MACOM Reports Fiscal Third Quarter 2021 Financial Results

LOWELL, Mass.–()–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 July 2, 2021.

Third Quarter Fiscal Year 2021 GAAP Results

  • Revenue was $152.6 million, an increase of 11.2%, compared to $137.3 million in the previous year fiscal third quarter and an increase of 1.4% compared to $150.6 million in the prior fiscal quarter;
  • Gross margin was 57.2%, compared to 51.6% in the previous year fiscal third quarter and 55.9% in the prior fiscal quarter;
  • Operating income was $23.7 million, compared to income of $6.5 million in the previous year fiscal third quarter and income of $19.0 million in the prior fiscal quarter; and
  • Net income was $15.0 million, or $0.21 per diluted share, compared to net loss of $25.0 million, or $0.37 loss per diluted share, in the previous year fiscal third quarter and net income of $14.8 million, or $0.21 per diluted share, in the prior fiscal quarter.

Third Quarter Fiscal Year 2021 Adjusted Non-GAAP Results

  • Adjusted gross margin was 60.3%, compared to 55.5% in the previous year fiscal third quarter and 59.2% in the prior fiscal quarter;
  • Adjusted operating income was $43.9 million, or 28.7% of revenue, compared to adjusted operating income of $29.3 million, or 21.4% of revenue, in the previous year fiscal third quarter and adjusted operating income of $41.8 million, or 27.8% of revenue, in the prior fiscal quarter; and
  • Adjusted net income was $40.3 million, or $0.57 per diluted share, compared to adjusted net income of $22.7 million, or $0.33 per diluted share, in the previous year fiscal third quarter and adjusted net income of $36.1 million, or $0.51 per diluted share, in the prior fiscal quarter.

Management Commentary

“Our Q3 results demonstrate MACOM’s potential,” said Stephen G. Daly, President and Chief Executive Officer. “We remain focused on engineering excellence and execution.”

Business Outlook

For the fiscal fourth quarter ending October 1, 2021, MACOM expects revenue to be in the range of $153 million to $157 million. Adjusted gross margin is expected to be between 59.5% and 61.5%, and adjusted earnings per share is expected to be between $0.56 and $0.60 on an anticipated 71.3 million fully diluted shares outstanding.

Conference Call

MACOM will host a conference call on Thursday, July 29, 2021 at 8:30 a.m. Eastern Time to discuss its fiscal third quarter 2021 financial results and business outlook. Investors and analysts may join the conference call by dialing 1-877-837-3908 and providing the passcode 2284784.

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 2284784. 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 semiconductor products for Telecommunication, Industrial and Defense and Data Center applications. Headquartered in Lowell, Massachusetts, MACOM has design centers and sales offices throughout North America, Europe and Asia. MACOM is certified to the ISO9001 international quality standard and ISO14001 environmental management standard.

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 2021 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 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 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 (loss) 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, impairment and restructuring charges, changes in common stock warrant liability, 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 is a non-cash expense and 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 including such benefits or charges does not reflect our ongoing operations.

Warrant Liability Expense – 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 including such charges does 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 and not correlated to future business operations and including such charges does 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. The investment losses are non-cash in nature and we believe these items are not correlated to future business operations and including such amounts does 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. These amounts are non-cash in nature and we believe are not correlated to future business operations and including such charges does not reflect on our ongoing operations.

Tax Effect of Non-GAAP Adjustments – includes adjustments to arrive at an estimate of our adjusted non-GAAP income tax rate associated with our adjusted non-GAAP income over a period of time. We determine our adjusted non-GAAP income tax rate by 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 adjusted non-GAAP net income before income taxes and our ability to realize tax assets. We generally assess this adjusted 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 adjusted 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

 

Nine Months Ended

 

July 2, 2021

 

April 2, 2021

 

July 3, 2020

 

July 2, 2021

 

July 3, 2020

 

 

 

 

 

Revenue

$

152,622

 

 

$

150,583

 

 

$

137,267

 

 

$

451,709

 

 

$

382,788

 

Cost of revenue

65,353

 

 

66,470

 

 

66,391

 

 

200,065

 

 

190,338

 

Gross profit

87,269

 

 

84,113

 

 

70,876

 

 

251,644

 

 

192,450

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

33,610

 

 

34,619

 

 

34,948

 

 

105,165

 

 

105,936

 

Selling, general and administrative

29,985

 

 

30,522

 

 

29,982

 

 

91,758

 

 

94,317

 

Restructuring (benefit) charges

 

 

 

 

(554)

 

 

 

 

1,494

 

Total operating expenses

63,595

 

 

65,141

 

 

64,376

 

