- Beats Guidance and Achieves Non-GAAP Net Income
Profitability
- High Performance Analog Revenue Grows 4% Sequentially
- Announces Definitive Merger Agreement with MACOM for $5.05 per
share
Mindspeed Technologies, Inc. (Nasdaq:MSPD), a
leading supplier of semiconductor solutions for communications
infrastructure applications, today reported results for its fiscal
fourth quarter of 2013. For the quarter ended September 27, 2013,
Mindspeed recorded net revenue of $36.0 million and earnings per
share of $0.02 on a non-GAAP basis, and a loss per share of $1.26
on a GAAP basis. Mindspeed has also concluded the strategic review
process it announced on April 30, 2013. In a separate release,
Mindspeed has announced the signing of a definitive agreement to be
acquired by M/A-COM Technology Solutions Holdings, Inc.
(Nasdaq:MTSI) ("MACOM") for $5.05 per share. Details can be found
in a separate release at the following link:
http://investors.mindspeed.com/releases.cfm.
"After a thorough review by Mindspeed's Board and management
team, and spearheaded by Morgan Stanley, we are excited to conclude
the strategic review process with an outcome that we believe
maximizes the value for shareholders, while at the same time
positions the two entities with very strong technology platforms in
the analog industry and deep customer relationships," commented
Raouf Y. Halim, chief executive officer at Mindspeed. "Furthermore,
the Mindspeed team was able to beat our forecast for the fourth
quarter, including net income profitability on a non-GAAP basis. I
would like to publicly commend everybody at Mindspeed for a job
well-done not only in the past quarter, but also over the past
decade."
Revenue from high-performance analog (HPA) products was $15.9
million, or 44 percent of fiscal fourth quarter 2013 net revenue,
and was up 4% percent versus the prior fiscal quarter. Revenue from
communications processors was $16.2 million, or 45 percent of net
revenue, and was down approximately 8 percent versus the prior
fiscal quarter. Wireless infrastructure revenue contributed $4.0
million in the quarter, or approximately 11 percent of total
revenue, and was up 49 percent versus the prior fiscal quarter.
Non-GAAP operating profit for the fiscal fourth quarter of 2013
was approximately $1.6 million, compared to a non-GAAP operating
profit of $644,000 in the prior fiscal quarter. GAAP operating loss
for the fiscal fourth quarter of 2013 was $50.9 million, due
primarily to an impairment charge related to the wireless
infrastructure assets, compared to a GAAP operating loss of $3.5
million in the prior fiscal quarter. Non-GAAP net income for the
fiscal fourth quarter of 2013 was $874,000, or $0.02 per share,
compared to a non-GAAP net loss of $461,000, or $0.01 per share, in
the prior fiscal quarter. GAAP net loss in the fiscal fourth
quarter of 2013 was $51.8 million, or $1.26 per share, compared to
GAAP net income of $1.6 million, or $0.04 per share, in the prior
fiscal quarter.
Non-GAAP results exclude goodwill and asset impairment charges,
stock-based compensation and related payroll costs, strategic
alternatives process costs, restructuring charges, amortization of
acquired intangible assets and non-cash interest expense on
convertible senior notes, among other items. Reconciliations of the
non-GAAP measures to GAAP measures are included in the accompanying
financial data.
Due to the announcement of the definitive merger agreement with
MACOM, Mindspeed will not conduct a conference call today to
discuss its fiscal fourth quarter of 2013 results.
About Mindspeed Technologies
Mindspeed Technologies (Nasdaq:MSPD) is a leading provider of
network infrastructure semiconductor solutions to the
communications industry. The company's low-power system-on-chip
(SoC) products are helping to drive video, voice and data
applications in worldwide fiber-optic networks and enable advanced
processing for 3G and long-term evolution (LTE) mobile networks.
The company's high-performance analog products are used in a
variety of optical, enterprise, industrial and video transport
systems. Mindspeed's products are sold to original equipment
manufacturers (OEMs) around the globe.
To learn more, please visit www.mindspeed.com. Company news and
updates are also posted at www.twitter.com/mindspeed.
Non-GAAP Measures
We provide non-GAAP measures as a supplement to financial
results based on GAAP. A detailed reconciliation of the non-GAAP
results to the most directly comparable GAAP measures is set forth
below under the heading "Reconciliation of Non-GAAP Measures to
GAAP Measures." Investors are encouraged to review the accompanying
press release reconciliations. We believe the presentation of
non-GAAP measures provides investors with additional insight into
underlying operating results and prospects for the future by
excluding goodwill and asset impairments, as well as stock-based
compensation and related payroll costs, profit in acquired
inventory, amortization of acquired intangible assets,
non-recurring legal and settlement costs, strategic alternatives
process costs, employee separation costs, acquisition-related
costs, integration costs, revaluation of contingent consideration,
purchase price adjustments, other income from the picoChip
settlement agreement, restructuring charges and/or non-cash
interest expense on our convertible senior notes. We have
historically reported similar financial measures and believe that
the inclusion of comparative numbers provides consistency in our
financial reporting.
