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Share Name | Share Symbol | Market | Type |
---|---|---|---|
MACOM Technology Solutions Holdings Inc | NASDAQ:MTSI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.27 | 0.27% | 101.50 | 101.50 | 150.00 | 101.50 | 98.325 | 101.50 | 639,003 | 00:26:56 |
MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal second quarter ended March 29, 2024.
Second Quarter Fiscal Year 2024 GAAP Results
Second Quarter Fiscal Year 2024 Adjusted Non-GAAP Results
Management Commentary
“Our engineering, sales, operations, quality and administrative teams are doing an excellent job supporting our customers,” said Stephen G. Daly, President and Chief Executive Officer. “As a result, we expect continued improvements in our financial performance in the second half of our fiscal year.”
Business Outlook
For the fiscal third quarter ending June 28, 2024, MACOM expects revenue to be in the range of $187 million to $193 million. Adjusted gross margin is expected to be between 56% and 58%, and adjusted earnings per diluted share is expected to be between $0.63 and $0.69 utilizing an anticipated non-GAAP income tax rate of 3% and 74.0 million fully diluted shares outstanding.
Conference Call
MACOM will host a conference call on Thursday, May 2, 2024 at 8:30 a.m. Eastern Time to discuss its fiscal second 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 develop new products, achieve market acceptance of those products and 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 performance improvements, the estimated financial results for our 2024 fiscal third 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.
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 two 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
Six Months Ended
March 29,
2024
December 29,
2023
March 31,
2023
March 29,
2024
March 31,
2023
Revenue
$
181,234
$
157,148
$
169,406
$
338,382
$
349,510
Cost of revenue
86,022
69,838
66,716
155,860
136,465
Gross profit
95,212
87,310
102,690
182,522
213,045
Operating expenses:
Research and development
45,621
39,413
35,537
85,034
74,369
Selling, general and administrative
34,184
36,887
31,249
71,071
64,189
Total operating expenses
79,805
76,300
66,786
156,105
138,558
Income from operations
15,407
11,010
35,904
26,417
74,487
Other income (expense):
Interest income
5,366
5,556
5,064
10,921
8,749
Interest expense
(1,285
)
(1,290
)
(3,430
)
(2,574
)
(6,513
)
Other expense, net
—
—
(123
)
—
(178
)
Total other income
4,081
4,266
1,511
8,347
2,058
Income before income taxes
19,488
15,276
37,415
34,764
76,545
Income tax expense
4,508
2,750
11,660
7,258
21,271
Net income
$
14,980
$
12,526
$
25,755
$
27,506
$
55,274
Net income per share:
Income per share - Basic
$
0.21
$
0.18
$
0.36
$
0.38
$
0.78
Income per share - Diluted
$
0.20
$
0.17
$
0.36
$
0.38
$
0.77
Weighted average common shares:
Shares - Basic
72,076
71,425
70,799
71,750
70,640
Shares - Diluted
73,272
72,286
71,402
72,779
71,388
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)
March 29,
2024
September 29,
2023
ASSETS
Current assets:
Cash and cash equivalents
$
114,990
$
173,952
Short-term investments
361,423
340,574
Accounts receivable, net
120,222
91,253
Inventories
177,806
136,300
Prepaid and other current assets
23,997
19,114
Total current assets
798,438
761,193
Property and equipment, net
180,229
149,496
Goodwill and intangible assets, net
423,386
390,392
Deferred income taxes
214,061
218,107
Other long-term assets
60,274
34,056
Total assets
$
1,676,388
$
1,553,244
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of finance lease obligations
$
948
$
1,162
Accounts payable
44,341
24,966
Accrued liabilities
63,564
57,397
Total current liabilities
108,853
83,525
Finance lease obligations, less current portion
31,427
31,776
Financing obligation
9,156
9,307
Long-term debt obligations
447,707
447,134
Other long-term liabilities
33,632
33,902
Total liabilities
630,775
605,644
Stockholders’ equity
1,045,613
947,600
Total liabilities and stockholders’ equity
$
1,676,388
$
1,553,244
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
Six Months Ended
March 29,
2024
March 31,
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
27,506
$
55,274
Depreciation and intangible asset amortization
31,486
25,365
Share-based compensation
20,747
20,507
Deferred income taxes
3,706
20,233
Other adjustments, net
(1,497
)
(2,784
)
Accounts receivable
(31,327
)
(18,316
)
Inventories
(12,325
)
(8,236
)
Accrued and other liabilities
(2,301
)
(17,471
)
Change in other operating assets and liabilities
15,307
(3,825
)
Net cash provided by operating activities
51,302
70,747
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of business, net
(74,813
)
(50,835
)
Sales, purchases and maturities of investments
