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MACOM Reports Fiscal Fourth Quarter and Fiscal Year 2021 Financial Results

MACOM Technology Solutions Holdings, Inc. (“MACOM”) (NASDAQ: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal fourth quarter and fiscal year ended October 1, 2021.

Fourth Quarter Fiscal Year 2021 GAAP Results

  • Revenue was $155.2 million, an increase of 5.4% compared to $147.2 million in the previous year fiscal fourth quarter and an increase of 1.7% compared to $152.6 million in the prior fiscal quarter;
  • Gross margin was 58.1%, compared to 52.8% in the previous year fiscal fourth quarter and 57.2% in the prior fiscal quarter;
  • Operating income was $26.3 million, compared to operating income of $12.7 million in the previous year fiscal fourth quarter and operating income of $23.7 million in the prior fiscal quarter; and
  • Net income was $17.1 million, or $0.24 per diluted share, compared to net income of $17.5 million, or $0.22 per diluted share, in the previous year fiscal fourth quarter and net income of $15.0 million, or $0.21 per diluted share, in the prior fiscal quarter.

Fourth Quarter Fiscal Year 2021 Adjusted Non-GAAP Results

  • Adjusted gross margin was 61.1%, compared to 56.4% in the previous year fiscal fourth quarter and 60.3% in the prior fiscal quarter;
  • Adjusted operating income was $46.8 million, or 30.2% of revenue, compared to adjusted operating income of $34.1 million, or 23.2% of revenue, in the previous year fiscal fourth quarter and adjusted operating income of $43.9 million, or 28.7% of revenue, in the prior fiscal quarter; and
  • Adjusted net income was $43.3 million, or $0.61 per diluted share, compared to adjusted net income of $27.6 million, or $0.40 per diluted share, in the previous year fiscal fourth quarter and adjusted net income of $40.3 million, or $0.57 per diluted share, in the prior fiscal quarter.

Fiscal Year 2021 GAAP Results

  • Revenue was $606.9 million, an increase of 14.5%, compared to $530.0 million in fiscal year 2020;
  • Gross margin was 56.3%, compared to 51.0% in fiscal year 2020;
  • Operating income was $81.0 million, compared to $3.4 million in fiscal year 2020; and
  • Net income was $38.0 million, or $0.54 per diluted share, compared to a net loss of $46.1 million, or $0.69 loss per diluted share in fiscal year 2020.

Fiscal Year 2021 Adjusted Non-GAAP Results

  • Adjusted gross margin was 59.6%, compared to 55.0% in fiscal year 2020;
  • Adjusted operating income was $170.3 million, compared to adjusted operating income of $96.0 million in fiscal year 2020; and
  • Adjusted net income was $151.9 million, or $2.15 per diluted share, compared to adjusted net income of $67.1 million, or $0.98 per diluted share, in fiscal year 2020.

Management Commentary

“We remain focused on growth and profitability as we enter our next fiscal year,” said Stephen G. Daly, President and Chief Executive Officer.

Business Outlook

For the fiscal first quarter ending December 31, 2021, MACOM expects revenue to be in the range of $157 million to $161 million. Adjusted gross margin is expected to be between 60.0% and 62.0%, and adjusted earnings per share is expected to be between $0.60 and $0.64 on an anticipated 71.4 million fully diluted shares outstanding.

Conference Call

MACOM will host a conference call on Thursday, November 4, 2021 at 8:30 a.m. Eastern Time to discuss its fiscal fourth quarter and fiscal year 2021 financial results and business outlook. Investors and analysts may join the conference call by dialing 1-877-837-3908 and providing the passcode 8292456.

International callers may join the teleconference by dialing +1-973-872-3000 and entering the same passcode at the prompt. A telephone replay of the call will be made available beginning two hours after the call and will remain available for five business days. The replay number is 1-855-859-2056 and the passcode is 8292456. International callers should dial +1-404-537-3406 and enter the same passcode at the prompt.