We also discuss certain non-GAAP measures excluding patent sales
as a supplement to financial results based on GAAP. The sale of
patents in the fiscal first quarter of 2013 impacted our net
revenue, gross margin, operating income and net income.
We use non-GAAP gross margin, research and development expenses,
selling, general and administrative expenses, operating expenses,
operating income, other expense, net, net income and net income per
share internally to evaluate our operating performance and to
determine certain components of management compensation. In
addition, we use these non-GAAP measures for internal budgets and
forecasts. We believe that these non-GAAP measures can be useful to
investors in allowing for greater transparency with respect to
supplemental information used by management in its financial and
operational decision making.
We exclude stock-based compensation and related payroll costs
and non-cash interest expense on our convertible senior notes from
non-GAAP measures because we believe that excluding these costs can
enhance the understanding of our performance. We exclude profit in
acquired inventory to facilitate comparability of gross profit
between periods and to better reflect continuing operations of the
acquired company. We exclude employee separation costs,
non-recurring legal and settlement costs, strategic alternatives
process costs, restructuring charges, acquisition-related costs,
integration costs, purchase price adjustments, other income from
the picoChip settlement agreement and revaluation of contingent
consideration because they include significant discrete items that
may not be indicative of our ongoing operations or economic
performance. Similarly, we have excluded goodwill and asset
impairment charges related to our wireless infrastructure reporting
unit because they involve non-cash items that relate to historic
imputed valuations of the reporting unit's business and assets and
are not indicative of its operating or economic performance.
We do not provide forward-looking GAAP measures or a
reconciliation of the forward-looking non-GAAP measures to GAAP
measures because of our inability to project restructuring charges,
employee separation costs and stock-based compensation and related
payroll costs.
The non-GAAP financial measures we provide have certain
limitations because they do not reflect all of the costs associated
with the operation of our business as determined in accordance with
GAAP. The non-GAAP measures are in addition to, and not a
substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP and may be different from non-GAAP
measures used by other companies. We endeavor to compensate for the
limitations of these non-GAAP measures by providing GAAP financial
statements, descriptions of the reconciling items and a
reconciliation of the non-GAAP measures to the most directly
comparable GAAP measures so that investors can appropriately
incorporate the non-GAAP measures and their limitations into their
analyses. For complete information on goodwill and asset
impairments, stock-based compensation and related payroll costs,
profit in acquired inventory, amortization of acquired intangible
assets, non-recurring legal and settlement costs, strategic
alternatives process costs, employee separation costs,
restructuring charges, acquisition-related costs, integration
costs, other income from the picoChip settlement agreement,
revaluation of contingent consideration and non-cash interest
expense on our convertible senior notes, please see our financial
statements and "Management's Discussion and Analysis of Results of
Operations and Financial Condition" that will be included in the
periodic report we expect to file with the SEC with respect to the
financial periods discussed herein.
Safe Harbor Statement
This press release contains forward-looking statements based on
Mindspeed's beliefs and assumptions and on information currently
available to our management. Forward-looking statements include, in
addition to statements relating to Mindspeed's business, financial
results and prospects, statements concerning the MACOM transaction,
including those regarding the potential date of closing of the
acquisition; the potential for the divestiture of Mindspeed's
wireless business; potential benefits and synergies; and other
financial and business expectations. Forward-looking statements
include all statements that are not historical facts and generally
may be identified by terms such as "anticipates," "believes,"
"could," "estimates," "expects," "intends," "may," "plans,"
"potential," "predicts," "projects," "seeks," "should," "will,"
"would" or similar expressions and the negatives of those
terms.
Forward-looking statements contained in this press release
reflect Mindspeed'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 expressed in any
forward-looking statement. Although Mindspeed believes that the
expectations reflected in the forward-looking statements are
reasonable, it cannot and does not guarantee future events,
results, actions, levels of activity, performance or achievements.
