GREENSBORO, N.C., Oct. 29, 2014 /PRNewswire/ --
Quarterly Highlights
- September Quarterly GAAP Revenue Increases Approximately
17% Year-Over-Year to $362.7
Million
- GAAP Gross Margin Expands 1,250 Basis Points Year-Over-Year to
46.2%
- GAAP Diluted EPS is $0.21, Versus
$0.02 in Q2 Fiscal 2014
- Non-GAAP Gross Margin Expands 1,180 Basis Points Year-Over-Year
to 48.0%
- Non-GAAP Diluted EPS is $0.30,
Versus $0.12 in Q2 Fiscal 2014
RF Micro Devices, Inc. (Nasdaq:RFMD), a global leader in the
design and manufacture of high-performance radio frequency
solutions, today reported financial results for the Company's
fiscal 2015 second quarter, ended September
27, 2014.
On a GAAP basis, September quarterly revenue increased 15%
sequentially and 17% year-over-year to $362.7 million. Gross margin for the September
quarter expanded sequentially by 120 basis points to 46.2%,
operating income was $75.3 million,
and net income was $63.3 million, or
$0.21 per diluted share.
On a non-GAAP basis, September quarterly revenue was
$362.0 million. Gross margin expanded
sequentially by 90 basis points to 48.0%, operating income was
$100.1 million, or 27.6% of sales,
and net income was $90.0 million, or
$0.30 per diluted share. Revenue,
gross profit, operating income, operating margin, and earnings per
share were all quarterly records.
Strategic Highlights
- On September 5, 2014, the
shareholders of RFMD and TriQuint Semiconductor, Inc. (Nasdaq:TQNT)
voted in favor of the pending business combination between RFMD and
TriQuint, and RFMD continues to expect a successful close this
calendar year, subject to required regulatory approvals and
customary closing conditions
- At the request of customers, RFMD and TriQuint executed
multiple three-way NDAs with leading smartphone manufacturers to
accelerate highly integrated products to market, as early as next
year
- RFMD's Cellular Products Group (CPG) commenced shipments of
envelope tracking (ET) power management integrated circuits (PMICs)
to a leading smartphone manufacturer in support of multiple
basebands
- CPG supported new customer engagements for RF Fusion™, a
complete RF front end solution for 4G world phones and tablets
- RFMD's Multi-Market Products Group (MPG) increased revenue 15%
sequentially, supported primarily by high-performance Wi-Fi, 4G
wireless infrastructure, and Gallium Nitride- (GaN-) related
revenue
GAAP
RESULTS
|
(in millions,
except
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
percentages and
per
|
|
Q2 Fiscal
|
|
Q1 Fiscal
|
|
Change
|
|
|
Q2 Fiscal
|
|
Change
|
|
share
data)
|
|
2015
|
|
|
2015
|
|
|
vs. Q1
2015
|
|
|
2014
|
|
|
vs. Q2
2014
|
|
Revenue
|
|
$
|
362.7
|
|
|
$
|
316.3
|
|
|
14.7
|
%
|
|
|
$
|
310.7
|
|
|
16.7
|
%
|
|
Gross
Margin
|
|
46.2
|
%
|
|
45.0
|
%
|
|
1.2
|
|
ppt
|
|
33.7
|
%
|
|
12.5
|
|
ppt
|
Operating
Income
|
|
$
|
75.3
|
|
|
$
|
46.1
|
|
|
$
|
29.2
|
|
|
|
$
|
9.5
|
|
|
$
|
65.8
|
|
|
Net Income
|
|
$
|
63.3
|
|
|
$
|
38.6
|
|
|
$
|
24.7
|
|
|
|
$
|
5.9
|
|
|
$
|
57.4
|
|
|
Diluted
EPS
|
|
$
|
0.21
|
|
|
$
|
0.13
|
|
|
$
|
0.08
|
|
|
|
$
|
0.02
|
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP
RESULTS
|
(excluding
share-based compensation, amortization of intangibles, acquisition
and integration related costs, intellectual property rights (IPR)
litigation costs, non-cash deferred royalty revenue and equal and
offsetting non-cash prepaid royalty amortization, start-up costs,
restructuring and disposal costs, certain consulting costs, (gain)
loss on PP&E, income from equity investment, non-cash interest
expense on convertible subordinated notes and tax
adjustments)
|
(in millions,
except
