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 Third Quarter 2024 Financial Results By: MACOM Technology Solutions Holdings, Inc. via Business Wire August 01, 2024 at 07:30 AM EDT MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal third quarter ended June 28, 2024. Third Quarter Fiscal Year 2024 GAAP Results Revenue was $190.5 million, an increase of 28.3%, compared to $148.5 million in the previous year fiscal third quarter and an increase of 5.1% compared to $181.2 million in the prior fiscal quarter; Gross margin was 53.2%, compared to 58.0% in the previous year fiscal third quarter and 52.5% in the prior fiscal quarter; Income from operations was $19.7 million, or 10.4% of revenue, compared to income from operations of $17.3 million, or 11.7% of revenue, in the previous year fiscal third quarter and income from operations of $15.4 million, or 8.5% of revenue, in the prior fiscal quarter; and Net income was $19.9 million, or $0.27 per diluted share, compared to net income of $11.9 million, or $0.17 per diluted share, in the previous year fiscal third quarter and net income of $15.0 million, or $0.20 per diluted share, in the prior fiscal quarter. Third Quarter Fiscal Year 2024 Adjusted Non-GAAP Results Adjusted gross margin was 57.5%, compared to 60.1% in the previous year fiscal third quarter and 57.1% in the prior fiscal quarter; Adjusted income from operations was $45.6 million, or 24.0% of revenue, compared to adjusted income from operations of $37.0 million, or 24.9% of revenue, in the previous year fiscal third quarter and adjusted income from operations of $40.2 million, or 22.2% of revenue, in the prior fiscal quarter; and Adjusted net income was $48.9 million, or $0.66 per diluted share, compared to adjusted net income of $38.5 million, or $0.54 per diluted share, in the previous year fiscal third quarter and adjusted net income of $43.2 million, or $0.59 per diluted share, in the prior fiscal quarter. Management Commentary “We remain focused on engineering excellence, financial performance and execution,” said Stephen G. Daly, President and Chief Executive Officer. “Our portfolio expansion strategy continues to create new business opportunities with our Industrial, Defense, Telecom and Data Center customers.” Business Outlook For the fiscal fourth quarter ending September 27, 2024, MACOM expects revenue to be in the range of $197 million to $203 million. Adjusted gross margin is expected to be between 57% and 59%, and adjusted earnings per diluted share is expected to be between $0.70 and $0.76 utilizing an anticipated non-GAAP income tax rate of 3% and 75.0 million fully diluted shares outstanding. Conference Call MACOM will host a conference call on Thursday, August 1, 2024 at 8:30 a.m. Eastern Time to discuss its fiscal third 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. 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 develop new products, achieve market acceptance of those products and better address certain markets, expand our capabilities and extend our product offerings, including 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 performance improvements, the estimated financial results for our 2024 fiscal fourth 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, 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. 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 three fiscal quarters 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 Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Revenue $ 190,486 $ 181,234 $ 148,522 $ 528,868 $ 498,032 Cost of revenue 89,077 86,022 62,396 244,937 198,861 Gross profit 101,409 95,212 86,126 283,931 299,171 Operating expenses: Research and development 47,531 45,621 36,668 132,566 111,037 Selling, general and administrative 34,162 34,184 32,152 105,233 96,341 Total operating expenses 81,693 79,805 68,820 237,799 207,378 Income from operations 19,716 15,407 17,306 46,132 91,793 Other income (expense): Interest income 5,820 5,366 6,001 16,742 