Additionally, this conference call will be broadcast live over the Internet and can be accessed by all interested parties in the Investors section of MACOM’s website at http://www.macom.com. To listen to the live call, please go to the Investors section of MACOM’s website and click on the conference call link at least fifteen minutes prior to the start of the conference call. For those unable to participate during the live broadcast, a replay will be available shortly after the call and will remain available for approximately 30 days.

About MACOM

MACOM designs and manufactures high-performance semiconductor products for the Telecommunications, Industrial and Defense and Datacenter 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 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. To learn more, visit www.macom.com.

Special Note Regarding Forward-Looking Statements

This press release 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 and priorities, our ability to ensure business continuity and to be successful in our engineering efforts, acceleration, strength and competitiveness of new product introductions, MACOM’s profitability, prospects and growth opportunities in our three primary markets, our strategy with respect to adjacent markets, development and process qualification timelines, continued improvements and the estimated financial results for our 2022 fiscal first 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 any failure to anticipate demand for our products; risks related to any weakening of economic conditions, including as a result of the COVID-19 pandemic; our dependence on a limited number of customers; our ability to develop new products and achieve market acceptance of those products; component shortages and supply constraints or other disruptions in our supply chain, including as a result of the COVID-19 pandemic; 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, adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP diluted shares, non-GAAP income tax rate, non-GAAP interest expense and non-GAAP free cash flow. 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, restructuring benefits and charges, warrant liability expense, non-cash interest, acquisition and integration related costs, loss on debt extinguishment, equity method investment gains and losses, 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. The exclusion of these items from our non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent or unusual. 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 the future price per share of our common stock for purposes of calculating the value of our common stock warrant liability, 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 managements 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. 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.

Restructuring Benefits/Charges – includes amounts primarily associated with our 2019 restructuring plan that reduced staffing and manufacturing, research and development and administrative footprints. We believe these amounts are not correlated to future business operations and do not reflect our ongoing operations.

Warrant Liability Expense/Gains – are associated with mark-to-market fair value adjustments which are largely based on the value of our common stock, which may vary from period to period due to factors such as stock price volatility. We believe these amounts are not correlated to future business operations and do not reflect our ongoing operations.

Non-cash Interest, Net – includes amounts associated with the amortization of the discount on our convertible notes and the amortization of certain fees associated with the establishment or amendment of our credit agreement, 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 amounts accrued for employees of acquired businesses which are not expected to have a continuing contribution to operations. We believe the exclusion of these items is useful in providing management a basis to evaluate ongoing operating activities and strategic decision making.

Equity Method Investment Gains/Losses – primarily includes gains and losses associated with a non-marketable equity investment we have in a private business. We believe these non-cash amounts are not correlated to future business operations and do not reflect our ongoing operations.

Loss on Debt Extinguishment – includes the write-off of unamortized deferred financing costs 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 on 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 5% for fiscal year 2021 and 8% for fiscal year 2020. Our historical effective income tax rate under GAAP has varied significantly from our adjusted non-GAAP income tax rate due primarily to changes in fair values of the common stock warrant liability, which are excluded from our adjusted net income and are neither deductible nor taxable for tax purposes, losses or gains associated with our equity method investment in a private business, income taxed in foreign jurisdictions at generally lower tax rates, intangible impairments, research and development tax credits and merger 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.

Free Cash Flow – is a calculation that starts with cash flow from operating activities and reduces this amount by our capital expenditures in the applicable period. Management reviews and utilizes this measure for cash flow analysis purposes. We believe competitors and others in the financial industry also utilize this measure for analyzing a company’s cash flow.

