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August 29, 2019
John Kober
Chief Financial Officer
MACOM Technology Solutions Holdings, Inc.
100 Chelmsford Street
Lowell, Massachusetts 01851
Re: MACOM Technology Solutions Holdings, Inc.
Form 10-K for the Fiscal Year ended September 28, 2018
Filed November 16, 2018
Form 10-Q for the Quarterly Period ended June 28, 2019
Filed August 6, 2019
Form 8-K Filed August 1, 2019
File No. 001-35451
Dear Mr. Kober:
We have limited our review of your filing to the financial statements
and related
disclosures and have the following comments. In some of our comments, we may
ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for the Fiscal Year ended September 28, 2018
Note 21 - Divested Business and Discontinued Operations
Divested Business, page 81
1. We note that you present the loss on the disposal of your Japan-based
long range optical
subassembly (LR4) business within "other expense" and outside of the
"(loss) income
from operations" caption on your statement of operations. Please tell us
how you
considered the guidance of ASC 360-10-45-5 which states that if an
operating income
subtotal is provided, that subtotal should include gains and losses
related to the sale of
long-lived assets. Otherwise, revise your presentation in future filings
to comply with that
guidance.
John Kober
FirstNameTechnology Solutions Holdings, Inc.
MACOM LastNameJohn Kober
Comapany NameMACOM Technology Solutions Holdings, Inc.
August 29, 2019
August 29, 2019 Page 2
Page 2
FirstName LastName
Form 10-Q for the Quarterly Period ended June 28, 2019
Notes to Condensed Consolidated Financial Statements
Note 2: Revenue - Disaggregation of Revenue, page 9
2. We note the disclosures in Note 1 relating to non-product revenues
that you generally
recognize over time. Please tell us the amount of 'over-time' revenue
you recorded in the
nine months ended June 30, 2019.
Note 10: Impairments, page 16
3. We note the the material impairment charges you recorded in the
current period and your
disclosures in this note and in Note 15 - Restructurings. To help us
better under your
accounting, please address the following:
Describe to us in detail the restructuring plan you initiated in
June 2019, including the
circumstances that led you to undertake the June 2019 plan, your
objectives, and a
clear description of each of the actions you will undertake
pursuant to that plan.
Explain to us how each action planned or taken to date has
resulted in the charges you
recorded in the period ended June 30, 2019. Cite the accounting
guidance on which
you relied in recording the charge.
Explain to us how the activities under the June 2019 plan impacted
your estimates of
expected future revenue growth and led to an impairment assessment
of goodwill and
long-lived assets.
Summarize for us the analyses you performed and explain how you
complied with US
GAAP - ASC Topics 350 and 360 - in performing the assessment and
in calculating
the resulting impairment charges.
Describe to us the business of the impaired asset group, tell us
its name, and explain
how it fits into the company's lines of business and operating
segments. Explain to us
how the activities planned under the June 2019 Plan will impact
its operations.
4. Revise the critical accounting estimates section of MD&A in future
filings to discuss the
methodologies, estimates and underlying assumptions you used in your
impairment
analysis. Disclose the degree of uncertainty associated with the
specific key assumptions
and describe the potential events or changes in circumstances that are
specific to the asset
group and could reasonably be expected to negatively affect the key
assumptions. Please
refer to Item 303(a)(3)(ii) of Regulation S-K and Section 501.14 of
the Financial
Reporting Codification.
John Kober
MACOM Technology Solutions Holdings, Inc.
August 29, 2019
Page 3
Note 15: Restructuring, page 19
5. In future filings revise this note to provide all disclosures required
by ASC 420 and SAB
Topic 5-P.4 relating to each of your restructuring plans, including
the reconciliation of the
beginning and ending liability balances. Similarly revise your
discussion in MD&A to
reflect the guidance outlined in the interpretive response in SAB
Topic 5-P.4. Provide a
clear description of each plan, its objectives and the actions you
will undertake pursuant to
the plan. Include a discussion of the events and decisions which gave
rise to the exit costs
and exit plan, and the likely effects of management's plans on
financial position, future
operating results and liquidity.
Note 17: Income Taxes, page 22
6. Revise your discussions of income taxes in this note and in MD&A in
future filings to
disclose the estimated annual effective tax rate used in computing
your year-to-date
provision for income taxes. Refer to ASC 740-270-25 and ASC
740-270-50.
Form 8-K Filed August 1, 2019
Exhibit 99.1, page 0
7. We note that you present the non-GAAP measure Adjusted Revenue, which
(i)
adjusted GAAP revenues to accelerate the recognition of deferred Data
Center Solution
business revenues in the quarter ended June 2018 and then (ii) reduced
GAAP revenues in
the quarter ended March 29, 2019 when the amounts were recognized.
Your presentation
is inconsistent with the guidance provided in Question 100.04 of the
Non-GAAP Financial
Measures Compliance and Disclosure Interpretations, as it substitutes
individually tailored
revenue recognition and measurement methods for those of GAAP. Please
revise your
future filings and earnings releases to comply with that guidance by
removing the
measure.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Eric Atallah at (202) 551-3663 or Martin James, Senior
Assistant Chief
Accountant at (202) 551-3671 with any questions.
FirstName LastNameJohn Kober Sincerely,
Comapany NameMACOM Technology Solutions Holdings, Inc.
Division of Corporation
Finance
August 29, 2019 Page 3 Office of Electronics and
Machinery
FirstName LastName