Annual Revenue Growth of 24 Percent; Full
Fiscal Year Design-Ins Totaling $8.3 Billion
Wolfspeed, Inc. (NYSE: WOLF) today announced its results for the
fourth quarter of fiscal 2023 and the full 2023 fiscal year.
Quarterly Financial Highlights (all comparisons are to the
fourth quarter of fiscal 2022)
- Revenue of $235.8 million, compared to $228.5 million
- GAAP gross margin of 27.4%, compared to 34.5%
- Non-GAAP gross margin of 29.0%, compared to 36.5%
- GAAP net loss from continuing operations of $113.3 million, or
$0.91 per diluted share, compared to $61.8 million, or $0.50 per
diluted share
- Non-GAAP net loss from continuing operations of $52.8 million,
or $0.42 per diluted share, compared to $26.0 million*, or $0.21*
per diluted share
- Quarterly design-ins of $1.6 billion
Full Fiscal Year Financial Highlights (all comparisons are to
fiscal 2022)
- Revenue of $921.9 million, compared to $746.2 million
- GAAP gross margin of 30.3%, compared to 33.4%
- Non-GAAP gross margin of 32.6%, compared to 35.6%
- GAAP net loss from continuing operations of $329.9 million, or
$2.65 per diluted share, compared to $295.1 million, or $2.46 per
diluted share
- Non-GAAP net loss from continuing operations of $180.7 million,
or $1.45 per diluted share, compared to $115.4 million*, or $0.96*
per diluted share
- Year-to-date design-ins of $8.3 billion
*See 'Non-GAAP Financial Measures' below for information about
changes to the Company's presentation of non-GAAP financial
measures for present and future periods.
"We are very pleased with our progress in fiscal 2023 as we
secured $5 billion of funding to support our continued capacity
expansion plans, initiated construction on our 200mm materials
factory in North Carolina, and generated initial revenue from the
Mohawk Valley 200mm device fab," said Wolfspeed CEO, Gregg Lowe.
"With approximately $8.3 billion of customer design-ins secured in
the last 12 months, customers are continuing to select Wolfspeed
for their future silicon carbide device needs, so we must remain
keenly focused on scaling our materials and device capacity in
fiscal 2024."
Business Outlook:
For its first quarter of fiscal 2024, Wolfspeed targets revenue
in a range of $220 million to $240 million. GAAP net loss is
targeted at $145 million to $169 million, or $1.16 to $1.35 per
diluted share. Non-GAAP net loss is targeted to be in a range of
$75 million to $94 million, or $0.60 to $0.75 per diluted share.
Targeted non-GAAP net loss excludes $70 million to $75 million of
estimated expenses, net of tax, related to stock-based compensation
expense, amortization or impairment of acquisition-related
intangibles, amortization of debt issuance costs, net of
capitalized interest, project, transformation and transaction costs
and loss on Wafer Supply Agreement. Targets in this paragraph,
other than revenue, reflect the presentation changes described
below.
Start-up and Underutilization Costs:
As part of expanding our production footprint to support
expected growth, we are incurring significant factory start-up
costs relating to facilities that we are constructing or expanding
that have not yet started revenue generating production. These
factory start-up costs have been and will be expensed as operating
expenses in our statement of operations.
When a new facility begins revenue generating production, the
operating costs of that facility that were previously expensed as
start-up costs will instead be primarily reflected as part of the
cost of production within the cost of revenue, net line item in our
statement of operations. For example, our new silicon carbide
device fabrication facility in Marcy, New York began revenue
generating production at the end of fiscal 2023 and the costs of
operating this facility going forward will be primarily reflected
in cost of revenue, net in future periods.
During the period when production begins, but before the
facility is at its expected utilization level, we expect some of
the costs to operate the facility will not be absorbed into the
cost of inventory. The costs incurred to operate the facility in
excess of the costs absorbed into inventory are referred to as
underutilization costs and are expensed as incurred to cost of
revenue, net. We expect that these costs will be substantial as we
ramp up the facility to the expected utilization level.