For example, there can be no assurances with respect to either the
closing of the Macom transaction or a divestiture of Mindspeed's
wireless business. Readers are cautioned not to place undue
reliance on these forward-looking statements. A number of important
factors could cause actual results to differ materially from those
indicated by the forward-looking statements, including, among
others, the potential that the tender offer will not be
successfully completed; the lack of a binding agreement with
respect to the divestiture of Mindspeed's wireless business to a
proposed third party and the risk that the divestiture may not be
completed; matters arising in connection with the parties' efforts
to comply with and satisfy applicable regulatory approvals and
closing conditions relating to the transaction; failure to achieve
expected synergies and other anticipated benefits of the
transaction; and other risks and uncertainties generally affecting
Mindspeed's business, including fluctuations in our operating
results and the potential for future operating losses; loss of or
diminished demand from one or more key distributors; our ability to
develop and introduce new products successfully; pricing pressures;
whether we continue to sustain losses and consume cash in our
operations; customer and employee uncertainty arising from the
announcement of the transaction with Macom and the potential
divestiture of our wireless business; and the potential for
intellectual property or other litigation. Additional risks and
uncertainties that could cause our actual results to differ from
those set forth in any forward-looking statements are discussed in
more detail under the caption "Risk Factors" in our Annual Report
on Form 10-K for the fiscal year ended September 28, 2012, our most
recent Quarterly Report on Form 10-Q, and our future filings with
the Securities and Exchange Commission.
| |
|
|
|
|
|
| MINDSPEED TECHNOLOGIES,
INC. |
| CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS |
| (unaudited, in thousands,
except per share amounts) |
| |
|
|
|
|
|
| |
Three Months Ended |
Year Ended |
| |
September 27, |
June 28, |
September 28, |
September 27, |
September 28, |
| |
2013 |
2013 |
2012 |
2013 |
2012 |
| |
|
|
|
|
|
| Net revenue: |
|
|
|
|
|
| Products |
$ 36,043 |
$ 35,579 |
$ 36,264 |
$ 145,401 |
$ 140,415 |
| Intellectual property |
-- |
-- |
-- |
6,000 |
591 |
| Total net
revenue |
36,043 |
35,579 |
36,264 |
151,401 |
141,006 |
| Cost of goods sold: |
|
|
|
|
|
| Products (a) |
13,794 |
13,776 |
15,253 |
56,859 |
59,112 |
| Asset impairments (b) |
21,151 |
-- |
-- |
23,571 |
3,385 |
| Total cost of goods
sold |
34,945 |
13,776 |
15,253 |
80,430 |
62,497 |
| Gross margin |
1,098 |
21,803 |
21,011 |
70,971 |
78,509 |
| |
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
| Research and development (a)
(b) |
15,027 |
15,153 |
17,093 |
61,883 |
67,946 |
| Selling, general and administrative
(a) |
9,282 |
9,823 |
9,297 |
38,886 |
43,317 |
| Goodwill impairment charge (b) |
26,596 |
-- |
-- |
57,062 |
-- |
| Impairment of intangible assets (b) |
1,146 |
-- |
-- |
1,646 |
-- |
| Acquisition-related costs |
-- |
26 |
29 |
216 |
3,777 |
| Restructuring charges |
(79) |
293 |
704 |
2,462 |
2,054 |
| Total
operating expenses |
51,972 |
25,295 |
27,123 |
162,155 |
117,094 |
| |
|
|
|
|
|
| Operating loss |
(50,874) |
(3,492) |
(6,112) |
(91,184) |
(38,585) |
| |
|
|
|
|
|
| Other (expense)/income, net |
(791) |
5,148 |
22 |
2,423 |
6,193 |
| |
|
|
|
|
|
| (Loss)/income before income taxes |
(51,665) |
1,656 |
(6,090) |
(88,761) |
(32,392) |
| |
|
|
|
|
|
| Provision/(benefit) for income
taxes |
105 |
57 |
(28) |
387 |
359 |
| |
|
|
|
|
|
| Net (loss)/income |
$ (51,770) |
$ 1,599 |
$ (6,062) |
