MACOM Reports Fiscal First Quarter 2020 Financial Results

LOWELL, Mass. — (BUSINESS WIRE) — January 28, 2020 — MACOM Technology Solutions Holdings, Inc. ("MACOM") (NASDAQ: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal first quarter ended January 3, 2020.

First Quarter Fiscal Year 2020 GAAP Results

  • Revenue was $119.1 million, a decrease of 21.0% compared to $150.7 million in the previous year fiscal first quarter and an increase of 6.1% compared to $112.2 million in the prior fiscal quarter;
  • Gross margin was 48.9%, compared to 50.8% in the previous year fiscal first quarter and 47.2% in the prior fiscal quarter;
  • Operating loss was $10.5 million, compared to a loss of $14.4 million in the previous year fiscal first quarter and a loss of $12.0 million in the prior fiscal quarter; and
  • Net loss was $28.4 million, or $0.43 loss per diluted share, compared to net loss of $23.4 million, or $0.44 loss per diluted share, in the previous year fiscal first quarter and net income of $10.5 million, or $0.16 per diluted share, in the prior fiscal quarter.

First Quarter Fiscal Year 2020 Adjusted Non-GAAP Results

  • Adjusted gross margin was 53.5%, compared to 56.3% in the previous year fiscal first quarter and 53.0% in the prior fiscal quarter;
  • Adjusted operating income was $13.0 million, or 10.9% of revenue, compared to adjusted operating income of $21.9 million, or 14.5% of revenue, in the previous year fiscal first quarter and adjusted operating income of $8.5 million, or 7.6% of revenue, in the prior fiscal quarter; and
  • Adjusted net income was $4.9 million, or $0.07 per diluted share, compared to adjusted net income of $12.9 million, or $0.20 per diluted share, in the previous year fiscal first quarter and adjusted net income of $0.8 million, or $0.01 per diluted share, in the prior fiscal quarter.

Management Commentary

“Q1 was a solid start to our fiscal year,” said Stephen G. Daly, President and Chief Executive Officer. “Our new organization and engineering leadership is having a positive impact on product development.”

Business Outlook

For the fiscal second quarter ending April 3, 2020, MACOM expects revenue to be in the range of $122 million to $126 million. Adjusted gross margin is expected to be between 53% and 55%, and adjusted earnings per share is expected to be between $0.09 and $0.13 on an anticipated 68.0 million fully diluted shares outstanding.

Conference Call

MACOM will host a conference call on Tuesday, January 28, 2020 at 5:00 p.m. Eastern Time to discuss its fiscal first quarter 2020 financial results and business outlook. Investors and analysts may join the conference call by dialing 1-877-837-3908 and providing the passcode 7669118.

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 with a passcode of 7669118. 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 Data Center, Telecommunication and Industrial and Defense 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 new organization structure and its impact on product development and operational enhancements, MACOM’s prospect and growth opportunities in our three primary markets, development and process qualification timelines and the estimated financial results for our fiscal second 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 those 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 income (loss) from operations and operating margin, non-GAAP operating expenses, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP income tax rate, adjusted EBITDA, non-GAAP interest expense and Free Cash Flow. From time to time 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 and non-cash compensation costs, impairment and restructuring charges, changes in common stock warrant liability, non-cash interest, litigation costs, acquisition, integration and restructuring related costs, equity investment gains and losses and the tax effect of each non-GAAP adjustment.

Management believes that these excluded items are not reflective of our underlying performance. Management 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 and other similar 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 for a more consistent basis of comparison and 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.

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