Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries MACOM Reports Fiscal First Quarter 2024 Financial Results By: MACOM Technology Solutions Holdings, Inc. via Business Wire February 01, 2024 at 07:30 AM EST MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal first quarter ended December 29, 2023. First Quarter Fiscal Year 2024 GAAP Results Revenue was $157.1 million, a decrease of 12.7%, compared to $180.1 million in the previous year fiscal first quarter and an increase of 4.5% compared to $150.4 million in the prior fiscal quarter; Gross margin was 55.6%, compared to 61.3% in the previous year fiscal first quarter and 57.6% in the prior fiscal quarter; Income from operations was $11.0 million, or 7.0% of revenue, compared to income from operations of $38.6 million, or 21.4% of revenue, in the previous year fiscal first quarter and income from operations of $15.6 million, or 10.4% of revenue, in the prior fiscal quarter; and Net income was $12.5 million, or $0.17 per diluted share, compared to net income of $29.5 million, or $0.41 per diluted share, in the previous year fiscal first quarter and net income of $24.5 million, or $0.34 per diluted share, in the prior fiscal quarter. First Quarter Fiscal Year 2024 Adjusted Non-GAAP Results Adjusted gross margin was 59.2%, compared to 62.6% in the previous year fiscal first quarter and 60.1% in the prior fiscal quarter; Adjusted income from operations was $38.6 million, or 24.5% of revenue, compared to adjusted income from operations of $58.8 million, or 32.7% of revenue, in the previous year fiscal first quarter and adjusted income from operations of $37.2 million, or 24.7% of revenue, in the prior fiscal quarter; and Adjusted net income was $41.8 million, or $0.58 per diluted share, compared to adjusted net income of $58.0 million, or $0.81 per diluted share, in the previous year fiscal first quarter and adjusted net income of $40.1 million, or $0.56 per diluted share, in the prior fiscal quarter. Management Commentary “Q1 was a solid start to fiscal year 2024,” said Stephen G. Daly, President and Chief Executive Officer. “We are pleased with the expansion of our product portfolio, and we continue to see new growth opportunities across the Industrial and Defense, Telecommunications and Data Center markets.” Business Outlook For the fiscal second quarter ending March 29, 2024, MACOM expects revenue to be in the range of $178 million to $184 million. Adjusted gross margin is expected to be between 56% and 58%, and adjusted earnings per diluted share is expected to be between $0.56 and $0.62 utilizing an anticipated non-GAAP income tax rate of 3% and 73.0 million fully diluted shares outstanding. Conference Call MACOM will host a conference call on Thursday, February 1, 2024 at 8:30 a.m. Eastern Time to discuss its fiscal first quarter 2024 financial results and business outlook. Investors and analysts may visit MACOM's Investor Relations website at https://ir.macom.com/events-webcasts to register for a user-specific access code for the live call or to access the live webcast. A replay of the call will be available within 24 hours and remain accessible by all interested parties for approximately 90 days. About MACOM MACOM designs and manufactures high-performance semiconductor products for the Telecommunications, Industrial and Defense and Data Center industries. MACOM services over 6,000 customers annually with a broad product portfolio that incorporates RF, Microwave, Analog and Mixed Signal and Optical semiconductor technologies. MACOM has achieved certification to the IATF16949 automotive standard, the AS9100D aerospace standard, the ISO9001 international quality standard and the ISO14001 environmental management standard. MACOM operates facilities across the United States, Europe, Asia and is headquartered in Lowell, Massachusetts. Special Note Regarding Forward-Looking Statements This press release and the associated earnings call contains forward-looking statements based on MACOM management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include, among others, statements about MACOM’s strategic plans, priorities and long-term growth drivers, our ability to execute our long-term strategy, strengthen our position and drive market share gains and growth, our ability to better address certain markets, expand our capabilities and extend our product offerings through the acquisitions of Linearizer Communications Group and the radio frequency (RF) business of Wolfspeed, Inc. and through the establishment of our European Semiconductor Center, and the teams’ capabilities and technologies and expansion thereof and any potential financial benefits derived by and financial impact to MACOM therefrom, strength and competitiveness of new product introductions and technology portfolio expansion, including the anticipated rate of new product introductions, anticipated demand for our products, MACOM’s profitability, revenue targets, prospects and growth opportunities in our three primary markets, the potential impact to our business of an economic downturn or recession, anticipated financial and business improvements, the estimated financial results for our 2024 fiscal second quarter and the stated business outlook and future results of operations. 