAP
operating income and operating margin. We believe disclosure
of non-GAAP net income and non-GAAP net income per diluted share
has economic substance because the excluded expenses are either
unrelated to ongoing operations or do not represent current cash
expenditures.
Non-GAAP research and development and selling, general and
administrative expenses. Non-GAAP research and development
and selling, general and administrative expenses exclude
stock-based compensation expense, amortization of intangible assets
and certain non-cash expenses (primarily acquisition and
integration related costs). We believe that presentation of
measures of these operating expenses that exclude amortization of
intangible assets and stock-based compensation expense is useful to
both management and investors for the same reasons as described
above with respect to our use of non-GAAP gross profit and gross
margin. We believe that acquisition and integration related
costs and certain non-cash expenses do not constitute part of
Qorvo's ongoing operations and therefore, the exclusion of these
costs provides management and investors with better visibility into
the actual costs required to generate revenues over time and gives
management and investors a more effective means of evaluating our
historical and projected performance. We believe disclosure
of these non-GAAP operating expenses has economic substance because
the excluded expenses are either unrelated to ongoing operations or
do not represent current cash expenditures.
Free cash flow. Qorvo defines free cash flow as net cash
provided by operating activities during the period minus property
and equipment expenditures made during the period. We use
free cash flow as a supplemental financial measure in our
evaluation of liquidity and financial strength. Management
believes that this measure is useful as an indicator of our ability
to service our debt, meet other payment obligations and make
strategic investments. Free cash flow should be considered in
addition to, rather than as a substitute for, net income as a
measure of our performance and net cash provided by operating
activities as a measure of our liquidity. Additionally, our
definition of free cash flow is limited, in that it does not
represent residual cash flows available for discretionary
expenditures due to the fact that the measure does not deduct the
payments required for debt service and other contractual
obligations. Therefore, we believe it is important to view
free cash flow as a measure that provides supplemental information
to our entire statement of cash flows.
EBITDA. Qorvo defines EBITDA as earnings before interest
expense and interest income, income tax expense (benefit),
depreciation and intangible amortization. Management believes
that this measure is useful to evaluate our ongoing operations and
as a general indicator of our operating cash flow (in conjunction
with a cash flow statement which also includes among other items,
changes in working capital and the effect of non-cash charges).
Non-GAAP ROIC. Return on invested capital (ROIC) is a
non-GAAP financial measure that management believes provides useful
supplemental information for management and the investor by
measuring the effectiveness of our operations' use of invested
capital to generate profits. We use ROIC to track how much
value we are creating for our shareholders. Non-GAAP ROIC is
calculated by dividing annualized non-GAAP operating income, net of
an adjustment for income taxes (as described above), by average
invested capital. Average invested capital is calculated by
subtracting the average of the beginning balance and the ending
balance of current liabilities (excluding the current portion of
long-term debt and other short-term financings) from the average of
the beginning balance and the ending balance of net accounts
receivable, inventories, other current assets, net property and
equipment and a cash amount equal to seven days of quarterly
revenue.
Net debt or positive net cash. Net debt or positive net
cash is defined as unrestricted cash, cash equivalents and
short-term investments minus any borrowings under our credit
facility and the principal balance of our senior unsecured
notes. Management believes that net debt or positive net cash
provides useful information regarding the level of Qorvo's
indebtedness by reflecting cash and investments that could be used
to repay debt.
Forward-looking non-GAAP measures. Our earnings release
contains forward-looking gross margin, income tax rate and diluted
earnings per share. We provide these non-GAAP measures to
investors on a prospective basis for the same reasons (set forth
above) that we provide them to investors on a historical
basis. We are unable to provide a reconciliation of the
forward-looking non-GAAP financial measures to the most directly
comparable forward-looking GAAP financial measures without
unreasonable effort due to variability and difficulty in making
accurate projections for items that would be required to be
included in the GAAP measures, such as stock-based compensation,
acquisition and integration related costs, restructuring related
charges, asset impairments and the provision for income taxes.
