M/A-COM Technology Solutions Holdings, Inc. Reports First Quarter Fiscal Year 2013 Financial Results
First Quarter Fiscal Year 2013 GAAP Results
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Revenue was
$75.0 million , compared to$74.6 million in the prior quarter; - Gross margin was 43.0 percent, compared to 42.3 percent in the prior quarter;
- Operating margin was 15.7 percent, compared to 19.5 percent in the prior quarter;
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Net income was
$6.1 million , or$0.13 per diluted share, compared to a net income of$17.0 million , or$0.36 per diluted share in the prior quarter; and -
Cash and cash equivalents totaled
$92.6 million atDecember 28, 2012 .
First Quarter Fiscal Year 2013 Non-GAAP Results
- Gross margin was 44.0 percent, compared to 43.9 percent in the prior quarter;
- Operating margin was 18.4 percent, compared to 20.5 percent in the prior quarter; and
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Net income was
$9.7 million , or$0.20 per diluted share, compared to net income of$10.4 million , or$0.22 per diluted share in the prior quarter.
Commenting on the results,
Business Outlook
M/A-COM currently expects second quarter of fiscal 2013 revenue to range between
Conference Call
M/A-COM will host a conference call on
Additionally, this conference call will be broadcast live over the Internet and can be accessed by all interested parties in the Investors section of M/A-COM's website at http://www.macomtech.com. To listen to the live call, please go to the Investors section of M/A-COM'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
M/A-COM (www.macomtech.com) is a leading supplier of high performance analog semiconductor solutions for use in radio frequency (RF), microwave, and millimeter wave applications. Recognized for its broad portfolio of products, M/A-COM serves diverse markets including CATV, wireless infrastructure, optical communications, aerospace and defense, automotive, industrial, medical, and mobile devices. M/A-COM builds on more than 60 years of experience designing and manufacturing innovative product solutions for customers worldwide.
Headquartered in
The
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements based on M/A-COM management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among others, information concerning our business outlook and future results of operations, our future expectations for our Automotive business and Optoelectronics products, and any statements regarding future trends, business strategies, competitive position, industry conditions 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 M/A-COM'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
M/A-COM 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, among others, the potential for continued weakness in our Networks market, lower than expected demand in our Automotive market or any or all of our primary markets or from any of our large OEM customers based on macro-economic weakness 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 relative success of our cost-savings initiatives,
the potential for inventory obsolescence and related write-offs, the potential for defense spending cuts, program cancellations or sequestration, lower than expected utilization and absorption in our manufacturing facilities, lack of success or slower than expected success in our new product development efforts, loss of business due to competitive factors, obsolescence, customer program shifts or otherwise, lower than anticipated or slower than expected customer acceptance of our new product introductions, the potential for increased pricing pressure based on competitive factors, technology shifts or otherwise, the impact of any acquisition, divestiture or restructuring activity, the impact of supply shortages or other disruptions in our internal or outsourced supply chain, the impact of any current or future litigation instituted by or against us, and the impact of any claims of
intellectual property infringement or misappropriation, which could require us to pay substantial damages for infringement, expend significant resources in prosecuting or defending such matters or developing non-infringing technology, incur material liability for royalty or license payments, or prevent us from selling certain of our products, as well as those factors described in "Risk Factors" in M/A-COM's filings with the
Non-GAAP Financial Measures
In addition to GAAP reporting, M/A-COM provides investors with non-GAAP financial reporting, including gross margin, operating margin, net income and other data calculated on a non-GAAP basis. This non-GAAP information excludes amortization of acquisition-related intangibles, share-based and other non-cash compensation expense, restructuring charges, Optomai litigation costs, changes in the carrying values of liabilities measured at fair value, other non-cash expenses and certain income tax items. In addition, certain cash flow activities are reported on a non-GAAP basis. Management does not believe that the excluded items are reflective of M/A-COM's underlying performance. The exclusion of these and other similar items from M/A-COM's non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual. M/A-COM believes this non-GAAP financial information provides additional insight into M/A-COM's on-going performance and has therefore chosen to provide this information to investors for a more consistent basis of comparison and to help them evaluate the results of M/A-COM's on-going operations and enable more meaningful period to period comparisons. These non-GAAP measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial data attached to this press release.