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 indicated by the forward-looking statements, including our ability to develop new products and achieve market acceptance of those products; component shortages or other disruptions in our supply chain, including as a result of geopolitical unrest or otherwise; inflationary pressures; any failure to accurately anticipate demand for our products and effectively manage our inventory; our dependence on a limited number of customers; risks related to any weakening of economic conditions; our ability to compete effectively; and those other factors described in “Risk Factors” in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Discussion Regarding the Use of Historical and Forward-Looking Non-GAAP Financial Measures In addition to United States Generally Accepted Accounting Principles (“GAAP”) reporting, MACOM provides investors with financial measures that have not been calculated in accordance with GAAP, such as: non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP income from operations and operating margin, non-GAAP EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP income tax rate and non-GAAP interest income. In this release or elsewhere, we may alternatively refer to such non-GAAP measures as “adjusted” measures. This non-GAAP information excludes the effect, where applicable, of intangible amortization expense, share-based compensation expense, non-cash interest, net, acquisition and integration related costs, debt extinguishment costs and the tax effect of each non-GAAP adjustment. Management believes these excluded items are not reflective of our underlying performance and 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. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors 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 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 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. 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. This non-cash expense is not considered by management in making operating decisions. Share-Based Compensation Expense – includes share-based compensation expense for awards that are equity and liability classified on our balance sheet and the related employer tax expense at vesting. 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. Share-based compensation expense amounts are not considered by management in making operating decisions. Non-cash Interest, Net – includes amounts associated with the amortization of certain fees associated with the establishment or amendment of our term loans and convertible notes that are being amortized over the life of the agreements. We believe these amounts are non-cash in nature, are not correlated to future business operations and do not reflect our ongoing operations. Acquisition and Integration Related Costs – includes items such as professional fees, employee severance and other costs incurred in connection with acquisitions and integration specific activities which are not expected to have a continuing contribution to operations 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. Debt Extinguishment Costs – includes the write-off of unamortized deferred financing costs and professional fees associated with the paydown of our term loans. We believe these non-cash amounts are not correlated to future business operations and do not reflect our ongoing operations. Tax Effect of Non-GAAP Adjustments – includes adjustments to arrive at an estimate of our non-GAAP income tax rate associated with our non-GAAP income over a period of time. We determine our non-GAAP income tax rate 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 non-GAAP net income before income taxes and our ability to realize tax assets. We generally assess this non-GAAP income tax rate quarterly and have utilized 3% for our first fiscal quarter of fiscal year 2024 and for our fiscal year 2023. Our historical effective income tax rate under GAAP has varied significantly from our non-GAAP income tax rate due primarily to income taxed in foreign jurisdictions at generally lower tax rates, research and development tax credits and acquisition expenses. We believe it is beneficial for management to review our non-GAAP income tax rate on a consistent basis over periods of time. Items such as those noted above may have a significant impact on our GAAP income tax expense and associated effective tax rate over time. Adjusted EBITDA – is a calculation that adds depreciation expense to our adjusted income from operations. Management reviews and utilizes this measure for operational analysis purposes. We believe competitors and others in the financial industry also utilize this measure for analysis purposes. MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share data) Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Revenue $ 157,148 $ 150,375 $ 180,104 Cost of revenue 69,838 63,749 69,749 Gross profit 87,310 86,626 110,355 Operating expenses: Research and development 39,413 37,508 38,832 Selling, general and administrative 36,887 33,511 32,940 Total operating expenses 76,300 71,019 71,772 Income from operations 11,010 15,607 38,583 Other income (expense): Interest income, net 4,266 3,843 602 Other expense, net — (458 ) (55 ) Total other income 4,266 3,385 547 Income before income taxes 15,276 18,992 39,130 Income tax expense (benefit) 2,750 (5,458 ) 9,611 Net income $ 12,526 $ 24,450 $ 29,519 Net income per share: Income per share - Basic $ 0.18 $ 0.34 $ 0.42 Income per share - Diluted $ 0.17 $ 0.34 $ 0.41 Weighted average common shares: Shares - Basic 71,425 70,988 70,481 Shares - Diluted 72,286 71,828 71,374 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) December 29, 2023 September 29, 2023 ASSETS Current assets: Cash and cash equivalents $ 163,586 $ 173,952 Short-term investments 299,705 340,574 Accounts receivable, net 101,075 91,253 Inventories 159,501 136,300 Prepaid and other current assets 21,084 19,114 Total current assets 744,951 761,193 Property and equipment, net 184,278 149,496 Goodwill and intangible assets, net 442,016 390,392 Deferred income taxes 217,463 218,107 Other long-term assets 62,094 34,056 Total assets $ 1,650,802 $ 1,553,244 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of finance lease obligations $ 1,052 $ 1,162 Accounts payable 27,137 24,966 Accrued liabilities 74,680 57,397 Total current liabilities 102,869 83,525 Finance lease obligations, less current portion 31,624 31,776 Financing obligation 9,232 9,307 Long-term debt obligations 447,421 447,134 Other long-term liabilities 35,565 33,902 Total liabilities 626,711 605,644 Stockholders’ equity 1,024,091 947,600 Total liabilities and stockholders’ equity $ 1,650,802 $ 1,553,244 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Three Months Ended December 29, 2023 December 30, 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 12,526 $ 