$ (89,148) |
$ (32,751) |
| |
|
|
|
|
|
| Net (loss)/income per share: |
|
|
|
|
|
| Basic |
$ (1.26) |
$ 0.04 |
$ (0.15) |
$ (2.21) |
$ (0.89) |
| Diluted |
$ (1.26) |
$ 0.04 |
$ (0.15) |
$ (2.21) |
$ (0.89) |
| |
|
|
|
|
|
| Weighted-average number of shares used in per
share computation: |
|
|
|
|
|
| Basic |
40,950 |
40,575 |
39,169 |
40,285 |
36,787 |
| Diluted |
40,950 |
40,929 |
39,169 |
40,285 |
36,787 |
| |
|
|
|
|
|
| |
| (a) Includes stock-based
compensation expense and related payroll costs. |
| |
|
|
|
|
|
| (b) During the second quarter of
fiscal 2013, we performed an evaluation of goodwill, definite-lived
intangible assets and indefinite-lived intangible assets as we
believed there was an impairment triggering circumstance which
warranted an evaluation. This circumstance was the slower than
expected deployments of 3G small cell base stations. As a result,
we recorded a charge for the impairment of goodwill, definite-lived
intangible assets and indefinite-lived intangibles of $33.4 million
related to our wireless infrastructure reporting unit. The
impairment charge for the definite-lived intangible assets was
included in cost of goods sold. During the fourth quarter of
fiscal 2013, we performed our annual evaluation of goodwill and
indefinite-lived intangible assets and concluded that goodwill was
impaired. During the fourth quarter of fiscal 2013, there were
indicators of impairment that required us to evaluate the
long-lived assets for recoverability. As a result, we recorded a
charge for the impairment of goodwill of $26.6 million and a charge
for the impairment of definite-lived intangibles of $22.4 million
related to our wireless infrastructure reporting unit. |
| |
| |
|
|
|
|
|
| MINDSPEED TECHNOLOGIES,
INC. |
| Reconciliation of
Non-GAAP Measures to GAAP Measures |
| (unaudited, in thousands,
except per share amounts) |
| |
|
|
|
|
|
| |
Three Months Ended |
Year Ended |
| |
September 27, |
June 28, |
September 28, |
September 27, |
September 28, |
| |
2013 |
2013 |
2012 |
2013 |
2012 |
| |
|
|
|
|
|
| Reconciliation of Non-GAAP Gross
Margin to GAAP Gross Margin |
|
|
|
|
|
| Non-GAAP gross margin |
$ 22,582 |
$ 22,048 |
$ 21,372 |
$ 95,723 |
$ 83,661 |
| Items excluded from non-GAAP gross
margin: |
|
|
|
|
|
| Asset impairments (b) |
21,151 |
-- |
-- |
23,571 |
3,385 |
| Stock-based compensation and related
payroll costs |
91 |
(2) |
91 |
198 |
138 |
| Profit in acquired inventory (c) |
-- |
-- |
24 |
-- |
986 |
| Amortization of acquired intangible
assets (d) |
242 |
247 |
246 |
983 |
643 |
| Gross margin |
$ 1,098 |
$ 21,803 |
$ 21,011 |
$ 70,971 |
$ 78,509 |
| |
|
|
|
|
|
| Reconciliation of Non-GAAP Research
and Development Expenses to GAAP Research and Development
Expenses |
|
|
|
|
|
| Non-GAAP research and development
expenses |
$ 14,288 |
$ 14,445 |
$ 16,128 |
$ 58,144 |
$ 63,949 |
| Items excluded from non-GAAP research and
development expenses: |
|
|
|
|
|
| Stock-based compensation and related
payroll costs |
630 |
886 |
942 |
3,474 |
3,727 |
| Asset impairments (b) |
104 |
-- |
-- |
239 |
-- |
| Employee separation costs (e) |
5 |
(178) |
23 |
26 |
270 |
| Research and development expenses |
$ 15,027 |
$ 15,153 |
$ 17,093 |
$ 61,883 |
$ 67,946 |
| |
|
|
|
|
|
| Reconciliation of Non-GAAP Selling,
General and Administrative Expenses to GAAP Selling, General and
Administrative Expenses |
|
|
|
|
|
| Non-GAAP selling, general and administrative
expenses |
$ 6,648 |
$ 6,959 |
$ 7,235 |
$ 28,382 |
$ 32,802 |
| Items excluded from non-GAAP selling, general
and administrative expenses: |
|
|
|
|
|
| Stock-based compensation and related
payroll costs |
2,188 |
2,163 |
848 |
8,248 |
6,880 |
| Amortization of acquired intangible
assets (d) |
77 |
104 |
104 |