 

196,923

 

 

201,747

 

Income (loss) from operations

23,674

 

 

18,972

 

 

6,500

 

 

54,721

 

 

(9,297)

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Warrant liability expense

 

 

 

 

(19,511)

 

 

(11,130)

 

 

(14,951)

 

Interest expense, net

(5,526)

 

 

(4,851)

 

 

(5,849)

 

 

(15,111)

 

 

(22,142)

 

Other (expense) income, net

(2,661)

 

 

2,879

 

 

(4,372)

 

 

(4,287)

 

 

(12,464)

 

Total other expense

(8,187)

 

 

(1,972)

 

 

(29,732)

 

 

(30,528)

 

 

(49,557)

 

Income (loss) before income taxes

15,487

 

 

17,000

 

 

(23,232)

 

 

24,193

 

 

(58,854)

 

Income tax expense

482

 

 

2,193

 

 

1,750

 

 

3,349

 

 

4,716

 

Net income (loss)

$

15,005

 

 

$

14,807

 

 

$

(24,982)

 

 

$

20,844

 

 

$

(63,570)

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Income (loss) per share – Basic

$

0.22

 

 

$

0.22

 

 

$

(0.37)

 

 

$

0.31

 

 

$

(0.96)

 

Income (loss) per share – Diluted

$

0.21

 

 

$

0.21

 

 

$

(0.37)

 

 

$

0.30

 

 

$

(0.96)

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

Shares – Basic

68,732

 

 

68,504

 

 

66,796

 

 

68,331

 

 

66,512

 

Shares – Diluted

70,880

 

 

70,546

 

 

66,796

 

 

70,282

 

 

66,512

 

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)

 

July 2, 2021

 

October 2, 2020

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

144,134

 

 

$

129,441

 

Short-term investments

164,766

 

 

203,711

 

Accounts receivable, net

71,619

 

 

45,884

 

Inventories

83,495

 

 

91,584

 

Prepaid and other current assets

12,321

 

 

10,899

 

Total current assets

476,335

 

 

481,519

 

Property and equipment, net

119,137

 

 

118,866

 

Goodwill and intangible assets, net

410,429

 

 

445,910

 

Deferred income taxes

39,703

 

 

41,935

 

Other investments

17,458

 

 

17,745

 

Other long-term assets

37,050

 

 

40,453

 

TOTAL ASSETS

$

1,100,112

 

 

$

1,146,428

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of finance lease obligations

$

1,082

 

 

$

1,368

 

Current portion of long-term debt

 

 

6,885

 

Accounts payable

25,980

 

 

23,043

 

Accrued liabilities

60,042

 

 

63,654

 

Total current liabilities

87,104

 

 

94,950

 

Finance lease obligations, less current portion

28,269

 

 

28,994

 

Long-term debt obligations, less current portion

488,043

 

 

652,172

 

Warrant liability

 

 

25,312

 

Other long-term liabilities

50,903

 

 

44,854

 

Total liabilities

654,319

 

 

846,282

 

Stockholders’ equity

445,793

 

 

300,146

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

1,100,112

 

 

$

1,146,428

 

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

 

 

Nine Months Ended

 

July 2, 2021

 

July 3, 2020

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net income (loss)

$

20,844

 

 

$

(63,570)

 

Depreciation and intangible asset amortization

52,854

 

 

59,751

 

Share-based compensation

26,841

 

 

26,921

 

Warrant liability expense

11,130

 

 

14,951

 

Deferred income taxes

2,200

 

 

3,581

 

Loss on equity method investment

287

 

 

13,637

 

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

11,007

 

 

4,239

 

Accounts receivable

(25,735)

 

 

9,286

 

Inventories

8,089

 

 

12,304

 

Change in other operating assets and liabilities

85

 

 

15,894

 

Net cash provided by operating activities

107,602

 

 

96,994

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Purchases of property and equipment

(12,926)

 

 

(12,658)

 

Sales, purchases and maturities of investments

38,970

 

 

(30,681)

 

Proceeds from divested business

 

 

11,003

 

Proceeds from sale of assets

280

 

 

366

 

Net cash provided by (used in) investing activities

26,324

 

 

(31,970)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Proceeds from convertible notes, net of issuance costs

444,249

 

 

 

Payments of long-term debt

(545,321)

 

 

(5,163)

 

Payments on finance leases

(1,012)

 

 

(1,307)

 

Proceeds from stock option exercises and employee stock purchases

5,774

 

 

4,565

 

Repurchase of common stock – tax withholdings on equity awards

(23,404)

 

 

(6,557)

 

Net cash used in financing activities

(119,714)

 

 