We believe such reconciliations would imply a degree of
precision that would be confusing or misleading to investors.
Limitations of non-GAAP financial measures. The primary
material limitations associated with the use of non-GAAP financial
measures as an analytical tool compared to the most directly
comparable GAAP financial measures are these non-GAAP financial
measures (i) may not be comparable to similarly titled measures
used by other companies in our industry, and (ii) exclude financial
information that some may consider important in evaluating our
performance, thus limiting their usefulness as a comparative
tool. We compensate for these limitations by providing full
disclosure of the differences between these non-GAAP financial
measures and the corresponding GAAP financial measures, including a
reconciliation of the non-GAAP financial measures to the
corresponding GAAP financial measures, to enable investors to
perform their own analysis of our gross profit and gross margin,
operating expenses, operating income, net income, net income per
diluted share and net cash provided by operating activities.
We further compensate for the limitations of our use of non-GAAP
financial measures by presenting the corresponding GAAP measures
more prominently.
Qorvo will conduct a conference call at 5:00 p.m. ET today to
discuss today’s press release. The conference call will be
broadcast live over the Internet and can be accessed by any
interested party at http://www.qorvo.com (under
“Investors”). A telephone playback of the conference call
will be available approximately two hours after the call’s
completion and can be accessed by dialing 719-457-0820 and using
the passcode 6708971. The playback will be available through
the close of business May 14, 2020.
About Qorvo
Qorvo (Nasdaq:QRVO) makes a better world possible by providing
innovative Radio Frequency (RF) solutions at the center of
connectivity. We combine product and technology leadership,
systems-level expertise and global manufacturing scale to quickly
solve our customers’ most complex technical challenges. Qorvo
serves diverse high-growth segments of large global markets,
including advanced wireless devices, wired and wireless networks
and defense radar and communications. We also leverage unique
competitive strengths to advance 5G networks, cloud computing, the
Internet of Things, and other emerging applications that expand the
global framework interconnecting people, places and things.
Visit www.qorvo.com to learn how Qorvo connects the world.
Qorvo is a registered trademark of Qorvo, Inc. in the U.S. and
in other countries. All other trademarks are the property of
their respective owners.
This press release includes "forward-looking statements" within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements about our
plans, objectives, representations and contentions, and are not
historical facts and typically are identified by use of terms such
as "may," "will," "should," "could," "expect," "plan,"
"anticipate," "believe," "estimate," "predict," "potential,"
"continue" and similar words, although some forward-looking
statements are expressed differently. You should be aware
that the forward-looking statements included herein represent
management's current judgment and expectations, but our actual
results, events and performance could differ materially from those
expressed or implied by forward-looking statements. We do not
intend to update any of these forward-looking statements or
publicly announce the results of any revisions to these
forward-looking statements, other than as is required under U.S.
federal securities laws. Our business is subject to numerous
risks and uncertainties, including those relating to fluctuations
in our operating results; our substantial dependence on developing
new products and achieving design wins; our dependence on a few
large customers for a substantial portion of our revenue; a loss of
revenue if contracts with the United States government or defense
and aerospace contractors are canceled or delayed or if defense
spending is reduced; our dependence on third parties; risks related
to sales through distributors; risks associated with the operation
of our manufacturing facilities; business disruptions resulting
from natural disasters, extreme weather conditions and public
health issues, including the outbreak of COVID-19; poor
manufacturing yields; increased inventory risks and costs due to
timing of customer forecasts; our inability to effectively manage
or maintain evolving relationships with platform providers; risks
from international sales and operations; economic regulation in
China; changes in government trade policies, including imposition
of tariffs and export restrictions; our ability to implement
innovative technologies; underutilization of manufacturing
facilities as a result of industry overcapacity; we may not be able
to borrow funds under our credit facility or secure future
financing; we may not be able to generate sufficient cash to
service all of our debt; restrictions imposed by the agreements
governing our debt; volatility in the price of our common stock;
damage to our reputation or brand; fluctuations in the amount and
frequency of our stock repurchases; our recent acquisitions and
other strategic investments could fail to achieve financial or
strategic objectives; our ability to attract, retain and motivate
key employees; our reliance on our intellectual property portfolio;
claims of infringement of third-party intellectual property rights;
security breaches and other similar disruptions compromising our
information; theft, loss or misuse of personal data by or about our
employees, customers or third parties; warranty claims, product
recalls and product liability; and risks associated with
environmental, health and safety regulations and climate
change. These and other risks and uncertainties, which are
described in more detail in Qorvo's most recent Annual Report on
Form 10-K and in other reports and statements filed with the
Securities and Exchange Commission, could cause actual results and
developments to be materially different from those expressed or
implied by any of these forward-looking statements.
