Qorvo® (Nasdaq:QRVO), a leading provider of innovative RF solutions
that connect the world, today announced financial results for the
Company’s fiscal 2021 third quarter, ended January 2, 2021.
On a GAAP basis, revenue for Qorvo’s fiscal 2021 third quarter
was $1.1 billion, gross margin was 49.1%, operating income was $299
million and diluted earnings per share was $1.74. On a non-GAAP
basis, gross margin was 54.4%, operating income was $401 million
and diluted earnings per share was $3.08.
Bob Bruggeworth, president and chief executive officer of Qorvo,
said, “Qorvo delivered an exceptional quarter helping our customers
keep the world connected through the deployment of 5G, the roll-out
of Wi-Fi 6 and 6E, and emerging technologies like precision
location ultra-wideband. We are sustaining technology leadership in
these markets and innovating in new ones including biotechnologies.
In January, the National Institutes of Health selected Qorvo for
its program to add COVID-19 testing capacity.”
Strategic Highlights
- Expanded shipments of complete main path solutions (LB, MHB and
UHB) across leading 5G basebands and secured wins to supply
next-generation complete main path solutions in 2021 Android®
smartphones
- Commenced shipments of first MHB dual-connectivity modules
(DCMs) to the leading Android OEM, leveraging Qorvo’s
high-performance BAW filtering in the diversity path for receive
and transmit
- Launched next-generation BAW process increasing bandwidth and
reducing insertion loss in UHB and Wi-Fi 6E applications
- Began production shipments of Wi-Fi 6E solutions to top-tier
Android customers, supporting increased capacity and lower latency
in a range of smartphones and other mobile devices
- Increased UWB customer engagements in smartphones and a
broadening range of consumer applications, including tracker tags,
smart speakers, smart TVs and other smart home appliances
- Selected by the National Institutes of Health (NIH) for its
Rapid Acceleration of Diagnostics initiative (RADxSM) to add
COVID-19 antigen testing capacity, utilizing Qorvo’s Omnia™ test
platform, enabled by Qorvo’s high-frequency BAW
- Secured design wins with multiple base station OEMs to support
U.S. 5G C-band deployments and received Best Comprehensive
Performance Award from ZTE for support of their 2020 5G
roll-out
- Achieved strong growth in defense business, driven by domestic
airborne radar and communications applications and GaN products for
international radar programs
- Commenced shipments of 5 GHz Wi-Fi 6 BAW filters and sampled 6
GHz Wi-Fi 6E FEMs for routers and gateways, maximizing throughput
and range for high bandwidth applications
- Selected to supply 5G/LTE, C-V2X and Wi-Fi automotive-qualified
products to multiple OEMs including Audi, BMW and Volvo
- Selected to supply the leading television manufacturer with low
power multi-protocol SOC and custom software enabling
solar-charging remote controls
Financial Commentary and Outlook
Mark Murphy, chief financial officer of Qorvo, said, “We expect
robust end market demand to continue into the March quarter driving
strong year-over-year revenue growth and operating margin
expansion. For the full fiscal year, we now project free cash flow
of approximately $1 billion.”