Incremental Shares – is the number of potential shares of common stock issuable upon the exercise of stock options, restricted stock, restricted stock units and warrants that were not included in the calculation of our GAAP diluted shares. We believe competitors and others in the financial industry 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

 

Twelve Months Ended

 

October 1,

 

July 2,

 

October 2,

 

October 1,

 

October 2,

 

2021

 

2021

 

2020

 

2021

 

2020

Revenue

$

155,211

 

 

$

152,622

 

 

$

147,249

 

 

$

606,920

 

 

$

530,037

 

Cost of revenue

65,000

 

 

65,353

 

 

69,533

 

 

265,065

 

 

259,871

 

Gross profit

90,211

 

 

87,269

 

 

77,716

 

 

341,855

 

 

270,166

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

33,679

 

 

33,610

 

 

35,397

 

 

138,844

 

 

141,333

 

Selling, general and administrative

30,250

 

 

29,985

 

 

29,990

 

 

122,009

 

 

124,306

 

Restructuring (benefit) charges

 

 

 

 

(356

)

 

 

 

1,139

 

Total operating expenses

63,929

 

 

63,595

 

 

65,031

 

 

260,853

 

 

266,778

 

Income from operations

26,282

 

 

23,674

 

 

12,685

 

 

81,002

 

 

3,388

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Warrant liability gain (expense)

 

 

 

 

2,003

 

 

(11,130

)

 

(12,948

)

Interest expense, net

(5,482

)

 

(5,526

)

 

(5,239

)

 

(20,593

)

 

(27,380

)

Other (expense) income, net

(2,048

)

 

(2,661

)

 

7,843

 

 

(6,334

)

 

(4,622

)

Total other (expense) income

(7,530

)

 

(8,187

)

 

4,607

 

 

(38,057

)

 

(44,950

)

Income (loss) before income taxes

18,752

 

 

15,487

 

 

17,292

 

 

42,945

 

 

(41,562

)

Income tax expense (benefit)

1,623

 

 

482

 

 

(200

)

 

4,972

 

 

4,516

 

Net income (loss)

$

17,129

 

 

$

15,005

 

 

$

17,492

 

 

$

37,973

 

 

$

(46,078

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Income (loss) per share - Basic

$

0.25

 

 

$

0.22

 

 

$

0.26

 

 

$

0.55

 

 

$

(0.69

)

Income (loss) per share - Diluted

$

0.24

 

 

$

0.21

 

 

$

0.22

 

 

$

0.54

 

 

$

(0.69

)

Weighted average common shares:

 

 

 

 

 

 

 

 

 

Shares – Basic

68,804

 

 

68,732

 

 

66,893

 

 

68,449

 

 

66,606

 

Shares – Diluted

71,050

 

 

70,880

 

 

69,286

 

 

70,474

 

 

66,606

 

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)

 

October 1,

 

October 2,

 

2021

 

2020

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

156,537

 

 

$

129,441

 

Short-term investments

188,365

 

 

203,711

 

Accounts receivable, net

84,570

 

 

45,884

 

Inventories

82,699

 

 

91,584

 

Prepaid and other current assets

9,365

 

 

10,899

 

Total current assets

521,536

 

 

481,519

 

Property and equipment, net

120,526

 

 

118,866

 

Goodwill and intangible assets, net

398,925

 

 

445,910

 

Deferred income taxes

39,516

 

 

41,935

 

Other investments

15,342

 

 

17,745

 

Other long-term assets

38,300

 

 

40,453

 

TOTAL ASSETS

$

1,134,145

 

 

$

1,146,428

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of finance lease obligations

$

958

 

 

$

1,368

 

Current portion of long-term debt

 

 

6,885

 

Accounts payable

28,712

 

 

23,043

 

Accrued liabilities

63,374

 

 

63,654

 

Total current liabilities

93,044

 

 

94,950

 

Finance lease obligations, less current portion

28,037

 

 

28,994

 

Long-term debt obligations, less current portion

492,097

 

 

652,172

 

Warrant liability

 

 

25,312

 

Other long-term liabilities

49,231

 

 

44,854

 

Total liabilities

662,409

 

 

846,282

 

Stockholders’ equity

471,736

 

 

300,146

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

1,134,145

 

 

$

1,146,428

 

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

 

Twelve Months Ended

 

October 1,

 

October 2,

 

2021

 

2020

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net income (loss)

$

37,973

 

 

$

(46,078

)

Depreciation and intangible asset amortization

69,953

 

 

78,826

 