(15,478
)
33,477
Purchases of property and equipment
(9,782
)
(15,614
)
Proceeds from sale of assets
—
8,000
Net cash used in investing activities
(100,073
)
(24,972
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on finance leases and other
(703
)
(591
)
Proceeds from stock option exercises and employee stock purchases
2,849
2,320
Common stock withheld for taxes on employee equity awards
(12,522
)
(31,253
)
Net cash used in financing activities
(10,376
)
(29,524
)
Foreign currency effect on cash
185
370
NET CHANGE IN CASH AND CASH EQUIVALENTS
(58,962
)
16,621
CASH AND CASH EQUIVALENTS — Beginning of period
173,952
119,952
CASH AND CASH EQUIVALENTS — End of period
$
114,990
$
136,573
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
Six Months Ended
March 29, 2024
December 29, 2023
March 31, 2023
March 29, 2024
March 31, 2023
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Gross profit - GAAP
$
95,212
52.5
$
87,310
55.6
$
102,690
60.6
$
182,522
53.9
$
213,045
61.0
Amortization expense
4,200
2.3
1,942
1.2
987
0.6
6,142
1.8
1,897
0.5
Share-based compensation expense
1,820
1.0
1,550
1.0
1,261
0.7
3,370
1.0
2,735
0.8
Acquisition and integration related costs
2,226
1.2
2,289
1.5
221
0.1
4,516
1.3
221
0.1
Adjusted gross profit (Non-GAAP)
$
103,458
57.1
$
93,091
59.2
$
105,159
62.1
$
196,550
58.1
$
217,898
62.3
Three Months Ended
Six Months Ended
March 29, 2024
December 29, 2023
March 31, 2023
March 29, 2024
March 31, 2023
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Operating expenses - GAAP
$
79,805
44.0
$
76,300
48.6
$
66,786
39.4
$
156,105
46.1
$
138,558
39.6
Amortization expense
(4,121
)
(2.3
)
(4,798
)
(3.1
)
(5,765
)
(3.4
)
(8,919
)
(2.6
)
(11,667
)
(3.3
)
Share-based compensation expense
(11,308
)
(6.2
)
(8,319
)
(5.3
)
(9,594
)
(5.7
)
(19,627
)
(5.8
)
(21,567
)
(6.2
)
Acquisition and integration related costs
(1,107
)
(0.6
)
(8,644
)
(5.5
)
(2,822
)
(1.7
)
(9,751
)
(2.9
)
(2,822
)
(0.8
)
Adjusted operating expenses (Non-GAAP)
$
63,269
34.9
$
54,539
34.7
$
48,605
28.7
$
117,808
34.8
$
102,502
29.3
Three Months Ended
Six Months Ended
March 29, 2024
December 29, 2023
March 31, 2023
March 29, 2024
March 31, 2023
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Income from operations - GAAP
$
15,407
8.5
$
11,010
7.0
$
35,904
21.2
$
26,417
7.8
$
74,487
21.3
Amortization expense
8,321
4.6
6,740
4.3
6,752
4.0
15,061
4.5
13,564
3.9
Share-based compensation expense
13,128
7.2
9,869
6.3
10,855
6.4
22,997
6.8
24,302
7.0
Acquisition and integration related costs
3,333
1.8
10,933
7.0
3,043
1.8
14,267
4.2
3,043
0.9
Adjusted income from operations (Non-GAAP)
$
40,189
22.2
$
38,552
24.5
$
56,554
33.4
$
78,742
23.3
$
115,396
33.0
Depreciation expense
7,253
4.0
6,254
4.0
5,759
3.4
13,507
4.0
11,801
3.4
Adjusted EBITDA (Non-GAAP)
$
47,442
26.2
$
44,806
28.5
$
62,313
36.8
$
92,249
27.3
$
127,197
36.4
Three Months Ended
Six Months Ended
March 29, 2024
December 29, 2023
March 31, 2023
March 29, 2024
March 31, 2023
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Net income - GAAP
$
14,980
8.3
$
12,526
8.0
$
25,755
15.2
$
27,506
8.1
$
55,274
15.8
Amortization expense
8,321
4.6
6,740
4.3
6,752
4.0
15,061
4.5
13,564
3.9
Share-based compensation expense
13,128
7.2
9,869
6.3
10,855
6.4
22,997
6.8
24,302
7.0
Non-cash interest, net
287
0.2
287
0.2
411
0.2
573
0.2
823
0.2
Acquisition and integration related costs
3,333
1.8
10,933
7.0
3,043
1.8
14,267
4.2
3,043
0.9
Tax effect of non-GAAP adjustments
3,171
1.7
1,457
0.9
9,906
5.8
4,628
1.4
17,723
5.1
Adjusted net income (Non-GAAP)
$
43,220
23.8
$
41,812
26.6
$
56,722
33.5
$
85,032
25.1
$
114,729
32.8
Three Months Ended
Six Months Ended
March 29, 2024
December 29, 2023
March 31, 2023
March 29, 2024
March 31, 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
$
14,980
$
0.20
$
12,526
$
0.17
$
25,755
$
0.36
$
27,506
$
0.38
$
55,274
$
0.77
Adjusted net income (Non-GAAP)
$
43,220
$
0.59
$
41,812
$
0.58
$
56,722
$
0.79
$
85,032
$
1.17
$
114,729
$
1.61
Three Months Ended
Six Months Ended
March 29, 2024
December 29, 2023
March 31, 2023
March 29, 2024
March 31, 2023
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Amount
% Revenue
Interest income - GAAP
$
(5,366
)
(3.0
)
$
(5,556
)
(3.5
)
$
(5,064
)
(3.0
)
$
(10,921
)
(3.2
)
$
(8,749
)
(2.5
)
Interest expense - GAAP
1,285
0.7
1,290
0.8
3,430
2.0
2,574
0.8
6,513
1.9
Non-cash interest expense
(287
)
(0.2
)
(287
)
(0.2
)
(411
)
(0.2
)
(573
)
(0.2
)
(823
)
(0.2
)
Adjusted interest income (Non-GAAP)
$
(4,368
)
(2.4
)
$
(4,553
)
(2.9
)
$
(2,045
)
(1.2
)
$
(8,920
)
(2.6
)
$
(3,059
)
(0.9
)
View source version on businesswire.com: https://www.businesswire.com/news/home/20240502883502/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
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