Qorvo currently believes the demand environment in its end
markets supports the following expectations for the March 2021
quarter:
- Quarterly revenue of $1.025 billion to $1.055 billion
- Non-GAAP gross margin of 50.5% to 51%
- Non-GAAP diluted earnings per share of $2.42 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 January 2, 2021 |
|
For the quarter ended October 3, 2020 |
|
Change vs. Q2 FY 2021 |
|
|
Revenue |
$ |
1,094.8 |
|
$ |
1,060.3 |
|
$ |
34.5 |
|
|
Gross profit |
$ |
537.8 |
|
$ |
491.6 |
|
$ |
46.2 |
|
|
Gross margin |
|
49.1 |
% |
|
46.4 |
% |
|
2.7 |
|
ppt |
Operating expenses |
$ |
238.5 |
|
$ |
269.9 |
|
$ |
(31.4 |
) |
|
Operating income |
$ |
299.2 |
|
$ |
221.6 |
|
$ |
77.6 |
|
|
Net income |
$ |
201.0 |
|
$ |
136.9 |
|
$ |
64.1 |
|
|
Weighted average diluted
shares |
|
115.7 |
|
|
116.2 |
|
|
(0.5 |
) |
|
Diluted EPS |
$ |
1.74 |
|
$ |
1.18 |
|
$ |
0.56 |
|
|
|
|
SELECTED NON-GAAP RESULTS1 |
|
|
|
(Unaudited) |
|
|
|
(In millions, except for percentages and EPS) |
|
|
|
For the quarter ended January 2, 2021 |
|
For the quarter ended October 3, 2020 |
|
Change vs. Q2 FY 2021 |
|
Revenue |
$ |
1,094.8 |
|
$ |
1,060.3 |
|
$ |
34.5 |
|
|
Gross profit |
$ |
595.6 |
|
$ |
547.9 |
|
$ |
47.7 |
|
|
Gross margin |
|
54.4 |
% |
|
51.7 |
% |
|
2.7 |
|
ppt |
Operating expenses |
$ |
194.2 |
|
$ |
218.6 |
|
$ |
(24.4 |
) |
|
Operating income |
$ |
401.4 |
|
$ |
329.4 |
|
$ |
72.0 |
|
|
Net income |
$ |
356.7 |
|
$ |
282.3 |
|
$ |
74.4 |
|
|
Weighted average diluted
shares |
|
115.7 |
|
|
116.2 |
|
|
(0.5 |
) |
|
Diluted EPS |
$ |
3.08 |
|
$ |
2.43 |
|
$ |
0.65 |
|
|
|
|
SELECTED GAAP RESULTS |
|
|
|
(Unaudited) |
|
|
|
(In millions, except for percentages and EPS) |
|
|
|
For the quarter ended January 2, 2021 |
|
For the quarter ended December 28, 2019 |
|
Change vs. Q3 FY 2020 |
|
Revenue |
$ |
1,094.8 |
|
$ |
869.1 |
|
$ |
225.7 |
|
|
Gross profit |
$ |
537.8 |
|
$ |
368.1 |
|
$ |
169.7 |
|
|
Gross margin |
|
49.1 |
% |
|
42.4 |
% |
|
6.7 |
|
ppt |
Operating expenses |
$ |
238.5 |
|
$ |
215.0 |
|
$ |
23.5 |
|
|
Operating income |
$ |
299.2 |
|
$ |
153.1 |
|
$ |
146.1 |
|
|
Net income |
$ |
201.0 |
|
$ |
161.4 |
|
$ |
39.6 |
|
|
Weighted average diluted
shares |
|
115.7 |
|
|
118.5 |
|
|
(2.8 |
) |
|
Diluted EPS |
$ |
1.74 |
|
$ |
1.36 |
|
$ |
0.38 |
|
|
|
|
SELECTED NON-GAAP RESULTS1 |
|
|
|
(Unaudited) |
|
|
|
(In millions, except for percentages and EPS) |
|
|
|
For the quarter ended January 2, 2021 |
|
For the quarter ended December 28, 2019 |
|
Change vs. Q3 FY 2020 |
|
Revenue |
$ |
1,094.8 |
|
$ |
869.1 |
|
$ |
225.7 |
|
|
Gross profit |
$ |
595.6 |
|
$ |
428.1 |
|
$ |
167.5 |
|
|
Gross margin |
|
54.4 |
% |
|
49.3 |
% |
|
5.1 |
|
ppt |
Operating expenses |
$ |
194.2 |
|
$ |
175.6 |
|
$ |
18.6 |
|
|
Operating income |
$ |
401.4 |
|
$ |
252.4 |
|
$ |
149.0 |
|
|
Net income |
$ |
356.7 |
|
$ |
220.8 |
|
$ |
135.9 |
|
|
Weighted average diluted
shares |
|
115.7 |
|
|
118.5 |
|
|
(2.8 |
) |
|
Diluted EPS |
$ |
3.08 |
|
$ |
1.86 |
|
$ |
1.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1Excludes
stock-based compensation expense, amortization of intangible
assets, restructuring related charges, acquisition and integration
related costs, accelerated depreciation, loss (gain) on assets,
start-up costs, loss on debt extinguishment, loss on investments,
gain on consolidation of investment, other 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 gross
profit and gross margin, (ii) non-GAAP operating income and
operating margin, (iii) non-GAAP net income, (iv) non-GAAP net
income per diluted share, (v) non-GAAP operating expenses (research
and development; selling, general and administrative), (vi) free