14,750 Interest expense (1,288 ) (1,285 ) (3,657 ) (3,862 ) (10,170 ) Other expense, net — — (29 ) — (207 ) Total other income 4,532 4,081 2,315 12,880 4,373 Income before income taxes 24,248 19,488 19,621 59,012 96,166 Income tax expense 4,309 4,508 7,768 11,567 29,039 Net income $ 19,939 $ 14,980 $ 11,853 $ 47,445 $ 67,127 Net income per share: Income per share - Basic $ 0.28 $ 0.21 $ 0.17 $ 0.66 $ 0.95 Income per share - Diluted $ 0.27 $ 0.20 $ 0.17 $ 0.65 $ 0.94 Weighted average common shares: Shares - Basic 72,143 72,076 70,937 71,881 70,739 Shares - Diluted 74,217 73,272 71,408 73,258 71,395 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) June 28, 2024 September 29, 2023 ASSETS Current assets: Cash and cash equivalents $ 117,304 $ 173,952 Short-term investments 404,196 340,574 Accounts receivable, net 106,776 91,253 Inventories 190,715 136,300 Prepaid and other current assets 24,621 19,114 Total current assets 843,612 761,193 Property and equipment, net 178,975 149,496 Goodwill and intangible assets, net 415,865 390,392 Deferred income taxes 211,507 218,107 Other long-term assets 55,253 34,056 Total assets $ 1,705,212 $ 1,553,244 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of finance lease obligations $ 808 $ 1,162 Accounts payable 40,288 24,966 Accrued liabilities 61,993 57,397 Total current liabilities 103,089 83,525 Finance lease obligations, less current portion 31,270 31,776 Financing obligation 9,092 9,307 Long-term debt obligations 447,994 447,134 Other long-term liabilities 32,716 33,902 Total liabilities 624,161 605,644 Stockholders’ equity 1,081,051 947,600 Total liabilities and stockholders’ equity $ 1,705,212 $ 1,553,244 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Nine Months Ended June 28, 2024 June 30, 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 47,445 $ 67,127 Depreciation and intangible asset amortization 49,419 38,415 Share-based compensation 34,092 28,769 Deferred income taxes 6,655 27,431 Other adjustments, net (1,207 ) (5,282 ) Accounts receivable (17,882 ) (2,387 ) Inventories (25,103 ) (12,208 ) Accrued and other liabilities (6,072 ) (16,607 ) Change in other operating assets and liabilities 12,964 (8,695 ) Net cash provided by operating activities 100,311 116,563 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of business, net (72,615 ) (87,692 ) Sales, purchases and maturities of investments (56,604 ) 11,216 Purchases of property and equipment (17,252 ) (18,890 ) Other investing (2,144 ) — Proceeds from sale of assets — 8,005 Net cash used in investing activities (148,615 ) (87,361 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on finance leases and other (1,062 ) (890 ) Proceeds from stock option exercises and employee stock purchases 6,505 5,574 Common stock withheld for taxes on employee equity awards (13,877 ) (32,479 ) Net cash used in financing activities (8,434 ) (27,795 ) Foreign currency effect on cash 90 161 NET CHANGE IN CASH AND CASH EQUIVALENTS (56,648 ) 1,568 CASH AND CASH EQUIVALENTS — Beginning of period 173,952 119,952 CASH AND CASH EQUIVALENTS — End of period $ 117,304 $ 121,520 Supplemental disclosure of non-cash activities Issuance of common stock in connection with the acquisition of the RF business of Wolfspeed, Inc. $ 57,733 $ — MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (unaudited and in thousands, except per share data) Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Gross profit - GAAP $ 101,409 53.2 $ 95,212 52.5 $ 86,126 58.0 $ 283,931 53.7 $ 299,171 60.1 Amortization expense 4,344 2.3 4,200 2.3 1,131 0.8 10,485 2.0 3,028 0.6 Share-based compensation expense 1,681 0.9 1,820 1.0 1,180 0.8 5,051 1.0 3,915 0.8 Acquisition and integration related costs 2,059 1.1 2,226 1.2 760 0.5 6,575 1.2 981 0.2 Adjusted gross profit (Non-GAAP) $ 109,493 57.5 $ 103,458 57.1 $ 89,197 60.1 $ 306,042 57.9 $ 307,095 61.7 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Operating expenses - GAAP $ 81,693 42.9 $ 79,805 44.0 $ 68,820 46.3 $ 237,799 