MACOM Reports Fiscal Third Quarter 2017 Financial Results
Third Quarter Fiscal Year 2017 GAAP Results
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Revenue was
$194.6 million , an increase of 36.7%, compared to$142.3 million in the previous year fiscal third quarter and an increase of 4.6% compared to$186.1 million in the prior fiscal quarter; -
Gross profit was
$92.6 million , an increase of 25.2%, compared to$74.0 million in the previous year fiscal third quarter and an increase of 34.5% compared to$68.9 million in the prior fiscal quarter; - Gross margin was 47.6%, compared to 52.0% in the previous year fiscal third quarter and 37.0% in the prior fiscal quarter;
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Operating income was
$6.6 million , compared to$10.2 million in the previous year fiscal third quarter and an operating loss of$33.6 million in the prior fiscal quarter; and -
Net loss from continuing operations was
$14.0 million , resulting in$0.22 loss per diluted share, compared to net income from continuing operations of$21.4 million , or$0.11 income per diluted share, in the previous year fiscal third quarter and net loss from continuing operations of$134.3 million , or$2.21 loss per diluted share, in the prior fiscal quarter.
Third Quarter Fiscal Year 2017 Adjusted Non-GAAP Results
- Adjusted gross margin was 58.5%, compared to 57.3% in the previous year fiscal third quarter and 58.5% in the prior fiscal quarter;
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Adjusted operating income was
$52.9 million , or 27.2% of revenue, compared to$34.9 million , or 24.5% of revenue, in the previous year fiscal third quarter and$48.6 million , or 26.1% of revenue, in the prior fiscal quarter; -
Adjusted net income was
$43.9 million , or$0.67 per diluted share, compared to adjusted net income of$27.9 million , or$0.51 per diluted share, in the previous year fiscal third quarter and adjusted net income of$39.4 million , or$0.63 per diluted share, in the prior fiscal quarter; and -
Adjusted EBITDA was
$61.6 million , compared to$42.1 million for the previous year fiscal third quarter and$56.7 million for the prior fiscal quarter.
Management Commentary
"We delivered 5 percent sequential growth in our fiscal third quarter,
in line with guidance, despite a weakening carrier spending environment
in
"Our Networks business overall was up 43.5 percent year-over-year,
despite a sequential decline in telecom Optical revenue. PON was down
considerably year-over-year and now comprises less than 5 percent of
total revenue. Carriers and OEM customers are now squarely focused on
deploying 10G PON, which we expect will drive a new wave of investment
next year. However, the rapid transition away from 2.5G has created a
temporary overhang for our business. Metro/Long-Haul business in
"The decline in Optical was offset by growth in our Data Center businesses, which were up strong sequentially and 310 percent year-over-year, now totaling almost 30 percent of company revenue. We continue to ramp supply aggressively to meet the demand in these Cloud-based businesses.
"Our visibility into carrier demand in
Business Outlook
For the fiscal fourth quarter ending
Conference Call
MACOM will host a conference call on
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 with a passcode of 51194336. 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
About MACOM
MACOM enables a better-connected and safer world by delivering breakthrough semiconductor technologies for optical, wireless and satellite networks that satisfy society's insatiable demand for information.
Today, MACOM powers the infrastructure that millions of lives and
livelihoods depend on every minute to communicate, transact business,
travel, stay informed and be entertained. Our technology increases the
speed and coverage of the mobile
Keeping us all safe, MACOM technology enables next-generation radars for air traffic control and weather forecasting, as well as mission success on the modern networked battlefield.
MACOM is the partner of choice to the world's leading communications infrastructure, aerospace and defense companies, helping solve their most complex challenges in areas including network capacity, signal coverage, energy efficiency and field reliability, through its best-in-class team and broad portfolio of RF, microwave, millimeterwave and lightwave semiconductor products.
MACOM is a pillar of the semiconductor industry, thriving for more than 60 years of daring to change the world for the better, through bold technological strokes that deliver true competitive advantage to customers and superior value to investors.
