MACOM Reports Fiscal Third Quarter 2020 Financial Results

LOWELL, Mass. — (BUSINESS WIRE) — July 29, 2020 — 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 3, 2020.

Third Quarter Fiscal Year 2020 GAAP Results

  • Revenue was $137.3 million, an increase of 26.7% compared to $108.3 million in the previous year fiscal third quarter and an increase of 8.6% compared to $126.4 million in the prior fiscal quarter;
  • Gross margin was 51.6%, compared to 31.2% in the previous year fiscal third quarter and 50.1% in the prior fiscal quarter;
  • Operating income was $6.5 million, compared to a loss of $323.8 million in the previous year fiscal third quarter and a loss of $5.3 million in the prior fiscal quarter; and
  • Net loss was $25.0 million, or $0.37 loss per diluted share, compared to net loss of $324.7 million, or $4.95 loss per diluted share, in the previous year fiscal third quarter and net loss of $10.2 million, or $0.28 loss per diluted share, in the prior fiscal quarter.

Third Quarter Fiscal Year 2020 Adjusted Non-GAAP Results

  • Adjusted gross margin was 55.5%, compared to 39.4% in the previous year fiscal third quarter and 54.5% in the prior fiscal quarter;
  • Adjusted operating income was $29.3 million, or 21.4% of revenue, compared to adjusted operating loss of $22.3 million, or (20.6)% of revenue, in the previous year fiscal third quarter and adjusted operating income of $19.6 million, or 15.5% of revenue, in the prior fiscal quarter; and
  • Adjusted net income was $22.7 million, or $0.33 per diluted share, compared to adjusted net loss of $27.7 million, or $0.42 loss per diluted share, in the previous year fiscal third quarter and adjusted net income of $11.9 million, or $0.17 per diluted share, in the prior fiscal quarter.

Management Commentary

“We remain focused on engineering excellence, financial performance and execution,” said Stephen G. Daly, President and Chief Executive Officer.

Business Outlook

For the fiscal fourth quarter ending October 2, 2020, MACOM expects revenue to be in the range of $144 million to $148 million. Adjusted gross margin is expected to be between 55% and 57%, and adjusted earnings per share is expected to be between $0.36 and $0.40 on an anticipated 69.5 million fully diluted shares outstanding.

Conference Call

MACOM will host a conference call on Wednesday, July 29, 2020 at 5:00 p.m. Eastern Time to discuss its fiscal third 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 7592729.

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 7592729. 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 of new product introductions, MACOM’s profitability, prospects and growth opportunities in our three primary markets, development and process qualification timelines and the estimated financial results for our 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; disruptions in our supply chain; 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 (loss), non-GAAP diluted earnings (loss) per share, non-GAAP income tax rate, 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 expense, 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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