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
percentages and
per
|
|
Q2 Fiscal
|
|
Q1 Fiscal
|
|
Change
|
|
|
Q2 Fiscal
|
|
Change
|
|
share
data)
|
|
2015
|
|
|
2015
|
|
|
vs. Q1
2015
|
|
|
2014
|
|
|
vs. Q2
2014
|
|
Revenue
|
|
$
|
362.0
|
|
|
$
|
316.3
|
|
|
14.4
|
%
|
|
|
$
|
310.7
|
|
|
16.5
|
%
|
|
Gross
Margin
|
|
48.0
|
%
|
|
47.1
|
%
|
|
0.9
|
|
ppt
|
|
36.2
|
%
|
|
11.8
|
|
ppt
|
Operating
Income
|
|
$
|
100.1
|
|
|
$
|
78.9
|
|
|
$
|
21.2
|
|
|
|
$
|
37.2
|
|
|
$
|
62.9
|
|
|
Net Income
|
|
$
|
90.0
|
|
|
$
|
71.3
|
|
|
$
|
18.7
|
|
|
|
$
|
33.9
|
|
|
$
|
56.1
|
|
|
Diluted
EPS
|
|
$
|
0.30
|
|
|
$
|
0.24
|
|
|
$
|
0.06
|
|
|
|
$
|
0.12
|
|
|
$
|
0.18
|
|
|
Financial Outlook
RFMD currently believes the demand environment in its end
markets supports the following non-GAAP expectations and
projections for the December 2014
quarter:
- RFMD expects quarterly revenue of approximately $385 million
- RFMD expects gross margin to be approximately flat
sequentially
- RFMD expects operating expenses to be approximately flat
- RFMD expects a tax rate of approximately 10% - 15%
- RFMD expects diluted EPS of approximately $0.33
RFMD's actual quarterly results may differ from these
expectations and projections, and such differences may be
material.
Comments From Management
Bob Bruggeworth, president and
CEO of RFMD, said, "In the September quarter, RFMD continued to
benefit from the increasing global demand for mobile data.
Consumers want more bandwidth for their data-hungry applications,
carriers want greater throughput from their available spectrum, and
device manufacturers want greater functionality within the same
product footprint. In each instance, RFMD's solutions are a key
enabling technology.
"RFMD is enjoying multiple diversified, long-term growth
opportunities across markets, customers, and products. This is
enabling RFMD to capture increasing content across a broad range of
mobile data devices and outpace the growth rate of our underlying
markets."
Dean Priddy, CFO and vice
president of administration of RFMD, said, "In the September 2014 quarter, RFMD's revenue, gross
profit, operating income, and earnings per share were all quarterly
records. Of note, gross profit increased by $24.9 million, and operating income increased by
$21.2 million on the $46 million increase in revenue.
"In the December quarter, RFMD anticipates continued superior
financial performance as we execute on our financial model. Our
growth drivers are broad-based, we are identifying new
opportunities to expand gross margin, and we see continued
improvement in operating income, earnings per share, free cash
flow, and return on invested capital."
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in
accordance with United States
(U.S.) generally accepted accounting principles (GAAP), RFMD's
earnings release contains some or all of the following non-GAAP
financial measures: (i) non-GAAP gross profit and gross margin,
(ii) non-GAAP operating income and operating margin, (iii) non-GAAP
net income, (iv) non-GAAP net income per diluted share, (v)
non-GAAP operating expenses (research and development, marketing
and selling and general and administrative), (vi) free cash flow,
(vii), EBITDA, (viii) return on invested capital (ROIC), and (ix)
net debt or positive net cash. Each of these non-GAAP
financial measures is either adjusted from GAAP results to exclude
certain expenses or derived from multiple GAAP measures, which are
outlined in the "Reconciliation of GAAP to Non-GAAP Financial
Measures" tables on pages 9 and 10 and the "Additional Selected
Non-GAAP Financial Measures And Reconciliations" tables on page
11.