29,519 Depreciation and intangible asset amortization 14,289 12,855 Share-based compensation 8,657 11,047 Deferred income taxes 294 9,067 Other adjustments, net (1,755 ) (381 ) Accounts receivable (12,180 ) (10,489 ) Inventories 1,555 (6,375 ) Accrued and other liabilities 6,612 (10,349 ) Change in other operating assets and liabilities 3,101 3,379 Net cash provided by operating activities 33,099 38,273 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of business, net (75,000 ) — Sales, purchases and maturities of investments 44,878 1,666 Purchases of property and equipment (4,652 ) (9,616 ) Net cash used in investing activities (34,774 ) (7,950 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on finance leases and other (349 ) (278 ) Proceeds from stock option exercises and employee stock purchases 2,848 2,320 Repurchase of common stock - tax withholdings on equity awards (11,552 ) (26,375 ) Net cash used in financing activities (9,053 ) (24,333 ) Foreign currency effect on cash 362 213 NET CHANGE IN CASH AND CASH EQUIVALENTS (10,366 ) 6,203 CASH AND CASH EQUIVALENTS — Beginning of period 173,952 119,952 CASH AND CASH EQUIVALENTS — End of period $ 163,586 $ 126,155 Supplemental disclosure of non-cash activities Issuance of common stock in connection with the acquisition of the RF business of Wolfspeed, Inc. $ 60,772 $ — MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (unaudited and in thousands, except per share data) Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Gross profit - GAAP $ 87,310 55.6 $ 86,626 57.6 $ 110,355 61.3 Amortization expense 1,942 1.2 1,341 0.9 910 0.5 Share-based compensation expense 1,550 1.0 1,389 0.9 1,474 0.8 Acquisition and integration related costs 2,289 1.5 981 0.7 — — Adjusted gross profit (Non-GAAP) $ 93,091 59.2 $ 90,337 60.1 $ 112,739 62.6 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Operating expenses - GAAP $ 76,300 48.6 $ 71,019 47.2 $ 71,772 39.9 Amortization expense (4,798 ) (3.1 ) (6,092 ) (4.1 ) (5,903 ) (3.3 ) Share-based compensation expense (8,319 ) (5.3 ) (9,180 ) (6.1 ) (11,973 ) (6.6 ) Acquisition and integration related costs (8,644 ) (5.5 ) (2,462 ) (1.6 ) — — Debt extinguishment costs — — (143 ) (0.1 ) — — Adjusted operating expenses (Non-GAAP) $ 54,539 34.7 $ 53,142 35.3 $ 53,896 29.9 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Income from operations - GAAP $ 11,010 7.0 $ 15,607 10.4 $ 38,583 21.4 Amortization expense 6,740 4.3 7,433 4.9 6,813 3.8 Share-based compensation expense 9,869 6.3 10,569 7.0 13,447 7.5 Acquisition and integration related costs 10,933 7.0 3,443 2.3 — — Debt extinguishment costs — — 143 0.1 — — Adjusted income from operations (Non-GAAP) $ 38,552 24.5 $ 37,195 24.7 $ 58,843 32.7 Depreciation expense 6,254 4.0 6,218 4.1 6,042 3.4 Adjusted EBITDA (Non-GAAP) $ 44,806 28.5 $ 43,413 28.9 $ 64,885 36.0 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Net income - GAAP $ 12,526 8.0 $ 24,450 16.3 $ 29,519 16.4 Amortization expense 6,740 4.3 7,433 4.9 6,813 3.8 Share-based compensation expense 9,869 6.3 10,569 7.0 13,447 7.5 Non-cash interest, net 287 0.2 328 0.2 412 0.2 Acquisition and integration related costs 10,933 7.0 3,443 2.3 — — Debt extinguishment costs — — 560 0.4 — — Tax effect of non-GAAP adjustments 1,457 0.9 (6,698 ) (4.5 ) 7,816 4.3 Adjusted net income (Non-GAAP) $ 41,812 26.6 $ 40,085 26.7 $ 58,007 32.2 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income - GAAP diluted $ 12,526 $ 0.17 $ 24,450 $ 0.34 $ 29,519 $ 0.41 Adjusted net income (Non-GAAP) $ 41,812 $ 0.58 $ 40,085 $ 0.56 $ 58,007 $ 0.81 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Interest income, net - GAAP $ (4,266 ) (2.7 ) $ (3,843 ) (2.6 ) $ (602 ) (0.3 ) Non-cash interest expense (287 ) (0.2 ) (328 ) (0.2 ) (412 ) (0.2 ) Adjusted interest income (Non-GAAP) $ (4,553 ) (2.9 ) $ (4,171 ) (2.8 ) $ (1,014 ) (0.6 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20240201816279/en/Contacts Company: MACOM Technology Solutions Holdings, Inc. Stephen Ferranti Vice President, Corporate Development and Investor Relations P: 978-656-2977 E: stephen.ferranti@macom.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
MACOM Reports Fiscal First Quarter 2024 Financial Results By: MACOM Technology Solutions Holdings, Inc. via Business Wire February 01, 2024 at 07:30 AM EST MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal first quarter ended December 29, 2023. First Quarter Fiscal Year 2024 GAAP Results Revenue was $157.1 million, a decrease of 12.7%, compared to $180.1 million in the previous year fiscal first quarter and an increase of 4.5% compared to $150.4 million in the prior fiscal quarter; Gross margin was 55.6%, compared to 61.3% in the previous year fiscal first quarter and 57.6% in the prior fiscal quarter; Income from operations was $11.0 million, or 7.0% of revenue, compared to income from operations of $38.6 million, or 21.4% of revenue, in the previous year fiscal first quarter and income from operations of $15.6 million, or 10.4% of revenue, in the prior fiscal quarter; and Net income was $12.5 million, or $0.17 per diluted share, compared to net income of $29.5 million, or $0.41 per diluted share, in the previous year fiscal first quarter and net income of $24.5 million, or $0.34 per diluted share, in the prior fiscal quarter. First Quarter Fiscal Year 2024 Adjusted Non-GAAP Results Adjusted gross margin was 59.2%, compared to 62.6% in the previous year fiscal first quarter and 60.1% in the prior fiscal quarter; Adjusted income from operations was $38.6 million, or 24.5% of revenue, compared to adjusted income from operations of $58.8 million, or 32.7% of revenue, in the previous year fiscal first quarter and adjusted income from operations of $37.2 million, or 24.7% of revenue, in the prior fiscal quarter; and Adjusted net income was $41.8 million, or $0.58 per diluted share, compared to adjusted net income of $58.0 million, or $0.81 per diluted share, in the previous year fiscal first quarter and adjusted net income of $40.1 million, or $0.56 per diluted share, in the prior fiscal quarter. Management