We incurred $39.5 million and $160.2 million of factory start-up
costs for the fourth quarter and full fiscal year 2023,
respectively, which accounted for a significant portion of our
operating expenses. For the first quarter of fiscal 2024, we target
our operating expenses to include approximately $8 million of
factory start-up costs primarily in connection with our materials
expansion efforts and our cost of revenue, net, to include
approximately $37 million of underutilization costs primarily in
connection with our new silicon carbide device fabrication facility
in Marcy, New York.
Quarterly Conference Call:
Wolfspeed will host a conference call at 5:00 p.m. Eastern time
today to review the highlights of its fourth quarter results and
its fiscal first quarter 2024 business outlook, including
significant factors and assumptions underlying the targets noted
above.
The conference call will be available to the public through a
live audio web broadcast via the Internet. For webcast details,
visit Wolfspeed's website at investor.wolfspeed.com/events.cfm.
Supplemental financial information, including the non-GAAP
reconciliation attached to this press release, is available on
Wolfspeed's website at investor.wolfspeed.com/results.cfm.
About Wolfspeed, Inc.
Wolfspeed (NYSE: WOLF) leads the market in the worldwide
adoption of silicon carbide and gallium nitride (GaN) technologies.
We provide industry-leading solutions for efficient energy
consumption and a sustainable future. Wolfspeed’s product families
include silicon carbide and GaN materials, power devices and RF
devices targeted for various applications such as electric
vehicles, fast charging, 5G, renewable energy and storage, and
aerospace and defense. We unleash the power of possibilities
through hard work, collaboration and a passion for innovation.
Learn more at www.wolfspeed.com.
Non-GAAP Financial Measures:
This press release highlights the Company's financial results on
both a GAAP and a non-GAAP basis. The GAAP results include certain
costs, charges and expenses that are excluded from non-GAAP
results. By publishing the non-GAAP measures, management intends to
provide investors with additional information to further analyze
the Company's performance, core results and underlying trends.
Wolfspeed's management evaluates results and makes operating
decisions using both GAAP and non-GAAP measures included in this
press release. Non-GAAP results are not prepared in accordance with
GAAP and non-GAAP information should be considered a supplement to,
and not a substitute for, financial statements prepared in
accordance with GAAP. Investors and potential investors are
encouraged to review the reconciliation of non-GAAP financial
measures to their most directly comparable GAAP measures attached
to this press release.
Beginning with the fourth quarter of fiscal 2023, the Company no
longer excludes start-up expenses from its non-GAAP measures and
will not exclude underutilization from its future non-GAAP
measures. Prior period non-GAAP measures have been updated in this
press release to reflect the current presentation of the Company's
non-GAAP measures. As a result of this change, previously published
non-GAAP financial measures for the Company for prior periods which
exclude start-up expenses are not directly comparable to the
non-GAAP measures included herein.