cash flow, (vii) EBITDA, (viii) non-GAAP return on invested capital
(ROIC), and (ix) 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 facilitates a useful evaluation of our
historical performance and projected costs and the potential for
realizing cost efficiencies. We view amortization of
acquisition-related intangible assets, such as the amortization of
the cost associated with an acquired company’s research and
development efforts, trade names, and customer relationships, as
items arising from pre-acquisition activities, determined at the
time of an acquisition, rather than ongoing costs of operating
Qorvo’s business. While these intangible assets are continually
evaluated for impairment, amortization of the cost of purchased
intangible assets is a static expense, which is not typically
affected by operations during any particular period. Although we
exclude the amortization of purchased intangible assets from these
non-GAAP financial measures, management believes that it is
important for investors to understand that such intangible assets
were recorded as part of purchase price accounting and contribute
to revenue generation.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 facilitates a
useful evaluation of 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, accelerated depreciation, loss (gain) on assets, 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,
accelerated depreciation, loss (gain) on assets, 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 facilitates a
useful evaluation of 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, accelerated
depreciation, loss (gain) on assets, start-up costs, certain
non-cash expenses, loss on debt extinguishment, loss on
investments, gain on consolidation of investment, other 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 operating expenses (research and development and
selling, general and administrative). 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 facilitates a useful evaluation of 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, and free cash
flow margin is calculated as free cash flow as a percentage of
revenue. 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 financial measures. Our earnings
release contains forward-looking free cash flow, 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 6596083.
The playback will be available through the close of business
February 10, 2021.
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; the COVID-19
pandemic, which has and will likely continue to negatively impact
the global economy and disrupt normal business activities, and
which may have an adverse effect on our results of operations; our
dependence on third parties; risks related to sales through
distributors; risks associated with the operation of our
manufacturing facilities; business disruptions; 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 and future
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. Many of the foregoing risks and
uncertainties are, and will continue to be, exacerbated by the
COVID-19 pandemic and any worsening of the global business and
economic environment as a result. 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
|
|
QORVO, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per
share data)(Unaudited) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
January 2, 2021 |
|
December 28, 2019 |
|
January 2, 2021 |
|
December 28, 2019 |
Revenue |
|
$ |
1,094,834 |
|
|
$ |
869,073 |
|
|
$ |
2,942,577 |
|
|
$ |
2,451,369 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of goods sold |
|
557,082 |
|
|
500,962 |
|
|
1,587,486 |
|
|