In managing RFMD's business on a consolidated basis, management
develops an annual operating plan, which is approved by our Board
of Directors, using non-GAAP financial measures. In
developing and monitoring performance against this plan, management
considers the actual or potential impacts on these non-GAAP
financial measures from actions taken to reduce unit costs with the
goal of increasing gross margin and operating margin. In
addition, management relies upon these non-GAAP financial measures
to assess whether research and development efforts are at an
appropriate level, and when making decisions about product
spending, administrative budgets, and marketing programs. In
addition, we believe that non-GAAP financial measures provide
useful supplemental information to investors and enable investors
to analyze the results of operations in the same way as
management. We have chosen to provide this supplemental
information to enable investors to perform additional comparisons
of operating results, to assess our liquidity and capital position
and to analyze financial performance excluding the effect of
expenses unrelated to operations, certain non-cash expenses and
share-based compensation expense, which may obscure trends in
RFMD's underlying performance.
We believe that these non-GAAP financial measures offer an
additional view of RFMD's operations that, when coupled with the
GAAP results and the reconciliations to corresponding GAAP
financial measures, provide a more complete understanding of RFMD's
results of operations and the factors and trends affecting RFMD's
business. However, these non-GAAP financial measures should
be considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP.
Our rationale for using these non-GAAP financial measures, as
well as their impact on the presentation of RFMD's operations, are
outlined below:
Non-GAAP revenue. Non-GAAP revenue excludes non-cash
deferred royalty revenue. We believe that the exclusion of
this non-cash adjustment to revenue provides management and
investors a more effective means of evaluating our historical and
projected performance.
Non-GAAP gross profit and gross margin. Non-GAAP
gross profit and gross margin exclude share-based compensation
expense, amortization of intangible assets, non-cash deferred
royalty revenue, non-cash prepaid royalty amortization, and
adjustments for restructuring and disposal costs. We believe
that exclusion of these costs in presenting non-GAAP gross profit
and gross margin gives management and investors a more effective
means of evaluating RFMD's historical performance and projected
costs and the potential for realizing cost efficiencies. We
believe that the majority of RFMD's purchased intangibles are not
relevant to analyzing current operations because they generally
represent costs incurred by the acquired company to build value
prior to acquisition, and thus are effectively part of transaction
costs rather than ongoing costs of operating RFMD's business.
In this regard, we note that (i) once the intangibles are fully
amortized, the intangibles will not be replaced with cash costs and
therefore, the exclusion of these costs provides management and
investors with better visibility into the actual costs required to
generate revenues over time, and (ii) although we set the
amortization expense based on useful life of the various assets at
the time of the transaction, we cannot influence the timing and
amount of the future amortization expense recognition once the
lives are established. Similarly, we believe that
presentation of non-GAAP gross profit and gross margin and other
non-GAAP financial measures that exclude the impact of share-based
compensation expense assists management and investors in evaluating
the period-over-period performance of RFMD's ongoing operations
because (i) the expenses are non-cash in nature, and (ii) although
the size of the grants is within our control, the amount of expense
varies depending on factors such as short-term fluctuations in
stock price volatility and prevailing interest rates, which can be
unrelated to the operational performance of RFMD during the period
in which the expense is incurred and generally is outside the
control of management. Moreover, we believe that the
exclusion of share-based compensation expense in presenting
non-GAAP gross profit and gross margin and other non-GAAP financial
measures is useful to investors to understand the impact of the
expensing of share-based compensation to RFMD's gross profit and
gross margins and other financial measures in comparison to both
prior periods as well as to its competitors. We also believe
that the adjustments to profit and margin related to non-cash
deferred royalty revenue, non-cash prepaid royalty amortization,
restructuring and disposal costs, do not constitute part of RFMD's
ongoing operations and therefore the exclusion of these items
provides management and investors with better visibility into the
actual revenue and actual costs required to generate revenues over
time and gives management and investors a more effective means of
evaluating our historical and projected performance. We
believe disclosure of non-GAAP gross profit and gross margin has
economic substance because the excluded expenses do not represent
continuing cash expenditures and, as described above, we have
little control over the timing and amount of the expenses in
question.