Forward Looking Statements:
The schedules attached to this release are an integral part of
the release. This press release contains forward-looking statements
involving risks and uncertainties, both known and unknown, that may
cause Wolfspeed’s actual results to differ materially from those
indicated in the forward-looking statements. Forward-looking
statements by their nature address matters that are, to different
degrees, uncertain, such as statements about our plans to grow the
business and our ability to achieve our targets for the first
quarter of fiscal 2024 and periods beyond. Actual results could
differ materially due to a number of factors, including but not
limited to, ongoing uncertainty in global economic and geopolitical
conditions, including the ongoing military conflict between Russia
and Ukraine, infrastructure development or customer or industrial
demand that could negatively affect product demand, including as a
result of an economic slowdown or recession, collectability of
receivables and other related matters as consumers and businesses
may defer purchases or payments, or default on payments; risks
associated with our expansion plans, including design and
construction delays and cost overruns, timing and amount of
government incentives actually received, issues in installing and
qualifying new equipment and ramping production, poor production
process yields and quality control, and potential increases to our
restructuring costs; the risk that we do not meet our production
commitments to those customers who provide us with capacity
reservation deposits or similar payments; the risk that we may
experience production difficulties that preclude us from shipping
sufficient quantities to meet customer orders or that result in
higher production costs, lower yields and lower margins; our
ability to lower costs; the risk that our results will suffer if we
are unable to balance fluctuations in customer demand and capacity,
including bringing on additional capacity on a timely basis to meet
customer demand; the risk that longer manufacturing lead times may
cause customers to fulfill their orders with a competitor's
products instead; product mix; risks associated with the ramp-up of
production of our new products, and our entry into new business
channels different from those in which we have historically
operated; our ability to convert customer design-ins to sales of
significant volume, and, if customer design-in activity does result
in such sales, when such sales will ultimately occur and what the
amount of such sales will be; the risk that the economic and
political uncertainty caused by the tariffs imposed by the United
States on Chinese goods, and corresponding Chinese tariffs and
currency devaluation in response, may negatively impact demand for
our products; the risk that we or our channel partners are not able
to develop and expand customer bases and accurately anticipate
demand from end customers, which can result in increased inventory
and reduced orders as we experience wide fluctuations in supply and
demand; risks related to international sales and purchases; risks
resulting from the concentration of our business among few
customers, including the risk that customers may reduce or cancel
orders or fail to honor purchase commitments; the risk that our
investments may experience periods of significant market value and
interest rate volatility causing us to recognize fair value losses
on our investment; the risk posed by managing an increasingly
complex supply chain (including managing the impacts of ongoing
supply constraints in the semiconductor industry and meeting
purchase commitments under take-or-pay arrangements with certain
suppliers) that has the ability to supply a sufficient quantity of
raw materials, subsystems and finished products with the required
specifications and quality; risks relating to the ongoing COVID-19
pandemic, including the risk of disruptions to our operations,
supply chain, including our contract manufacturers, or customer
demand; the risk we may be required to record a significant charge
to earnings if our remaining goodwill or amortizable assets become
impaired; risks relating to confidential information theft or
misuse, including through cyber-attacks or cyber intrusion; our
ability to complete development and commercialization of products
under development; the rapid development of new technology and
competing products that may impair demand or render our products
obsolete; the potential lack of customer acceptance for our
products; risks associated with ongoing litigation; the risk that
customers do not maintain their favorable perception of our brand
and products, resulting in lower demand for our products; the risk
that our products fail to perform or fail to meet customer
requirements or expectations, resulting in significant additional
costs; risks associated with strategic transactions; and other
factors discussed in our filings with the Securities and Exchange
Commission (SEC), including our report on Form 10-K for the fiscal
year ended June 26, 2022, and subsequent reports filed with the
SEC. These forward-looking statements represent Wolfspeed's
judgment as of the date of this release. Except as required under
the U.S. federal securities laws and the rules and regulations of
the SEC, Wolfspeed disclaims any intent or obligation to update any
forward-looking statements after the date of this release, whether
as a result of new information, future events, developments,
changes in assumptions or otherwise.
Wolfspeed® is a registered trademark of Wolfspeed, Inc.