Headquartered in
MACOM, M/
Special Note Regarding Forward-Looking Statements
This press release and our commentary in our conference call held today
each contain forward-looking statements based on MACOM management's
beliefs and assumptions and on information currently available to our
management. Forward-looking statements include, among others,
information concerning our stated business outlook and future results of
operations, our expectations for business and market conditions in the
PON,
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 expressed in any
forward-looking statement. Although MACOM 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 the
potential that we are unable to identify and timely enter into new
markets for our products, such as our publicly-announced market
opportunities in Cloud Data Centers, 100G optical networks, 10G PON, GaN
technology and Active Antennas, the potential that we are unable to
timely deliver the quantities of our products targeting these or other
applications at the right price point due to design challenges,
manufacturing bottlenecks, supply shortages, yield issues or otherwise,
the potential that the expected rollout of
Discussion Regarding the Use of Historical and Forward-Looking Non-GAAP Financial Measures
In addition to GAAP reporting, MACOM provides investors with financial
measures that have not been calculated in accordance with
Management believes that these excluded items are not reflective of our underlying performance. Management uses these non-GAAP financial measures to; evaluate our ongoing operating performance and compare it against prior periods, make operating decisions, forecast future periods, evaluate potential acquisitions, compare our operating performance against peer companies and assess certain compensation programs. The exclusion of these and other similar items from our non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent or unusual. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors for a more consistent basis of comparison and to help them evaluate the results of our ongoing 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. We have not provided a reconciliation with respect to any forward-looking non-GAAP financial data presented because we do not have and cannot reliably estimate certain key inputs required to calculate the most comparable GAAP financial data, such as the future price per share of our common stock for purposes of calculating the value of our common stock warrant liability, future acquisition costs, the possibility and impact of any litigation costs, changes in our GAAP effective tax rate and impairment charges. We believe these unknown inputs are likely to have a significant impact on any estimate of the comparable GAAP financial data.
Investors are cautioned against placing undue reliance on these non-GAAP financial measures and are urged to review and consider carefully the adjustments made by management to the most directly comparable GAAP financial measures to arrive at these non-GAAP financial measures. Non-GAAP financial measures may have limited value as analytical tools because they may exclude certain expenses that some investors consider important in evaluating our operating performance or ongoing business performance. Further, non-GAAP financial measures may have limited value for purposes of drawing comparisons between companies because different companies may calculate similarly titled non-GAAP financial measures in different ways because non-GAAP measures are not based on any comprehensive set of accounting rules or principles.
Additional information and management's assessment regarding why certain items are excluded from our Non-GAAP measures are summarized below:
Amortization Expense - is related to acquired intangible assets which are based upon valuation methodologies, and are generally amortized over the expected life of the intangible asset at the time of acquisition, which may result in amortization amounts that vary over time. The expense is not considered by management in making operating decisions, and the expense is non-cash.
Share-Based and Non-cash Compensation Expense - includes share based compensation including awards that are equity and liability classified on our balance sheet as well as non-cash compensation expense primarily associated with amounts due to employees of an acquired business that were placed in escrow at the time of the acquisition and amortized as expense over a 2-year period. Share Based Compensation expense is partially outside of our control due to factors such as stock price volatility and interest rates, which may be unrelated to our operating performance during the period in which the expense is incurred. It is an expense based upon valuation methodologies and assumptions that vary over time, and the amount of the expense can vary significantly between companies due to factors that can be outside of their control. Share-based and non-cash compensation expense amounts are not considered by management in making operating decisions.
Impairment Charges - includes expenses associated with our strategic decision to exit a product line and end programs with a license and technology transfer as well as certain related fixed assets and inventory. We believe these charges are one-time in nature and are not correlated to future business operations and including such charges does not reflect our ongoing operations.
Restructuring Charges - includes amounts primarily associated with approved plans to reduce staffing and manufacturing or administrative footprints. We believe these amounts are not correlated to future business operations and including such charges does not reflect our ongoing operations.