389 |
275 |
| Non-recurring legal and settlement
costs |
(92) |
306 |
715 |
1,105 |
715 |
| Strategic alternatives process costs
(f) |
439 |
268 |
-- |
707 |
-- |
| Employee separation costs (e) |
22 |
23 |
169 |
75 |
426 |
| Integration costs (g) |
-- |
-- |
226 |
(20) |
2,219 |
| Selling, general and administrative
expenses |
$ 9,282 |
$ 9,823 |
$ 9,297 |
$ 38,886 |
$ 43,317 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| MINDSPEED TECHNOLOGIES,
INC. |
| Reconciliation of
Non-GAAP Measures to GAAP Measures |
| (unaudited, in thousands,
except per share amounts) |
| |
|
|
|
|
|
| |
Three Months Ended |
Year Ended |
| |
September 27, |
June 28, |
September 28, |
September 27, |
September 28, |
| |
2013 |
2013 |
2012 |
2013 |
2012 |
| |
|
|
|
|
|
| Reconciliation of Non-GAAP Operating
Expenses to GAAP Operating Expenses |
|
|
|
|
|
| Non-GAAP operating expenses |
$ 20,936 |
$ 21,404 |
$ 23,363 |
$ 86,526 |
$ 96,751 |
| Items excluded from non-GAAP operating
expenses: |
|
|
|
|
|
| Asset impairments (b) |
1,250 |
-- |
-- |
1,385 |
-- |
| Goodwill impairment charge (b) |
26,596 |
-- |
-- |
57,062 |
-- |
| Asset impairment - indefinite-lived
intangibles (b) |
-- |
-- |
-- |
500 |
-- |
| Stock-based compensation and related
payroll costs |
2,818 |
3,049 |
1,790 |
11,722 |
10,607 |
| Acquisition-related costs (h) |
-- |
26 |
29 |
216 |
3,777 |
| Restructuring charges |
(79) |
293 |
704 |
2,462 |
2,054 |
| Amortization of acquired intangible
assets (d) |
77 |
104 |
104 |
389 |
275 |
| Non-recurring legal and settlement
costs |
(92) |
306 |
715 |
1,105 |
715 |
| Strategic alternatives process costs
(f) |
439 |
268 |
-- |
707 |
-- |
| Employee separation costs (e) |
27 |
(155) |
192 |
101 |
696 |
| Integration costs (g) |
-- |
-- |
226 |
(20) |
2,219 |
| Operating expenses |
$ 51,972 |
$ 25,295 |
$ 27,123 |
$ 162,155 |
$ 117,094 |
| |
|
|
|
|
|
| Reconciliation of Non-GAAP Operating
Income/(Loss) to GAAP Operating Loss |
|
|
|
|
|
| Non-GAAP operating income/(loss) |
$ 1,646 |
$ 644 |
$ (1,991) |
$ 9,197 |
$ (13,090) |
| Items excluded from non-GAAP operating
income/(loss): |
|
|
|
|
|
| Asset impairments (b) |
22,401 |
-- |
-- |
24,956 |
3,385 |
| Goodwill impairment charge (b) |
26,596 |
-- |
-- |
57,062 |
-- |
| Asset impairment - indefinite-lived
intangibles (b) |
-- |
|
|
500 |
|
| Stock-based compensation and related
payroll costs |
2,909 |
3,047 |
1,881 |
11,920 |
10,745 |
| Acquisition-related costs (h) |
-- |
26 |
29 |
216 |
3,777 |
| Restructuring charges |
(79) |
293 |
704 |
2,462 |
2,054 |
| Profit in acquired inventory (c) |
-- |
-- |
24 |
-- |
986 |
| Amortization of acquired intangible
assets (d) |
319 |
351 |
350 |
1,372 |
918 |
| Non-recurring legal and settlement
costs |
(92) |
306 |
715 |
1,105 |
715 |
| Strategic alternatives process costs
(f) |
439 |
268 |
-- |
707 |
-- |
| Employee separation costs (e) |
27 |
(155) |
192 |
101 |
696 |
| Integration costs (g) |
-- |
-- |
226 |
(20) |
2,219 |
| Operating loss |
$ (50,874) |
$ (3,492) |
$ (6,112) |
$ (91,184) |
$ (38,585) |
| |
|
|
|
|
|
| Reconciliation of Non-GAAP Other
Expense, Net to GAAP Other (Expense)/Income, Net |
|
|
|
|
|
| Non-GAAP other (expense)/income, net |
$ (667) |
$ (1,048) |
$ (663) |
$ (3,195) |
$ (1,458) |
| Items excluded from non-GAAP other expense,
net: |
|
|
|
|
|
| Purchase price adjustments (j) |
-- |
-- |
-- |
(92) |
-- |
| Other income from picoChip settlement
agreement (k) |
-- |
6,382 |
-- |
6,382 |
-- |
| Revaluation of contingent
consideration |
-- |
-- |
885 |
10 |
8,162 |
| Non-cash interest expense on convertible
senior notes (i) |
(124) |
(186) |
(200) |
(682) |
(511) |
| Other (expense)/income, net |
$ (791) |
$ 5,148 |
$ 22 |
$ 2,423 |
$ 6,193 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| MINDSPEED TECHNOLOGIES,