Commentary “Q1 was a solid start to fiscal year 2024,” said Stephen G. Daly, President and Chief Executive Officer. “We are pleased with the expansion of our product portfolio, and we continue to see new growth opportunities across the Industrial and Defense, Telecommunications and Data Center markets.” Business Outlook For the fiscal second quarter ending March 29, 2024, MACOM expects revenue to be in the range of $178 million to $184 million. Adjusted gross margin is expected to be between 56% and 58%, and adjusted earnings per diluted share is expected to be between $0.56 and $0.62 utilizing an anticipated non-GAAP income tax rate of 3% and 73.0 million fully diluted shares outstanding. Conference Call MACOM will host a conference call on Thursday, February 1, 2024 at 8:30 a.m. Eastern Time to discuss its fiscal first quarter 2024 financial results and business outlook. Investors and analysts may visit MACOM's Investor Relations website at https://ir.macom.com/events-webcasts to register for a user-specific access code for the live call or to access the live webcast. A replay of the call will be available within 24 hours and remain accessible by all interested parties for approximately 90 days. About MACOM MACOM designs and manufactures high-performance semiconductor products for the Telecommunications, Industrial and Defense and Data Center industries. MACOM services over 6,000 customers annually with a broad product portfolio that incorporates RF, Microwave, Analog and Mixed Signal and Optical semiconductor technologies. MACOM has achieved certification to the IATF16949 automotive standard, the AS9100D aerospace standard, the ISO9001 international quality standard and the ISO14001 environmental management standard. MACOM operates facilities across the United States, Europe, Asia and is headquartered in Lowell, Massachusetts. Special Note Regarding Forward-Looking Statements This press release and the associated earnings call contains forward-looking statements based on MACOM management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include, among others, statements about MACOM’s strategic plans, priorities and long-term growth drivers, our ability to execute our long-term strategy, strengthen our position and drive market share gains and growth, our ability to better address certain markets, expand our capabilities and extend our product offerings through the acquisitions of Linearizer Communications Group and the radio frequency (RF) business of Wolfspeed, Inc. and through the establishment of our European Semiconductor Center, and the teams’ capabilities and technologies and expansion thereof and any potential financial benefits derived by and financial impact to MACOM therefrom, strength and competitiveness of new product introductions and technology portfolio expansion, including the anticipated rate of new product introductions, anticipated demand for our products, MACOM’s profitability, revenue targets, prospects and growth opportunities in our three primary markets, the potential impact to our business of an economic downturn or recession, anticipated financial and business improvements, the estimated financial results for our 2024 fiscal second quarter and the stated business outlook and future results of operations. 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 indicated by the forward-looking statements, including our ability to develop new products and achieve market acceptance of those products; component shortages or other disruptions in our supply chain, including as a result of geopolitical unrest or otherwise; inflationary pressures; any failure to accurately anticipate demand for our products and effectively manage our inventory; our dependence on a limited number of customers; risks related to any weakening of economic conditions; our ability to compete effectively; and those other factors described in “Risk Factors” in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Discussion Regarding the Use of Historical and Forward-Looking Non-GAAP Financial Measures In addition to United States Generally Accepted Accounting Principles (“GAAP”) reporting, MACOM provides investors with financial measures that have not been calculated in accordance with GAAP, such as: non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP income from operations and operating margin, non-GAAP EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP income tax rate and non-GAAP interest income. In this release or elsewhere, we may alternatively refer to such non-GAAP measures as “adjusted” measures. This non-GAAP information excludes the effect, where applicable, of intangible amortization expense, share-based compensation expense, non-cash interest, net, acquisition and integration related costs, debt extinguishment costs and the tax effect of each non-GAAP adjustment. Management believes these excluded items are not reflective of our underlying performance and 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. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors 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 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 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. 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. This non-cash expense is not considered by management in making operating decisions. Share-Based Compensation Expense – includes share-based compensation expense for awards that are equity and liability classified on our balance sheet and the related employer tax expense at vesting. 