M/A-COM Technology Solutions Holdings, Inc. Reports Third Quarter of Fiscal 2012 Financial Results
Third Quarter Fiscal Year 2012 GAAP Results
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Revenue was
$77.1 million , compared to$77.5 million in the prior quarter; - Gross margin was 45.9 percent, compared to 47.2 percent in the prior quarter;
- Operating margin was 20.0 percent, compared to 23.2 percent in the prior quarter;
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Net income was
$13.5 million , or$0.29 per diluted share, compared to a net loss of($53.6) million , or($8.02) per share in the prior quarter; and -
Cash and cash equivalents were
$77.6 million , with no debt outstanding as ofJune 29, 2012 .
Third Quarter Fiscal Year 2012 Non-GAAP Results
- Gross margin was 46.8 percent, compared to 47.7 percent in the prior quarter;
- Operating margin was 22.5 percent, compared to 23.0 percent in the prior quarter; and
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Net income was
$11.8 million , or$0.25 per diluted share, compared to net income of$12.1 million , or$0.28 per diluted share in the prior quarter;
Commenting on the results,
Business Outlook
Based on the present and projected end-market demand environment for its products, M/A-COM Tech currently expects fourth quarter of fiscal 2012 revenue to range between
Conference Call
M/A-COM Tech will host a conference call on
Additionally, this conference call will be broadcast live over the Internet and can be accessed by all interested parties in the Investors section of M/A-COM Tech's website at http://www.macomtech.com. To listen to the live call, please go to the Investors section of M/A-COM Tech'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
M/A-COM Tech (www.macomtech.com) is a leading supplier of high performance analog semiconductor solutions for use in radio frequency (RF), microwave, and millimeter wave applications. Recognized for its broad portfolio of products, M/A-COM Tech serves diverse markets including CATV, wireless infrastructure, optical communications, aerospace and defense, automotive, industrial, medical, and mobile devices. M/A-COM Tech builds on more than 60 years of experience designing and manufacturing innovative product solutions for customers worldwide.
Headquartered in
The
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements based on M/A-COM Tech 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, expected weaker demand environment and less favorable market and product mix and impact on our results in the coming quarter, our expectations as to achieving our long-term goals by ramping new products and furthering cost efficiencies, as well as any statements regarding future trends, business strategies, competitive position, industry conditions and market opportunities. Forward-looking statements include all statements that are not historical facts and generally may be identified by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "seeks," "should," "will," "would" or similar expressions and the negatives of those terms.
Forward-looking statements contained in this press release reflect M/A-COM Tech'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 M/A-COM Tech 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, among others, the potential for continued weakness in our A&D market, lower than expected demand in
any of our three primary markets or from any of our large OEM customers, lower than expected absorption in our manufacturing facilities, lack of success or slower than expected success in our new product development efforts, loss of business due to competitive factors, obsolescence, customer program shifts or otherwise, lower than anticipated or slower than expected customer acceptance of our new product introductions, the potential for a shift in the mix of products sold in any period toward lower-margin products or a shift in the geographical mix of our revenues, the impact of any acquisition, divestiture or restructuring activity, the impact of supply shortages or other disruptions in our internal or outsourced supply chain, the relative success of our cost-savings initiatives, the impact of any current or future litigation instituted by or against us, and the impact of any claims of
intellectual property infringement or misappropriation, which could required us to pay substantial damages for infringement, expend significant resources in prosecuting or defending such matters or developing non-infringing technology, incur material liability for royalty or license payments, or prevent us from selling certain of our products, as well as those factors described in "Risk Factors" in M/A-COM Tech's filings with the
Non-GAAP Financial Measures
In addition to GAAP reporting, M/A-COM Tech provides investors with Non-GAAP financial reporting, including gross margin, operating margin, net income and other data calculated on a Non-GAAP basis. This Non-GAAP information excludes amortization of acquisition-related intangibles, share-based and other non-cash compensation expense, restructuring charges, changes in the carrying values of liabilities measured at fair value, other non-cash expenses and certain income tax items. Management does not believe that the excluded items are reflective of M/A-COM Tech's underlying performance. The exclusion of these and other similar items from M/A-COM Tech's Non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual. M/A-COM Tech believes this Non-GAAP financial information provides additional insight into M/A-COM Tech's on-going performance and has therefore chosen to provide this information to investors for a more consistent basis of comparison and to help them evaluate the results of M/A-COM Tech's on-going 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.