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
| (unaudited and in thousands, except per share data) | |||
| Three Months Ended | |||
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| 2012 | 2012 | 2011 | |
| Revenue |
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| Cost of revenue | 42,749 | 43,029 | 41,620 |
| Gross profit | 32,265 | 31,534 | 31,415 |
| Operating expenses: | |||
| Research and development | 9,823 | 7,960 | 9,891 |
| Selling, general and administrative | 10,867 | 11,730 | 11,278 |
| Accretion of contingent consideration | (172) | (2,945) | 169 |
| Restructuring charges | — | 276 | 1,586 |
| Total operating expenses | 20,518 | 17,021 | 22,924 |
| Income from operations | 11,747 | 14,513 | 8,491 |
| Other income (expense): | |||
| Accretion of common stock warrant liability | (2,026) | 5,966 | 1,458 |
| Accretion of Class B conversion liability | — | — | 13,620 |
| Interest expense | (226) | (150) | (181) |
| Other income - related party | 84 | 94 | — |
| Total other income expense | (2,168) | 5,910 | 14,897 |
| Income before income taxes | 9,579 | 20,423 | 23,388 |
| Income tax provision | 3,471 | 3,465 | 1,346 |
| Net income | 6,108 | 16,958 | 22,042 |
| Accretion of redeemable preferred stock and | |||
| participating stock dividends | — | (49) | (21,291) |
| Net income attributable to common stockholders |
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| Net income per share: | |||
| Basic |
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| Diluted |
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| Shares used to compute net income per share: | |||
| Basic | 45,511 | 45,235 | 1,747 |
| Diluted | 46,870 | 46,913 | 3,753 |
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| RECONCILIATION OF GAAP TO NON-GAAP RESULTS | ||||||
| (unaudited and in thousands, except per share data) | ||||||
| Three Months Ended | ||||||
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| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |
| Gross profit - GAAP |
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43.0% |
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42.3% |
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43.0% |
| Amortization expense | 474 | 0.6 | 841 | 1.1 | 382 | 0.5 |
| Non-cash compensation expense | 288 | 0.4 | 335 | 0.4 | 36 | — |
| Gross profit - non-GAAP |
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44.0% |
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43.9% |
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43.6% |
| Research and Development - GAAP |
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13.1% |
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10.7% |
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13.5% |
| Non-cash compensation expense | (321) | (0.4) | (367) | (0.5) | (106) | (0.1) |
| Research and Development - non-GAAP |
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12.7% |
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10.2% |
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13.4% |
| Selling, General and Administrative - GAAP |
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14.5% |
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15.7% |
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15.4% |
| Amortization expense | (315) | (0.4) | (545) | (0.7) | (258) | (0.4) |
| Non-cash compensation expense | (654) | (0.9) | (871) | (1.2) | (391) | (0.5) |
| Optomai litigation costs | (195) | (0.3) | (484) | (0.6) | — | — |
| Selling, General and Administrative - non-GAAP |
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12.9% |
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13.2% |
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14.6% |
| Total operating expenses - GAAP |
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27.4% |
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22.8% |
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31.4% |
| Amortization expense | (315) | (0.4) | (545) | (0.7) | (258) | (0.4 |
| Non-cash compensation expense | (975) | (1.3) | (1,238) | (1.7) | (497) | (0.7) |
| Optomai litigation costs | (195) | (0.3) | (484) | (0.6) | — | — |
| Accretion of contingent consideration | 172 | 0.2 | 2,945 | 3.9 | (169) | (0.2) |
| Restructuring charges | — | — | (276) | (0.4) | (1,586) | (2.2) |
| Total operating expenses - non-GAAP |
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25.6% |
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23.4% |
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28.0% |
| Income from operations - GAAP |
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15.7% |
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19.5% |
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11.6% |
| Amortization expense | 789 | 1.1 | 1,386 | 1.9 | 640 | 0.9 |
| Non-cash compensation expense | 1,263 | 1.7 | 1,573 | 2.1 | 533 | 0.7 |
| Optomai litigation costs | 195 | 0.3 | 484 | 0.6 | — | — |
| Accretion of contingent consideration | (172) | (0.2) | (2,945) | (3.9) | 169 | 0.2 |
| Restructuring charges | — | — | 276 | 0.4 | 1,586 | 2.2 |
| Income from operations - non-GAAP |