Financial Tables to Follow
QRVO-F
QORVO, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
INCOME(In thousands, except per share data)(Unaudited)
|
Three Months Ended |
|
Twelve Months Ended |
|
March 28, 2020 |
|
March 30, 2019 |
|
March 28, 2020 |
|
March 30, 2019 |
Revenue |
$ |
787,772 |
|
|
$ |
680,882 |
|
|
$ |
3,239,141 |
|
|
$ |
3,090,325 |
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
Cost of goods sold |
451,991 |
|
|
414,309 |
|
|
1,917,378 |
|
|
1,895,142 |
|
Research and development |
127,029 |
|
|
112,846 |
|
|
484,414 |
|
|
450,482 |
|
Selling, general and administrative |
85,111 |
|
|
75,033 |
|
|
343,569 |
|
|
476,074 |
|
Other operating expense |
21,487 |
|
|
14,647 |
|
|
70,564 |
|
|
52,161 |
|
Total costs and expenses |
685,618 |
|
|
616,835 |
|
|
2,815,925 |
|
|
2,873,859 |
|
|
|
|
|
|
|
|
|
Income from
operations |
102,154 |
|
|
64,047 |
|
|
423,216 |
|
|
216,466 |
|
Interest
expense |
(18,935 |
) |
|
(10,359 |
) |
|
(60,392 |
) |
|
(43,963 |
) |
Other (expense)
income, net |
(18,584 |
) |
|
(3,492 |
) |
|
32,265 |
|
|
(80,711 |
) |
|
|
|
|
|
|
|
|
Income before
income taxes |
$ |
64,635 |
|
|
$ |
50,196 |
|
|
$ |
395,089 |
|
|
$ |
91,792 |
|
Income tax
(expense) benefit |
(14,245 |
) |
|
11,321 |
|
|
(60,764 |
) |
|
41,333 |
|
Net income |
$ |
50,390 |
|
|
$ |
61,517 |
|
|
$ |
334,325 |
|
|
$ |
133,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share, diluted |
$ |
0.43 |
|
|
$ |
0.50 |
|
|
$ |
2.80 |
|
|
$ |
1.05 |
|
|
|
|
|
|
|
|
|
Weighted
average outstanding diluted shares |
117,757 |
|
|
124,057 |
|
|
119,293 |
|
|
127,356 |
|
QORVO, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES(In thousands, except per share
data)(Unaudited)
|
Three Months Ended |
|
March 28, 2020 |
|
December 28, 2019 |
|
March 30, 2019 |
|
|
|
|
|
|
GAAP operating
income |
$ |
102,154 |
|
|
$ |
153,069 |
|
|
$ |
64,047 |
|
Stock-based compensation expense |
13,768 |
|
|
16,381 |
|
|
12,706 |
|
Amortization of intangible assets |
69,183 |
|
|
62,910 |
|
|
54,997 |
|
Restructuring related charges |
3,958 |
|
|
5,956 |
|
|
8,645 |
|
Acquisition and integration related costs |
23,986 |
|
|
7,226 |
|
|
2,642 |
|
Asset impairment and accelerated depreciation |
221 |
|
|
4,324 |
|
|
19,252 |
|
(Gain) loss on assets, start-up costs and other non-cash
expenses |
(3,326 |
) |
|
2,540 |
|
|
5,116 |
|
Non-GAAP
operating income |
$ |
209,944 |
|
|
$ |
252,406 |
|
|
$ |
167,405 |
|
|
|
|
|
|
|
GAAP net
income |
$ |
50,390 |
|
|
$ |
161,356 |
|
|
$ |
61,517 |
|
Stock-based compensation expense |
13,768 |
|
|
16,381 |
|
|
12,706 |
|
Amortization of intangible assets |
69,183 |
|
|
62,910 |
|
|
54,997 |
|
Restructuring related charges |
3,958 |
|
|