Warrant Liability Expenses/Gains - are associated with mark-to-market fair value adjustments which are largely based on the value of our common stock, which may vary from period to period due to factors such as stock price volatility. We believe these amounts are not correlated to future business operations and including such charges does not reflect our ongoing operations.
Non-Cash Interest, Net - includes amounts associated with the amortization of certain fees associated with the establishment or amendment of our Credit Agreement and Term Loans that are being amortized over the life of the agreement. We believe these amounts are non-cash in nature and not correlated to future business operations and including such charges does not reflect our ongoing operations.
Litigation Costs - includes gains, losses and expenses related to the resolution of other-than-ordinary-course threatened and actually filed lawsuits and other-than-ordinary-course contractual disputes and legal matters. We exclude these gains and losses because they are not considered by management in making operating decisions. We believe such gains, losses and expenses do not necessarily reflect the performance of our ongoing operations for the period in which such charges are recognized and the amount of such gains or losses and expenses can vary significantly between companies and make comparisons less reliable.
Acquisition and Integration Related Costs - includes such items as professional fees incurred in connection with pre-acquisition and integration specific activities, post-acquisition employee retention amounts, contingent consideration adjustments, severance and other amounts accrued or paid to terminated employees of acquired businesses, costs including salaries incurred which are not expected to have a continuing contribution to operations or are expected to have a diminishing contribution during the integration period and the amortization of the fair market step-up value of acquired inventory and fixed assets. We believe the exclusion of these items is useful in providing management a basis to evaluate ongoing operating activities and strategic decision making.
Discontinued Operations excluding consulting income - includes the profit and loss amounts of discontinued operations, with the exception of consulting income associated with a consulting agreement we entered into at the time of our Automotive business divestiture. We believe excluding gains and losses associated with historically divested businesses from our net income provides management with a comparable basis to our current ongoing operating activities. We do not exclude the consulting agreement income classified as discontinued operations because management views this income as part of our ongoing operations and correlated with future operations since we both derive income and incur ongoing costs associated with the consulting services available under the consulting agreement.
Other - primarily include transaction expenses incurred as part of our Credit Agreement Amendments in the fourth fiscal quarter of 2016 as well as the second and third fiscal quarters of 2017. We believe these amounts are not correlated to future business operations and including such charges does not reflect our ongoing operations.
Tax Effect of Non-GAAP Adjustments - adjustments to arrive at an
estimate of our Adjusted Non-GAAP tax rate associated with our Adjusted
Non-GAAP income over a period of time. We determine our Adjusted
Non-GAAP income tax rate by using applicable rates in taxing
jurisdictions and assessing certain factors including our historical and
forecast earnings by jurisdiction, discrete items, cash taxes paid in
relation to our Adjusted Non-GAAP Net Income before income taxes and our
ability to realize tax assets. We generally assess this Adjusted
Non-GAAP income tax rate quarterly and have utilized 10% for our second
and third fiscal quarters of 2017, 12% for our first fiscal quarter of
2017 and 15% for our fiscal year 2016. Our historical effective income
tax rate under GAAP has varied significantly from our Adjusted Non-GAAP
income tax rate. Items that have historically resulted in significant
difference between our effective income tax rate under GAAP and our
Adjusted Non-GAAP income tax rate include changes in fair values of the
common stock warrant liability, which is excluded from our Adjusted
Non-GAAP net Income and is neither deductible nor taxable for tax
purposes, income taxed in foreign jurisdictions at generally lower tax
rates, non-deductible compensation, research and development tax credits
and merger expenses, as well as the establishment of a valuation
allowance against our
Adjusted EBITDA - is a calculation that adds depreciation expense and consulting agreement income to our Adjusted Non-GAAP Income from Operations. Adjusted EBITDA is a measure that management reviews and utilizes for operational analysis purposes. We believe competitors and others in the financial industry utilize this Non-GAAP measure for analysis purposes.