(8,462)

 

Foreign currency effect on cash

481

 

 

(211)

 

NET CHANGE IN CASH AND CASH EQUIVALENTS

14,693

 

 

56,351

 

CASH AND CASH EQUIVALENTS — Beginning of period

129,441

 

 

75,519

 

CASH AND CASH EQUIVALENTS — End of period

$

144,134

 

 

$

131,870

 

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

 

July 2, 2021

April 2, 2021

July 3, 2020

July 2, 2021

July 3, 2020

 

Amount

% Revenue

Amount

%Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Gross profit – GAAP

$

87,269

 

57.2

 

$

84,113

 

55.9

 

$

70,876

 

51.6

 

$

251,644

 

55.7

 

$

192,450

 

50.3

 

Amortization expense

3,806

 

2.5

 

3,806

 

2.5

 

4,347

 

3.2

 

11,490

 

2.5

 

13,115

 

3.4

 

Share-based compensation expense

927

 

0.6

 

1,241

 

0.8

 

1,024

 

0.7

 

3,436

 

0.8

 

3,229

 

0.8

 

Adjusted gross profit (Non-GAAP)

$

92,002

 

60.3

 

$

89,160

 

59.2

 

$

76,247

 

55.5

 

$

266,570

 

59.0

 

$

208,794

 

54.5

 

 

Three Months Ended

Nine Months Ended

 

July 2, 2021

April 2, 2021

July 3, 2020

July 2, 2021

July 3, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Operating expenses – GAAP

$

63,595

 

41.7

 

$

65,141

 

43.3

 

$

64,376

 

46.9

 

$

196,923

 

43.6

 

$

201,747

 

52.7

 

Amortization expense

(7,601)

 

(5.0)

 

(7,601)

 

(5.0)

 

(8,071)

 

(5.9)

 

(23,317)

 

(5.2)

 

(24,798)

 

(6.5)

 

Share-based compensation expense

(7,854)

 

(5.1)

 

(10,208)

 

(6.8)

 

(9,908)

 

(7.2)

 

(30,500)

 

(6.8)

 

(28,456)

 

(7.4)

 

Restructuring benefit (charges)

 

 

 

 

554

 

0.4

 

 

 

(1,494)

 

(0.4)

 

Acquisition and integration related costs

 

 

 

 

(22)

 

 

 

 

(66)

 

 

Adjusted operating expenses (Non-GAAP)

$

48,140

 

31.5

 

$

47,332

 

31.4

 

$

46,929

 

34.2

 

$

143,106

 

31.7

 

$

146,933

 

38.4

 

 

Three Months Ended

Nine Months Ended

 

July 2, 2021

April 2, 2021

July 3, 2020

July 2, 2021

July 3, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Income (loss) from operations – GAAP

$

23,674

 

15.5

 

$

18,972

 

12.6

 

$

6,500

 

4.7

 

$

54,721

 

12.1

 

$

(9,297)

 

(2.4)

 

Amortization expense

11,407

 

7.5

 

11,407

 

7.6

 

12,417

 

9.0

 

34,807

 

7.7

 

37,911

 

9.9

 

Share-based compensation expense

8,781

 

5.8

 

11,450

 

7.6

 

10,933

 

8.0

 

33,936

 

7.5

 

31,685

 

8.3

 

Restructuring (benefit) charges

 

 

 

 

(554)

 

(0.4)

 

 

 

1,494

 

0.4

 

Acquisition and integration related costs

 

 

 

 

22

 

 

 

 

66

 

 

Adjusted income from operations (Non-GAAP)

$

43,862

 

28.7

 

$

41,829

 

27.8

 

$

29,318

 

21.4

 

$

123,464

 

27.3

 

$

61,859

 

16.2

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

5,834

 

3.8

 

6,006

 

4.0

 

7,092

 

5.2

 

18,047

 

4.0

 

21,840

 

5.7

 

Adjusted EBITDA (Non-GAAP)

$

49,696

 

32.6

 

$

47,835

 

31.8

 

$

36,410

 

26.5

 

$

141,511

 

31.3

 

$

83,699

 

21.9

 

 

Three Months Ended

Nine Months Ended

 

July 2, 2021

April 2, 2021

July 3, 2020

July 2, 2021

July 3, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Net income (loss) – GAAP

$

15,005

 

9.8

 

$

14,807

 

9.8

 

$

(24,982)

 

(18.2)

 

$

20,844

 

4.6

 

$

(63,570)

 

(16.6)

 

Amortization expense

11,407

 

7.5

 

11,407

 

7.6

 

12,418

 

9.0

 

34,807

 

7.7

 

37,912

 