WOLFSPEED, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited)
Three months ended
Fiscal years ended
(in millions of U.S. Dollars, except per
share data)
June 25, 2023
June 26, 2022
June 25, 2023
June 26, 2022
Revenue, net
$235.8
$228.5
$921.9
$746.2
Cost of revenue, net
171.2
149.6
642.4
496.9
Gross profit
64.6
78.9
279.5
249.3
Gross margin percentage
27
%
35
%
30
%
33
%
Operating expenses:
Research and development
57.1
48.2
225.4
196.4
Sales, general and administrative
64.1
55.0
235.3
203.5
Factory start-up costs
39.5
29.0
160.2
70.0
Amortization or impairment of
acquisition-related intangibles
2.6
3.0
10.9
13.6
Loss (gain) on disposal or impairment of
other assets
0.1
—
2.0
(0.3
)
Other operating expense
12.9
2.6
26.3
13.9
Total operating expense
176.3
137.8
660.1
497.1
Operating loss
(111.7
)
(58.9
)
(380.6
)
(247.8
)
Operating loss percentage
(47
)%
(26
)%
(41
)%
(33
)%
Non-operating expense (income), net
1.3
2.6
(52.1
)
38.3
Loss before income taxes
(113.0
)
(61.5
)
(328.5
)
(286.1
)
Income tax expense
0.3
0.3
1.4
9.0
Net loss from continuing
operations
(113.3
)
(61.8
)
(329.9
)
(295.1
)
Net income from discontinued
operations
—
94.2
—
94.2
Net (loss) income
(113.3
)
32.4
(329.9
)
(200.9
)
Basic and diluted (loss) income per
share
Continuing operations
($0.91
)
($0.50
)
($2.65
)
($2.46
)
Net (loss) income
($0.91
)
$0.26
($2.65
)
($1.67
)
Weighted average shares - basic and
diluted (in thousands)
124,679
123,746
124,374
120,120
WOLFSPEED, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in millions of U.S. Dollars)
June 25, 2023
June 26, 2022
Assets
Current assets:
Cash, cash equivalents, and short-term
investments
$2,954.9
$1,198.8
Accounts receivable, net
154.8
150.2
Inventories
327.5
227.0
Income taxes receivable
0.8
1.3
Prepaid expenses
36.8
32.1
Other current assets
150.9
151.4
Current assets held for sale
—
1.6
Total current assets
3,625.7
1,762.4
Property and equipment, net
2,204.0
1,481.1
Goodwill
359.2
359.2
Intangible assets, net
115.9
125.4
Long-term receivables
2.6
104.7
Deferred tax assets
1.2
1.0
Other assets
312.1
83.7
Total assets
$6,620.7
$3,917.5
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable and accrued expenses
$570.9
$307.7
Accrued contract liabilities
43.0
37.0
Income taxes payable
9.6
11.6
Finance lease liabilities
0.5
0.5
Other current liabilities
37.9
31.7
Total current liabilities
661.9
388.5
Long-term liabilities:
Long-term debt
1,149.5
—
Convertible notes, net
3,025.6
1,021.6
Deferred tax liabilities
3.9
3.2
Finance lease liabilities - long-term
9.2
9.6
Other long-term liabilities
148.7
55.3
Total long-term liabilities
4,336.9
1,089.7
Shareholders’ equity:
Common stock
0.2
0.2
Additional paid-in-capital
3,711.0
4,228.4
Accumulated other comprehensive loss
(25.1
)
(25.3
)
Accumulated deficit
(2,064.2
)
(1,764.0
)
Total shareholders’ equity
1,621.9
2,439.3
Total liabilities and shareholders’
equity
$6,620.7
$3,917.5
WOLFSPEED, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited)
Fiscal years ended
(in millions of U.S. Dollars)
June 25, 2023
June 26, 2022
Operating activities:
Net loss
($329.9
)
($200.9
)
Net income (loss) from discontinued
operations
—
94.2
Net loss from continuing operations
(329.9
)
(295.1
)
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation and amortization
164.0
129.8
Amortization of debt issuance costs and
discount, net of non-cash capitalized interest
7.5
20.1
Loss on extinguishment of debt
—
24.8
Stock-based compensation
81.9
60.9
Loss on disposal or impairment of
long-lived assets, including loss on disposal portion of factory
optimization and start-up costs
3.8
1.0
Amortization of (premium) discount on
investments, net
(4.7
)
6.1
Realized gain on sale of investments
—
(0.3
)
Deferred income taxes
0.5
0.7
Changes in operating assets and
liabilities:
Accounts receivable, net
(4.6
)
(54.3
)
Inventories
(97.5
)
(68.8
)
Prepaid expenses and other assets
(18.5
)
(0.4
)
Accounts payable, trade
30.0
29.2
Accrued salaries and wages and other
liabilities
(1.1
)
(10.5
)
Accrued contract liabilities
26.0
2.6
Cash used in operating
activities
(142.6
)
(154.2
)
Investing activities:
Purchases of property and equipment
(955.8
)
(644.9
)
Purchases of patent and licensing
rights
(6.5
)
(5.7
)
Proceeds from sale of property and