45.0 $ 207,378 41.6 Amortization expense (4,332 ) (2.3 ) (4,121 ) (2.3 ) (5,976 ) (4.0 ) (13,251 ) (2.5 ) (17,643 ) (3.5 ) Share-based compensation expense (13,010 ) (6.8 ) (11,308 ) (6.2 ) (7,538 ) (5.1 ) (32,637 ) (6.2 ) (29,105 ) (5.8 ) Acquisition and integration related costs (493 ) (0.3 ) (1,107 ) (0.6 ) (3,095 ) (2.1 ) (10,244 ) (1.9 ) (5,917 ) (1.2 ) Adjusted operating expenses (Non-GAAP) $ 63,858 33.5 $ 63,269 34.9 $ 52,211 35.2 $ 181,667 34.4 $ 154,713 31.1 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Income from operations - GAAP $ 19,716 10.4 $ 15,407 8.5 $ 17,306 11.7 $ 46,132 8.7 $ 91,793 18.4 Amortization expense 8,676 4.6 8,321 4.6 7,107 4.8 23,736 4.5 20,671 4.2 Share-based compensation expense 14,691 7.7 13,128 7.2 8,718 5.9 37,688 7.1 33,020 6.6 Acquisition and integration related costs 2,552 1.3 3,333 1.8 3,855 2.6 16,819 3.2 6,898 1.4 Adjusted income from operations (Non-GAAP) $ 45,635 24.0 $ 40,189 22.2 $ 36,986 24.9 $ 124,375 23.5 $ 152,382 30.6 Depreciation expense 7,333 3.8 7,253 4.0 5,827 3.9 20,840 3.9 17,628 3.5 Adjusted EBITDA (Non-GAAP) $ 52,968 27.8 $ 47,442 26.2 $ 42,813 28.8 $ 145,215 27.5 $ 170,010 34.1 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Net income - GAAP $ 19,939 10.5 $ 14,980 8.3 $ 11,853 8.0 $ 47,445 9.0 $ 67,127 13.5 Amortization expense 8,676 4.6 8,321 4.6 7,107 4.8 23,736 4.5 20,671 4.2 Share-based compensation expense 14,691 7.7 13,128 7.2 8,718 5.9 37,689 7.1 33,020 6.6 Non-cash interest, net 287 0.2 287 0.2 412 0.3 860 0.2 1,235 0.2 Acquisition and integration related costs 2,552 1.3 3,333 1.8 3,855 2.6 16,819 3.2 6,898 1.4 Tax effect of non-GAAP adjustments 2,795 1.5 3,171 1.7 6,576 4.4 7,423 1.4 24,299 4.9 Adjusted net income (Non-GAAP) $ 48,940 25.7 $ 43,220 23.8 $ 38,521 25.9 $ 133,972 25.3 $ 153,250 30.8 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income - GAAP diluted $ 19,939 $ 0.27 $ 14,980 $ 0.20 $ 11,853 $ 0.17 $ 47,445 $ 0.65 $ 67,127 $ 0.94 Adjusted net income (Non-GAAP) $ 48,940 $ 0.66 $ 43,220 $ 0.59 $ 38,521 $ 0.54 $ 133,972 $ 1.83 $ 153,250 $ 2.15 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Interest income - GAAP $ (5,820 ) (3.1 ) $ (5,366 ) (3.0 ) $ (6,001 ) (4.0 ) $ (16,742 ) (3.2 ) $ (14,750 ) (3.0 ) Interest expense - GAAP 1,288 0.7 1,285 0.7 3,657 2.5 3,862 0.7 10,170 2.0 Non-cash interest expense (287 ) (0.2 ) (287 ) (0.2 ) (412 ) (0.3 ) (860 ) (0.2 ) (1,235 ) (0.2 ) Adjusted interest income (Non-GAAP) $ (4,819 ) (2.5 ) $ (4,368 ) (2.4 ) $ (2,756 ) (1.9 ) $ (13,740 ) (2.6 ) $ (5,815 ) (1.2 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20240801547335/en/Contacts Company Contact: 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 Third Quarter 2024 Financial Results By: MACOM Technology Solutions Holdings, Inc. via Business Wire August 01, 2024 at 07:30 AM EDT MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal third quarter ended June 28, 2024. Third Quarter Fiscal Year 2024 GAAP Results Revenue was $190.5 million, an increase of 28.3%, compared to $148.5 million in the previous year fiscal third quarter and an increase of 5.1% compared to $181.2 million in the prior fiscal quarter; Gross margin was 53.2%, compared to 58.0% in the previous year fiscal third quarter and 52.5% in the prior fiscal quarter; Income from operations was $19.7 million, or 10.4% of revenue, compared to income from operations of $17.3 million, or 11.7% of revenue, in the previous year fiscal third quarter and income from operations of $15.4 million, or 8.5% of revenue, in the prior fiscal quarter; and Net income was $19.9 million, or $0.27 per diluted share, compared to net income of $11.9 million, or $0.17 per diluted share, in the previous year fiscal third quarter and net income of $15.0 million, or $0.20 per diluted share, in the prior fiscal quarter. Third Quarter Fiscal Year 2024 Adjusted Non-GAAP Results Adjusted gross margin was 57.5%, compared to 60.1% in the previous year fiscal third quarter and 57.1% in the prior fiscal quarter; Adjusted