1,465,387 |
|
Research and development |
|
136,697 |
|
|
122,851 |
|
|
423,110 |
|
|
357,385 |
|
Selling, general and administrative |
|
93,139 |
|
|
81,205 |
|
|
289,115 |
|
|
258,458 |
|
Other operating expense |
|
8,713 |
|
|
10,986 |
|
|
29,307 |
|
|
49,077 |
|
Total costs and expenses |
|
795,631 |
|
|
716,004 |
|
|
2,329,018 |
|
|
2,130,307 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
299,203 |
|
|
153,069 |
|
|
613,559 |
|
|
321,062 |
|
Interest expense |
|
(17,453 |
) |
|
(16,900 |
) |
|
(59,788 |
) |
|
(41,457 |
) |
Other (expense) income,
net |
|
(58,234 |
) |
|
47,022 |
|
|
(33,177 |
) |
|
50,849 |
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
223,516 |
|
|
183,191 |
|
|
520,594 |
|
|
330,454 |
|
Income
tax expense |
|
(22,481 |
) |
|
(21,835 |
) |
|
(85,720 |
) |
|
(46,519 |
) |
Net
income |
|
$ |
201,035 |
|
|
$ |
161,356 |
|
|
$ |
434,874 |
|
|
$ |
283,935 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income per share, diluted |
|
$ |
1.74 |
|
|
$ |
1.36 |
|
|
$ |
3.74 |
|
|
$ |
2.37 |
|
|
|
|
|
|
|
|
|
|
Weighted average outstanding
diluted shares |
|
115,690 |
|
|
118,455 |
|
|
116,257 |
|
|
119,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QORVO, INC. AND SUBSIDIARIESRECONCILIATION
OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands,
except per share data)(Unaudited) |
|
|
|
Three Months Ended |
|
|
January 2, 2021 |
|
October 3, 2020 |
|
December 28, 2019 |
|
|
|
|
|
|
|
GAAP operating income |
|
$ |
299,203 |
|
|
$ |
221,644 |
|
|
$ |
153,069 |
|
Stock-based compensation expense |
|
19,247 |
|
|
30,048 |
|
|
16,381 |
|
Amortization of intangible assets |
|
73,112 |
|
|
72,147 |
|
|
62,910 |
|
Restructuring related charges |
|
546 |
|
|
609 |
|
|
5,956 |
|
Acquisition and integration related costs |
|
5,261 |
|
|
7,259 |
|
|
7,226 |
|
Accelerated depreciation |
|
— |
|
|
— |
|
|
4,324 |
|
Loss (gain) on assets, start-up costs and other non-cash
expenses |
|
3,990 |
|
|
(2,354 |
) |
|
2,540 |
|
Non-GAAP operating income |
|
$ |
401,359 |
|
|
$ |
329,353 |
|
|
$ |
252,406 |
|
|
|
|
|
|
|
|
GAAP net income |
|
$ |
201,035 |
|
|
$ |
136,917 |
|
|
$ |
161,356 |
|
Stock-based compensation expense |
|
19,247 |
|
|
30,048 |
|
|
16,381 |
|
Amortization of intangible assets |
|
73,112 |
|
|
72,147 |
|
|
62,910 |
|
Restructuring related charges |
|
546 |
|
|
609 |
|
|
5,956 |
|
Acquisition and integration related costs |
|
5,261 |
|
|
7,259 |
|
|
7,226 |
|
Accelerated depreciation |
|
— |
|
|
— |
|
|
4,324 |
|
Loss (gain) on assets, start-up costs and other non-cash
expenses |
|
3,990 |
|
|
(2,354 |
) |
|
2,540 |
|
Loss on debt extinguishment |
|
61,991 |
|
|
— |
|
|
— |
|
Loss on investments |
|
388 |
|
|
450 |
|
|
— |
|
Gain on consolidation of investment |
|
— |
|
|
— |
|
|
(43,008 |
) |
Other income |
|
(2,850 |
) |
|
(2,051 |
) |
|
(1,560 |
) |
Adjustment of income taxes |
|
(6,033 |
) |
|
39,262 |
|
|
4,712 |
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
356,687 |
|
|
$ |
282,287 |
|
|
$ |
220,837 |
|
|
|
|
|
|
|
|
GAAP weighted average outstanding diluted shares |
|
115,690 |
|
|
116,177 |
|
|
118,455 |
|
Dilutive stock-based awards |
|
— |
|
|
— |
|
|
— |
|
Non-GAAP weighted average outstanding diluted shares |
|
115,690 |
|
|
116,177 |
|
|
118,455 |
|
|
|
|
|
|
|
|
Non-GAAP net income per share, diluted |
|
$ |
3.08 |
|
|
$ |
2.43 |
|
|
$ |
1.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QORVO, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP
TO NON-GAAP FINANCIAL MEASURES(Unaudited) |
|
|
Three Months Ended |
(in thousands, except
percentages) |
January 2, 2021 |
|
October 3, 2020 |
|
December 28, 2019 |
GAAP gross profit/margin |
$ |