equipment, including insurance proceeds
1.7
3.1
Purchases of short-term investments
(1,191.0
)
(475.0
)
Proceeds from maturities of short-term
investments
637.2
242.3
Proceeds from sale of short-term
investments
110.1
225.2
Reimbursement of property and equipment
purchases from long-term incentive agreement
155.5
139.0
Proceeds from sale of business resulting
from the receipt of transaction related note receivable
101.8
125.0
Cash used in investing
activities
(1,147.0
)
(391.0
)
Financing activities:
Proceeds from long-term debt
borrowings
1,200.0
20.0
Proceeds from convertible notes
1,750.0
750.0
Payments of debt issuance costs
(82.1
)
(17.7
)
Cash paid for capped call transactions
(273.9
)
(108.2
)
Proceeds from issuance of common stock
23.8
22.4
Tax withholding on vested equity
awards
(19.2
)
(29.1
)
Payments on long-term debt borrowings,
including finance lease obligations
(0.5
)
(20.5
)
Commitment fees on long-term incentive
agreement
(1.0
)
(1.0
)
Cash provided by financing
activities
2,597.1
615.9
Effects of foreign exchange changes on
cash and cash equivalents
—
(0.2
)
Net change in cash and cash
equivalents
1,307.5
70.5
Cash and cash equivalents, beginning of
period
449.5
379.0
Cash and cash equivalents, end of
period
$1,757.0
$449.5
Wolfspeed, Inc. Non-GAAP Measures of
Financial Performance
To supplement the Company's consolidated financial statements
presented in accordance with generally accepted accounting
principles, or GAAP, Wolfspeed uses non-GAAP measures of certain
components of financial performance. These non-GAAP measures
include non-GAAP gross margin, non-GAAP operating (loss) income,
non-GAAP non-operating income (expense), net, non-GAAP net (loss)
income, non-GAAP diluted (loss) earnings per share and free cash
flow.
Reconciliation to the nearest GAAP measure of all historical
non-GAAP measures included in this press release can be found in
the tables included with this press release.
Non-GAAP measures presented in this press release are not in
accordance with or an alternative to measures prepared in
accordance with GAAP and may be different from non-GAAP measures
used by other companies. In addition, these non-GAAP measures are
not based on any comprehensive set of accounting rules or
principles. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with Wolfspeed's results of
operations as determined in accordance with GAAP. These non-GAAP
measures should only be used to evaluate Wolfspeed's results of
operations in conjunction with the corresponding GAAP measures.
Wolfspeed believes that these non-GAAP measures, when shown in
conjunction with the corresponding GAAP measures, enhance
investors' and management's overall understanding of the Company's
current financial performance and the Company's prospects for the
future, including cash flows available to pursue opportunities to
enhance shareholder value. In addition, because Wolfspeed has
historically reported certain non-GAAP results to investors, the
Company believes the inclusion of non-GAAP measures provides
consistency in the Company's financial reporting.
For its internal budgeting process, and as discussed further
below, Wolfspeed's management uses financial statements that do not
include the items listed below and the income tax effects
associated with the foregoing. Wolfspeed's management also uses
non-GAAP measures, in addition to the corresponding GAAP measures,
in reviewing the Company's financial results.
Wolfspeed excludes the following items from one or more of its
non-GAAP measures when applicable:
Stock-based compensation expense. This expense consists of
expenses for stock options, restricted stock, performance stock
awards and employee stock purchases through its Employee Stock
Purchase Program. Wolfspeed excludes stock-based compensation
expenses from its non-GAAP measures because they are non-cash
expenses that Wolfspeed does not use to evaluate core operating
performance.
Amortization or impairment of acquisition-related intangibles.
Wolfspeed incurs amortization or impairment of acquisition-related
intangibles in connection with acquisitions. Wolfspeed excludes
these items because they are non-cash expenses that Wolfspeed does
not use to evaluate core operating performance.