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18.4% |
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20.5% |
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15.6% |
| Net income - GAAP |
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8.1% |
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22.7% |
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30.2% |
| Amortization expense | 553 | 0.7 | 1,054 | 1.4 | 437 | 0.6 |
| Non-cash compensation expense | 885 | 1.2 | 1,196 | 1.6 | 364 | 0.5 |
| Optomai litigation costs | 137 | 0.2 | 368 | 0.5 | — | — |
| Accretion of contingent consideration | (120) | (0.2) | (2,239) | (3.0) | 115 | 0.2 |
| Restructuring charges | — | — | 210 | 0.3 | 1,083 | 1.5 |
| Accretion of common stock warrant liability | 2,026 | 2.7 | (5,966) | (8.0) | (1,458) | (2.0) |
| Accretion of Class B conversion liability | — | — | — | — | (13,620) | (18.6) |
| Non-cash interest expense | 69 | 0.1 | 54 | 0.1 | 40 | 0.1 |
| Tax adjustments | — | — | (1,202) | (1.6) | (1,287) | (1.8) |
| Net income - non-GAAP |
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12.9% |
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14.0% |
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10.6% |
| Net cash from operations - GAAP |
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| Contingent consideration payment | 5,328 | |||||
| Net cash from operations - non-GAAP |
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| RECONCILIATION OF GAAP TO NON-GAAP RESULTS | ||||||
| (unaudited and in thousands, except per share data) | ||||||
| Three Months Ended | ||||||
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| Amount | Income per diluted share | Amount | Income per diluted share | Amount | Income per diluted share | |
| Net income - GAAP: | ||||||
| Net income |
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| Accretion of redeemable preferred stock and participating stock dividends | — | — | (49) | — | (21,291) | (5.67) |
| Net income attributable to common stockholders |
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| Net income - non-GAAP |
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| Diluted shares - GAAP | 46,870 | 46,913 | 3,753 | |||
| Convertible preferred stock | — | — | 37,748 | |||
| Incremental stock options, warrants, restricted stock and units | 776 | 513 | — | |||
| Diluted shares - non-GAAP | 47,646 | 47,426 | 41,501 | |||
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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (unaudited and in thousands) | ||
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September 28, | |
| 2012 | 2012 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents |
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| Accounts receivable, net | 52,142 | 54,184 |
| Inventories | 58,629 | 57,459 |
| Deferred income taxes and other current assets | 13,347 | 16,863 |
| Total current assets | 216,692 | 213,034 |
| Property and equipment, net | 29,548 | 30,209 |
| Goodwill and intangible assets, net | 21,977 | 22,766 |
| Other assets | 1,989 | 2,064 |
| TOTAL ASSETS |
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| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable, accrued liabilities and other |
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| Deferred revenue | 8,067 | 7,992 |
| Current portion of contingent consideration | 405 | 6,580 |
| Total current liabilities | 47,082 | 55,727 |
| Common stock warrant liability | 9,587 | 7,561 |
| Deferred income taxes and other long-term liabilities | 5,326 | 5,327 |
| Total liabilities | 61,995 | 68,615 |
| Commitments and contingencies | ||
| Stockholders' equity | 208,211 | 199,458 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
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| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (unaudited and in thousands) | ||
| Three Months Ended | ||
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| 2012 | 2011 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net income |
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| Non-cash adjustments | 6,413 | (13,565) |
| Payment of contingent consideration | (5,328) | — |
| Change in operating assets and liabilities | 1,849 | (221) |
| Net cash from operating activities | 9,042 | 8,256 |
| CASH FLOWS FROM INVESTING ACTIVITIES -- | ||
| Purchases of property and equipment | (1,580) | (4,503) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Payment of contingent consideration | (675) | (15,000) |
| Financing activities | 1,259 | (1,313) |
| Net cash from financing activities | 584 | (16,313) |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 8,046 | (12,560) |
| CASH AND CASH EQUIVALENTS — Beginning of period | 84,528 | 45,668 |
| CASH AND CASH EQUIVALENTS — End of period |
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CONTACT: Company Contact:
M/A-COM Technology Solutions Holdings, Inc.
Conrad Gagnon
Chief Financial Officer
P: 978-656-2550
E: Conrad.Gagnon@macomtech.com
Investor Relations Contact:
Shelton Group
Leanne K. Sievers
EVP, Investor Relations
P: 949-224-3874
E: lsievers@sheltongroup.com
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