TriQuint Semiconductor, Inc. (NASDAQ: TQNT), a leading RF
solutions supplier and technology innovator, announces its
financial results for the quarter ended June 28, 2014,
including the following highlights:
- Revenue grew 30% sequentially to $230.8
million
- GAAP gross margin was 40.2% and net
income was $0.03 per share
- Non-GAAP gross margin was up 640 basis
points sequentially to 41.7%
- Non-GAAP net income was well above
guidance at $0.13 per share
- Sold premium filters to over 50 unique
customers with discrete filter revenue on track to more than double
in 2014
- 5 GHz WLAN front-end modules winning
chipset reference design
- Completed GaN performance, cost and
capacity goals as part of the Defense Production Act Title III
program
- Expected merger with RFMD on track for
second half of 2014
Commenting on the results, Ralph Quinsey, President and Chief
Executive Officer, stated, “Revenue and earnings in the second
quarter exceeded the high end of our previous guidance and our full
year outlook remains strong. We continue to see robust demand in
our infrastructure and mobile markets as worldwide demand for 4G
LTE services ramp up with very strong demand for LTE base station
products and premium filters for smartphones. We expect to exceed
our goal of 500 basis points of gross margin improvement year over
year and are now targeting 2014 full year non-GAAP gross margins to
be greater than 40%. Additionally, we expect full year non-GAAP EPS
to be up more than 6 times our 2013 results."
Summary Financial Results for the Three Months Ended
June 28, 2014:
Revenue for the second quarter of 2014 was $230.8 million, up
21% from the second quarter of 2013 and 30% sequentially.
Cash and investments increased by $60.0 million this quarter to
$223.5 million driven by operating results and cash proceeds from
employee stock option exercises.
GAAP
Gross margin for the second quarter of 2014 was 40.2%, up
sharply from 29.8% in the second quarter of 2013 due to higher
revenue, product mix and better factory execution. Operating
expenses for the second quarter of 2014 were $85.3 million, up
sequentially due to merger and integration related costs.
Net income for the second quarter of 2014 was $5.2 million or
$0.03 per diluted share, compared with a net loss of $14.9 million
or $(0.09) per share in the second quarter of 2013.
Non-GAAP
Gross margin for the second quarter was 41.7%, up sharply from
31.3% in the second quarter of 2013. Operating expenses for the
quarter were $72.0 million, up slightly sequentially.
Net income for the second quarter of 2014 was $23.6 million, or
$0.13 per diluted share, compared with a net loss of $10.9 million
or $(0.07) per share in the second quarter of 2013.
Please see the discussion of non-GAAP financial measures below
and the attached supplemental schedule for a reconciliation of GAAP
to non-GAAP financial measures.
Outlook:
The company believes second half revenue will be between $550
million and $600 million, up 11% at the midpoint from the prior
year. While the split of this revenue between the third and fourth
quarters depends on major program timing, the company currently
expects third quarter revenue to range between $255 million and
$265 million. Third quarter non-GAAP gross margin is expected to be
between 43% and 45%, driven by strong execution, higher factory
utilization and product mix. Non-GAAP operating expenses are
expected to be approximately $70 million. Third quarter non-GAAP
net income per diluted share is expected to be between $0.23 and
$0.25. As of today, the company is 93% booked to the midpoint of Q3
revenue guidance.
Additional Information Regarding Results for the Three and
Six Months Ended June 28, 2014:
GAAP and non-GAAP financial measures are presented in the tables
below (in millions, except for percentage and per share
information). Non-GAAP financial measures are reconciled to the
corresponding GAAP financial measures in the table later in this
press release.