INC. |
| Reconciliation of
Non-GAAP Measures to GAAP Measures |
| (unaudited, in thousands,
except per share amounts) |
| |
|
|
|
|
|
| |
Three Months Ended |
Year Ended |
| |
September 27, |
June 28, |
September 28, |
September 27, |
September 28, |
| |
2013 |
2013 |
2012 |
2013 |
2012 |
| |
|
|
|
|
|
| Reconciliation of Non-GAAP Net
Income/(Loss) to GAAP Net (Loss)/Income |
|
|
|
|
|
| Non-GAAP net income/(loss) |
$ 874 |
$ (461) |
$ (2,626) |
$ 5,615 |
$ (14,907) |
| Items excluded from non-GAAP net
income/(loss): |
|
|
|
|
|
| Asset impairments (b) |
22,401 |
-- |
-- |
24,956 |
3,385 |
| Goodwill impairment charge (b) |
26,596 |
-- |
-- |
57,062 |
-- |
| Asset impairment - indefinite-lived
intangibles (b) |
-- |
-- |
-- |
500 |
-- |
| Stock-based compensation and related
payroll costs |
2,909 |
3,047 |
1,881 |
11,920 |
10,745 |
| Acquisition-related costs (h) |
-- |
26 |
29 |
216 |
3,777 |
| Restructuring charges |
(79) |
293 |
704 |
2,462 |
2,054 |
| Profit in acquired inventory (c) |
-- |
-- |
24 |
-- |
986 |
| Amortization of acquired intangible
assets (d) |
319 |
351 |
350 |
1,372 |
918 |
| Non-recurring legal and settlement
costs |
(92) |
306 |
715 |
1,105 |
715 |
| Strategic alternatives process costs
(f) |
439 |
268 |
-- |
707 |
-- |
| Employee separation costs (e) |
27 |
(155) |
192 |
101 |
696 |
| Integration costs (g) |
-- |
-- |
226 |
(20) |
2,219 |
| Purchase price adjustments (j) |
-- |
-- |
-- |
92 |
-- |
| Other income from picoChip settlement
agreement (k) |
-- |
(6,382) |
-- |
(6,382) |
-- |
| Revaluation of contingent
consideration |
-- |
-- |
(885) |
(10) |
(8,162) |
| Non-cash interest expense on convertible
senior notes (i) |
124 |
186 |
200 |
682 |
511 |
| Net (loss)/income |
$ (51,770) |
$ 1,599 |
$ (6,062) |
$ (89,148) |
$ (32,751) |
| |
|
|
|
|
|
| Reconciliation of Non-GAAP Net
Income/(Loss) Per Share to GAAP Net (Loss)/Income Per
Share |
|
|
|
|
|
| Basic: |
|
|
|
|
|
| Non-GAAP net income/(loss) per share |
$ 0.02 |
$ (0.01) |
$ (0.07) |
$ 0.14 |
$ (0.41) |
| Adjustments |
(1.28) |
0.05 |
(0.08) |
(2.35) |
(0.48) |
| Net (loss)/income per share |
$ (1.26) |
$ 0.04 |
$ (0.15) |
$ (2.21) |
$ (0.89) |
| |
|
|
|
|
|
| Diluted: |
|
|
|
|
|
| Non-GAAP net income/(loss) per share |
$ 0.02 |
$ (0.01) |
$ (0.07) |
$ 0.14 |
$ (0.41) |
| Adjustments |
(1.28) |
0.05 |
(0.08) |
(2.35) |
(0.48) |
| Net (loss)/income per share |
$ (1.26) |
$ 0.04 |
$ (0.15) |
$ (2.21) |
$ (0.89) |
| |
|
|
|
|
|
| Reconciliation of Shares used in
Non-GAAP diluted shares to GAAP diluted shares |
|
|
|
|
|
| Non-GAAP diluted shares |
41,325 |
40,575 |
39,169 |
40,903 |
36,787 |
| |
|
|
|
|
|
| The effect of dilutive potential common
shares due to reporting Non-GAAP net income |
(375) |
354 |
-- |
(618) |
-- |
| Diluted shares |
40,950 |
40,929 |
39,169 |
40,285 |
36,787 |
| |
|
|
|
|
|
| (c) Profit in acquired inventory
results from purchase-accounting adjustments which increase the
value of inventory acquired to its fair value. As the acquired
inventory is sold, the associated profit in acquired inventory
increases cost of goods sold and reduces gross profit. |
| (d) Amortization of acquired
intangible assets reflects amortization expense on intangible
assets recorded in conjunction with the picoChip acquisition. |
| (e) Employee separation costs
consist of severance benefits payable to certain former employees
of the Company as a result of organizational changes. |
| (f) Strategic alternatives
process costs represent fees incurred in the Company's evaluation
of strategic alternatives. |
| (g) Integration costs represent
costs incurred related to the transition of picoChip to a wholly
owned subsidiary of Mindspeed. |
| (h) Acquisition-related costs are