Project, transformation and transaction costs. The Company has
incurred professional services fees and other costs associated with
completed and potential acquisitions and divestitures, as well as
internal transformation programs focused on optimizing the
Company's administrative processes. Wolfspeed excludes these items
because Wolfspeed believes they are not reflective of the ongoing
operating results of Wolfspeed's business.
Factory optimization restructuring costs. The Company has
incurred restructuring costs in connection with various operating
plans, including a multi-year factory optimization plan anchored by
a state-of-the-art, automated 200mm silicon carbide device
fabrication facility in Marcy, New York to complement a factory
expansion at its U.S. campus headquarters in Durham, North
Carolina. Because these charges relate to assets which had been
retired prior to the end of their estimated useful lives, Wolfspeed
does not believe these costs are reflective of ongoing operating
results. Similarly, Wolfspeed does not consider the realized net
losses on sale of assets relating to the restructuring to be
reflective of ongoing operating results.
Severance costs. The Company has incurred costs in conjunction
with the termination of key executive personnel. Wolfspeed excludes
these items because Wolfspeed believes they have no direct
correlation to the ongoing operating results of Wolfspeed's
business.
Gain on arbitration proceedings. In the first quarter of fiscal
2023, Wolfspeed received an arbitration award in relation to a
former customer failing to fulfill contractual obligations to
purchase a certain amount of product over a period of time. A final
payment was received in the second quarter of fiscal 2023.
Wolfspeed excludes this item because Wolfspeed believes it is not
reflective of the ongoing operating results of Wolfspeed's
business.
Loss on debt extinguishment related to the conversion of 2023
Notes. In the second quarter of fiscal 2022, all outstanding 0.875%
convertible senior notes due 2023 (2023 Notes) and issued in August
2018 were surrendered for conversion, resulting in the settlement
of the 2023 Notes in approximately 7.1 million shares of the
Company's common stock. This conversion resulted in a loss on
extinguishment of convertible notes. Wolfspeed excludes this item
because Wolfspeed believes it is not reflective of the ongoing
operating results of Wolfspeed's business.
Amortization of discount and debt issuance costs, net of
capitalized interest. The issuance of the Company's convertible
senior notes in April 2020, February 2022 and November 2022 results
in amortization of the convertible notes' issue costs and, in the
prior period before the Company's adoption of ASU 2020-06, interest
accretion of the convertible notes' discount. Wolfspeed considers
these items as either limited in term or having no impact on the
Company's cash flows, and therefore has excluded such items to
facilitate a review of current operating performance and
comparisons to the Company's past operating performance.
Loss on Wafer Supply Agreement. In connection with the completed
sale of the LED Products business unit to SMART (as defined below),
the Company entered into a Wafer Supply and Fabrication Services
Agreement (the Wafer Supply Agreement), pursuant to which the
Company supplies CreeLED, Inc. (CreeLED) with certain silicon
carbide materials and fabrication services for up to four years.
Wolfspeed excludes the financial impact of this agreement because
Wolfspeed believes it is not reflective of the ongoing operating
results of Wolfspeed's business.
Interest income on transaction-related note receivables. In
connection with the completed sale of the LED Products business
unit to SMART Global Holdings, Inc. (SGH) and its wholly owned
acquisition subsidiary CreeLED (collectively with SGH, SMART), the
Company received two unsecured promissory notes issued to the
Company in the amounts of $125 million by SGH (the Purchase Price
Note) and $101.8 million by CreeLED (the Earnout Note, and
collectively, the LED Notes). The Company received an early payment
on the Purchase Price Note in the third quarter of fiscal 2022 and
an early payment on the Earnout Note in the first quarter of fiscal
2023. Unpaid interest on the Earnout Note was waived in exchange
for the early payment. Interest income on the LED Notes is excluded
because Wolfspeed believes it is not reflective of the ongoing
operating results of Wolfspeed's business.