Non-GAAP operating income and operating margin. Non-GAAP
operating income and operating margin exclude share-based
compensation expense, amortization of intangible assets,
restructuring and disposal costs, acquisition and integration
related costs, certain consulting costs, intellectual property
rights (IPR) litigation costs, loss (gain) on PP&E and start-up
costs. We believe that presentation of a measure of operating
income and operating margin that excludes amortization of
intangible assets and share-based compensation expense is useful to
both management and investors for the same reasons as described
above with respect to our use of non-GAAP gross profit and gross
margin. We believe that restructuring and disposal costs,
acquisition and integration related costs, certain consulting
costs, IPR litigation costs, loss (gain) on PP&E and start-up
costs do not constitute part of RFMD's ongoing operations and
therefore, the exclusion of these costs provides management and
investors with better visibility into the actual costs required to
generate revenues over time and gives management and investors a
more effective means of evaluating our historical and projected
performance. We believe disclosure of non-GAAP operating
income and operating margin has economic substance because the
excluded expenses are either unrelated to operations or do not
represent current cash expenditures.
Non-GAAP net income and non-GAAP net income per diluted share.
Non-GAAP net income and non-GAAP net income per diluted share
exclude the effects of share-based compensation expense,
amortization of intangible assets, restructuring and disposal
costs, acquisition and integration related costs, certain
consulting costs, IPR litigation costs, loss (gain) on PP&E,
start-up costs, loss on retirement of convertible subordinated
notes, non-cash interest expense on convertible subordinated notes,
income from equity investment and also reflect an adjustment of
income taxes for cash basis. We believe that presentation of
measures of net income and net income per diluted share that
exclude these items is useful to both management and investors for
the reasons described above with respect to non-GAAP gross profit
and gross margin and non-GAAP operating income and operating
margin. We believe disclosure of non-GAAP net income and
non-GAAP net income per diluted share has economic substance
because the excluded expenses are either unrelated to operations or
do not represent current cash expenditures.
Non-GAAP research and development, marketing and selling and
general and administrative expenses. Non-GAAP research and
development, marketing and selling and general and administrative
expenses exclude share-based compensation expense, amortization of
intangible assets, other non-cash expenses, certain consulting
costs, and IPR litigation costs. We believe that presentation
of measures of these operating expenses that exclude amortization
of intangible assets and share-based compensation expense is useful
to both management and investors for the same reasons as described
above with respect to our use of non-GAAP gross profit and gross
margin. We believe that other non-cash expenses, certain
consulting costs, and IPR litigation costs do not constitute part
of RFMD's ongoing operations and therefore, the exclusion of these
costs provides management and investors with better visibility into
the actual costs required to generate revenues over time and gives
management and investors a more effective means of evaluating our
historical and projected performance. We believe disclosure
of these non-GAAP operating expenses has economic substance because
the excluded expenses are either unrelated to operations or do not
represent current cash expenditures.
Free cash flow. RFMD defines free cash flow as net cash provided
by operating activities during the period minus property and
equipment expenditures made during the period. We use free
cash flow as a supplemental financial measure in our evaluation of
liquidity and financial strength. Management believes that
this measure is useful as an indicator of our ability to service
our debt, meet other payment obligations and make strategic
investments. Free cash flow should be considered in addition
to, rather than as a substitute for, net income as a measure of our
performance and net cash provided by operating activities as a
measure of our liquidity. Additionally, our definition of
free cash flow is limited, in that it does not represent residual
cash flows available for discretionary expenditures due to the fact
that the measure does not deduct the payments required for debt
service and other contractual obligations. Therefore, we
believe it is important to view free cash flow as a measure that
provides supplemental information to our entire statement of cash
flows.
EBITDA. RFMD defines EBITDA as earnings before interest
expense and interest income, income tax expense (benefit),
depreciation and intangible amortization. Management believes
that this measure is useful to evaluate our ongoing operations and
as a general indicator of our operating cash flow (in conjunction
with a cash flow statement which also includes among other items,
changes in working capital and the effect of non-cash charges).
Non-GAAP ROIC. Return on invested capital (ROIC) is a non-GAAP
financial measure that management believes provides useful
supplemental information for management and the investor by
measuring the effectiveness of our operations' use of invested
capital to generate profits. We use ROIC to track how much
value we are creating for our shareholders. Non-GAAP ROIC is
calculated by dividing annualized non-GAAP operating income, net of
cash taxes, by average invested capital. Average invested
capital is calculated by subtracting the average of the beginning
balance and the ending balance of current liabilities (excluding
the current portion of long-term debt and other short-term
financings) from the average of the beginning balance and the
ending balance of net accounts receivable, inventories, other
current assets, net property and equipment and a cash amount equal
to seven days of quarterly revenue.