income from operations was $45.6 million, or 24.0% of revenue, compared to adjusted income from operations of $37.0 million, or 24.9% of revenue, in the previous year fiscal third quarter and adjusted income from operations of $40.2 million, or 22.2% of revenue, in the prior fiscal quarter; and Adjusted net income was $48.9 million, or $0.66 per diluted share, compared to adjusted net income of $38.5 million, or $0.54 per diluted share, in the previous year fiscal third quarter and adjusted net income of $43.2 million, or $0.59 per diluted share, in the prior fiscal quarter. Management Commentary “We remain focused on engineering excellence, financial performance and execution,” said Stephen G. Daly, President and Chief Executive Officer. “Our portfolio expansion strategy continues to create new business opportunities with our Industrial, Defense, Telecom and Data Center customers.” Business Outlook For the fiscal fourth quarter ending September 27, 2024, MACOM expects revenue to be in the range of $197 million to $203 million. Adjusted gross margin is expected to be between 57% and 59%, and adjusted earnings per diluted share is expected to be between $0.70 and $0.76 utilizing an anticipated non-GAAP income tax rate of 3% and 75.0 million fully diluted shares outstanding. Conference Call MACOM will host a conference call on Thursday, August 1, 2024 at 8:30 a.m. Eastern Time to discuss its fiscal third 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. 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 develop new products, achieve market acceptance of those products and better address certain markets, expand our capabilities and extend our product offerings, including 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 performance improvements, the estimated financial results for our 2024 fiscal fourth 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, 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. 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 three fiscal quarters 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 Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Revenue $ 190,486 $ 181,234 $ 148,522 $ 528,868 $ 498,032 Cost of revenue 89,077 86,022 62,396 244,937 198,861 Gross profit 101,409 95,212 86,126 283,931 299,171 Operating expenses: Research and development 47,531 45,621 36,668 132,566 111,037 Selling, general and administrative 34,162 34,184 32,152 105,233 96,341 Total operating expenses 81,693 79,805 68,820 237,799 207,378 Income from operations 19,716 15,407 17,306 46,132 91,793 Other income (expense): Interest income 5,820 5,366 6,001 16,742 14,750 Interest expense (1,288 ) (1,285 ) (3,657 ) (3,862 ) (10,170 ) Other expense, net — — (29 ) — (207 ) Total other income 4,532 4,081 2,315 12,880 4,373 Income before income taxes 24,248 19,488 19,621 59,012 96,166 Income tax expense 4,309 4,508 7,768 11,567 29,039 Net income $ 19,939 $ 14,980 $ 11,853 $ 47,445 $ 67,127 Net income per share: Income per share - Basic $ 0.28 $ 0.21 $ 0.17 $ 0.66 $ 0.95 Income per share - Diluted $ 0.27 $ 0.20 $ 0.17 $ 0.65 $ 0.94 Weighted average common shares: Shares - Basic 72,143 72,076 70,937 71,881 70,739 Shares - Diluted 74,217 73,272 71,408 73,258 71,395 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) June 28, 2024 September 29, 2023 ASSETS Current assets: Cash and cash equivalents $ 117,304 $ 173,952 Short-term investments 404,196 340,574 Accounts receivable, net 106,776 91,253 Inventories 190,715 136,300 Prepaid and other current assets 24,621 19,114 Total current assets 843,612 761,193 Property and equipment, net 178,975 149,496 Goodwill and intangible assets, net 415,865 390,392 Deferred income taxes 211,507 218,107 Other long-term assets 55,253 34,056 Total assets $ 1,705,212 $ 1,553,244 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of finance lease obligations $ 808 $ 1,162 Accounts payable 40,288 24,966 Accrued liabilities 61,993 57,397 Total current liabilities 103,089 83,525 Finance lease