GAAP RESULTS
Three Months
Ended
Six Months
Ended
Q2
2014
Q1
2014
Change vs. Q1
2014
Q2
2013
Change vs. Q2
2013
Q2
2014
Q2
2013
Change vs. Q2
2013
Revenue $ 230.8 $ 177.6 30 % $
190.1 21 % $ 408.4 $ 374.3
9 % Gross Profit $ 92.7 $ 59.1
57 % $ 56.7 63 % $ 151.8 $ 95.5
59 % Gross Margin % 40.2 % 33.2 % 7.0 % 29.8 %
10.4 % 37.2 % 25.5 % 11.7 % Op Income (Loss) $
7.4 $ (20.0 ) 137 % $ (16.4 ) 145 % $
(12.6 ) $ (50.9 ) 75 % Net Income (Loss) $ 5.2
$ (19.1 ) 127 % $ (14.9 ) 135 % $ (13.9 )
$ (42.8 ) 68 % Inc (Loss) per share $ 0.03
$ (0.12 ) $ 0.15 $ (0.09 ) $
0.12 $ (0.08 ) $ (0.27 ) $ 0.19
NON-GAAP RESULTS
A
Three Months
Ended
Six Months
Ended
Q2
2014
Q1
2014
Change vs. Q1
2014
Q2
2013
Change vs. Q2
2013
Q2
2014
Q2
2013
Change vs. Q2
2013
Revenue $ 230.8 $ 177.6 30 % $ 190.1
21 % $ 408.4 $ 374.3 9 %
Gross Profit $ 96.2 $ 62.6 54 % $ 59.5
62 % $ 158.8 $ 101.5 56 %
Gross Margin % 41.7 % 35.3 % 6.4 % 31.3 % 10.4
% 38.9 % 27.1 % 11.8 % Op Income (Loss) $ 24.3
$ (8.3 ) 393 % $ (10.1 ) 341 % $ 15.9
$ (36.1 ) 144 % Net Income (Loss) $ 23.6
$ (9.4 ) 351 % $ (10.9 ) 317 % $ 14.2
$ (38.2 ) 137 % Inc (Loss) per share $ 0.13
$ (0.06 ) $ 0.19 $ (0.07 ) $ 0.20
$ 0.08 $ (0.24 ) $ 0.32
A
Excludes stock based compensation charges, non-cash tax benefit,
certain entries associated with mergers and acquisitions and other
specifically identified non-routine transactions.
Conference Call:
TriQuint will host a conference call this afternoon at 1:30 p.m.
PDT to discuss the results for the quarter and our future
expectations for the company. To access the conference call, please
dial (888) 813-6582 domestically, or (706) 643-7082
internationally, approximately ten minutes prior to the beginning
of the call, using passcode 59055508. The call can also be heard
via webcast accessed through the “Investors” section of TriQuint's
web site at: http://invest.triquint.com. A replay of the conference
call will be available until August 6, 2014.
Non-GAAP Financial Measures:
This press release provides financial measures for non-GAAP net
income (loss), diluted earnings (loss) per share, gross profit,
gross margin, operating expenses and operating income (loss) that
exclude equity compensation expense, non-cash tax expense
(benefit), certain entries associated with mergers and acquisitions
and other specifically identified non-routine items, and are
therefore not calculated in accordance with accounting principles
generally accepted in the United States (“GAAP”). The charges
associated with mergers and acquisitions reflect the amortization
of intangible and tangible assets, transaction costs and changes to
the earnout liability estimates recorded in connection with
acquisition accounting and charged to the income statement. The
non-cash tax expense (benefit) excludes certain deferred tax
charges and benefits that do not currently result in a tax payment
or tax refund. Management believes that these non-GAAP financial
measures provide meaningful supplemental information that enhances
management's and investors' ability to evaluate TriQuint's
operating results.
These non-GAAP financial measures are not intended to be used in
isolation and should not be considered a substitute for any other
performance measure determined in accordance with GAAP. Investors
and potential investors are cautioned that there are material
limitations associated with the use of non-GAAP financial measures
as an analytical tool, including that other companies may calculate
similar non-GAAP financial measures differently than we do,
limiting their usefulness as a comparative tool. The company
compensates for these limitations by providing specific information
regarding the GAAP amount excluded from the non-GAAP financial
measures. The company further compensates for the limitations of
our use of non-GAAP financial measures by presenting comparable
GAAP measures more prominently. Investors and potential investors
are encouraged to review the reconciliation of non-GAAP financial
measures contained within this press release with our GAAP net
income and net income per share.
Forward-Looking Statements:
This press release contains forward-looking statements made
pursuant to the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include statements regarding improved financial results in 2014,
expectations regarding discrete premium filter revenue for 2014,
and anticipated full year gross margins and earnings; expected
timing and completion of TriQuint’s merger with RFMD; and
statements under "Outlook" regarding anticipated third and fourth
quarter revenues, third quarter gross margin, operating expenses
and net income per diluted share. These forward-looking statements
are statements of management's opinion and are subject to various
assumptions, risks, uncertainties and changes in circumstances.