Share-based compensation

34,998

 

 

35,674

 

Warrant liability expense

11,130

 

 

12,948

 

Deferred financing cost amortization and write-offs

6,458

 

 

4,061

 

Accretion of discount on convertible note

7,619

 

 

 

Loss on equity method investment

2,403

 

 

5,867

 

Other adjustments to reconcile income (loss) to net operating cash

3,804

 

 

4,581

 

Accounts receivable

(38,686

)

 

23,906

 

Inventories

8,886

 

 

16,296

 

Change in other operating assets and liabilities

3,874

 

 

35,316

 

Net cash provided by operating activities

148,412

 

 

171,397

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Purchases of property and equipment

(17,954

)

 

(17,573

)

Sales, purchases and maturities of investments

15,087

 

 

(101,044

)

Proceeds from divested business

 

 

11,003

 

Proceeds from sale of assets

284

 

 

419

 

Net cash used in investing activities

(2,583

)

 

(107,195

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Proceeds from convertible notes, net of issuance costs

444,249

 

 

 

Payments of long-term debt

(545,321

)

 

(6,885

)

Payments on finance leases

(1,368

)

 

(1,708

)

Proceeds from stock option exercises and employee stock purchases

6,781

 

 

4,585

 

Repurchase of common stock - tax withholdings on equity awards

(23,436

)

 

(6,708

)

Net cash used in financing activities

(119,095

)

 

(10,716

)

Foreign currency effect on cash

362

 

 

436

 

NET CHANGE IN CASH AND CASH EQUIVALENTS

27,096

 

 

53,922

 

CASH AND CASH EQUIVALENTS — Beginning of period

129,441

 

 

75,519

 

CASH AND CASH EQUIVALENTS — End of period

$

156,537

 

 

$

129,441

 

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS

(unaudited and in thousands, except per share data)

 

 

Three Months Ended

Twelve Months Ended

 

October 1, 2021

July 2, 2021

October 2, 2020

October 1, 2021

October 2, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Gross profit – GAAP

$

90,211

 

58.1

 

$

87,269

 

57.2

 

$

77,716

 

52.8

 

$

341,855

 

56.3

 

$

270,166

 

51.0

 

Amortization expense

3,806

 

2.5

 

3,806

 

2.5

 

4,347

 

3.0

 

15,296

 

2.5

 

17,462

 

3.3

 

Share-based compensation expense

878

 

0.6

 

927

 

0.6

 

914

 

0.6

 

4,314

 

0.7

 

4,143

 

0.8

 

Adjusted gross profit (Non-GAAP)

$

94,895

 

61.1

 

$

92,002

 

60.3

 

$

82,977

 

56.4

 

$

361,465

 

59.6

 

$

291,771

 

55.0

 

 

Three Months Ended

Twelve Months Ended

 

October 1, 2021

July 2, 2021

October 2, 2020

October 1, 2021

October 2, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Operating expenses – GAAP

$

63,929

 

41.2

 

$

63,595

 

41.7

 

$

65,031

 

44.2

 

$

260,853

 

43.0

 

$

266,778

 

50.3

 

Amortization expense

(7,601

)

(4.9

)

(7,601

)

(5.0

)

(8,071

)

(5.5

)

(30,918

)

(5.1

)

(32,868

)

(6.2

)

Share-based compensation expense

(8,272

)

(5.3

)

(7,854

)

(5.1

)

(8,560

)

(5.8

)

(38,772

)

(6.4

)

(37,016

)

(7.0

)

Restructuring benefit (charges)

 

 

 

 

356

 

0.2

 

 

 

(1,139

)

(0.2

)

Acquisition and integration related costs

 

 

 

 

104

 

0.1

 

 

 

38

 

 

Adjusted operating expenses (Non-GAAP)

$

48,056

 

31.0

 

$

48,140

 

31.5

 

$

48,860

 

33.2

 

$

191,163

 

31.5

 

$

195,793

 

36.9

 

 

Three Months Ended

Twelve Months Ended

 