Net debt or positive net cash. Net debt or positive net cash is
defined as unrestricted cash, cash equivalents and short-term
investments minus any borrowings under our credit facility.
Management believes that net debt or positive net cash provides
useful information regarding the level of RFMD's indebtedness by
reflecting cash and investments that could be used to repay
debt.
Limitations of non-GAAP financial measures. The primary material
limitations associated with the use of non-GAAP gross profit and
gross margin, non-GAAP operating expenses, non-GAAP operating
income and operating margin, non-GAAP net income, non-GAAP net
income per diluted share, free cash flow, EBITDA, non-GAAP ROIC and
net debt or positive net cash, as compared to the most directly
comparable GAAP financial measures of gross profit and gross
margin, operating expenses, operating income, net income, net
income per diluted share and net cash provided by operating
activities are (i) they may not be comparable to similarly titled
measures used by other companies in RFMD's industry, and (ii) they
exclude financial information that some may consider important in
evaluating our performance. We compensate for these
limitations by providing full disclosure of the differences between
these non-GAAP financial measures and the corresponding GAAP
financial measures, including a reconciliation of the non-GAAP
financial measures to the corresponding GAAP financial measures, to
enable investors to perform their own analysis of our gross profit
and gross margin, operating expenses, operating income, net income,
net income per diluted share and net cash provided by operating
activities.
RF Micro Devices will conduct a conference call at 5:00 p.m. EDT today to discuss today's press
release. The conference call will be broadcast live over the
Internet and can be accessed by any interested party at
http://www.rfmd.com (under "Investor Relations"). A
telephone playback of the conference call will be available
approximately two hours after the call's completion and can be
accessed by dialing 719-457-0820 and using the passcode 1337709.
The playback will be available through the close of business
November 5, 2014.
About RFMD
RFMD (NASDAQ: RFMD) is a global leader in the design and
manufacture of high-performance radio frequency solutions. RFMD's
products enable worldwide mobility, provide enhanced connectivity,
and support advanced functionality in the mobile device, wireless
infrastructure, wireless local area network (WLAN or Wi-Fi), cable
television (CATV)/broadband, Smart Energy/advanced metering
infrastructure (AMI), and aerospace and defense markets. RFMD is
recognized for its diverse portfolio of semiconductor technologies
and RF systems expertise and is a preferred supplier to the world's
leading mobile device, customer premises, and communications
equipment providers. RFMD is an ISO 9001-, ISO 14001-, and ISO/TS
16949-certified manufacturer with worldwide engineering, design,
sales and service facilities. For more information, please visit
RFMD's web site at rfmd.com.
This press release includes "forward-looking statements" within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, statements about our plans,
objectives, representations and contentions and are not historical
facts and typically are identified by use of terms such as "may,"
"will," "should," "could," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential," "continue" and
similar words, although some forward-looking statements are
expressed differently. You should be aware that the forward-looking
statements included herein represent management's current judgment
and expectations, but our actual results, events and performance
could differ materially from those expressed or implied by
forward-looking statements. We do not intend to update any of these
forward-looking statements or publicly announce the results of any
revisions to these forward-looking statements, other than as is
required under the federal securities laws. RF Micro Devices'
business is subject to numerous risks and uncertainties, including
variability in operating results, the inability of certain of our
customers or suppliers to access their traditional sources of
credit, our industry's rapidly changing technology, our dependence
on a few large customers for a substantial portion of our revenue,
our ability to implement innovative technologies, our ability to
bring new products to market and achieve design wins, the efficient
and successful operation of our wafer fabrication facilities,
assembly facilities and test and tape and reel facilities, our
ability to adjust production capacity in a timely fashion in
response to changes in demand for our products, variability in
manufacturing yields, industry overcapacity and current
macroeconomic conditions, inaccurate product forecasts and
corresponding inventory and manufacturing costs, dependence on
third parties and our ability to manage channel partners and
customer relationships, our dependence on international sales and
operations, our ability to attract and retain skilled personnel and
develop leaders, the possibility that future acquisitions may
dilute our shareholders' ownership and cause us to incur debt and
assume contingent liabilities, fluctuations in the price of our
common stock, additional claims of infringement on our intellectual
property portfolio, lawsuits and claims relating to our products,
security breaches and other similar disruptions compromising our
information and exposing us to liability, the impact of stringent
environmental regulations, and the receipt of required regulatory
and shareholder approvals related to our proposed business
combination with TriQuint Semiconductor, Inc. and the completion of
the proposed transaction. These and other risks and uncertainties,
which are described in more detail in RF Micro Devices' most recent
Annual Report on Form 10-K and other reports and statements filed
with the Securities and Exchange Commission, could cause actual
results and developments to be materially different from those
expressed or implied by any of these forward-looking
statements.