9.9

 

Share-based compensation expense

8,781

 

5.8

 

11,450

 

7.6

 

10,933

 

8.0

 

33,936

 

7.5

 

31,685

 

8.3

 

Restructuring (benefit) charges

 

 

 

 

(554)

 

(0.4)

 

 

 

1,494

 

0.4

 

Warrant liability expense

 

 

 

 

19,511

 

14.2

 

11,130

 

2.5

 

14,951

 

3.9

 

Non-cash interest, net

4,070

 

2.7

 

849

 

0.6

 

1,015

 

0.7

 

5,467

 

1.2

 

3,046

 

0.8

 

Acquisition and integration related costs

 

 

 

 

22

 

 

 

 

66

 

 

Equity method investment losses and (gains)

2,025

 

1.3

 

(6,541)

 

(4.3)

 

4,571

 

3.3

 

287

 

0.1

 

12,675

 

3.3

 

Loss on debt extinguishment

647

 

0.4

 

3,841

 

2.6

 

 

 

4,488

 

1.0

 

 

 

Tax effect of non-GAAP adjustments

(1,639)

 

(1.1)

 

293

 

0.2

 

(224)

 

(0.2)

 

(2,367)

 

(0.5)

 

1,278

 

0.3

 

Adjusted net income (Non-GAAP)

$

40,296

 

26.4

 

$

36,106

 

24.0

 

$

22,710

 

16.5

 

$

108,592

 

24.0

 

$

39,537

 

10.3

 

 

Three Months Ended

Nine Months Ended

 

July 2, 2021

April 2, 2021

July 3, 2020

July 2, 2021

July 3, 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 diluted

$

15,005

 

$

0.21

 

$

14,807

 

$

0.21

 

$

(24,982)

 

$

(0.37)

 

$

20,844

 

$

0.30

 

$

(63,570)

 

$

(0.96)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income (Non-GAAP)

$

40,296

 

$

0.57

 

$

36,106

 

$

0.51

 

$

22,710

 

$

0.33

 

$

108,592

 

$

1.54

 

$

39,537

 

$

0.58

 

 

Three Months Ended

Nine Months Ended

 

July 2, 2021

April 2, 2021

July 3, 2020

July 2, 2021

July 3, 2020

 

Shares

 

Shares

 

Shares

 

Shares

 

Shares

 

Diluted shares – GAAP

70,880

 

 

70,546

 

 

66,796

 

 

70,282

 

 

66,512

 

 

Incremental shares

 

 

 

 

1,767

 

 

117

 

 

1,544

 

 

Adjusted diluted shares (Non-GAAP)

70,880

 

 

70,546

 

 

68,563

 

 

70,399

 

 

68,056

 

 

 

Three Months Ended

Nine Months Ended

 

July 2, 2021

April 2, 2021

July 3, 2020

July 2, 2021

July 3, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Interest expense, net – GAAP

$

5,526

 

3.6

 

$

4,851

 

3.2

 

$

5,849

 

4.3

 

$

15,111

 

3.3

 

$

22,142

 

5.8

 

Non-cash interest expense

(4,070)

 

(2.7)

 

(849)

 

(0.6)

 

(1,015)

 

(0.7)

 

(5,467)

 

(1.2)

 

(3,046)

 

(0.8)

 

Adjusted interest expense (Non-GAAP)

$

1,456

 

1.0

 

$

4,002

 

2.7

 

$

4,834

 

3.5

 

$

9,644

 

2.1

 

$

19,096

 

5.0

 

 

Three Months Ended

Nine Months Ended

 

July 2, 2021

April 2, 2021

July 3, 2020

July 2, 2021

July 3, 2020

 

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Amount

% Revenue

Cash flow from operations

$

44,881

 

29.4

 

$

27,941

 

18.6

 

$

34,056

 

24.8

 

$

107,602

 

23.8

 

$

96,994

 

25.3

 

Capital expenditures

(5,598)

 

(3.7)

 

(4,438)

 

(2.9)

 

(3,622)

 

(2.6)

 

(12,926)

 

(2.9)

 

(12,658)

 

(3.3)

 

Free cash flow (Non-GAAP)

$

39,283

 

25.7

 

$

23,503

 

15.6

 

$

30,434

 

22.2

 

$

94,676

 

21.0

 

$

84,336

 

22.0

 

Free cash flow as a percentage of Adjusted

net income (Non-GAAP)

97.5

%

 

65.1

%

 

134.0

%

 

87.2

%

 

213.3

%

 

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

 

2,276

 

2,276

 

Balances as of July 2, 2021

$

 

$

488,043

 

$

488,043

 

 

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