UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 7, 2011
CONEXANT SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
(State or other jurisdiction
of incorporation)
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000-24923
(Commission
File Number)
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25-1799439
(I.R.S. Employer
Identification No.) |
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4000 MacArthur Boulevard
Newport Beach, California
(Address of principal executive offices)
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92660
(Zip Code) |
Registrant’s telephone number, including area code: 949-483-4600
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 2.02 |
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Results of Operations and Financial Condition. |
On February 7, 2011, Registrant disclosed its earnings for the first fiscal quarter of 2011 in a
press release and is furnishing a copy of the press release to the Securities and Exchange
Commission under Item 2.02 of this Current Report on Form 8-K. The press release is attached
herewith as Exhibit 99.1 and is incorporated herein by reference.
The non-GAAP financial measures contained in the attached press release are a supplement to the
corresponding financial measures prepared in accordance with generally accepted accounting
principles (GAAP). The non-GAAP financial measures presented exclude non-cash and non-core
operating and non-operating items as described in the GAAP to Non-GAAP Core Adjustments section in
the press release and in the discussion below. The GAAP to Non-GAAP Core Adjustments exclude (i)
recognized gains and losses related to (a) the sale of equity securities, (b) changes in the fair
value of the warrant to purchase shares of Mindspeed Technologies, Inc. common stock, (c) other
investments accounted for using the equity method of accounting, (d) interest expense adjustments,
(e) debt discount and debt issuance cost amortization, (f) the sale of intellectual property, (g)
losses on repurchase and exchange of debt, (h) recognized cumulative translation adjustments, and
(i) other non-Core adjustments including environmental remediation charges, (ii) restructuring and
other charges related to the Company’s business restructurings, (iii) amortization of intangible
assets resulting from business combinations, and (iv) non-cash stock-based compensation expense.
Management of the Company believes that the Company’s core results of operations include (i) the
sale of its products and related costs and gross margin, (ii) its on-going cash operating expenses
to develop products and related selling, general and administrative functions, (iii) interest
income from its cash, and (iv) its debt service and income tax expense. In addition, the Company
has presented its non-GAAP cost of goods sold, non-GAAP gross margin and non-GAAP operating income.
Please refer to the Reconciliation of GAAP Financial Measures to Non-GAAP Core Financial Measures
in the press release for a quantitative reconciliation of these non-GAAP financial measures to the
most directly comparable GAAP measures.
The Company has presented non-GAAP cost of goods sold, non-GAAP gross margin, non-GAAP operating
expenses, non-GAAP total operating income, non-GAAP interest expense, non-GAAP other (income) expense,
non-GAAP (loss) income from continuing operations, and non-GAAP basic and diluted (loss) income from continuing operations per share, on a basis consistent with its historical presentation
to assist investors in understanding the Company’s core results of operations on an on-going basis. The
non-GAAP financial measures also enhance comparisons of the Company’s core results of operations
with historical periods. The Company is providing these non-GAAP financial measures to investors
to enable them to perform additional financial analysis and because it is consistent with the
financial models and estimates published by analysts who follow the Company. Management believes
that these are important measures in the evaluation of the Company’s results of operations.
Investors should consider non-GAAP financial measures in addition to, and not as a substitute for,
or superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP
financial measures presented by the Company may be different from non-GAAP financial measures
used by other companies.
The Company has presented the following non-GAAP financial measures:
(1) Non-GAAP Core cost of goods sold and Non-GAAP Core gross margin: the use of these non-GAAP
financial measures allows management of the Company to quantify and discuss the core cost of goods
sold and the core gross margins of the business on an on-going basis. Items excluded from these
non-GAAP financial measures consist of the non-cash and non-core expenses and credits more fully
described in items (a) and (e) in the GAAP to Non-GAAP Core Adjustments section of the press
release. Management presents non-GAAP gross margin to enable investors to understand the core
on-going cost of goods sold and gross margins of the Company. Management uses this non-GAAP
financial measure in its evaluation of the Company’s core gross margin and trends between fiscal
periods and believes this measure is an important component of its internal performance measurement
process. In addition, the Company prepares and maintains its budgets and forecasts for future
periods on a basis consistent with this non-GAAP financial measure. This non-GAAP financial measure
has certain limitations in that it does not reflect all of the cost of goods sold related to the
Company’s business and may not be indicative of the cash flows from operations as determined in
accordance with GAAP. Management compensates for these limitations by reviewing the Company’s cash
flows from operations which include all costs of goods sold of the Company.
(2) Non-GAAP Core operating expenses: the use of this non-GAAP financial measure allows management
of the Company to quantify and discuss the core operating expenses of the business on an on-going
basis. Items excluded
from this non-GAAP financial measure consist of the non-cash and non-core operating expenses and
credits more fully described in items (a) through (d) in the GAAP to Non-GAAP Core Adjustments
section of the press release. Management presents non-GAAP operating expenses to enable investors
to understand the core on-going operating expenses of the Company. Management uses this non-GAAP
financial measure in its evaluation of the Company’s core results of operations and trends between
fiscal periods and believes this measure is an important component of its internal performance
measurement process. In addition, the Company prepares and maintains its budgets and forecasts for
future periods on a basis consistent with this non-GAAP financial measure. This non-GAAP financial
measure has certain limitations in that it does not reflect all of the operating costs and other
costs and expenses related to the Company’s business and may not be indicative of the cash flows
from operations as determined in accordance with GAAP. Management compensates for these limitations
by reviewing the Company’s cash flows from operations which include all operating expenses of the
Company.
(3) Non-GAAP Core operating income, Non-GAAP Core interest expense, Non-GAAP Core other (income)
expense, Non-GAAP Core (loss) income from continuing operations, and Non-GAAP Core basic and
diluted (loss) income per share from continuing operations are mathematical subtotals, totals and
resultant computations after considering the non-GAAP adjustments and measures discussed above and
in items (f) through (l) in the GAAP to Non-GAAP Core Adjustments section of the press release.
Management presents these non-GAAP financial measures to enable investors to understand the core
on-going results of operations of the Company. Management uses these non-GAAP financial measures in
its evaluation of the Company’s core results of operations and trends between fiscal periods and
believes these measures are an important component of its internal performance measurement process.
In addition, the Company prepares and maintains its budgets and forecasts for future periods on a
basis consistent with these non-GAAP financial measures. These non-GAAP financial measures have
certain limitations in that they do not reflect all of the operating costs and other income and
expenses related to the Company’s business and may not be indicative of the cash flows from
operations as determined in accordance with GAAP. Management compensates for these limitations by
reviewing the Company’s cash flows from operations which include all operating costs and other
income and expenses of the Company.
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| Item 9.01 |
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Financial Statements and Exhibits. |
(d) Exhibits.
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99.1 |
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Press Release of Registrant dated February 7, 2011. |