Free Cash Flow - is a calculation that starts with cash flow from operating activities, reduces this amount by our capital expenditures in the applicable period and adds AppliedMicro transaction related payments. Free Cash Flow is a measure that management reviews and utilizes for cash flow analysis purposes. We believe competitors and others in the financial industry utilize this Non-GAAP measure for analyzing a company's cash flow.
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||
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(unaudited and in thousands, except per share data) |
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| Three Months Ended | Nine Months Ended | |||||||||||||||||||||
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| Revenue | $ | 194,555 | $ | 186,084 | $ | 142,288 | $ | 532,391 | $ | 391,641 | ||||||||||||
| Cost of revenue | 101,926 | 117,220 | 68,326 | 292,403 | 191,836 | |||||||||||||||||
| Gross profit | 92,629 | 68,864 | 73,962 | 239,988 | 199,805 | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||
| Research and development | 38,729 | 39,685 | 26,064 | 108,588 | 77,589 | |||||||||||||||||
| Selling, general and administrative | 46,666 | 62,326 | 35,866 | 145,488 | 105,169 | |||||||||||||||||
| Impairment charges | — | — | 760 | — | 11,765 | |||||||||||||||||
| Restructuring charges | 586 | 469 | 1,092 | 2,342 | 2,100 | |||||||||||||||||
| Total operating expenses | 85,981 | 102,480 | 63,782 | 256,418 | 196,623 | |||||||||||||||||
| Income (loss) from operations | 6,648 | (33,616 | ) | 10,180 | (16,430 | ) | 3,182 | |||||||||||||||
| Other income (expense): | ||||||||||||||||||||||
| Warrant liability expense (gain) | (9,085 | ) | (2,573 | ) | 15,339 | (16,481 | ) | (3,741 | ) | |||||||||||||
| Interest expense, net | (7,178 | ) | (7,374 | ) | (4,363 | ) | (21,902 | ) | (13,117 | ) | ||||||||||||
| Other (expense) income, net | (1,139 | ) | (899 | ) | 16 | (2,042 | ) | 36 | ||||||||||||||
| Total other (expense) income | (17,402 | ) | (10,846 | ) | 10,992 | (40,425 | ) | (16,822 | ) | |||||||||||||
| (Loss) income before income taxes | (10,754 | ) | (44,462 | ) | 21,172 | (56,855 | ) | (13,640 | ) | |||||||||||||
| Income tax expense (benefit) | 3,223 | 89,805 | (181 | ) | 93,559 | (6,178 | ) | |||||||||||||||
| (Loss) income from continuing operations | (13,977 | ) | (134,267 | ) | 21,353 | (150,414 | ) | (7,462 | ) | |||||||||||||
| (Loss) income from discontinued operations | (13,700 | ) | 4,136 | 1,199 | (8,358 | ) | 3,794 | |||||||||||||||
| Net (loss) income | $ | (27,677 | ) | $ | (130,131 | ) | $ | 22,552 | $ | (158,772 | ) | $ | (3,668 | ) | ||||||||
| Net (loss) income per share: | ||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||
| (Loss) income from continuing operations | $ | (0.22 | ) | $ | (2.21 | ) | $ | 0.40 | $ | (2.53 | ) | $ | (0.14 | ) | ||||||||
| (Loss) income from discontinued operations | (0.21 | ) | 0.07 | 0.02 | (0.14 | ) | 0.07 | |||||||||||||||
| (Loss) income per share - basic | $ | (0.43 | ) | $ | (2.14 | ) | $ | 0.42 | $ | (2.67 | ) | $ | (0.07 | ) | ||||||||
| Diluted: | ||||||||||||||||||||||
| (Loss) income from continuing operations | $ | (0.22 | ) | $ | (2.21 | ) | $ | 0.11 | $ | (2.53 | ) | $ | (0.14 | ) | ||||||||
| (Loss) income from discontinued operations | (0.21 | ) | 0.07 | 0.02 | (0.14 | ) | 0.07 | |||||||||||||||