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
| (unaudited) | |||||
| (in thousands, except per share data) | |||||
| Three Months Ended | Nine Months Ended | ||||
| June 29, | March 30, | July 1, | June 29, | July 1, | |
| 2012 | 2012 | 2011 | 2012 | 2011 | |
| Revenue | $ 77,125 | $ 77,480 | $ 78,700 | $ 227,640 | $ 231,493 |
| Cost of revenue | 41,721 | 40,931 | 44,582 | 124,272 | 134,516 |
| Gross profit | 35,404 | 36,549 | 34,118 | 103,368 | 96,977 |
| Operating expenses: | |||||
| Research and development | 9,193 | 8,773 | 9,463 | 27,857 | 25,533 |
| Selling, general and administrative | 10,706 | 11,040 | 11,824 | 33,024 | 36,617 |
| Accretion of contingent consideration | 101 | (1,247) | 365 | (977) | 660 |
| Restructuring charges | -- | -- | 127 | 1,586 | 866 |
| Total operating expenses | 20,000 | 18,566 | 21,779 | 61,490 | 63,676 |
| Income from operations | 15,404 | 17,983 | 12,339 | 41,878 | 33,301 |
| Other (income) expense: | |||||
| Accretion of common stock warrant liability | (3,198) | 7,447 | 7,291 | 2,791 | 10,241 |
| Accretion of Class B conversion liability | -- | 57,739 | 39,631 | 44,119 | 57,051 |
| Interest expense | 161 | 203 | 135 | 545 | 750 |
| Other income - related party | (91) | -- | -- | (91) | -- |
| Total other (income) expense | (3,128) | 65,389 | 47,057 | 47,364 | 68,042 |
| Income (loss) before income taxes | 18,532 | (47,406) | (34,718) | (5,486) | (34,741) |
| Income tax provision | 4,987 | 6,155 | 7,184 | 12,488 | 7,179 |
| Net income (loss) from continuing operations | 13,545 | (53,561) | (41,902) | (17,974) | (41,920) |
| Net income from discontinued operations | -- | -- | 1,887 | -- | 754 |
| Net income (loss) | 13,545 | (53,561) | (40,015) | (17,974) | (41,166) |
| Accretion of redeemable preferred stock and participating stock dividends | (41) | (1,201) | (1,364) | (2,616) | (79,062) |
| Net income (loss) attributable to common stockholders | $ 13,504 | $ (54,762) | $ (41,379) | $ (20,590) | $ (120,228) |
| Net income (loss) per share: | |||||
| Basic income (loss) per common share: | |||||
| Income (loss) from continuing operations | $ 0.30 | $ (8.02) | $ (26.17) | $ (1.15) | $ (84.49) |
| Income from discontinued operations | -- | -- | 1.14 | -- | 0.53 |
| Net income (loss) - basic | $ 0.30 | $ (8.02) | $ (25.03) | $ (1.15) | $ (83.96) |
| Diluted income (loss) per common share: | |||||
| Income (loss) from continuing operations | $ 0.29 | $ (8.02) | $ (26.17) | $ (1.15) | $ (84.49) |
| Income from discontinued operations | -- | -- | 1.14 | -- | 0.53 |
| Net income (loss) - diluted | $ 0.29 | $ (8.02) | $ (25.03) | $ (1.15) | $ (83.96) |
| Shares used to compute net income (loss) per share: | |||||
| Basic | 45,160 | 6,829 | 1,653 | 17,933 | 1,432 |
| Diluted | 47,264 | 6,829 | 1,653 | 17,933 | 1,432 |
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CONDENSED CONSOLIDATED RECONCILIATION OF GAAP TO NON-GAAP RESULTS (unaudited) (in thousands, except per share data) |
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| Three Months Ended | ||||||||||||
| June 29, 2012 |
|
July 1, 2011 | ||||||||||
| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||
| Gross profit - GAAP | $ 35,404 | 45.9 % | $ 36,549 | 47.2 % | $ 34,118 | 43.4 % | ||||||
| Amortization expense | 383 | 0.5 | 382 | 0.5 | 443 | 0.6 | ||||||
| Non-cash compensation expense | 302 | 0.4 | 42 | 0.1 | 134 | 0.2 | ||||||