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. Share-based compensation expense amounts are not considered by management in making operating decisions. Non-cash Interest, Net – includes amounts associated with the amortization of certain fees associated with the establishment or amendment of our term loans and convertible notes that are being amortized over the life of the agreements. We believe these amounts are non-cash in nature, are not correlated to future business operations and do not reflect our ongoing operations. Acquisition and Integration Related Costs – includes items such as professional fees, employee severance and other costs incurred in connection with acquisitions and integration specific activities which are not expected to have a continuing contribution to operations 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. Debt Extinguishment Costs – includes the write-off of unamortized deferred financing costs and professional fees associated with the paydown of our term loans. We believe these non-cash amounts are not correlated to future business operations and do not reflect our ongoing operations. Tax Effect of Non-GAAP Adjustments – includes adjustments to arrive at an estimate of our non-GAAP income tax rate associated with our non-GAAP income over a period of time. We determine our non-GAAP income tax rate 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 non-GAAP net income before income taxes and our ability to realize tax assets. We generally assess this non-GAAP income tax rate quarterly and have utilized 3% for our first fiscal quarter of fiscal year 2024 and for our fiscal year 2023. Our historical effective income tax rate under GAAP has varied significantly from our non-GAAP income tax rate due primarily to income taxed in foreign jurisdictions at generally lower tax rates, research and development tax credits and acquisition expenses. We believe it is beneficial for management to review our non-GAAP income tax rate on a consistent basis over periods of time. Items such as those noted above may have a significant impact on our GAAP income tax expense and associated effective tax rate over time. Adjusted EBITDA – is a calculation that adds depreciation expense to our adjusted income from operations. Management reviews and utilizes this measure for operational analysis purposes. We believe competitors and others in the financial industry also utilize this measure for analysis purposes. MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share data) Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Revenue $ 157,148 $ 150,375 $ 180,104 Cost of revenue 69,838 63,749 69,749 Gross profit 87,310 86,626 110,355 Operating expenses: Research and development 39,413 37,508 38,832 Selling, general and administrative 36,887 33,511 32,940 Total operating expenses 76,300 71,019 71,772 Income from operations 11,010 15,607 38,583 Other income (expense): Interest income, net 4,266 3,843 602 Other expense, net — (458 ) (55 ) Total other income 4,266 3,385 547 Income before income taxes 15,276 18,992 39,130 Income tax expense (benefit) 2,750 (5,458 ) 9,611 Net income $ 12,526 $ 24,450 $ 29,519 Net income per share: Income per share - Basic $ 0.18 $ 0.34 $ 0.42 Income per share - Diluted $ 0.17 $ 0.34 $ 0.41 Weighted average common shares: Shares - Basic 71,425 70,988 70,481 Shares - Diluted 72,286 71,828 71,374 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) December 29, 2023 September 29, 2023 ASSETS Current assets: Cash and cash equivalents $ 163,586 $ 173,952 Short-term investments 299,705 340,574 Accounts receivable, net 101,075 91,253 Inventories 159,501 136,300 Prepaid and other current assets 21,084 19,114 Total current assets 744,951 761,193 Property and equipment, net 184,278 149,496 Goodwill and intangible assets, net 442,016 390,392 Deferred income taxes 217,463 218,107 Other long-term assets 62,094 34,056 Total assets $ 1,650,802 $ 1,553,244 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of finance lease obligations $ 1,052 $ 1,162 Accounts payable 27,137 24,966 Accrued liabilities 74,680 57,397 Total current liabilities 102,869 83,525 Finance lease obligations, less current portion 31,624 31,776 Financing obligation 9,232 9,307 Long-term debt obligations 447,421 447,134 Other long-term liabilities 35,565 33,902 Total liabilities 626,711 605,644 Stockholders’ equity 1,024,091 947,600 Total liabilities and stockholders’ equity $ 1,650,802 $ 1,553,244 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Three Months Ended December 29, 2023 December 30, 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 12,526 $ 29,519 Depreciation and intangible asset amortization 14,289 12,855 Share-based compensation 8,657 11,047 Deferred income taxes 294 9,067 Other adjustments, net (1,755 ) (381 ) Accounts receivable (12,180 ) (10,489 ) Inventories 1,555 (6,375 ) Accrued and other liabilities 6,612 (10,349 ) Change in other operating assets and liabilities 3,101 3,379 Net cash provided by operating activities 33,099 38,273 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of business, net (75,000 ) — Sales, purchases and maturities of investments 44,878 1,666 Purchases of property and equipment (4,652 ) (9,616 ) Net cash used in investing activities (34,774 ) (7,950 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on finance leases and other (349 ) (278 ) Proceeds from stock option exercises and employee stock purchases 2,848 2,320 Repurchase of common stock - tax withholdings on equity awards (11,552 ) (26,375 ) Net cash used in financing activities (9,053 ) (24,333 ) Foreign currency effect on cash 362 213 NET CHANGE IN CASH AND CASH EQUIVALENTS (10,366 ) 6,203 CASH AND CASH EQUIVALENTS — Beginning of period 173,952 119,952 CASH AND CASH EQUIVALENTS — End of period $ 163,586 $ 126,155 Supplemental disclosure of non-cash activities Issuance of common stock in connection with the acquisition of the RF business of Wolfspeed, Inc. $ 60,772 $ — MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (unaudited and in thousands, except per share data) Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Gross profit - GAAP $ 87,310 55.6 $ 86,626 57.6 $ 110,355 61.3 Amortization expense 1,942 1.2 1,341 0.9 910 0.5 Share-based compensation expense 1,550 1.0 1,389 0.9 1,474 0.8 Acquisition and integration related costs 2,289 1.5 981 0.7 — — Adjusted gross profit (Non-GAAP) $ 93,091 59.2 $ 90,337 60.1 $ 112,739 62.6 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Operating expenses - GAAP $ 76,300 48.6 $ 71,019 47.2 $ 71,772 39.9 Amortization expense (4,798 ) (3.1 ) (6,092 ) (4.1 ) (5,903 ) (3.3 ) Share-based compensation expense (8,319 ) (5.3 ) (9,180 ) (6.1 ) (11,973 ) (6.6 ) Acquisition and integration related costs (8,644 ) (5.5 ) (2,462 ) (1.6 ) — — Debt extinguishment costs — — (143 ) (0.1 ) — — Adjusted operating expenses (Non-GAAP) $ 54,539 34.7 $ 53,142 35.3 $ 53,896 29.9 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Income from operations - GAAP $ 11,010 7.0 $ 15,607 10.4 $ 38,583 21.4 Amortization expense 6,740 4.3 7,433 4.9 6,813 3.8 Share-based compensation expense 9,869 6.3 10,569 7.0 13,447 7.5 Acquisition and integration related costs 10,933 7.0 3,443 2.3 — — Debt extinguishment costs — — 143 0.1 — — Adjusted income from operations (Non-GAAP) $ 38,552 24.5 $ 37,195 24.7 $ 58,843 32.7 Depreciation expense 6,254 4.0 6,218 4.1 6,042 3.4 Adjusted EBITDA (Non-GAAP) $ 44,806 28.5 $ 43,413 28.9 $ 64,885 36.0 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Net income - GAAP $ 12,526 8.0 $ 24,450 16.3 $ 29,519 16.4 Amortization expense 6,740 4.3 7,433 4.9 6,813 3.8 Share-based compensation expense 9,869 6.3 10,569 7.0 13,447 7.5 Non-cash interest, net 287 0.2 328 0.2 412 0.2 Acquisition and integration related costs 10,933 7.0 3,443 2.3 — — Debt extinguishment costs — — 560 0.4 — — Tax effect of non-GAAP adjustments 1,457 0.9 (6,698 ) (4.5 ) 7,816 4.3 Adjusted net income (Non-GAAP) $ 41,812 26.6 $ 40,085 26.7 $ 58,007 32.2 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income - GAAP diluted $ 12,526 $ 0.17 $ 24,450 $ 0.34 $ 29,519 $ 0.41 Adjusted net income (Non-GAAP) $ 41,812 $ 0.58 $ 40,085 $ 0.56 $ 58,007 $ 0.81 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Interest income, net - GAAP $ (4,266 ) (2.7 ) $ (3,843 ) (2.6 ) $ (602 ) (0.3 ) Non-cash interest expense (287 ) (0.2 ) (328 ) (0.2 ) (412 ) (0.2 ) Adjusted interest income (Non-GAAP) $ (4,553 ) (2.9 ) $ (4,171 ) (2.8 ) $ (1,014 ) (0.6 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20240201816279/en/Contacts Company: MACOM Technology Solutions Holdings, Inc. Stephen Ferranti Vice President, Corporate Development and Investor Relations P: 978-656-2977 E: stephen.ferranti@macom.com
MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal first quarter ended December 29, 2023. First Quarter Fiscal Year 2024 GAAP Results Revenue was $157.1 million, a decrease of 12.7%, compared to $180.1 million in the previous year fiscal first quarter and an increase of 4.5% compared to $150.4 million in the prior fiscal quarter; Gross margin was 55.6%, compared to 61.3% in the previous year fiscal first quarter and 57.6% in the prior fiscal quarter; Income from operations was $11.0 million, or 7.0% of revenue, compared to income from operations of $38.6 million, or 21.4% of revenue, in the previous year fiscal first quarter and income from operations of $15.6 million, or 10.4% of revenue, in the prior fiscal quarter; and Net income was $12.5 million, or $0.17 per diluted share, compared to net income of $29.5 million, or $0.41 per diluted share, in the previous year fiscal first quarter and net income of $24.5 million, or $0.34 per diluted share, in the prior fiscal quarter. First Quarter Fiscal Year 2024 Adjusted Non-GAAP Results Adjusted gross margin was 59.2%, compared to 62.6% in the previous year fiscal first quarter and 60.1% in the prior fiscal quarter; Adjusted income from operations was $38.6 million, or 24.5% of revenue, compared to adjusted income from operations of $58.8 million, or 32.7% of revenue, in the previous year fiscal first quarter and adjusted income from operations of $37.2 million, or 24.7% of revenue, in the prior fiscal quarter; and Adjusted net income was $41.8 million, or $0.58 per diluted share, compared to adjusted net income of $58.0 million, or $0.81 per diluted share, in the previous year fiscal first quarter and adjusted net income of $40.1 million, or $0.56 per diluted share, in the prior fiscal quarter. Management Commentary “Q1 was a solid start to fiscal year 2024,” said Stephen G. Daly, President and Chief Executive Officer. “We are pleased with the expansion of our product portfolio, and we continue to see new growth opportunities across the Industrial and Defense, Telecommunications and Data Center markets.” Business Outlook For the fiscal second quarter ending March 29, 2024, MACOM expects revenue to be in the range of $178 million to $184 million. Adjusted gross margin is expected to be between 56% and 58%, and adjusted earnings per diluted share is expected to be between $0.56 and $0.62 utilizing an anticipated non-GAAP income tax rate of 3% and 73.0 million fully diluted shares outstanding. Conference Call MACOM will host a conference call on Thursday, February 1, 2024 at 8:30 a.m. Eastern Time to discuss its fiscal first quarter 2024 financial results and business outlook. Investors and analysts may visit MACOM's Investor Relations website at https://ir.macom.com/events-webcasts to register for a user-specific access code for the live call or to access the live webcast. A replay of the call will be available within 24 hours and remain accessible by all interested parties for approximately 90 days. About MACOM MACOM designs and manufactures high-performance semiconductor products for the Telecommunications, Industrial and Defense and Data Center industries. MACOM services over 6,000 customers annually with a broad product portfolio that incorporates RF, Microwave, Analog and Mixed Signal and Optical semiconductor technologies. MACOM has achieved certification to the IATF16949 automotive standard, the AS9100D aerospace standard, the ISO9001 international quality standard and the ISO14001 environmental management standard. MACOM operates facilities across the United States, Europe, Asia and is headquartered in Lowell, Massachusetts. Special Note Regarding Forward-Looking Statements This press release and the associated earnings call contains forward-looking statements based on MACOM management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include, among others, statements about MACOM’s strategic plans, priorities and long-term growth drivers, our