| (Loss) income per share - diluted | $ | (0.43 | ) | $ | (2.14 | ) | $ | 0.13 | $ | (2.67 | ) | $ | (0.07 | ) | ||||||||
| Shares - Basic | 64,019 | 60,813 | 53,516 | 59,524 | 53,253 | |||||||||||||||||
| Shares - Diluted | 64,019 | 60,813 | 55,288 | 59,524 | 53,253 | |||||||||||||||||
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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
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(unaudited and in thousands) |
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September |
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| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 167,606 | $ | 332,977 | ||||||
| Short term investments | 81,641 | 23,776 | ||||||||
| Accounts receivable, net | 129,838 | 108,331 | ||||||||
| Inventories | 120,345 | 114,935 | ||||||||
| Income tax receivable | 20,617 | 21,607 | ||||||||
| Assets held for sale, current | 31,519 | — | ||||||||
| Prepaids and other current assets | 18,284 | 11,318 | ||||||||
| Total current assets | 569,850 | 612,944 | ||||||||
| Property and equipment, net | 121,413 | 99,167 | ||||||||
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933,096 | 379,626 | ||||||||
| Deferred income taxes | 2,070 | 89,606 | ||||||||
| Other long-term assets | 6,450 | 7,208 | ||||||||
| TOTAL ASSETS | $ | 1,632,879 | $ | 1,188,551 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Current portion of lease payable | $ | 888 | $ | 1,152 | ||||||
| Current portion of long-term debt obligations | 7,071 | 6,051 | ||||||||
| Liabilities held for sale | 10,719 | — | ||||||||
| Accounts payable, accrued liabilities and other | 82,935 | 84,947 | ||||||||
| Total current liabilities | 101,613 | 92,150 | ||||||||
| Lease payable, less current portion | 15,117 | 2,463 | ||||||||
| Long-term debt obligations, less current portion | 662,260 | 573,882 | ||||||||
| Common stock warrant liability | 54,734 | 38,253 | ||||||||
| Deferred income taxes | 11,731 | 11,765 | ||||||||
| Other long-term liabilities | 8,043 | 7,254 | ||||||||
| Total liabilities | 853,498 | 725,767 | ||||||||
| Stockholders' equity | 779,381 | 462,784 | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,632,879 | $ | 1,188,551 | ||||||
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| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
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(unaudited and in thousands) |
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| Nine Months Ended | |||||||||||
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| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net loss | $ | (158,772 | ) | $ | (3,668 | ) | |||||
| Adjustments to reconcile loss to net operating cash | 229,591 | 91,282 | |||||||||
| Change in operating assets and liabilities | (22,130 | ) | (33,267 | ) | |||||||
| Net cash provided by operating activities | 48,689 | 54,347 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Acquisition of businesses, net | (231,712 | ) | (85,516 | ) | |||||||
| Purchases, sales and maturities of investments | (58,088 | ) | 15,412 | ||||||||
| Proceeds from discontinued operations | 23,645 | 3,750 | |||||||||
| Sale of businesses and assets | 215 | — | |||||||||
| Purchases of property and equipment | (24,496 | ) | (24,100 | ) | |||||||