Loss on early payment of transaction-related note receivable. In
the third quarter of fiscal 2022, the Company received an early
payment for the Purchase Price Note. The principal amount of $125.0
million was prepaid in full, along with outstanding accrued
interest as of the payment date (the Early Payment). In conjunction
with the Early Payment, the Company transferred naming rights and
trademarks related to Cree, Inc. and the CREE brand to SMART (the
Trademark Transfer). Because the Early Payment did not include
additional consideration in exchange for the Trademark Transfer,
the Company allocated consideration from the principal amount to
the value of the trademarks transferred to SMART. The portion of
the Early Payment not allocated to the Trademark Transfer was
$123.2 million. At the time of payment, the Company had a note
receivable balance of $124.4 million, resulting in a loss of $1.2
million. This loss is excluded because Wolfspeed believes it is not
reflective of the ongoing operating results of Wolfspeed's
business.
Income tax adjustment. This amount reconciles GAAP tax (benefit)
expense to a calculated non-GAAP tax (benefit) expense utilizing a
non-GAAP tax rate. The non-GAAP tax rate estimates an appropriate
tax rate if the listed non-GAAP items were excluded. This
reconciling item adjusts non-GAAP net (loss) income to the amount
it would be if the calculated non-GAAP tax rate was applied to
non-GAAP (loss) income before income taxes.
Wolfspeed may incur some of these same expenses, including
income taxes associated with these expenses, in future periods.
In addition to the non-GAAP measures discussed above, Wolfspeed
also uses free cash flow as a measure of operating performance and
liquidity. Free cash flow represents operating cash flows less net
purchases of property and equipment and patent and licensing
rights. Wolfspeed considers free cash flow to be an operating
performance and a liquidity measure that provides useful
information to management and investors about the amount of cash
generated by the business after the purchases of property and
equipment, a portion of which can then be used to, among other
things, invest in Wolfspeed's business, make strategic acquisitions
and strengthen the balance sheet. A limitation of the utility of
free cash flow as a measure of operating performance and liquidity
is that it does not represent the residual cash flow available to
the company for discretionary expenditures, as it excludes certain
mandatory expenditures such as debt service.
WOLFSPEED, INC.
Reconciliation of GAAP to
Non-GAAP Measures
(in millions of U.S. Dollars,
except per share amounts and percentages)
(unaudited)
Non-GAAP Gross Margin
Three months ended
Fiscal years ended
June 25, 2023
June 26, 2022
June 25, 2023
June 26, 2022
GAAP gross profit
$64.6
$78.9
$279.5
$249.3
GAAP gross margin percentage
27
%
35
%
30
%
33
%
Adjustments:
Stock-based compensation expense
3.8
4.5
21.5
16.0
Non-GAAP gross profit
$68.4
$83.4
$301.0
$265.3
Non-GAAP gross margin percentage
29
%
36
%
33
%
36
%
Non-GAAP Operating Loss
Three months ended
Fiscal years ended
June 25, 2023
June 26, 2022
June 25, 2023
June 26, 2022
GAAP operating loss
($111.7
)
($58.9
)
($380.6
)
($247.8
)
GAAP operating loss percentage
(47
)%
(26
)%
(41
)%
(33
)%
Adjustments:
Stock-based compensation expense:
Cost of revenue, net
3.8
4.5
21.5
16.0
Research and development
3.8
2.6
15.8
9.9
Sales, general and administrative
11.5
8.6
44.6
35.0
Total stock-based compensation expense
19.1
15.7
81.9
60.9
Amortization or impairment of
acquisition-related intangibles
2.6