ability to execute our long-term strategy, strengthen our position and drive market share gains and growth, our ability to better address certain markets, expand our capabilities and extend our product offerings through the acquisitions of Linearizer Communications Group and the radio frequency (RF) business of Wolfspeed, Inc. and through the establishment of our European Semiconductor Center, and the teams’ capabilities and technologies and expansion thereof and any potential financial benefits derived by and financial impact to MACOM therefrom, strength and competitiveness of new product introductions and technology portfolio expansion, including the anticipated rate of new product introductions, anticipated demand for our products, MACOM’s profitability, revenue targets, prospects and growth opportunities in our three primary markets, the potential impact to our business of an economic downturn or recession, anticipated financial and business improvements, the estimated financial results for our 2024 fiscal second quarter and the stated business outlook and future results of operations. 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 indicated by the forward-looking statements, including our ability to develop new products and achieve market acceptance of those products; component shortages or other disruptions in our supply chain, including as a result of geopolitical unrest or otherwise; inflationary pressures; any failure to accurately anticipate demand for our products and effectively manage our inventory; our dependence on a limited number of customers; risks related to any weakening of economic conditions; our ability to compete effectively; and those other factors described in “Risk Factors” in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Discussion Regarding the Use of Historical and Forward-Looking Non-GAAP Financial Measures In addition to United States Generally Accepted Accounting Principles (“GAAP”) reporting, MACOM provides investors with financial measures that have not been calculated in accordance with GAAP, such as: non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP income from operations and operating margin, non-GAAP EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP income tax rate and non-GAAP interest income. In this release or elsewhere, we may alternatively refer to such non-GAAP measures as “adjusted” measures. This non-GAAP information excludes the effect, where applicable, of intangible amortization expense, share-based compensation expense, non-cash interest, net, acquisition and integration related costs, debt extinguishment costs and the tax effect of each non-GAAP adjustment. Management believes these excluded items are not reflective of our underlying performance and 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. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors 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 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 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. 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. This non-cash expense is not considered by management in making operating decisions. Share-Based Compensation Expense – includes share-based compensation expense for awards that are equity and liability classified on our balance sheet and the related employer tax expense at vesting. 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. Share-based compensation expense amounts are not considered by management in making operating decisions. Non-cash Interest, Net – includes amounts associated with the amortization of certain fees associated with the establishment or amendment of our term loans and convertible notes that are being amortized over the life of the agreements. We believe these amounts are non-cash in nature, are not correlated to future business operations and do not reflect our ongoing operations. Acquisition and Integration Related Costs – includes items such as professional fees, employee severance and other costs incurred in connection with acquisitions and integration specific activities which are not expected to have a continuing contribution to operations 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. Debt Extinguishment Costs – includes the write-off of unamortized deferred financing costs and professional fees associated with the paydown of our term loans. We believe these non-cash amounts are not correlated to future business operations and do not reflect our ongoing operations. Tax Effect of Non-GAAP Adjustments – includes adjustments to arrive at an estimate of our non-GAAP income tax rate associated with our non-GAAP income over a period of time. We determine our non-GAAP income tax rate 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 non-GAAP net income before income taxes and our ability to realize tax assets. We generally assess this non-GAAP income tax rate quarterly and have utilized 3% for our first fiscal quarter of fiscal year 2024 and for our fiscal year 2023. Our historical effective income tax rate under GAAP has varied significantly from our non-GAAP income tax rate due primarily to income taxed in foreign jurisdictions at generally lower tax rates, research and development tax credits and acquisition expenses. We believe it is beneficial for management to review our non-GAAP income tax rate on a consistent basis over periods of time. Items such as those noted above may have a significant impact on our GAAP income tax expense and associated effective tax rate over time. Adjusted EBITDA – is a calculation that adds depreciation expense to our adjusted income from operations. Management reviews and utilizes this measure for operational analysis purposes. We believe competitors and others in the financial industry also utilize this measure for analysis purposes. MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share data) Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Revenue $ 157,148 $ 150,375 $ 180,104 Cost of revenue 69,838 63,749 69,749 Gross profit 87,310 86,626 110,355 Operating expenses: Research