| Acquisition of intellectual property | — | (777 | ) | ||||||||
| Net cash used in investing activities | (290,436 | ) | (91,231 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from notes payable | 96,558 | — | |||||||||
| Payments of financing costs | (9,077 | ) | — | ||||||||
| Proceeds from corporate facility financing obligation | 4,250 | — | |||||||||
| Payments of notes payable and assumed debt | (3,954 | ) | (12,178 | ) | |||||||
| Proceeds from stock option exercises and employee stock purchases | 8,162 | 5,336 | |||||||||
| Repurchase of common stock | (18,092 | ) | (9,966 | ) | |||||||
| Other adjustments | (1,296 | ) | (1,195 | ) | |||||||
| Net cash provided by (used in) financing activities | 76,551 | (18,003 | ) | ||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (175 | ) | (583 | ) | |||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (165,371 | ) | (55,470 | ) | |||||||
| CASH AND CASH EQUIVALENTS — Beginning of period | 332,977 | 122,312 | |||||||||
| CASH AND CASH EQUIVALENTS — End of period | $ | 167,606 | $ | 66,842 | |||||||
| Supplemental disclosure of non-cash activities | |||||||||||
| Issuance of common stock in connection with the AppliedMicro Acquisition | 465,082 | — | |||||||||
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| RECONCILIATION OF GAAP TO NON-GAAP RESULTS | ||||||||||||||||||||||||||||||||||||
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(unaudited and in thousands, except per share data) |
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| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||
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| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||||||
| Gross profit - GAAP | $ | 92,629 | 47.6 | $ | 68,864 | 37.0 | $ | 73,962 | 52.0 | $ | 239,988 | 45.1 | $ | 199,805 | 51.0 | |||||||||||||||||||||
| Amortization expense | 8,416 | 4.3 | 7,277 | 3.9 | 6,440 | 4.5 | 21,694 | 4.1 | 20,249 | 5.2 | ||||||||||||||||||||||||||
| Share-based and non-cash compensation | 956 | 0.5 | 966 | 0.5 | 685 | 0.5 | 2,716 | 0.5 | 1,918 | 0.5 | ||||||||||||||||||||||||||
| Impairment and restructuring charges | — | — | — | — | — | — | — | — | 1,950 | 0.5 | ||||||||||||||||||||||||||
| Acquisition and integration related costs | 11,736 | 6.0 | 31,793 | 17.1 | 422 | 0.3 | 45,075 | 8.5 | 3,102 | 0.8 | ||||||||||||||||||||||||||
| Adjusted gross profit (Non-GAAP) | $ | 113,737 | 58.5 | $ | 108,900 | 58.5 | $ | 81,509 | 57.3 | $ | 309,473 | 58.1 | $ | 227,024 | 58.0 | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||
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| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | ||||||||||||||||||||||||||||
| Operating expenses - GAAP | $ | 85,981 | 44.2 | $ | 102,480 | 55.1 | $ | 63,782 | 44.8 | $ | 256,418 | 48.2 | $ | 196,623 | 50.2 | ||||||||||||||||||||||
| Amortization expense | (10,832 | ) | (5.6 | ) | (7,163 | ) | (3.8 | ) | (6,415 | ) | (4.5 | ) | (24,462 | ) | (4.6 | ) | (17,142 | ) | (4.4 | ) | |||||||||||||||||
| Share-based and non-cash compensation | (9,833 | ) | (5.1 | ) | (11,260 | ) | (6.1 | ) | (6,206 | ) | (4.4 | ) | (30,384 | ) | (5.7 | ) | (24,806 | ) | (6.3 | ) | |||||||||||||||||