October 1, 2021

July 2, 2021

October 2, 2020

October 1, 2021

October 2, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Income from operations - GAAP

$

26,282

 

16.9

 

$

23,674

 

15.5

 

$

12,685

 

8.6

 

$

81,002

 

13.3

 

$

3,388

 

0.6

 

Amortization expense

11,407

 

7.3

 

11,407

 

7.5

 

12,418

 

8.4

 

46,214

 

7.6

 

50,330

 

9.5

 

Share-based compensation expense

9,150

 

5.9

 

8,781

 

5.8

 

9,474

 

6.4

 

43,086

 

7.1

 

41,159

 

7.8

 

Restructuring (benefit) charges

 

 

 

 

(356

)

(0.2

)

 

 

1,139

 

0.2

 

Acquisition and integration related costs

 

 

 

 

(104

)

(0.1

)

 

 

(38

)

 

Adjusted income from operations (Non-GAAP)

$

46,839

 

30.2

 

$

43,862

 

28.7

 

$

34,117

 

23.2

 

$

170,302

 

28.1

 

$

95,978

 

18.1

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

5,692

 

3.7

 

5,834

 

3.8

 

6,657

 

4.5

 

23,739

 

3.9

 

28,496

 

5.4

 

Adjusted EBITDA (Non-GAAP)

$

52,531

 

33.8

 

$

49,696

 

32.6

 

$

40,774

 

27.7

 

$

194,041

 

32.0

 

$

124,474

 

23.5

 

 

Three Months Ended

Twelve Months Ended

 

October 1, 2021

July 2, 2021

October 2, 2020

October 1, 2021

October 2, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Net income (loss) - GAAP

$

17,129

 

11.0

 

$

15,005

 

9.8

 

$

17,492

 

11.9

 

$

37,973

 

6.3

 

$

(46,078

)

(8.7

)

Amortization expense

11,407

 

7.3

 

11,407

 

7.5

 

12,418

 

8.4

 

46,214

 

7.6

 

50,330

 

9.5

 

Share-based compensation expense

9,150

 

5.9

 

8,781

 

5.8

 

9,474

 

6.4

 

43,086

 

7.1

 

41,159

 

7.8

 

Restructuring (benefit) charges

 

 

 

 

(356

)

(0.2

)

 

 

1,139

 

0.2

 

Warrant liability (gain) expense

 

 

 

 

(2,003

)

(1.4

)

11,130

 

1.8

 

12,948

 

2.4

 

Non-cash interest, net

4,123

 

2.7

 

4,070

 

2.7

 

1,015

 

0.7

 

9,590

 

1.6

 

4,061

 

0.8

 

Acquisition and integration related costs

 

 

 

 

(104

)

(0.1

)

 

 

(38

)

 

Equity method investment losses (gains)

2,116

 

1.4

 

2,025

 

1.3

 

(7,770

)

(5.3

)

2,403

 

0.4

 

4,905

 

0.9

 

Loss on debt extinguishment

 

 

647

 

0.4

 

 

 

4,488

 

0.7

 

 

 

Tax effect of non-GAAP adjustments

(655

)

(0.4

)

(1,639

)

(1.1

)

(2,596

)

(1.8

)

(3,021

)

(0.5

)

(1,319

)

(0.2

)

Adjusted net income (Non-GAAP)

$

43,270

 

27.9

 

$

40,296

 

26.4

 

$

27,570

 

18.7

 

$

151,863

 

25.0

 

$

67,107

 

12.7

 

 

Three Months Ended

Twelve Months Ended

 

October 1, 2021

July 2, 2021

October 2, 2020

October 1, 2021

October 2, 2020

 

Net Income

(Loss)

Income (loss)

per diluted

share

Net Income

(Loss)

Income (loss)

per diluted

share

Net Income

(Loss)

Income (loss)

per diluted

share

Net Income

(Loss)

Income (loss)

per diluted

share

Net Income

(Loss)

Income (loss)

per diluted

share

Net income (loss) - GAAP

$

17,129

 

 

$

15,005

 

