Vitesse Reports Fourth Quarter and Fiscal Year 2014 Results


VITESSE SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS

	September 30,			September 30,
	2014			2013
	(in thousands, except par value)
ASSETS
Current assets:
Cash	$	71,903		$	68,863
Accounts receivable		10,850			9,807
Inventories		12,792			10,692
Restricted cash		794			101
Prepaid expenses and other current assets		1,047			1,796
Total current assets		97,386			91,259
Property, plant and equipment, net		2,858			3,107
Other intangible assets, net		1,476			1,170
Other assets		3,104			3,425
	$	104,824		$	98,961
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,814		$	7,436
Accrued expenses and other current liabilities		12,472			12,245
Current portion of debt, net		32,727			—
Deferred revenue		4,902			2,215
Total current liabilities		56,915			21,896
Other long-term liabilities		234			407
Long-term debt, net		16,417			16,366
Convertible subordinated debt, net		—			44,384
Total liabilities		73,566			83,053
Stockholders’ equity:
Preferred stock, $0.01 par value: 10,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $0.01 par value: 250,000 shares authorized; 67,703 and 57,545 shares outstanding at September 30, 2014 and 2013, respectively		677			575
Additional paid-in-capital		1,924,984			1,891,661
Accumulated deficit		(1,894,403	)		(1,876,328	)
Total stockholders’ equity		31,258			15,908
	$	104,824		$	98,961


VITESSE SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months ended									Year Ended
	September 30,			June 30,			September 30,			September 30,
	2014			2014			2013			2014			2013
Net revenues:	(in thousands, except per share data)
Product revenues	$	27,007		$	26,012		$	26,455		$	102,751		$	101,334
Intellectual property revenues		1,664			1,139			420			5,746			2,439
Net revenues		28,671			27,151			26,875			108,497			103,773
Costs and expenses:
Cost of product revenues		10,571			12,254			12,753			44,480			46,763
Engineering, research and development		10,869			10,006			9,940			42,450			41,927
Selling, general and administrative		7,792			7,330			7,593			30,981			30,210
Amortization of intangible assets		93			88			81			360			347
Costs and expenses		29,325			29,678			30,367			118,271			119,247
Loss from operations		(654	)		(2,527	)		(3,492	)		(9,774	)		(15,474	)
Other expense (income):
Interest expense, net		1,521			1,510			1,997			6,227			7,916
Gain on compound embedded derivative		—			—			—			—			(803	)
Loss on extinguishment of debt		—			—			—			1,594			—
Other expense, net		28			18			34			139			39
Other expense, net		1,549			1,528			2,031			7,960			7,152
Loss before income tax expense (benefit)		(2,203	)		(4,055	)		(5,523	)		(17,734	)		(22,626	)
Income tax expense (benefit)		282			333			242			341			(548	)
Net loss	$	(2,485	)	$	(4,388	)	$	(5,765	)	$	(18,075	)	$	(22,078	)

Net loss per common share - basic and diluted	$	(0.04	)	$	(0.07	)	$	(0.10	)	$	(0.30	)	$	(0.55	)
Weighted average common shares outstanding - basic and diluted		67,580			59,965			57,254			60,887			40,311


VITESSE SEMICONDUCTOR CORPORATION
UNAUDITED RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS

	Three Months Ended									Year Ended
	September 30,			June 30,			September 30,			September 30,
	2014			2014			2013			2014			2013
	(in thousands, except per share data)
UNAUDITED RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
GAAP net loss	$	(2,485	)	$	(4,388	)	$	(5,765	)	$	(18,075	)	$	(22,078	)
Adjustments:
Stock-based compensation charges		1,609			1,586			1,091			6,075			4,396
Amortization of intangible assets		93			88			81			360			347
Gain on compound embedded derivative		—			—			—			—			(803	)
Loss on extinguishment of debt		—			—			—			1,594			—
Total GAAP to non-GAAP adjustments		1,702			1,674			1,172			8,029			3,940
Non-GAAP net loss	$	(783	)	$	(2,714	)	$	(4,593	)	$	(10,046	)	$	(18,138	)
Net loss per common share - basic and diluted:
GAAP net loss per common share	$	(0.04	)	$	(0.07	)	$	(0.10	)	$	(0.30	)	$	(0.55	)
Adjustments		0.03			0.03			0.02			0.14			0.10
Non-GAAP net loss per common share	$	(0.01	)	$	(0.04	)	$	(0.08	)	$	(0.16	)	$	(0.45	)

UNAUDITED RECONCILIATION OF GAAP LOSS FROM OPERATIONS TO NON-GAAP INCOME (LOSS) FROM OPERATIONS
GAAP loss from operations	$	(654	)	$	(2,527	)	$	(3,492	)	$	(9,774	)	$	(15,474	)
Adjustments:
Stock-based compensation charges		1,609			1,586			1,091			6,075			4,396
Amortization of intangible assets		93			88			81			360			347
Total GAAP to non-GAAP adjustments		1,702			1,674			1,172			6,435			4,743
Non-GAAP income (loss) from operations	$	1,048		$	(853	)	$	(2,320	)	$	(3,339	)	$	(10,731	)

UNAUDITED RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
GAAP operating expenses:
Engineering, research and development	$	10,869		$	10,006		$	9,940		$	42,450		$	41,927
Selling, general and administrative		7,792			7,330			7,593			30,981			30,210
Amortization of intangible assets		93			88			81			360			347
Total GAAP operating expenses		18,754			17,424			17,614			73,791			72,484
Adjustments:
Stock-based compensation charges		1,405			1,376			933			5,252			3,779
Amortization of intangible assets		93			88			81			360			347
Total GAAP to non-GAAP adjustments		1,498			1,464			1,014			5,612			4,126
Non-GAAP operating expenses	$	17,256		$	15,960		$	16,600		$	68,179		$	68,358

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