| Gross profit - Non-GAAP | $ 36,089 | 46.8 % | $ 36,973 | 47.7 % | $ 34,695 | 44.1 % | ||||||
| Income from operations - GAAP | $ 15,404 | 20.0 % | $ 17,983 | 23.2 % | $ 12,339 | 15.7 | ||||||
| Amortization expense | 640 | 0.8 | 639 | 0.8 | 739 | 0.9 | ||||||
| Non-cash compensation expense | 1,193 | 1.5 | 463 | 0.6 | 358 | 0.5 | ||||||
| Accretion of contingent consideration | 101 | 0.1 | (1,247) | (1.6) | 365 | 0.5 | ||||||
| Restructuring charges | -- | -- | -- | -- | 127 | 0.2 | ||||||
| Income from operations - Non-GAAP | $ 17,338 | 22.5 % | $ 17,838 | 23.0 % | $ 13,928 | 17.7 % | ||||||
| Net income(loss) - GAAP | $ 13,545 | 17.6 % | $ (53,561) | -69.1 % | $ (40,015) | -50.8 % | ||||||
| Amortization expense | 437 | 0.6 | 436 | 0.6 | 480 | 0.6 | ||||||
| Non-cash compensation expense | 815 | 1.1 | 316 | 0.4 | 233 | 0.3 | ||||||
| Accretion of contingent consideration | 69 | 0.1 | (852) | -1.1 | 237 | 0.3 | ||||||
| Restructuring charges | -- | -- | -- | -- | 83 | 0.1 | ||||||
| Accretion of common stock warrant liability | (3,198) | -4.1 | 7,447 | 9.6 | 7,291 | 9.3 | ||||||
| Accretion of Class B conversion liability | -- | -- | 57,739 | 74.5 | 39,631 | 50.4 | ||||||
| Non-cash interest expense | 46 | 0.1 | 50 | 0.1 | 31 | -- | ||||||
| Non-recurring tax items | 126 | 0.2 | 520 | 0.7 | 2,912 | 3.7 | ||||||
| Net income from discontinued operations | -- | -- | -- | -- | (1,887) | -2.4 | ||||||
| Net income - Non-GAAP | $ 11,840 | 15.4 % | $ 12,095 | 15.6 % | $ 8,996 | 11.4 % | ||||||
| Net income(loss) - GAAP: |
Income per diluted share |
Income (loss) per diluted share |
Income (loss) per diluted share |
|||||||||
| Net income (loss) | $ 13,545 | $ 0.29 | $ (53,561) | $ (7.84) | $ (40,015) | $ (24.21) | ||||||
| Accretion of redeemable preferred stock and participating stock dividends | (41) | -- | (1,201) | (0.18) | (1,364) | (0.83) | ||||||
| Net income (loss) attributable to common stockholders | $ 13,504 | $ 0.29 | $ (54,762) | $ (8.02) | $ (41,379) | $ (25.03) | ||||||
| Net income - Non-GAAP | $ 11,840 | $ 0.25 | $ 12,095 | $ 0.28 | $ 8,996 | $ 0.22 | ||||||
| Diluted shares - GAAP | 47,264 | 6,829 | 1,653 | |||||||||
| Convertible preferred stock | -- | 33,591 | 37,748 | |||||||||
| Incremental stock options, warrants, restricted stock and units | 549 | 2,342 | 2,349 | |||||||||
| Diluted shares - Non-GAAP | 47,813 | 42,762 | 41,750 | |||||||||
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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (unaudited) | ||
| (in thousands) | ||
|
June 29, 2012 |
September 30, 2011 |
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| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 77,628 | $ 45,668 |
| Accounts receivable, net | 50,592 | 46,212 |
| Inventories | 53,034 | 52,480 |
| Deferred income taxes and other current assets | 13,880 | 12,175 |
| Total current assets | 195,134 | 156,535 |
| Property and equipment, net | 30,926 | 25,364 |
| Goodwill and intangible assets, net | 24,152 | 26,071 |
| Other assets | 2,126 | 3,298 |
| TOTAL ASSETS | $ 252,338 | $ 211,268 |
| LIABILITIES AND EQUITY (DEFICIT) | ||
| Current liabilities: | ||
| Accounts payable, accrued liabilities and other | $ 39,134 | $ 38,990 |
| Deferred revenue | 7,879 | 13,119 |
| Current portion of contingent consideration | 9,525 | 15,000 |