obligations, less current portion 31,270 31,776 Financing obligation 9,092 9,307 Long-term debt obligations 447,994 447,134 Other long-term liabilities 32,716 33,902 Total liabilities 624,161 605,644 Stockholders’ equity 1,081,051 947,600 Total liabilities and stockholders’ equity $ 1,705,212 $ 1,553,244 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Nine Months Ended June 28, 2024 June 30, 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 47,445 $ 67,127 Depreciation and intangible asset amortization 49,419 38,415 Share-based compensation 34,092 28,769 Deferred income taxes 6,655 27,431 Other adjustments, net (1,207 ) (5,282 ) Accounts receivable (17,882 ) (2,387 ) Inventories (25,103 ) (12,208 ) Accrued and other liabilities (6,072 ) (16,607 ) Change in other operating assets and liabilities 12,964 (8,695 ) Net cash provided by operating activities 100,311 116,563 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of business, net (72,615 ) (87,692 ) Sales, purchases and maturities of investments (56,604 ) 11,216 Purchases of property and equipment (17,252 ) (18,890 ) Other investing (2,144 ) — Proceeds from sale of assets — 8,005 Net cash used in investing activities (148,615 ) (87,361 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on finance leases and other (1,062 ) (890 ) Proceeds from stock option exercises and employee stock purchases 6,505 5,574 Common stock withheld for taxes on employee equity awards (13,877 ) (32,479 ) Net cash used in financing activities (8,434 ) (27,795 ) Foreign currency effect on cash 90 161 NET CHANGE IN CASH AND CASH EQUIVALENTS (56,648 ) 1,568 CASH AND CASH EQUIVALENTS — Beginning of period 173,952 119,952 CASH AND CASH EQUIVALENTS — End of period $ 117,304 $ 121,520 Supplemental disclosure of non-cash activities Issuance of common stock in connection with the acquisition of the RF business of Wolfspeed, Inc. $ 57,733 $ — MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (unaudited and in thousands, except per share data) Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Gross profit - GAAP $ 101,409 53.2 $ 95,212 52.5 $ 86,126 58.0 $ 283,931 53.7 $ 299,171 60.1 Amortization expense 4,344 2.3 4,200 2.3 1,131 0.8 10,485 2.0 3,028 0.6 Share-based compensation expense 1,681 0.9 1,820 1.0 1,180 0.8 5,051 1.0 3,915 0.8 Acquisition and integration related costs 2,059 1.1 2,226 1.2 760 0.5 6,575 1.2 981 0.2 Adjusted gross profit (Non-GAAP) $ 109,493 57.5 $ 103,458 57.1 $ 89,197 60.1 $ 306,042 57.9 $ 307,095 61.7 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Operating expenses - GAAP $ 81,693 42.9 $ 79,805 44.0 $ 68,820 46.3 $ 237,799 45.0 $ 207,378 41.6 Amortization expense (4,332 ) (2.3 ) (4,121 ) (2.3 ) (5,976 ) (4.0 ) (13,251 ) (2.5 ) (17,643 ) (3.5 ) Share-based compensation expense (13,010 ) (6.8 ) (11,308 ) (6.2 ) (7,538 ) (5.1 ) (32,637 ) (6.2 ) (29,105 ) (5.8 ) Acquisition and integration related costs (493 ) (0.3 ) (1,107 ) (0.6 ) (3,095 ) (2.1 ) (10,244 ) (1.9 ) (5,917 ) (1.2 ) Adjusted operating expenses (Non-GAAP) $ 63,858 33.5 $ 63,269 34.9 $ 52,211 35.2 $ 181,667 34.4 $ 154,713 31.1 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Income from operations - GAAP $ 19,716 10.4 $ 15,407 8.5 $ 17,306 11.7 $ 46,132 8.7 $ 91,793 18.4 Amortization expense 8,676 4.6 8,321 4.6 7,107 4.8 23,736 4.5 20,671 4.2 Share-based compensation expense 14,691 7.7 13,128 7.2 8,718 5.9 37,688 7.1 33,020 6.6 Acquisition and integration related costs 2,552 1.3 3,333 1.8 3,855 2.6 16,819 3.2 6,898 1.4 Adjusted income from operations (Non-GAAP) $ 45,635 24.0 $ 40,189 22.2 $ 36,986 24.9 $ 124,375 23.5 $ 152,382 30.6 Depreciation expense 7,333 3.8 7,253 4.0 5,827 3.9 20,840 3.9 17,628 3.5 Adjusted EBITDA (Non-GAAP) $ 52,968 27.8 $ 47,442 26.2 $ 42,813 28.8 $ 145,215 27.5 $ 170,010 34.1 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Net income - GAAP $ 19,939 10.5 $ 14,980 8.3 $ 11,853 8.0 $ 47,445 9.0 $ 67,127 13.5 Amortization expense 8,676 4.6 8,321 4.6 7,107 4.8 23,736 4.5 20,671 4.2 