Financial Tables to Follow
RF MICRO DEVICES,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(In thousands,
except per share data)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
September 27,
2014
|
|
September 28,
2013
|
|
September 27,
2014
|
|
September 28,
2013
|
Revenue
|
$
|
362,667
|
|
|
$
|
310,716
|
|
|
$
|
678,988
|
|
|
$
|
603,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
195,216
|
|
|
206,060
|
|
|
369,268
|
|
|
405,587
|
|
Research and
development
|
48,567
|
|
|
49,204
|
|
|
93,153
|
|
|
97,529
|
|
Marketing and
selling
|
19,179
|
|
|
18,918
|
|
|
38,069
|
|
|
38,327
|
|
General and
administrative
|
17,754
|
|
|
24,062
|
|
|
36,819
|
|
|
43,554
|
|
Other operating
expense
|
6,695
|
|
|
3,016
|
|
|
20,303
|
|
|
6,024
|
|
Total costs and
expenses
|
287,411
|
|
|
301,260
|
|
|
557,612
|
|
|
591,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
75,256
|
|
|
9,456
|
|
|
121,376
|
|
|
12,691
|
|
Other expense,
net
|
(18)
|
|
|
(999)
|
|
|
(73)
|
|
|
(2,059)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
75,238
|
|
|
$
|
8,457
|
|
|
$
|
121,303
|
|
|
$
|
10,632
|
|
Income tax
expense
|
(11,927)
|
|
|
(2,565)
|
|
|
(19,345)
|
|
|
(3,179)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
63,311
|
|
|
$
|
5,892
|
|
|
$
|
101,958
|
|
|
$
|
7,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share,
diluted
|
$
|
0.21
|
|
|
$
|
0.02
|
|
|
$
|
0.34
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
outstanding diluted shares
|
296,535
|
|
|
287,629
|
|
|
295,586
|
|
|
287,367
|
|
RF MICRO DEVICES,
INC. AND SUBSIDIARIES
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands,
except percentages and per share data)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
September 27,
2014
|
|
June 28,
2014
|
|
September 28,
2013
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
75,256
|
|
|
$
|
46,120
|
|
|
$
|
9,456
|
|
Share-based
compensation expense
|
9,543
|
|
|
9,169
|
|
|
10,436
|
|
Amortization of
intangible assets
|
6,801
|
|
|
6,966
|
|
|
6,746
|
|
Restructuring and
disposal costs
|
262
|
|
|
1,315
|
|
|
4,015
|
|
Certain consulting
costs
|
—
|
|
|
—
|
|
|
4,800
|
|
IPR litigation
costs
|
1,992
|
|
|
6,014
|
|
|
1,902
|
|
Acquisition and
integration related costs
|
5,461
|
|
|
8,453
|
|
|
—
|
|
Other expenses
(including loss (gain) on PP&E and start-up costs)
|
776
|
|
|
845
|
|
|
(167)
|
|
Non-GAAP operating
income
|
100,091
|
|
|
78,882
|
|
|
37,188
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
63,311
|
|
|
$
38,647
|
|
|
$
5,892
|
|
Share-based
compensation expense
|
9,543
|
|
|
9,169
|
|
|
10,436
|
|
Amortization of
intangible assets
|
6,801
|
|
|
6,966
|
|
|
6,746
|
|
Restructuring and
disposal costs
|
262
|
|
|
1,315
|
|
|
4,015
|
|
Certain consulting
costs
|
—
|
|
|
—
|
|
|
4,800
|
|
IPR litigation
costs
|
1,992
|
|
|
6,014
|
|
|
1,902
|
|
Acquisition and
integration related costs
|
5,461
|
|
|
8,453
|
|
|
—
|
|
Other expenses
(including loss (gain) on PP&E and start-up costs)
|
776
|
|
|
845
|
|
|
(167)
|
|
Non-cash interest
expense on convertible subordinated notes