| Impairment and restructuring charges | (586 | ) | (0.3 | ) | (469 | ) | (0.3 | ) | (1,852 | ) | (1.3 | ) | (2,342 | ) | (0.4 | ) | (13,865 | ) | (3.5 | ) | |||||||||||||||||
| Litigation costs | (569 | ) | (0.3 | ) | (780 | ) | (0.4 | ) | (818 | ) | (0.6 | ) | (1,610 | ) | (0.3 | ) | (1,159 | ) | (0.3 | ) | |||||||||||||||||
| Acquisition and integration related costs | (2,645 | ) | (1.4 | ) | (22,334 | ) | (12.0 | ) | (1,911 | ) | (1.3 | ) | (29,746 | ) | (5.6 | ) | (7,637 | ) | (2.0 | ) | |||||||||||||||||
| Other | (719 | ) | (0.4 | ) | (183 | ) | (0.1 | ) | — | — | (905 | ) | (0.2 | ) | — | — | |||||||||||||||||||||
| Adjusted operating expenses (Non-GAAP) | $ | 60,797 | 31.2 | $ | 60,291 | 32.4 | $ | 46,580 | 32.7 | $ | 166,969 | 31.4 | $ | 132,014 | 33.7 | ||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||
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| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||||||
| Income (loss) from operations - GAAP | $ | 6,648 | 3.4 | $ | (33,616 | ) | (18.1 | ) | $ | 10,180 | 7.2 | $ | (16,430 | ) | (3.1 | ) | $ | 3,182 | 0.8 | |||||||||||||||||
| Amortization expense | 19,248 | 9.9 | 14,440 | 7.8 | 12,855 | 9.0 | 46,157 | 8.7 | 37,391 | 9.5 | ||||||||||||||||||||||||||
| Share-based and non-cash compensation | 10,789 | 5.5 | 12,226 | 6.6 | 6,891 | 4.8 | 33,100 | 6.2 | 26,723 | 6.8 | ||||||||||||||||||||||||||
| Impairment and restructuring charges | 586 | 0.3 | 469 | 0.3 | 1,852 | 1.3 | 2,342 | 0.4 | 15,815 | 4.0 | ||||||||||||||||||||||||||
| Litigation costs | 569 | 0.3 | 780 | 0.4 | 817 | 0.6 | 1,610 | 0.3 | 1,157 | 0.3 | ||||||||||||||||||||||||||
| Acquisition and integration related costs | 14,380 | 7.4 | 54,127 | 29.1 | 2,334 | 1.6 | 74,821 | 14.1 | 10,740 | 2.7 | ||||||||||||||||||||||||||
| Other | 719 | 0.4 | 183 | 0.1 | — | — | 905 | 0.2 | — | — | ||||||||||||||||||||||||||
| Adjusted income from operations (Non-GAAP) | $ | 52,939 | 27.2 | $ | 48,609 | 26.1 | $ | 34,929 | 24.5 | $ | 142,505 | 26.8 | $ | 95,008 | 24.3 | |||||||||||||||||||||
| Depreciation expense | 6,739 | 3.5 | 6,173 | 3.3 | 5,278 | 3.7 | 18,447 | 3.5 | 14,021 | 3.6 | ||||||||||||||||||||||||||
| Consulting income | 1,875 | 1.0 | 1,875 | 1.0 | 1,890 | 1.3 | 5,625 | 1.1 | 5,637 | 1.4 | ||||||||||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 61,553 | 31.6 | $ | 56,657 | 30.4 | $ | 42,097 | 29.6 | $ | 166,577 | 31.3 | $ | 114,666 | 29.3 | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||
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| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | ||||||||||||||||||||||||||||
| Net (loss) income - GAAP | $ | (27,677 | ) | (14.2 | ) | $ | (130,131 | ) | (69.9 | ) | $ | 22,552 | 15.8 | $ | (158,772 | ) | (29.8 | ) | $ | (3,668 | ) | (0.9 | ) | ||||||||||||||
| Amortization expense | 19,248 | 9.9 | 14,440 | 7.8 | 12,855 | 9.0 | 46,157 | 8.7 | 37,391 | 9.5 | |||||||||||||||||||||||||||
| Share-based and non-cash compensation | 10,789 | 5.5 | 12,226 | 6.6 | 6,891 | 4.8 | 33,100 | 6.2 | 26,723 | 6.8 | |||||||||||||||||||||||||||
| Impairment and restructuring charges | 586 | 0.3 | 469 | 0.3 | 1,852 | 1.3 | 2,342 | 0.4 | 15,815 | 4.0 | |||||||||||||||||||||||||||
| Warrant liability expense | 9,085 | 4.7 | 2,573 | 1.4 | (15,339 | ) | (10.8 | ) | 16,480 | 3.1 | 3,741 | 1.0 | |||||||||||||||||||||||||
| Non-cash interest, net | 1,122 | 0.6 | 721 | 0.4 | 405 | 0.3 | 2,546 | 0.5 | 1,228 | 0.3 | |||||||||||||||||||||||||||
