Non-GAAP Financial Measures
In addition to GAAP reporting, MACOM provides investors with adjusted non-GAAP financial information. Adjusted items include revenue, gross profit, gross margin, operating margin, operating income, net income, earnings per share, Adjusted EBITDA and other data calculated on a non-GAAP basis. This non-GAAP information excludes non-consulting agreement related discontinued operations, the impact of fair value accounting in merger and acquisitions (M&A) of businesses, M&A costs, including acquisition and related integration costs, certain cost savings from synergies expected from M&A activities, income and expenses from transition services related to M&A activities, expected amortization of acquisition-related intangibles, share-based and other non-cash compensation expense, certain cash compensation, restructuring charges, impairment charges, litigation settlement and costs, changes in the carrying values of assets and liabilities measured at fair value, contingent consideration, amortization of debt discounts and issuance costs, debt settlement costs, other non-cash expenses, earn-out costs, restructuring costs and certain income tax items. The non-GAAP information includes consulting agreement related revenue associated with the Automotive business divestiture. Management does not believe that the adjusted items are reflective of MACOM's underlying performance. The adjustment of these and other similar items from MACOM's non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual. These and other similar items are also excluded from Adjusted EBITDA, which is non-GAAP earnings before interest, income taxes, depreciation and amortization. MACOM believes this adjusted non-GAAP financial information provides additional insight into these items and MACOM's performance and has, therefore, chosen to provide this information to investors for a consistent basis of comparison and to help them evaluate the results of MACOM's operations and enable more meaningful period to period comparisons. These adjusted non-GAAP measures may be different than similar measures used by other companies and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and adjusted non-GAAP financial data used in this earnings release is included in the supplemental financial data attached to this press release.
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M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share data) |
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| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| April 1, | January 1, | April 3, | April 1, | April 3, | ||||||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||
| Revenue | $ | 133,579 | $ | 115,774 | $ | 102,431 | $ | 249,353 | $ | 198,987 | ||||||||||||||
| Cost of revenue | 68,054 | 55,456 | 55,717 | 123,510 | 104,854 | |||||||||||||||||||
| Gross profit | 65,525 | 60,318 | 46,714 | 125,843 | 94,133 | |||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Research and development | 26,203 | 25,322 | 20,439 | 51,525 | 39,221 | |||||||||||||||||||
| Selling, general and administrative | 34,617 | 34,686 | 28,247 | 69,303 | 53,475 | |||||||||||||||||||
| Impairment charges | 11,005 | — | — | 11,005 | — | |||||||||||||||||||
| Restructuring charges | 851 | 157 | 413 | 1,008 | 413 | |||||||||||||||||||
| Total operating expenses | 72,676 | 60,165 | 49,099 | 132,841 | 93,109 | |||||||||||||||||||
| Income (loss) from operations | (7,151 | ) | 153 | (2,385 | ) | (6,998 | ) | 1,024 | ||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||
| Warrant liability expense | (4,201 | ) | (14,878 | ) | (5,609 | ) | (19,079 | ) | (16,217 | ) | ||||||||||||||
| Interest expense, net | (4,408 | ) | (4,346 | ) | (4,723 | ) | (8,754 | ) | (9,446 | ) | ||||||||||||||
| Other income (expense), net | (81 | ) | 100 | (1,376 | ) | 19 | (1,001 | ) | ||||||||||||||||
| Total other income (expense) | (8,690 | ) | (19,124 | ) | (11,708 | ) | (27,814 | ) | (26,664 | ) | ||||||||||||||
| Loss before income taxes | (15,841 | ) | (18,971 | ) | (14,093 | ) | (34,812 | ) | (25,640 | ) | ||||||||||||||
| Income tax benefit | (3,796 | ) | (2,201 | ) | (2,917 | ) | (5,997 | ) | (4,500 | ) | ||||||||||||||
| Loss from continuing operations | (12,045 | ) | (16,770 | ) | (11,176 | ) | (28,815 | ) | (21,140 | ) | ||||||||||||||
| Income from discontinued operations | 1,396 | 1,199 | 3,639 | 2,595 | 7,297 | |||||||||||||||||||
| Net loss | $ | (10,649 | ) | $ | (15,571 | ) | $ | (7,537 | ) | $ | (26,220 | ) | $ | (13,843 | ) | |||||||||
| Net income (loss) per share: | ||||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||||
| Loss from continuing operations | $ | (0.23 | ) | $ | (0.32 | ) | $ | (0.22 | ) | $ | (0.54 | ) | $ | (0.43 | ) | |||||||||
| Income from discontinued operations | 0.03 | 0.02 | 0.07 | 0.05 | 0.15 | |||||||||||||||||||
| Loss per share - basic | $ | (0.20 | ) | $ | (0.29 | ) | $ | (0.15 | ) | $ | (0.49 | ) | $ | (0.28 | ) | |||||||||
| Diluted: | ||||||||||||||||||||||||
| Loss from continuing operations | $ | (0.23 | ) | $ | (0.32 | ) | $ | (0.22 | ) | $ | (0.54 | ) | $ | (0.43 | ) | |||||||||
| Income from discontinued operations | 0.03 | 0.02 | 0.07 | 0.05 | 0.15 | |||||||||||||||||||
| Loss per share - diluted | $ | (0.20 | ) | $ | (0.29 | ) | $ | (0.15 | ) | $ | (0.49 | ) | $ | (0.28 | ) | |||||||||
| Shares - Basic | 53,228 | 53,015 | 50,593 | 53,122 | 49,100 | |||||||||||||||||||
| Shares - Diluted | 53,228 | 53,015 | 50,593 | 53,122 | 49,100 | |||||||||||||||||||
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M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) |
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| April 1, | October 2, | ||||||||||
| 2016 | 2015 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 58,187 | $ | 122,312 | |||||||
| Short term investments | 23,632 | 39,557 | |||||||||
| Accounts receivable, net | 91,604 | 83,950 | |||||||||
| Inventories | 106,972 | 79,943 | |||||||||
| Deferred income taxes (1) | — | 31,431 | |||||||||
| Income tax receivable | 16,077 | 15,854 | |||||||||
| Prepaids and other current assets | 11,553 | 11,172 | |||||||||
| Total current assets | 308,025 | 384,219 | |||||||||
| Property and equipment, net | 99,637 | 83,759 | |||||||||
| Goodwill and intangible assets, net | 397,370 | 337,012 | |||||||||
| Deferred income taxes | 83,909 | 48,239 | |||||||||
| Other long-term assets | 11,457 | 13,022 | |||||||||
| TOTAL ASSETS | $ | 900,398 | $ | 866,251 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of debt obligations | $ | 4,499 | $ | 4,058 | |||||||
| Accounts payable, accrued liabilities and other | 78,335 | 67,418 | |||||||||
| Total current liabilities | 82,834 | 71,476 | |||||||||
| Long-term debt obligations, less current portion | 341,396 | 340,504 | |||||||||
| Common stock warrant liability | 40,901 | 21,822 | |||||||||
| Deferred income taxes | 13,920 | — | |||||||||
| Long-term liabilities and other | 7,339 | 7,916 | |||||||||
| Total liabilities | 486,390 | 441,718 | |||||||||
| Stockholders' equity | 414,008 | 424,533 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 900,398 | $ | 866,251 | |||||||