and development 39,413 37,508 38,832 Selling, general and administrative 36,887 33,511 32,940 Total operating expenses 76,300 71,019 71,772 Income from operations 11,010 15,607 38,583 Other income (expense): Interest income, net 4,266 3,843 602 Other expense, net — (458 ) (55 ) Total other income 4,266 3,385 547 Income before income taxes 15,276 18,992 39,130 Income tax expense (benefit) 2,750 (5,458 ) 9,611 Net income $ 12,526 $ 24,450 $ 29,519 Net income per share: Income per share - Basic $ 0.18 $ 0.34 $ 0.42 Income per share - Diluted $ 0.17 $ 0.34 $ 0.41 Weighted average common shares: Shares - Basic 71,425 70,988 70,481 Shares - Diluted 72,286 71,828 71,374 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) December 29, 2023 September 29, 2023 ASSETS Current assets: Cash and cash equivalents $ 163,586 $ 173,952 Short-term investments 299,705 340,574 Accounts receivable, net 101,075 91,253 Inventories 159,501 136,300 Prepaid and other current assets 21,084 19,114 Total current assets 744,951 761,193 Property and equipment, net 184,278 149,496 Goodwill and intangible assets, net 442,016 390,392 Deferred income taxes 217,463 218,107 Other long-term assets 62,094 34,056 Total assets $ 1,650,802 $ 1,553,244 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of finance lease obligations $ 1,052 $ 1,162 Accounts payable 27,137 24,966 Accrued liabilities 74,680 57,397 Total current liabilities 102,869 83,525 Finance lease obligations, less current portion 31,624 31,776 Financing obligation 9,232 9,307 Long-term debt obligations 447,421 447,134 Other long-term liabilities 35,565 33,902 Total liabilities 626,711 605,644 Stockholders’ equity 1,024,091 947,600 Total liabilities and stockholders’ equity $ 1,650,802 $ 1,553,244 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Three Months Ended December 29, 2023 December 30, 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 12,526 $ 29,519 Depreciation and intangible asset amortization 14,289 12,855 Share-based compensation 8,657 11,047 Deferred income taxes 294 9,067 Other adjustments, net (1,755 ) (381 ) Accounts receivable (12,180 ) (10,489 ) Inventories 1,555 (6,375 ) Accrued and other liabilities 6,612 (10,349 ) Change in other operating assets and liabilities 3,101 3,379 Net cash provided by operating activities 33,099 38,273 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of business, net (75,000 ) — Sales, purchases and maturities of investments 44,878 1,666 Purchases of property and equipment (4,652 ) (9,616 ) Net cash used in investing activities (34,774 ) (7,950 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on finance leases and other (349 ) (278 ) Proceeds from stock option exercises and employee stock purchases 2,848 2,320 Repurchase of common stock - tax withholdings on equity awards (11,552 ) (26,375 ) Net cash used in financing activities (9,053 ) (24,333 ) Foreign currency effect on cash 362 213 NET CHANGE IN CASH AND CASH EQUIVALENTS (10,366 ) 6,203 CASH AND CASH EQUIVALENTS — Beginning of period 173,952 119,952 CASH AND CASH EQUIVALENTS — End of period $ 163,586 $ 126,155 Supplemental disclosure of non-cash activities Issuance of common stock in connection with the acquisition of the RF business of Wolfspeed, Inc. $ 60,772 $ — MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (unaudited and in thousands, except per share data) Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Gross profit - GAAP $ 87,310 55.6 $ 86,626 57.6 $ 110,355 61.3 Amortization expense 1,942 1.2 1,341 0.9 910 0.5 Share-based compensation expense 1,550 1.0 1,389 0.9 1,474 0.8 Acquisition and integration related costs 2,289 1.5 981 0.7 — — Adjusted gross profit (Non-GAAP) $ 93,091 59.2 $ 90,337 60.1 $ 112,739 62.6 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Operating expenses - GAAP $ 76,300 48.6 $ 71,019 47.2 $ 71,772 39.9 Amortization expense (4,798 ) (3.1 ) (6,092 ) (4.1 ) (5,903 ) (3.3 ) Share-based compensation expense (8,319 ) (5.3 ) (9,180 ) (6.1 ) (11,973 ) (6.6 ) Acquisition and integration related costs (8,644 ) (5.5 ) (2,462 ) (1.6 ) — — Debt extinguishment costs — — (143 ) (0.1 ) — — Adjusted operating expenses (Non-GAAP) $ 54,539 34.7 $ 53,142 35.3 $ 53,896 29.9 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Income from operations - GAAP $ 11,010 7.0 $ 15,607 10.4 $ 38,583 21.4 Amortization expense 6,740 4.3 7,433 4.9 6,813 3.8 Share-based compensation expense 9,869 6.3 10,569 7.0 13,447 7.5 Acquisition and integration related costs 10,933 7.0 3,443 2.3 — — Debt extinguishment costs — — 143 0.1 — — Adjusted income from operations (Non-GAAP) $ 38,552 24.5 $ 37,195 24.7 $ 58,843 32.7 Depreciation expense 6,254 4.0 6,218 4.1 6,042 3.4 Adjusted EBITDA (Non-GAAP) $ 44,806 28.5 $ 43,413 28.9 $ 64,885 36.0 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Net income - GAAP $ 12,526 8.0 $ 24,450 16.3 $ 29,519 16.4 Amortization expense 6,740 4.3 7,433 4.9 6,813 3.8 Share-based compensation expense 9,869 6.3 10,569 7.0 13,447 7.5 Non-cash interest, net 287 0.2 328 0.2 412 0.2 Acquisition and integration related costs 10,933 7.0 3,443 2.3 — — Debt extinguishment costs — — 560 0.4 — — Tax effect of non-GAAP adjustments 1,457 0.9 (6,698 ) (4.5 ) 7,816 4.3 Adjusted net income (Non-GAAP) $ 41,812 26.6 $ 40,085 26.7 $ 58,007 32.2 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income - GAAP diluted $ 12,526 $ 0.17 $ 24,450 $ 0.34 $ 29,519 $ 0.41 Adjusted net income (Non-GAAP) $ 41,812 $ 0.58 $ 40,085 $ 0.56 $ 58,007 $ 0.81 Three Months Ended December 29, 2023 September 29, 2023 December 30, 2022 Amount % Revenue Amount % Revenue Amount % Revenue Interest income, net - GAAP $ (4,266 ) (2.7 ) $ (3,843 ) (2.6 ) $ (602 ) (0.3 ) Non-cash interest expense (287 ) (0.2 ) (328 ) (0.2 ) (412 ) (0.2 ) Adjusted interest income (Non-GAAP) $ (4,553 ) (2.9 ) $ (4,171 ) (2.8 ) $ (1,014 ) (0.6 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20240201816279/en/
Company: MACOM Technology Solutions Holdings, Inc. Stephen Ferranti Vice President, Corporate Development and Investor Relations P: 978-656-2977 E: stephen.ferranti@macom.com