professional fees incurred related to the acquisition of
picoChip. |
| (i) Non-cash interest expense on
convertible senior notes represents the amortization of debt
discounts recorded in accordance with FASB ASC 470-20, related to
the Company's 6.50% and 6.75% convertible senior notes. |
| (j) Purchase price adjustments
consist of adjustments to amounts recognized in the picoChip
acquisition that occurred after the measurement period. |
| (k) Other income from the
picoChip settlement agreement was recorded as a result of a
settlement the Company reached with the picoChip selling
shareholders' representative to relieve the parties of all
outstanding obligations under the picoChip acquisition
agreement. |
| |
|
|
|
|
|
| |
|
|
| MINDSPEED TECHNOLOGIES,
INC. |
| CONSOLIDATED CONDENSED
BALANCE SHEETS |
| (unaudited, in thousands) |
| |
|
|
| |
September 27, |
September 28, |
| |
2013 |
2012 |
| |
|
|
| ASSETS |
|
|
| Current Assets |
|
|
| Cash and cash equivalents |
$ 25,974 |
$ 49,098 |
| Receivables, net |
19,633 |
14,527 |
| Inventories |
11,267 |
10,482 |
| Prepaid expenses and other current
assets |
4,429 |
10,497 |
| Total current assets |
61,303 |
84,604 |
| |
|
|
| Property, plant and equipment, net |
15,621 |
16,031 |
| Intangible assets, net |
9,677 |
35,351 |
| Goodwill |
-- |
57,110 |
| Other assets |
4,723 |
4,000 |
| Total assets |
$ 91,324 |
$ 197,096 |
| |
|
|
| |
|
|
| LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
| Current Liabilities |
|
|
| Accounts payable |
$ 6,999 |
$ 9,262 |
| Accrued compensation and benefits |
5,629 |
6,401 |
| Accrued income taxes |
512 |
707 |
| Deferred income on sales to
distributors |
3,405 |
4,396 |
| Deferred revenue |
2,308 |
2,338 |
| Restructuring |
141 |
427 |
| Line of credit - short-term |
4,484 |
5,511 |
| Short-term debt |
2,250 |
15,384 |
| Contingent consideration |
-- |
1,876 |
| Other current liabilities |
4,848 |
9,527 |
| Total current
liabilities |
30,576 |
55,829 |
| |
|
|
| Line of credit - long-term |
8,000 |
8,000 |
| Long-term debt |
42,832 |
44,765 |
| Other liabilities |
6,158 |
6,767 |
| Total liabilities |
87,566 |
115,361 |
| |
|
|
| Stockholders' Equity |
3,758 |
81,735 |
| Total liabilities and
stockholders' equity |
$ 91,324 |
$ 197,096 |
| |
|
|
| |
|
|
| MINDSPEED TECHNOLOGIES,
INC. |
| CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS |
| (unaudited, in thousands) |
| |
|
|
| |
Year
Ended |
| |
September 27, |
September 28, |
| |
2013 |
2012 |
| |
|
|
| Cash Flows From Operating
Activities |
|
|
| Net loss |
$ (89,148) |
$ (32,751) |
| Adjustments required to reconcile net loss to
net cash provided/(used in) by operating activities: |
|
|
| Depreciation and amortization of
property, plant and equipment |
5,853 |
6,345 |
| Amortization of intangible assets |
3,403 |
3,419 |
| Asset impairments |
24,956 |
3,385 |
| Revaluation of contingent
consideration |
(10) |
(8,162) |
| Restructuring charges |
2,462 |
2,054 |
| Goodwill impairment charge |
57,062 |
-- |
| Impairment of indefinite-lived intangible
assets |
500 |
-- |
| Stock-based compensation |
11,731 |
10,505 |
| Provision for bad debt |
(8) |
48 |
| Inventory provisions |
1,486 |
1,266 |
| Amortization of debt discount and
issuance costs |
1,032 |
625 |
| Non-cash effect of picoChip settlement
arrangement |
(5,357) |
-- |
| Other non-cash items, net |
(38) |
(211) |
| Changes in assets and liabilities, net of
acquisitions: |
|
|
| Receivables |
(5,099) |
217 |
| Inventories |
(2,271) |
4,407 |
| Other assets, net |
3,793 |
(4,141) |
| Accounts payable |
(2,610) |
194 |
| Deferred income on sales to
distributors |
(991) |
(950) |
| Accrued restructuring
charges |
(2,747) |
(2,573) |
| Accrued compensation and
benefits |
(714) |
(4,060) |
