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M/A-COM Technology Solutions Holdings, Inc. (Nasdaq:MTSI), a leading supplier of high performance analog semiconductor solutions, today reported its financial results for its fiscal third quarter ended July 4, 2014.
Third Quarter Fiscal Year 2014 GAAP Results:
– Revenue was $112.4 million, compared to $107.8 million in the prior fiscal quarter and $83.5 million in the previous year’s fiscal third quarter;
– Gross margin was 44.7 percent, compared to 24.9 percent in the prior fiscal quarter and 42.5 percent in the previous year’s fiscal third quarter;
– Operating income was $7.3 million, compared to operating loss of $20.6 million in the prior fiscal quarter and operating income of $8.9 million in the previous year’s fiscal third quarter; and
– Net income was $1.2 million, or $0.02 earnings per diluted share, compared to net loss of $22.1 million, or $0.47 loss per share, in the prior fiscal quarter and net income of $7.0 million, or $0.15 earnings per diluted share, in the previous year’s fiscal third quarter.
Third Quarter Fiscal Year 2014 Non-GAAP Results:
– Gross margin was 51.7 percent, compared to 49.3 percent in the prior fiscal quarter and 45.0 percent in the previous year’s fiscal third quarter;
– Operating income was $23.9 million, or 21.3 percent of revenue, compared to $21.4 million, or 19.9 percent of revenue, in the prior fiscal quarter and $16.2 million, or 19.8 percent of revenue, in the previous year’s fiscal third quarter;
– EBITDA was $27.2 million, compared to $24.8 million for the prior fiscal quarter and $18.9 million for the previous year’s fiscal third quarter; and
– Net income was $15.8 million, or $0.33 earnings per diluted share, compared to net income of $15.2 million, or $0.32 per diluted share, in the prior fiscal quarter and net income of $11.5 million, or $0.24 earnings per diluted share, in the previous year’s fiscal third quarter.
John Croteau, Chief Executive Officer of MACOM stated, “Revenue and earnings per share for the quarter were at the high end of our guidance with strong sequential growth that was broadly distributed across our end markets. Non-GAAP gross margin improved by 240 basis points sequentially and 670 basis points year over year to 51.7%, representing our seventh consecutive quarter of margin improvement.”
“During the quarter, we closed on the sale of the CPE business to Freescale Semiconductor, which contributed one month of revenue in the quarter. Additionally, we closed on our seven-year Term Loan B facility that further strengthens our balance sheet and financial flexibility.”
Mr. Croteau concluded, “We are pleased with our execution as we realize the benefits of our strategic initiatives and past investments in growth and gross margin expansion. We will remain laser-focused on servicing our target customers and applications as we further extend our leadership position and capture a greater share of the high performance analog RF, microwave and millimeter wave market.”
During the fiscal third quarter, MACOM completed its refinancing of its existing revolving credit facility with a $450 million senior secured credit facility consisting of a $350 million Term Loan B facility and a $100 million Revolving Credit Facility. The initial draw down of the Term Loan B Facility was $350 million. Key benefits of this refinancing include extending the principal maturity of MACOM’s outstanding indebtedness, providing access to institutional lenders and credit agency ratings, and providing access to additional capital for general corporate purposes, including future acquisitions.
Based on the greater level of outstanding debt and higher interest costs associated with the new facility, for the full fiscal fourth quarter, the refinancing will have a dilutive effect to MACOM’s future EPS as described in more detail below.