5,956 |
|
|
8,645 |
|
Acquisition and integration related costs |
23,986 |
|
|
7,226 |
|
|
2,642 |
|
Asset impairment and accelerated depreciation |
221 |
|
|
4,324 |
|
|
19,252 |
|
(Gain) loss on assets, start-up costs and other non-cash
expenses |
(3,326 |
) |
|
2,540 |
|
|
5,116 |
|
Loss on debt extinguishment |
— |
|
|
— |
|
|
6,197 |
|
Gain on consolidation of investment |
— |
|
|
(43,008 |
) |
|
— |
|
Impairment on investment |
18,336 |
|
|
— |
|
|
— |
|
Other expense (income) |
4,218 |
|
|
(1,560 |
) |
|
169 |
|
Adjustment of income taxes |
4,607 |
|
|
4,712 |
|
|
(20,316 |
) |
|
|
|
|
|
|
Non-GAAP net
income |
$ |
185,341 |
|
|
$ |
220,837 |
|
|
$ |
150,925 |
|
|
|
|
|
|
|
GAAP weighted
average outstanding diluted shares |
117,757 |
|
|
118,455 |
|
|
124,057 |
|
Dilutive stock-based awards |
— |
|
|
— |
|
|
— |
|
Non-GAAP
weighted average outstanding diluted shares |
117,757 |
|
|
118,455 |
|
|
124,057 |
|
|
|
|
|
|
|
Non-GAAP net
income per share, diluted |
$ |
1.57 |
|
|
$ |
1.86 |
|
|
$ |
1.22 |
|
|
|
|
|
|
|
QORVO, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES(Unaudited)
|
Three Months Ended |
(in thousands,
except percentages) |
March 28, 2020 |
|
December 28, 2019 |
|
March 30, 2019 |
GAAP gross
profit/margin |
$ |
335,781 |
|
42.6 |
% |
|
$ |
368,111 |
|
42.4 |
% |
|
$ |
266,573 |
|
39.2 |
% |
Amortization of intangible assets |
49,866 |
|
6.3 |
% |
|
44,910 |
|
5.2 |
% |
|
38,695 |
|
5.7 |
% |
Restructuring related charges |
2,058 |
|
0.3 |
% |
|
3,438 |
|
0.4 |
% |
|
— |
|
— |
% |
Stock-based compensation expense |
2,571 |
|
0.3 |
% |
|
6,601 |
|
0.7 |
% |
|
3,276 |
|
0.4 |
% |
Accelerated depreciation |
221 |
|
— |
% |
|
4,324 |
|
0.5 |
% |
|
18,266 |
|
2.7 |
% |
Other non-cash expenses |
408 |
|
0.1 |
% |
|
670 |
|
0.1 |
% |
|
1,387 |
|
0.2 |
% |
Non-GAAP gross
profit/margin |
$ |
390,905 |
|
49.6 |
% |
|
$ |
428,054 |
|
49.3 |
% |
|
$ |
328,197 |
|
48.2 |
% |
|
Three Months Ended |
Non-GAAP Operating Income |
March 28, 2020 |
(as a
percentage of sales) |
|
|
|
GAAP operating
income |
13.0 |
% |
Stock-based compensation expense |
1.8 |
% |
Amortization of intangible assets |
8.8 |
% |
Restructuring related charges |
0.5 |
% |
Acquisition and integration related costs |
3.0 |
% |
(Gain) loss on assets, start-up costs and other non-cash
expenses |
(0.3 |
)% |
Non-GAAP
operating income |
26.8 |
% |
|
Three Months Ended |
Free Cash Flow (1) |
March 28, 2020 |
(in
millions) |
|
|
|
Net cash
provided by operating activities |
$ |
214.3 |
|
Purchases of
property and equipment |
(35.1 |
) |
Free cash
flow |
$ |
179.2 |
|
(1) Free Cash Flow is calculated as net cash provided by
operating activities minus property and equipment expenditures.