Share-based compensation expense 14,691 7.7 13,128 7.2 8,718 5.9 37,689 7.1 33,020 6.6 Non-cash interest, net 287 0.2 287 0.2 412 0.3 860 0.2 1,235 0.2 Acquisition and integration related costs 2,552 1.3 3,333 1.8 3,855 2.6 16,819 3.2 6,898 1.4 Tax effect of non-GAAP adjustments 2,795 1.5 3,171 1.7 6,576 4.4 7,423 1.4 24,299 4.9 Adjusted net income (Non-GAAP) $ 48,940 25.7 $ 43,220 23.8 $ 38,521 25.9 $ 133,972 25.3 $ 153,250 30.8 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income - GAAP diluted $ 19,939 $ 0.27 $ 14,980 $ 0.20 $ 11,853 $ 0.17 $ 47,445 $ 0.65 $ 67,127 $ 0.94 Adjusted net income (Non-GAAP) $ 48,940 $ 0.66 $ 43,220 $ 0.59 $ 38,521 $ 0.54 $ 133,972 $ 1.83 $ 153,250 $ 2.15 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Interest income - GAAP $ (5,820 ) (3.1 ) $ (5,366 ) (3.0 ) $ (6,001 ) (4.0 ) $ (16,742 ) (3.2 ) $ (14,750 ) (3.0 ) Interest expense - GAAP 1,288 0.7 1,285 0.7 3,657 2.5 3,862 0.7 10,170 2.0 Non-cash interest expense (287 ) (0.2 ) (287 ) (0.2 ) (412 ) (0.3 ) (860 ) (0.2 ) (1,235 ) (0.2 ) Adjusted interest income (Non-GAAP) $ (4,819 ) (2.5 ) $ (4,368 ) (2.4 ) $ (2,756 ) (1.9 ) $ (13,740 ) (2.6 ) $ (5,815 ) (1.2 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20240801547335/en/Contacts Company Contact: 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 third quarter ended June 28, 2024. Third Quarter Fiscal Year 2024 GAAP Results Revenue was $190.5 million, an increase of 28.3%, compared to $148.5 million in the previous year fiscal third quarter and an increase of 5.1% compared to $181.2 million in the prior fiscal quarter; Gross margin was 53.2%, compared to 58.0% in the previous year fiscal third quarter and 52.5% in the prior fiscal quarter; Income from operations was $19.7 million, or 10.4% of revenue, compared to income from operations of $17.3 million, or 11.7% of revenue, in the previous year fiscal third quarter and income from operations of $15.4 million, or 8.5% of revenue, in the prior fiscal quarter; and Net income was $19.9 million, or $0.27 per diluted share, compared to net income of $11.9 million, or $0.17 per diluted share, in the previous year fiscal third quarter and net income of $15.0 million, or $0.20 per diluted share, in the prior fiscal quarter. Third Quarter Fiscal Year 2024 Adjusted Non-GAAP Results Adjusted gross margin was 57.5%, compared to 60.1% in the previous year fiscal third quarter and 57.1% in the prior fiscal quarter; Adjusted income from operations was $45.6 million, or 24.0% of revenue, compared to adjusted income from operations of $37.0 million, or 24.9% of revenue, in the previous year fiscal third quarter and adjusted income from operations of $40.2 million, or 22.2% of revenue, in the prior fiscal quarter; and Adjusted net income was $48.9 million, or $0.66 per diluted share, compared to adjusted net income of $38.5 million, or $0.54 per diluted share, in the previous year fiscal third quarter and adjusted net income of $43.2 million, or $0.59 per diluted share, in the prior fiscal quarter. Management Commentary “We remain focused on engineering excellence, financial performance and execution,” said Stephen G. Daly, President and Chief Executive Officer. “Our portfolio expansion strategy continues to create new business opportunities with our Industrial, Defense, Telecom and Data Center customers.” Business Outlook For the fiscal fourth quarter ending September 27, 2024, MACOM expects revenue to be in the range of $197 million to $203 million. Adjusted gross margin is expected to be between 57% and 59%, and adjusted earnings per diluted share is expected to be between $0.70 and $0.76 utilizing an anticipated non-GAAP income tax rate of 3% and 75.0 million fully diluted shares outstanding. Conference Call MACOM will host a conference call on Thursday, August 1, 2024 at 8:30 a.m. Eastern Time to discuss its fiscal third 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. 