LOWELL, Mass. — (BUSINESS WIRE) — November 5, 2020 — MACOM Technology Solutions Holdings, Inc. (“MACOM”) (NASDAQ: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal fourth quarter and fiscal year ended October 2, 2020.

Fourth Quarter Fiscal Year 2020 GAAP Results

• Revenue was $147.2 million, an increase of 31.2% compared to $112.2 million in the previous year fiscal fourth quarter and an increase of 7.3% compared to $137.3 million in the prior fiscal quarter;
• Gross margin was 52.8%, compared to 47.2% in the previous year fiscal fourth quarter and 51.6% in the prior fiscal quarter;
• Operating income was $12.7 million, compared to an operating loss of $12.0 million in the previous year fiscal fourth quarter and operating income of $6.5 million in the prior fiscal quarter; and
• Net income was $17.5 million, or $0.22 per diluted share, compared to net income of $10.5 million, or $0.16 per diluted share, in the previous year fiscal fourth quarter and net loss of $25.0 million, or $0.37 loss per diluted share, in the prior fiscal quarter.

Fourth Quarter Fiscal Year 2020 Adjusted Non-GAAP Results

• Adjusted gross margin was 56.4%, compared to 53.0% in the previous year fiscal fourth quarter and 55.5% in the prior fiscal quarter;
• Adjusted operating income was $34.1 million, or 23.2% of revenue, compared to adjusted operating income of $8.5 million, or 7.6% of revenue, in the previous year fiscal fourth quarter and adjusted operating income of $29.3 million, or 21.4% of revenue, in the prior fiscal quarter; and
• Adjusted net income was $27.6 million, or $0.40 per diluted share, compared to adjusted net income of $0.8 million, or $0.01 per diluted share, in the previous year fiscal fourth quarter and adjusted net income of $22.7 million, or $0.33 per diluted share, in the prior fiscal quarter.

Fiscal Year 2020 GAAP Results

• Revenue was $530.0 million, an increase of 6.1%, compared to $499.7 million in fiscal year 2019;
• Gross margin was 51.0%, compared to 44.2% in fiscal year 2019;
• Operating income was $3.4 million, compared to an operating loss of $380.4 million in fiscal year 2019; and
• Net loss was $46.1 million, or $0.69 loss per diluted share, compared to a net loss of $383.8 million, or $5.84 loss per diluted share in fiscal year 2019.

Fiscal Year 2020 Adjusted Non-GAAP Results

• Adjusted gross margin was 55.0%, compared to 50.6% in fiscal year 2019;
• Adjusted operating income was $96.0 million, compared to $10.9 million in fiscal year 2019; and
• Adjusted net income was $67.1 million, or $0.98 per diluted share, compared to adjusted net loss of $19.2 million, or $0.29 loss per diluted share in fiscal year 2019.

Management Commentary

“During fiscal 2020, we took steps to improve MACOM's financial performance, reinvigorate new product development and update our strategic plan,” said Stephen G. Daly, President and Chief Executive Officer. “We look forward to continued improvements during fiscal 2021.”

Business Outlook

For the fiscal first quarter ending January 1, 2021, MACOM expects revenue to be in the range of $146 million to $150 million. Adjusted gross margin is expected to be between 56% and 58%, and adjusted earnings per share is expected to be between $0.41 and $0.45 on an anticipated 69.8 million fully diluted shares outstanding.

Conference Call

MACOM will host a conference call on Thursday, November 5, 2020 at 5:00 p.m. Eastern Time to discuss its fiscal fourth quarter and fiscal year 2020 financial results and business outlook. Investors and analysts may join the conference call by dialing 1-877-837-3908 and providing the passcode 1388469.

International callers may join the teleconference by dialing +1-973-872-3000 and entering the same passcode at the prompt. A telephone replay of the call will be made available beginning two hours after the call and will remain available for five business days. The replay number is 1-855-859-2056 and the passcode is 1388469. 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 designs and manufactures semiconductor products for Telecommunication, Industrial and Defense and Data Center applications. Headquartered in Lowell, Massachusetts, MACOM has design centers and sales offices throughout North America, Europe and Asia. MACOM is certified to the ISO9001 international quality standard and ISO14001 environmental management standard.

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements based on MACOM management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include, among others, statements about MACOM’s strategic plans and priorities, our ability to ensure business continuity and to be successful in our engineering efforts, acceleration of new product introductions, MACOM’s profitability, prospects and growth opportunities in our three primary markets, development and process qualification timelines, continued improvements and the estimated financial results for our 2021 fiscal first quarter and the stated business outlook and future results of operations.

These forward-looking statements 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 indicated by the forward-looking statements, including any failure to anticipate demand for our products; risks related to any weakening of economic conditions, including as a result of the COVID-19 pandemic; our dependence on a limited number of customers; our ability to develop new products and achieve market acceptance of those products; disruptions in our supply chain; and those other factors described in "Risk Factors" in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and 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 United States Generally Accepted Accounting Principles ("GAAP") reporting, MACOM provides investors with financial measures that have not been calculated in accordance with GAAP, such as: non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations and operating margin, adjusted EBITDA, non-GAAP net income (loss), non-GAAP diluted earnings (loss) per share, non-GAAP diluted shares, non-GAAP income tax rate, non-GAAP interest expense and free cash flow. 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 intangible amortization expense, share-based and non-cash compensation expense, impairment and restructuring charges, changes in common stock warrant liability, non-cash interest, litigation costs, acquisition, integration and restructuring related costs, equity investment gains and losses, sale of business losses and other and the tax effect of each non-GAAP adjustment.