537,752 |
|
49.1 |
% |
|
$ |
491,550 |
|
46.4 |
% |
|
$ |
368,111 |
|
42.4 |
% |
Amortization of intangible assets |
52,989 |
|
4.9 |
% |
|
52,149 |
|
4.9 |
% |
|
44,910 |
|
5.2 |
% |
Restructuring related charges |
— |
|
— |
% |
|
— |
|
— |
% |
|
3,438 |
|
0.4 |
% |
Stock-based compensation expense |
4,478 |
|
0.4 |
% |
|
3,600 |
|
0.3 |
% |
|
6,601 |
|
0.7 |
% |
Accelerated depreciation |
— |
|
— |
% |
|
— |
|
— |
% |
|
4,324 |
|
0.5 |
% |
Other non-cash expenses |
375 |
|
— |
% |
|
627 |
|
0.1 |
% |
|
670 |
|
0.1 |
% |
Non-GAAP gross
profit/margin |
$ |
595,594 |
|
54.4 |
% |
|
$ |
547,926 |
|
51.7 |
% |
|
$ |
428,054 |
|
49.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Non-GAAP Operating Income |
January 2, 2021 |
(as a percentage of sales) |
|
|
|
GAAP operating income |
27.3 |
% |
Stock-based compensation expense |
1.8 |
% |
Amortization of intangible assets |
6.7 |
% |
Restructuring related charges |
0.1 |
% |
Acquisition and integration related costs |
0.5 |
% |
Loss on assets, start-up costs and other non-cash expenses |
0.3 |
% |
Non-GAAP operating income |
36.7 |
% |
|
Three Months Ended |
Free Cash Flow (1) |
January 2, 2021 |
(in millions) |
|
|
|
Net cash provided by operating activities |
$ |
403.7 |
|
Purchases of property and
equipment |
(36.1 |
) |
Free cash flow |
$ |
367.6 |
|
|
(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 |
|
January 2, 2021 |
|
October 3, 2020 |
|
December 28, 2019 |
GAAP research and development expense |
$ |
136,697 |
|
|
$ |
156,342 |
|
|
$ |
122,851 |
|
Less: |
|
|
|
|
|
Stock-based compensation expense |
7,897 |
|
|
8,445 |
|
|
6,205 |
|
Other non-cash expenses |
525 |
|
|
526 |
|
|
482 |
|
Non-GAAP research and
development expense |
$ |
128,275 |
|
|
$ |
147,371 |
|
|
$ |
116,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
January 2, 2021 |
|
October 3, 2020 |
|
December 28, 2019 |
GAAP selling, general and
administrative expense |
$ |
93,139 |
|
|
$ |
109,372 |
|
|
$ |
81,205 |
|
Less: |
|
|
|
|
|
Stock-based compensation expense |
6,872 |
|
|
18,001 |
|
|
3,540 |
|
Amortization of intangible assets |
20,123 |
|
|
19,998 |
|
|
17,999 |
|
Other non-cash expenses |
184 |
|
|
171 |
|
|
182 |
|
Non-GAAP selling, general and
administrative expense |
$ |
65,960 |
|
|
$ |
71,202 |
|
|
$ |
59,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
QORVO, INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited) |
|
|
January 2, 2021 |
|
March 28, 2020 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
1,234,415 |
|
|
$ |
714,939 |
|
Accounts receivable, net |
507,078 |
|
|
367,172 |
|
Inventories |
479,340 |
|
|
517,198 |
|
Other current assets |
101,424 |
|
|
91,193 |
|
Total current assets |
2,322,257 |
|
|
1,690,502 |
|
|
|
|
|
Property and equipment,
net |
1,232,374 |
|
|
1,259,203 |
|
Goodwill |
2,650,912 |
|
|
2,614,274 |
|
Intangible assets, net |
656,239 |
|
|
808,892 |
|
Long-term investments |
31,271 |
|
|
22,515 |
|
Other non-current assets |
148,325 |
|
|
165,296 |
|
Total assets |
$ |
7,041,378 |
|
|
$ |
6,560,682 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued liabilities |
$ |
516,108 |
|
|
$ |
464,755 |
|
Other current liabilities |
97,790 |
|
|
74,248 |
|
Total current liabilities |
613,898 |
|
|
539,003 |
|
|
|
|
|
Long-term debt |
1,743,794 |
|
|
1,567,231 |
|
Other long-term
liabilities |
179,985 |
|
|
161,783 |
|
Total liabilities |
2,537,677 |
|
|
2,268,017 |
|
|
|
|
|
Stockholders’ equity |
4,503,701 |
|
|
4,292,665 |
|
Total liabilities and
stockholders’ equity |
$ |
7,041,378 |
|
|
$ |
6,560,682 |
|
At Qorvo®Doug DeLietoVP, Investor Relations1-336-678-7968
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