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 develop new products, achieve market acceptance of those products and better address certain markets, expand our capabilities and extend our product offerings, including 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 performance improvements, the estimated financial results for our 2024 fiscal fourth 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, 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. 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 three fiscal quarters 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 Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Revenue $ 190,486 $ 181,234 $ 148,522 $ 528,868 $ 498,032 Cost of revenue 89,077 86,022 62,396 244,937 198,861 Gross profit 101,409 95,212 86,126 283,931 299,171 Operating expenses: Research and development 47,531 45,621 36,668 132,566 111,037 Selling, general and administrative 34,162 34,184 32,152 105,233 96,341 Total operating expenses 81,693 79,805 68,820 237,799 207,378 Income from operations 19,716 15,407 17,306 46,132 91,793 Other income (expense): Interest income 5,820 5,366 6,001 16,742 14,750 Interest expense (1,288 ) (1,285 ) (3,657 ) (3,862 ) (10,170 ) Other expense, net — — (29 ) — (207 ) Total other income 4,532 4,081 2,315 12,880 4,373 Income before income taxes 24,248 19,488 19,621 59,012 96,166 Income tax expense 4,309 4,508 7,768 11,567 29,039 Net income $ 19,939 $ 14,980 $ 11,853 $ 47,445 $ 67,127 Net income per share: Income per share - Basic $ 0.28 $ 0.21 $ 0.17 $ 0.66 $ 0.95 Income per share - Diluted $ 0.27 $ 0.20 $ 0.17 $ 0.65 $ 0.94 Weighted average common shares: Shares - Basic 72,143 72,076 70,937 71,881 70,739 Shares - Diluted 74,217 73,272 71,408 73,258 71,395 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) June 28, 2024 September 29, 2023 ASSETS Current assets: Cash and cash equivalents $ 117,304 $ 173,952 Short-term investments 404,196 340,574 Accounts receivable, net 106,776 91,253 Inventories 190,715 136,300 Prepaid and other current assets 24,621 19,114 Total current assets 843,612 761,193 Property and equipment, net 178,975 149,496 Goodwill and intangible assets, net 415,865 390,392 Deferred income taxes 211,507 218,107 Other long-term assets 55,253 34,056 Total assets $ 1,705,212 $ 1,553,244 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of finance lease obligations $ 808 $ 1,162 Accounts payable 40,288 24,966 Accrued liabilities 61,993 57,397 Total current liabilities 103,089 83,525 Finance lease obligations, less current portion 31,270 31,776 Financing obligation 9,092 9,307 Long-term debt obligations 447,994 447,134 Other long-term liabilities 32,716 33,902 Total liabilities 624,161 605,644 Stockholders’ equity 1,081,051 947,600 Total liabilities and stockholders’ equity $ 1,705,212 $ 1,553,244 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Nine Months Ended June 28, 2024 June 30, 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 47,445 $ 67,127 Depreciation and intangible asset amortization 49,419 38,415 Share-based compensation 34,092 28,769 Deferred income taxes 6,655 27,431 Other adjustments, net (1,207 ) (5,282 ) Accounts receivable (17,882 ) (2,387 ) Inventories (25,103 ) (12,208 ) Accrued and other liabilities (6,072 ) (16,607 ) Change in other operating assets and liabilities 12,964 (8,695 ) Net cash provided by operating activities 100,311 116,563 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of business, net (72,615 ) (87,692 ) Sales, purchases and maturities of investments (56,604 ) 11,216 Purchases of property and equipment (17,252 ) (18,890 ) Other investing (2,144 ) — Proceeds from sale of assets — 8,005 Net cash used in investing activities (148,615 ) (87,361 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on finance leases and other (1,062 ) (890 ) Proceeds from stock option exercises and employee stock purchases 6,505 5,574 Common stock withheld for taxes on employee equity awards (13,877 ) (32,479 ) Net cash used in financing activities (8,434 ) (27,795 ) Foreign currency effect on cash 90 