QORVO, INC. AND
SUBSIDIARIESADDITIONAL SELECTED NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS(In thousands)(Unaudited)
|
Three Months Ended |
|
March 28, 2020 |
|
December 28, 2019 |
|
March 30, 2019 |
GAAP research
and development expense |
$ |
127,029 |
|
|
$ |
122,851 |
|
|
$ |
112,846 |
|
Less: |
|
|
|
|
|
Stock-based compensation expense |
6,242 |
|
|
6,205 |
|
|
5,430 |
|
Other non-cash expenses |
482 |
|
|
482 |
|
|
1,154 |
|
Non-GAAP
research and development expense |
$ |
120,305 |
|
|
$ |
116,164 |
|
|
$ |
106,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 28, 2020 |
|
December 28, 2019 |
|
March 30, 2019 |
GAAP selling,
general and administrative expense |
$ |
85,111 |
|
|
$ |
81,205 |
|
|
$ |
75,033 |
|
Less: |
|
|
|
|
|
Stock-based compensation expense |
4,955 |
|
|
3,540 |
|
|
3,970 |
|
Amortization of intangible assets |
19,318 |
|
|
17,999 |
|
|
16,302 |
|
Other non-cash expenses |
182 |
|
|
182 |
|
|
231 |
|
Non-GAAP
selling, general and administrative expense |
$ |
60,656 |
|
|
$ |
59,484 |
|
|
$ |
54,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
QORVO, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands)(Unaudited)
|
March 28, 2020 |
|
March 30, 2019 |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
714,939 |
|
|
$ |
711,035 |
|
Accounts receivable, net |
367,172 |
|
|
378,172 |
|
Inventories |
517,198 |
|
|
511,793 |
|
Other current assets |
91,193 |
|
|
83,841 |
|
Total current assets |
1,690,502 |
|
|
1,684,841 |
|
|
|
|
|
Property and
equipment, net |
1,259,203 |
|
|
1,366,513 |
|
Goodwill |
2,614,274 |
|
|
2,173,889 |
|
Intangible
assets, net |
808,892 |
|
|
408,210 |
|
Long-term
investments |
22,515 |
|
|
97,786 |
|
Other non-current
assets |
165,296 |
|
|
76,785 |
|
Total assets |
$ |
6,560,682 |
|
|
$ |
5,808,024 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable and accrued liabilities |
$ |
464,755 |
|
|
$ |
393,823 |
|
Other current liabilities |
74,248 |
|
|
41,791 |
|
Total current liabilities |
539,003 |
|
|
435,614 |
|
|
|
|
|
Long-term
debt |
1,567,231 |
|
|
920,935 |
|
Other long-term
liabilities |
161,783 |
|
|
91,796 |
|
Total liabilities |
2,268,017 |
|
|
1,448,345 |
|
|
|
|
|
Stockholders’ equity |
4,292,665 |
|
|
4,359,679 |
|
Total liabilities
and stockholders’ equity |
$ |
6,560,682 |
|
|
$ |
5,808,024 |
|
At Qorvo®Doug DeLietoVP, Investor Relations1.336.678.7968
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