 

$

17,492

 

 

$

37,973

 

 

$

(46,078

)

 

Warrant liability gain

 

 

 

 

(2,003

)

 

 

 

 

 

Net income (loss) - GAAP diluted

$

17,129

 

$

0.24

 

$

15,005

 

$

0.21

 

$

15,489

 

$

0.22

 

$

37,973

 

$

0.54

 

$

(46,078

)

$

(0.69

)

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (Non-GAAP)

$

43,270

 

$

0.61

 

$

40,296

 

$

0.57

 

$

27,570

 

$

0.40

 

$

151,863

 

$

2.15

 

$

67,107

 

$

0.98

 

 

Three Months Ended

Twelve Months Ended

 

October 1, 2021

July 2, 2021

October 2, 2020

October 1, 2021

October 2, 2020

 

Shares

 

Shares

 

Shares

 

Shares

 

Shares

 

Diluted shares - GAAP

71,050

 

 

70,880

 

 

69,286

 

 

70,474

 

 

66,606

 

 

Incremental shares

 

 

 

 

 

 

87

 

 

1,756

 

 

Adjusted diluted shares (Non-GAAP)

71,050

 

 

70,880

 

 

69,286

 

 

70,561

 

 

68,362

 

 

 

Three Months Ended

Twelve Months Ended

 

October 1, 2021

July 2, 2021

October 2, 2020

October 1, 2021

October 2, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Interest expense, net - GAAP

$

5,482

 

3.5

 

$

5,526

 

3.6

 

$

5,239

 

3.6

 

$

20,593

 

3.4

 

$

27,380

 

5.2

 

Non-cash interest expense

(4,123

)

(2.7

)

(4,070

)

(2.7

)

(1,016

)

(0.7

)

(9,590

)

(1.6

)

(4,061

)

(0.8

)

Adjusted interest expense (Non-GAAP)

$

1,359

 

0.9

 

$

1,456

 

1.0

 

$

4,223

 

2.9

 

$

11,003

 

1.8

 

$

23,319

 

4.4

 

 

Three Months Ended

Twelve Months Ended

 

October 1, 2021

July 2, 2021

October 2, 2020

October 1, 2021

October 2, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Cash flow from operations

$

40,812

 

 

26.3

 

$

44,881

 

 

29.4

 

$

74,403

 

 

50.5

 

$

148,412

 

 

24.5

 

$

171,397

 

 

32.3

 

Capital expenditures

(5,029

)

 

(3.2

)

(5,598

)

 

(3.7

)

(4,915

)

 

(3.3

)

(17,954

)

 

(3.0

)

(17,573

)

 

(3.3

)

Free cash flow (Non-GAAP)

$

35,783

 

 

23.1

 

$

39,283

 

 

25.7

 

$

69,488

 

 

47.2

 

$

130,458

 

 

21.5

 

$

153,824

 

 

29.0

 

Free cash flow as a percentage of Adjusted net income (Non-GAAP)

82.7

 

%

 

97.5

 

%

 

252.0

 

%

 

85.9

 

%

 

229.2

 

%

 

RECONCILIATION OF DEBT ACTIVITY

(unaudited and in thousands)

 

 

Long-term debt, current

portion

Long-term debt, less

current portion

Total Debt

Balances as of October 2, 2020

$

6,885

 

$

652,172

 

$

659,057

 

$100M paydown of debt

(6,885

)

(93,115

)

(100,000

)

Issuance of convertible notes

 

450,000

 

450,000

 

Convertible notes proceeds paydown of debt

 

(443,600

)

(443,600

)

Equity component of convertible notes issued

 

(79,690

)

(79,690

)

Other activity

 

6,330

 

6,330

 

Balances as of October 1, 2021

$

 

$

492,097

 

$

492,097

 

 

Contacts

Company Contact:

MACOM Technology Solutions Holdings, Inc.

Stephen Ferranti

Vice President, Strategic Initiatives and Investor Relations

P: 978-656-2977

E: stephen.ferranti@macom.com

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