161 NET CHANGE IN CASH AND CASH EQUIVALENTS (56,648 ) 1,568 CASH AND CASH EQUIVALENTS — Beginning of period 173,952 119,952 CASH AND CASH EQUIVALENTS — End of period $ 117,304 $ 121,520 Supplemental disclosure of non-cash activities Issuance of common stock in connection with the acquisition of the RF business of Wolfspeed, Inc. $ 57,733 $ — MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS (unaudited and in thousands, except per share data) Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Gross profit - GAAP $ 101,409 53.2 $ 95,212 52.5 $ 86,126 58.0 $ 283,931 53.7 $ 299,171 60.1 Amortization expense 4,344 2.3 4,200 2.3 1,131 0.8 10,485 2.0 3,028 0.6 Share-based compensation expense 1,681 0.9 1,820 1.0 1,180 0.8 5,051 1.0 3,915 0.8 Acquisition and integration related costs 2,059 1.1 2,226 1.2 760 0.5 6,575 1.2 981 0.2 Adjusted gross profit (Non-GAAP) $ 109,493 57.5 $ 103,458 57.1 $ 89,197 60.1 $ 306,042 57.9 $ 307,095 61.7 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Operating expenses - GAAP $ 81,693 42.9 $ 79,805 44.0 $ 68,820 46.3 $ 237,799 45.0 $ 207,378 41.6 Amortization expense (4,332 ) (2.3 ) (4,121 ) (2.3 ) (5,976 ) (4.0 ) (13,251 ) (2.5 ) (17,643 ) (3.5 ) Share-based compensation expense (13,010 ) (6.8 ) (11,308 ) (6.2 ) (7,538 ) (5.1 ) (32,637 ) (6.2 ) (29,105 ) (5.8 ) Acquisition and integration related costs (493 ) (0.3 ) (1,107 ) (0.6 ) (3,095 ) (2.1 ) (10,244 ) (1.9 ) (5,917 ) (1.2 ) Adjusted operating expenses (Non-GAAP) $ 63,858 33.5 $ 63,269 34.9 $ 52,211 35.2 $ 181,667 34.4 $ 154,713 31.1 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Income from operations - GAAP $ 19,716 10.4 $ 15,407 8.5 $ 17,306 11.7 $ 46,132 8.7 $ 91,793 18.4 Amortization expense 8,676 4.6 8,321 4.6 7,107 4.8 23,736 4.5 20,671 4.2 Share-based compensation expense 14,691 7.7 13,128 7.2 8,718 5.9 37,688 7.1 33,020 6.6 Acquisition and integration related costs 2,552 1.3 3,333 1.8 3,855 2.6 16,819 3.2 6,898 1.4 Adjusted income from operations (Non-GAAP) $ 45,635 24.0 $ 40,189 22.2 $ 36,986 24.9 $ 124,375 23.5 $ 152,382 30.6 Depreciation expense 7,333 3.8 7,253 4.0 5,827 3.9 20,840 3.9 17,628 3.5 Adjusted EBITDA (Non-GAAP) $ 52,968 27.8 $ 47,442 26.2 $ 42,813 28.8 $ 145,215 27.5 $ 170,010 34.1 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Net income - GAAP $ 19,939 10.5 $ 14,980 8.3 $ 11,853 8.0 $ 47,445 9.0 $ 67,127 13.5 Amortization expense 8,676 4.6 8,321 4.6 7,107 4.8 23,736 4.5 20,671 4.2 Share-based compensation expense 14,691 7.7 13,128 7.2 8,718 5.9 37,689 7.1 33,020 6.6 Non-cash interest, net 287 0.2 287 0.2 412 0.3 860 0.2 1,235 0.2 Acquisition and integration related costs 2,552 1.3 3,333 1.8 3,855 2.6 16,819 3.2 6,898 1.4 Tax effect of non-GAAP adjustments 2,795 1.5 3,171 1.7 6,576 4.4 7,423 1.4 24,299 4.9 Adjusted net income (Non-GAAP) $ 48,940 25.7 $ 43,220 23.8 $ 38,521 25.9 $ 133,972 25.3 $ 153,250 30.8 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income Income per diluted share Net income - GAAP diluted $ 19,939 $ 0.27 $ 14,980 $ 0.20 $ 11,853 $ 0.17 $ 47,445 $ 0.65 $ 67,127 $ 0.94 Adjusted net income (Non-GAAP) $ 48,940 $ 0.66 $ 43,220 $ 0.59 $ 38,521 $ 0.54 $ 133,972 $ 1.83 $ 153,250 $ 2.15 Three Months Ended Nine Months Ended June 28, 2024 March 29, 2024 June 30, 2023 June 28, 2024 June 30, 2023 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Interest income - GAAP $ (5,820 ) (3.1 ) $ (5,366 ) (3.0 ) $ (6,001 ) (4.0 ) $ (16,742 ) (3.2 ) $ (14,750 ) (3.0 ) Interest expense - GAAP 1,288 0.7 1,285 0.7 3,657 2.5 3,862 0.7 10,170 2.0 Non-cash interest expense (287 ) (0.2 ) (287 ) (0.2 ) (412 ) (0.3 ) (860 ) (0.2 ) (1,235 ) (0.2 ) Adjusted interest income (Non-GAAP) $ (4,819 ) (2.5 ) $ (4,368 ) (2.4 ) $ (2,756 ) (1.9 ) $ (13,740 ) (2.6 ) $ (5,815 ) (1.2 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20240801547335/en/
Company Contact: MACOM Technology Solutions Holdings, Inc. Stephen Ferranti Vice President, Corporate Development and Investor Relations P: 978-656-2977 E: stephen.ferranti@macom.com