| Accrued expenses and other
current liabilities |
131 |
(1,888) |
| Other liabilities, net |
(774) |
5,513 |
| |
|
|
| Net cash provided by/(used in) operating
activities |
2,642 |
(16,758) |
| |
|
|
| Cash Flows From Investing
Activities |
|
|
| Purchases of property, plant and
equipment |
(4,542) |
(4,637) |
| Payments under license agreements |
(3,735) |
(13,030) |
| Net cash paid for acquired companies |
-- |
(20,096) |
| |
|
|
| Net cash used in investing activities |
(8,277) |
(37,763) |
| |
|
|
| Cash Flows From Financing
Activities |
|
|
| Payments made on capital lease
obligations |
(356) |
(497) |
| Maturity and payment of convertible debt |
(15,000) |
-- |
| Borrowings under term loan |
-- |
15,000 |
| Payments made on term loan |
(750) |
-- |
| Borrowings under line of credit |
1,420 |
16,808 |
| Payments made on line of credit |
(2,447) |
(3,297) |
| Borrowings under convertible debt |
-- |
30,560 |
| Deferred financing costs |
-- |
(1,034) |
| Repurchase of restricted stock for income tax
withholding |
(1,567) |
(1,213) |
| Proceeds from equity compensation
programs |
1,215 |
2,074 |
| |
|
|
| Net cash provided by financing
activities |
(17,485) |
58,401 |
| |
|
|
| Effect of foreign currency exchange rates on
cash |
(4) |
(9) |
| |
|
|
| Net (decrease)/increase in cash and cash
equivalents |
(23,124) |
3,871 |
| Cash and cash equivalents at beginning of
period |
49,098 |
45,227 |
| |
|
|
| Cash and cash equivalents at end of
period |
$ 25,974 |
$ 49,098 |
| |
|
|
| |
|
|
|
|
|
| MINDSPEED TECHNOLOGIES,
INC. |
| Selected Corporate
Data |
| (unaudited, in thousands) |
| |
|
|
|
|
|
| |
Three Months Ended |
Year Ended |
| |
September 27, |
June 28, |
September 28, |
September 27, |
September 28, |
| |
2013 |
2013 |
2012 |
2013 |
2012 |
| |
|
|
|
|
|
| Gross margin % |
3.0% |
61.3% |
57.9% |
46.9% |
55.7% |
| |
|
|
|
|
|
| Cash provided by/(used in): |
|
|
|
|
|
| Operating activities |
$ 517 |
$ (531) |
$ (1,079) |
$ 2,642 |
$ (16,758) |
| Investing activities |
(862) |
(2,285) |
(4,975) |
(8,277) |
(37,763) |
| Financing activities |
(16,734) |
(708) |
(51) |
(17,485) |
58,401 |
| Effect of foreign currency on
cash |
6 |
(2) |
65 |
(4) |
(9) |
| Net (decrease)/increase in cash |
$ (17,073) |
$ (3,526) |
$ (6,040) |
$ (23,124) |
$ 3,871 |
| |
|
|
|
|
|
| Depreciation and amortization |
$ 1,396 |
$ 1,349 |
$ 1,552 |
$ 5,853 |
$ 6,345 |
| Amortization of intangible assets |
$ 587 |
$ 723 |
$ 1,017 |
$ 3,403 |
$ 3,419 |
| Capital expenditures |
$ 861 |
$ 2,285 |
$ 4,975 |
$ 8,277 |
$ 17,667 |
| Net cash paid for acquired companies |
$ -- |
$ -- |
$ -- |
$ -- |
$ 20,096 |
| |
|
|
|
|
|
| Net revenue by region: |
|
|
|
|
|
| Americas |
$ 6,085 |
$ 8,598 |
$ 5,942 |
$ 32,913 |
$ 23,848 |
| Europe, Middle East and Africa |
2,943 |
2,128 |
2,325 |
11,881 |
9,433 |
| Asia-Pacific |
27,015 |
24,853 |
27,997 |
106,607 |
107,725 |
| Total net revenue |
$ 36,043 |
$ 35,579 |
$ 36,264 |
$ 151,401 |
$ 141,006 |
| |
|
|
|
|
|
| Net revenue by product line: |
|
|
|
|
|
| High-performance analog |
$ 15,931 |
$ 15,276 |
$ 17,821 |
$ 66,081 |
$ 64,667 |
| Communications processors |
16,162 |
17,654 |
14,037 |
65,579 |
64,834 |
| Wireless infrastructure |
3,950 |
2,649 |
4,406 |
13,741 |
10,914 |
| Total net product revenue |
36,043 |
35,579 |
36,264 |
145,401 |
140,415 |
| Intellectual property |
-- |
-- |
-- |
6,000 |
591 |
| Total net revenue |
$ 36,043 |
$ 35,579 |
$ 36,264 |
$ 151,401 |
$ 141,006 |
| |
|
|
|
|
|
CONTACT: Investor Relations Contact:
Mindspeed Technologies, Inc.
Kevin Trosian
VP, Corporate Development and Investor Relations
+1 949.579.3111
Investor.Relations@Mindspeed.com
Mindspeed Technologies, Inc. (MM) (NASDAQ:MSPD)
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