| Total current liabilities | 56,538 | 67,109 |
| Contingent consideration, less current portion | -- | 10,502 |
| Common stock warrant liability | 13,527 | 10,736 |
| Class B conversion liability | -- | 81,378 |
| Other long-term liabilities | 1,618 | 4,362 |
| Total liabilities | 71,683 | 174,087 |
| Redeemable and convertible preferred stock | -- | 182,018 |
| Commitments and contingencies | ||
| Stockholders' equity (deficit) | 180,655 | (144,837) |
| TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ 252,338 | $ 211,268 |
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| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (unaudited) | ||
| (in thousands) | ||
| Nine Months Ended | ||
|
June 29, 2012 |
July 1, 2011 |
|
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net loss | $ (17,974) | $ (41,166) |
| Adjustments to reconcile net loss to net cash from operating activities — net of effects from acquisition: | ||
| Accretion of common stock warrant liability | 2,791 | 10,241 |
| Accretion of Class B conversion liability | 44,119 | 57,051 |
| Depreciation and amortization | 8,377 | 7,752 |
| Accretion of contingent consideration | (977) | 660 |
| Share-based and other noncash incentive compensation | 2,189 | 1,135 |
| Amortization of deferred financing costs | 200 | 110 |
| Deferred income taxes and other | (1,737) | (11,651) |
| Change in operating assets and liabilities (net of assets acquired and liabilities assumed in acquisition): | ||
| Accounts receivable | (4,380) | (3,489) |
| Inventories | (554) | (6,799) |
| Prepaid expenses and other assets | (2,350) | (748) |
| Accounts payable and accrued liabilities and other | 1,815 | 4,487 |
| Deferred revenue | (5,240) | 844 |
| Net cash from operating activities | 26,279 | 18,427 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Acquisition of a business - net of cash acquired | -- | (1,807) |
| Proceeds from sale of assets | -- | 3,042 |
| Purchases of property and equipment | (13,511) | (6,721) |
| Net cash from investing activities | (13,511) | (5,486) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Proceeds from initial public offering, net of underwriters' discount | 98,175 | -- |
| Payment of Class B preference | (60,000) | -- |
| Financing and offering costs | (3,351) | -- |
| Proceeds from stock option exercises | 174 | 549 |
| Payments on notes payable | -- | (30,000) |
| Payments on capital leases | -- | (1,426) |
| Proceeds from issuance of convertible preferred stock with warrants and conversion features | -- | 118,680 |
| Excess tax benefits | 232 | -- |
| Repurchase of common stock | (546) | -- |
| Payment of contingent consideration | (15,000) | (8,825) |
| Payment of dividends | (475) | (79,137) |
|
Payments to |
(17) | -- |
| Net cash from financing activities | 19,192 | (159) |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 31,960 | 12,782 |
| CASH AND CASH EQUIVALENTS — Beginning of period | 45,668 | 23,946 |
| CASH AND CASH EQUIVALENTS — End of period | $ 77,628 | $ 36,728 |
CONTACT: Company Contact:
M/A-COM Technology Solutions Holdings, Inc. Conrad Gagnon
Chief Financial Officer
P: 978-656-2550
E: Conrad.Gagnon@macomtech.com
Investor Relations Contact:
Shelton Group Leanne K. Sievers
EVP, Investor Relations
P: 949-224-3874
E: lsievers@sheltongroup.com
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