3.0
10.9
13.6
Project, transformation and transaction
costs
11.5
1.3
22.9
8.2
Factory optimization restructuring
costs
—
0.6
—
6.1
Severance costs
1.4
0.7
3.4
1.2
Total adjustments to GAAP operating
loss
34.6
21.3
119.1
90.0
Non-GAAP operating loss
($77.1
)
($37.6
)
($261.5
)
($157.8
)
Non-GAAP operating loss percentage
(33
)%
(16
)%
(28
)%
(21
)%
Non-GAAP Non-Operating Income,
net
Three months ended
Fiscal years ended
June 25, 2023
June 26, 2022
June 25, 2023
June 26, 2022
GAAP non-operating (expense) income,
net
($1.3
)
($2.6
)
$52.1
($38.3
)
Adjustments:
Gain on arbitration proceedings
—
—
(50.3
)
—
Loss on debt extinguishment related to
conversion of 2023 Notes
—
—
—
24.8
Amortization of discount and debt issuance
costs, net of capitalized interest
2.3
7.2
7.5
20.1
Loss on Wafer Supply Agreement
6.3
(0.6
)
13.6
0.8
Interest income on transaction-related
note receivables
—
(1.0
)
—
(3.7
)
Loss on early payment of
transaction-related note receivable
—
—
—
1.2
Non-GAAP non-operating income, net
$7.3
$3.0
$22.9
$4.9
Non-GAAP Net Loss
Three months ended
Fiscal years ended
June 25, 2023
June 26, 2022
June 25, 2023
June 26, 2022
GAAP net loss
($113.3
)
($61.8
)
($329.9
)
($295.1
)
Adjustments:
Stock-based compensation expense
19.1
15.7
81.9
60.9
Amortization or impairment of
acquisition-related intangibles
2.6
3.0
10.9
13.6
Project, transformation and transaction
costs
11.5
1.3
22.9
8.2
Factory optimization restructuring
costs
—
0.6
—
6.1
Severance costs
1.4
0.7
3.4
1.2
Gain on arbitration proceedings
—
—
(50.3
)
—
Loss on debt extinguishment related to
conversion of 2023 Notes
—
—
—
24.8
Amortization of discount and debt issuance
costs, net of capitalized interest
2.3
7.2
7.5
20.1
Loss on Wafer Supply Agreement
6.3
(0.6
)
13.6
0.8
Interest income on transaction-related
note receivables
—
(1.0
)
—
(3.7
)
Loss on early payment of
transaction-related note receivable
—
—
—
1.2
Total adjustments to GAAP net loss before
provision for income taxes
43.2
26.9
89.9
133.2
Income tax adjustment - benefit
(expense)
17.3
8.9
59.3
46.5
Non-GAAP net loss
($52.8
)
($26.0
)
($180.7
)
($115.4
)
Non-GAAP diluted loss per share
($0.42
)
($0.21
)
($1.45
)
($0.96
)
Non-GAAP weighted average shares (in
thousands)
124,679
123,746
124,374
120,120
Free Cash Flow
Three months ended
Fiscal years ended
June 25, 2023
June 26, 2022
June 25, 2023
June 26, 2022
Net cash used in operating activities
($51.9
)
($30.8
)
($142.6
)
($154.2
)
Less: PP&E spending, net of
reimbursements from long-term incentive agreement
(401.1
)
(53.9
)
(800.3
)
(505.9
)
Less: Patents spending
(1.8
)
(1.5
)
(6.5
)
(5.7
)
Total free cash flow
($454.8
)
($86.2
)
($949.4
)
($665.8
)
WOLFSPEED, INC.
Business Outlook Unaudited
GAAP to Non-GAAP Reconciliation
Three Months Ended
(in millions of U.S. Dollars)
September 24, 2023
GAAP net loss outlook range
($169) to ($145)
Adjustments:
Stock-based compensation expense
21
Amortization or impairment of
acquisition-related intangibles
3
Amortization of debt issuance costs, net
of capitalized interest
8
Project, transformation and transaction
costs
9
Loss on Wafer Supply Agreement
6
Total adjustments to GAAP net loss before
provision for income taxes
47
Income tax adjustment
28 to 23
Non-GAAP net loss outlook range
($94) to ($75)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230816700051/en/
Tyler Gronbach Wolfspeed, Inc. Vice President of External
Affairs Phone: 919-407-4820 investorrelations@wolfspeed.com
Wolfspeed (NYSE:WOLF)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Wolfspeed (NYSE:WOLF)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024