Actual results may vary materially from those expressed or implied
in the statements herein or from historical results, due to changes
in economic, business, competitive, technological and/or regulatory
factors. More detailed information about risk factors that may
affect actual results are set forth in TriQuint's reports on Form
10-K and 10-Q and other filings with the Securities and Exchange
Commission. These reports can be accessed at the SEC web site,
www.sec.gov. Except as required by
law, TriQuint undertakes no obligation to revise or publicly
release the results of any revision to these forward-looking
statements.
A reader of this release should understand that it is not
possible to predict or identify all risk factors and should not
consider the risk factors described in TriQuint's filings with the
Securities and Exchange Commission to be a complete statement of
all potential risks and uncertainties.
Facts About TriQuint
Founded in 1985, TriQuint Semiconductor (NASDAQ: TQNT) is a
leading RF solutions supplier and technology innovator for the
world's top communications, defense and aerospace companies. People
and organizations around the world need real-time, all-the-time
connections; TriQuint products help reduce the cost and increase
the performance of connected mobile devices and the networks that
deliver critical voice, data and video communications. With the
industry's broadest technology portfolio, recognized R&D
leadership, and expertise in high-volume manufacturing, TriQuint
creates standard and custom products using gallium arsenide (GaAs),
gallium nitride (GaN), surface acoustic wave (SAW) and bulk
acoustic wave (BAW) technologies. The company has ISO
9001-certified manufacturing facilities in the U.S., production in
Costa Rica, and design centers in North America and Germany. For
more information, visit www.triquint.com.
TriQuint: Reach Further, Reach Faster™
TQNT-F
TriQuint Semiconductor, Inc.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited) (In thousands)
June 28,
2014 December 31, 2013 Assets Current assets:
Cash and cash equivalents $ 214,498 $ 79,026 Investments in
marketable securities 8,979 — Accounts receivable, net 141,719
177,114 Inventories 157,400 159,488 Prepaid expenses 10,429 13,617
Deferred tax assets, net 15,982 12,787 Other current assets 37,341
39,960 Total current assets 586,348 481,992 Property, plant
and equipment, net 415,109 420,363 Goodwill 13,519 13,519
Intangible assets, net 20,680 23,510 Deferred tax assets –
noncurrent, net 61,679 61,554 Other noncurrent assets, net 34,073
32,319 Total assets $ 1,131,408 $ 1,033,257
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable $ 65,779 $ 52,472 Accrued payroll 41,587 39,743
Other accrued liabilities 12,101 15,893 Total current
liabilities 119,467 108,108 Long-term liabilities: Long-term income
tax liability 3,996 2,062 Cross-licensing liability 11,604 11,752
Other long-term liabilities 16,402 16,782 Total liabilities
151,469 138,704 Stockholders' equity: Common stock 174 162
Additional paid-in capital 799,138 699,903 Accumulated other
comprehensive income 93 95 Retained earnings 180,534 194,393
Total stockholders' equity 979,939 894,553 Total liabilities
and stockholders' equity $ 1,131,408 $ 1,033,257
TriQuint Semiconductor, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited) (In thousands, except per share amounts)
Three Months Ended Six Months
Ended June 28, 2014 March 29, 2014 June 29,
2013 June 28, 2014 June 29, 2013 Revenues
$ 230,771 $ 177,606 $ 190,103 $ 408,377 374,312 Cost of goods sold
138,057 118,556 133,384 256,613 278,821