| Litigation costs | 569 | 0.3 | 780 | 0.4 | 817 | 0.6 | 1,610 | 0.3 | 1,157 | 0.3 | |||||||||||||||||||||||||||
| Acquisition and integration related costs | 14,380 | 7.4 | 54,127 | 29.1 | 2,334 | 1.6 | 74,821 | 14.1 | 10,717 | 2.7 | |||||||||||||||||||||||||||
| Discontinued operations, excluding consulting income | 15,575 | 8.0 | (2,261 | ) | (1.2 | ) | 676 | 0.5 | 13,983 | 2.6 | 1,831 | 0.5 | |||||||||||||||||||||||||
| Other | 719 | 0.4 | 1,055 | 0.6 | — | — | 1,776 | 0.3 | — | — | |||||||||||||||||||||||||||
| Tax effect of non-GAAP adjustments | (516 | ) | (0.3 | ) | 85,424 | 45.9 | (5,111 | ) | (3.6 | ) | 81,098 | 15.2 | (19,491 | ) | (5.0 | ) | |||||||||||||||||||||
| Adjusted net income (Non-GAAP) | $ | 43,880 | 22.6 | $ | 39,423 | 21.2 | $ | 27,932 | 19.6 | $ | 115,141 | 21.6 | $ | 75,444 | 19.3 | ||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||
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| Net (loss) income - diluted | $ | (27,677 | ) | $ | (0.43 | ) | $ | (130,131 | ) | $ | (2.14 | ) | $ | 7,213 | $ | 0.13 | $ | (158,772 | ) | $ | (2.67 | ) | $ | (3,668 | ) | $ | (0.07 | ) | ||||||||||||||
| Adjusted (Non-GAAP) | $ | 43,880 | $ | 0.67 | $ | 39,423 | $ | 0.63 | $ | 27,932 | $ | 0.51 | $ | 115,141 | $ | 1.87 | $ | 75,444 | $ | 1.37 | ||||||||||||||||||||||
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| Shares | Shares | Shares | Shares | Shares | ||||||||||||||||
| Diluted shares - GAAP | 64,019 | 60,813 | 55,288 | 59,524 | 53,253 | |||||||||||||||
| Incremental shares | 1,916 | 2,031 | — | 1,941 | 2,007 | |||||||||||||||
| Adjusted diluted shares (Non-GAAP) | 65,935 | 62,844 | 55,288 | 61,465 | 55,260 | |||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
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| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||
| Interest expense, net - GAAP | $ | 7,178 | 3.7 | $ | 7,374 | 4.0 | $ | 4,477 | 3.1 | $ | 21,902 | 4.1 | $ | 13,430 | 3.4 | |||||||||||||
| Non-cash interest expense | (1,122 | ) | (0.6 | ) | (721 | ) | (0.4 | ) | (405 | ) | (0.3 | ) | (2,546 | ) | (0.5 | ) | (1,228 | ) | (0.3 | ) | ||||||||
| Adjusted Interest Expense (Non-GAAP) | $ | 6,056 | 3.1 | $ | 6,653 | 3.6 | $ | 4,072 | 2.9 | $ | 19,356 | 3.6 | $ | 12,202 | 3.1 | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||
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| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | ||||||||||||||||||||||||||||
| Cash flow from operations | $ | 27,850 | 14.3 | $ | 432 | 0.2 | $ | 19,249 | 13.5 | $ | 48,689 | 9.1 | $ | 54,347 | 13.9 | ||||||||||||||||||||||
| Capital expenditures | (8,201 | ) | (4.2 | ) | (11,353 | ) | (6.1 | ) | (7,138 | ) | (5.0 | ) | (24,496 | ) | (4.6 | ) | (24,877 | ) | (6.4 | ) | |||||||||||||||||
| AppliedMicro transaction related payments | 419 | 0.2 | 28,114 | 15.1 | — | — | 28,533 | 5.4 | — | — | |||||||||||||||||||||||||||
| Free cash flow (Non-GAAP) | $ | 20,068 | 10.3 | $ | 17,193 | 9.2 | $ | 12,111 | 8.5 | $ | 52,726 | 9.9 | $ | 29,470 | 7.5 | ||||||||||||||||||||||
| Free cash flow as a percentage of adjusted net income | 46 | % | 44 | % | 43 | % | 46 | % | 39 | % | |||||||||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170801006541/en/
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