Gross profit 92,714 59,050 56,719 151,764 95,491
Operating expenses: Research, development and engineering 48,001
49,870 47,107 97,871 93,178 Selling, general and administrative
37,316 29,163 25,989 66,479 53,230
Total operating expenses 85,317 79,033 73,096 164,350
146,408
Operating income (loss) 7,397 (19,983 ) (16,377 )
(12,586 ) (50,917 ) Other (expense) income: Interest income
42 27 38 69 76 Interest expense (844 ) (855 ) (1,137 ) (1,699 )
(2,276 ) Other, net (624 ) 45 336 (579 ) 27
Other (expense) income, net (1,426 ) (783 ) (763 ) (2,209 ) (2,173
)
Income (loss) before income tax 5,971 (20,766 ) (17,140 )
(14,795 ) (53,090 ) Income tax expense (benefit) 761
(1,697 ) (2,255 ) (936 ) (10,256 ) Net income (loss) $ 5,210
$ (19,069 ) $ (14,885 ) $ (13,859 ) $ (42,834 ) Per Share
Data: Basic per share net earnings (loss) $ 0.03 $ (0.12 ) $ (0.09
) $ (0.08 ) $ (0.27 ) Diluted per share net earnings (loss) $ 0.03
$ (0.12 ) $ (0.09 ) (0.08 ) $ (0.27 ) Weighted-average
shares outstanding: Basic 171,770 164,386 159,347 168,140 160,044
Diluted 181,319 164,386 159,347 168,140 160,044
TriQuint Semiconductor, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited) (% of revenue)
Three Months Ended Six Months Ended
June 28, 2014 March 29, 2014 June 29, 2013
June 28, 2014 June 29, 2013 Revenues 100.0 %
100.0 % 100.0 % 100.0 % 100.0 % Cost of goods sold 59.8 % 66.8 %
70.2 % 62.8 % 74.5 % Gross profit 40.2 % 33.2 % 29.8 % 37.2 % 25.5
% Operating expenses: Research, development and engineering
20.8 % 28.1 % 24.8 % 24.0 % 24.9 % Selling, general and
administrative 16.2 % 16.4 % 13.6 % 16.3 % 14.2 % Total operating
expenses 37.0 % 44.5 % 38.4 % 40.3 % 39.1 %
Operating income
(loss) 3.2 % (11.3 )% (8.6 )% (3.1 )% (13.6 )% Other
(expense) income: Interest income 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Interest expense (0.3 )% (0.4 )% (0.6 )% (0.4 )% (0.6 )% Other, net
(0.3 )% 0.0 % 0.2 % (0.1 )% 0.0 % Other (expense) income, net (0.6
)% (0.4 )% (0.4 )% (0.5 )% (0.6 )%
Income (loss) before
income tax 2.6 % (11.7 )% (9.0 )% (3.6 )% (14.2 )% Income
tax expense (benefit) 0.3 % (1.0 )% (1.2 )% (0.2 )% (2.8 )% Net
income (loss) 2.3 % (10.7 )% (7.8 )% (3.4 )% (11.4 )%
TriQuint Semiconductor, Inc.
SUPPLEMENTAL RECONCILIATION OF GAAP TO
NON-GAAP RESULTS
(Unaudited) (Dollars in thousands, except per share amounts)
Three Months Ended Six Months
Ended June 28, 2014 March 29, 2014
June 29, 2013 June 28, 2014 June 29,
2013 (% of revenues) (% of revenues) (% of revenues) (% of
revenues) (% of revenues) GAAP GROSS PROFIT $ 92,714 40.2 %
$ 59,050 33.2 % $ 56,719 29.8 % $ 151,764 37.2 % $ 95,491 25.5 %
Adjustment for stock based compensation charges 2,218 1.0 % 1,785
1.0 % 1,570 0.8 % 4,003 1.0 % 3,606 1.0 % Adjustment for
restructuring and impairment charges (20 ) 0.0 % 715 0.4 % — — %
695 0.0 % — — % Adjustment for charges associated with acquisitions
1,301 0.5 % 1,083 0.7 % 1,202 0.7 % 2,384
0.6 % 2,410 0.6 % NON-GAAP GROSS PROFIT $ 96,213 41.7
% $ 62,633 35.3 % $ 59,491 31.3 % 158,846 38.9 % 101,507 27.1 %
GAAP OPERATING EXPENSES $ 85,317 37.0 % $ 79,033 44.5 % $
73,096 38.4 % $ 164,350 40.3 % $ 146,408 39.1 % Adjustment for
stock based compensation charges (5,287 ) (2.3 )% (4,805 ) (2.7 )%
(5,623 ) (3.0 )% (10,092 ) (2.5 )% (10,610 ) (2.8 )% Adjustment for
restructuring and impairment charges 52 0.0 % (1,080 ) (0.6 )% — —
% (1,028 ) (0.3 )% — — % Adjustment for charges associated with
acquisitions (8,124 ) (3.5 )% (2,200 ) (1.2 )% 2,108 1.2 %
(10,324 ) (2.4 )% 1,794 0.5 % NON-GAAP OPERATING EXPENSES $
71,958 31.2 % $ 70,948 40.0 % $ 69,581 36.6 % $ 142,906 35.1 % $
137,592 36.8 % GAAP OPERATING INCOME (LOSS) $ 7,397 3.2 % $
(19,983 ) (11.3 )% $ (16,377 ) (8.6 )% $ (12,586 ) (3.1 )% $
(50,917 ) (13.6 )% Adjustment for stock based compensation charges
7,505 3.3 % 6,590 3.7 % 7,193 3.8 % 14,095 3.5 % 14,216 3.8 %
Adjustment for restructuring and impairment charges (72 ) (0.1 )%
1,795 1.0 % — — % 1,723 0.4 % — — % Adjustment for charges
associated with acquisitions 9,425 4.1 % 3,283 1.9 %
(906 ) (0.5 )% 12,708 3.1 % 616 0.2 % NON-GAAP
OPERATING INCOME (LOSS) $ 24,255 10.5 % $ (8,315 ) (4.7 )% $
(10,090 ) (5.3 )% $ 15,940 3.9 % $ (36,085 ) (9.6 )% GAAP
NET INCOME (LOSS) $ 5,210 2.3 % $ (19,069 ) (10.7 )% $ (14,885 )
(7.8 )% $ (13,859 ) (3.4 )% $ (42,834 ) (11.4 )% Adjustment for
stock based compensation charges 7,505 3.3 % 6,590 3.7 % 7,193 3.8
% 14,095 3.5 % 14,216 3.8 % Adjustment for restructuring and
impairment charges (72 ) 0.0 % 1,795 1.0 % — — % 1,723 0.4 % — — %
Adjustment for impairment (recovery) of investment 515 0.2 % — — %
(421 ) (0.2 )% 515 0.1 % (421 ) (0.1 )% Adjustment for non-cash tax
expense (benefit) 803 0.3 % (2,190 ) (1.2 )% (2,413 ) (1.4 )%
(1,387 ) (0.2 )% (10,725 ) (2.9 )% Adjustment for charges
associated with acquisitions 9,643 4.1 % 3,510 1.9 %
(421 ) (0.2 )% 13,153 3.2 % 1,591 0.4 % NON-GAAP NET
INCOME (LOSS) $ 23,604 10.2 % $ (9,364 ) (5.3 )% $ (10,947 ) (5.8
)% $ 14,240 3.6 % $ (38,173 ) (10.2 )% GAAP DILUTED EARNINGS
(LOSS) PER SHARE 0.03 $ (0.12 ) $ (0.09 ) $ (0.08 ) (0.27 )
Adjustment for stock based compensation charges 0.04 0.04 0.04 0.08
0.09 Adjustment for restructuring and impairment charges (0.00 )
0.01 — 0.01 — Adjustment for impairment (recovery) of investment
0.00 — 0.00 0.00 0.00 Adjustment for non-cash tax expense (benefit)
0.01 (0.01 ) (0.02 ) (0.01 ) (0.07 ) Adjustment for charges
associated with acquisitions 0.05 0.02 0.00
0.08 0.01 NON-GAAP DILUTED EARNINGS (LOSS) PER SHARE
$ 0.13 $ (0.06 ) $ (0.07 ) $ 0.08 $ (0.24 )
Our earnings release contains forward looking estimates of
non-GAAP gross margin and loss per share for the third quarter of
2014. We provide these non-GAAP measures on a prospective basis for
the same reasons that we provide them to investors on a historical
basis. The following table provides a reconciliation of GAAP gross
margin and loss per share to non-GAAP gross margin and earnings per
share anticipated for the third quarter of 2014 based on the
mid-point of guidance.
Forward Looking Q3 GAAP Gross Margin 42.0 %
Adjustment for stock based compensation charges 1.0 % Adjustment
for charges associated with acquisitions 1.0 % Forward Looking Q3
non-GAAP Gross Margin 44.0 % Forward Looking Q3 GAAP
Operating Expenses (in millions) $ 82.7 Adjustment for stock based
compensation charges (5.0 ) Adjustment for charges associated with
acquisitions (7.7 ) Forward Looking Q3 non-GAAP Operating Expenses
$ 70.0 Forward Looking Q3 GAAP Net Earnings per Share $ 0.10
Adjustment for stock based compensation charges 0.04 Adjustment for
non-cash tax expense 0.02 Adjustment for charges associated with
acquisitions 0.08 Forward Looking Q3 non-GAAP Net Earnings
per Share $ 0.24
TriQuint Semiconductor, Inc.Steve BuhalyVP of Finance &
Administration, CFOTel: +1.503.615.9401E-mail:
steve.buhaly@triquint.comorTriQuint Semiconductor,
Inc.Grant BrownDirector, Investor RelationsTel:
+1.503.615.9413E-mail:
grant.brown@triquint.comorMedia
Contact:TriQuint Semiconductor, Inc.Brandi FryeSr. Director,
Corporate CommunicationsTel: +1.503.615.9488E-mail:
brandi.frye@triquint.com
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