|
—
|
|
|
240
|
|
|
1,213
|
|
Income from equity
investment
|
—
|
|
|
—
|
|
|
(116)
|
|
Tax
adjustments
|
1,828
|
|
|
(321)
|
|
|
(780)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
$
|
89,974
|
|
|
$
|
71,328
|
|
|
$
|
33,941
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average
outstanding diluted shares
|
296,535
|
|
|
294,637
|
|
|
287,629
|
|
Diluted
share-based awards
|
—
|
|
|
—
|
|
|
—
|
|
Non-GAAP weighted
average outstanding diluted shares
|
296,535
|
|
|
294,637
|
|
|
287,629
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
per share, diluted
|
$
|
0.30
|
|
|
$
|
0.24
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
RF MICRO DEVICES,
INC. AND SUBSIDIARIES
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands,
except percentages)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
September 27,
2014
|
|
June 28,
2014
|
|
September 28,
2013
|
GAAP gross
profit/margin
|
$
|
167,451
|
|
46.2
|
%
|
|
$
|
142,269
|
|
45.0
|
%
|
|
$
|
104,656
|
|
33.7
|
%
|
Adjustment for
intangible amortization
|
5,614
|
|
1.5
|
%
|
|
5,779
|
|
1.8
|
%
|
|
5,559
|
|
1.8
|
%
|
Adjustment for
share-based compensation
|
1,004
|
|
0.3
|
%
|
|
928
|
|
0.3
|
%
|
|
1,357
|
|
0.4
|
%
|
Restructuring and
disposal costs
|
(196)
|
|
(0.1)%
|
|
|
4
|
|
—
|
%
|
|
763
|
|
0.3
|
%
|
Non-cash deferred royalty revenue and equal and offsetting non-cash
prepaid royalty amortization ($647)
|
—
|
|
0.1
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
Non-GAAP gross
profit/margin
|
$
|
173,873
|
|
48.0
|
%
|
|
$
|
148,980
|
|
47.1
|
%
|
|
$
|
112,335
|
|
36.2
|
%
|
|
Three Months
Ended
|
Non-GAAP Operating
Income
|
September 27,
2014
|
(as a percentage
of sales)
|
|
|
|
|
|
GAAP operating
income
|
20.8
|
%
|
Share-based
compensation expense
|
2.6
|
%
|
Amortization of
intangible assets
|
1.9
|
%
|
Restructuring and
disposal costs
|
0.1
|
%
|
IPR litigation
costs
|
0.6
|
%
|
Acquisition and
integration related costs
|
1.5
|
%
|
Other expenses
(including loss on PP&E and start-up costs)
|
0.2
|
%
|
Non-GAAP operating
income
|
27.7
|
%
|
Free Cash Flow
(1)
|
Three Months
Ended
|
September 27,
2014
|
(In
millions)
|
|
|
|
|
|
Net cash
provided by operating activities
|
$
|
58.7
|
|
Purchases of
property and equipment
|
(19.3)
|
|
Free cash
flow
|
$
|
39.4
|
|
(1) Free Cash Flow is calculated as net cash provided by
operating activities minus property and equipment expenditures.
RF MICRO DEVICES,
INC. AND SUBSIDIARIES
ADDITIONAL
SELECTED NON-GAAP FINANCIAL MEASURES AND
RECONCILIATIONS
(In
thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
September 27,
2014
|
|
June 28,
2014
|
|
September 28,
2013
|
GAAP research and
development expense
|
$
|
48,567
|
|
|
$
|
44,586
|
|
|
$
|
49,204
|
|
Less:
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
2,147
|
|
|
1,994
|
|
|
2,109
|
|
Other
expense
|
—
|
|
|
—
|
|
|
92
|
|
Non-GAAP research and
development expense
|
$
|
46,420
|
|
|
$
|
42,592
|
|
|
$
|
47,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
September 27,
2014
|
|
June 28,
2014
|
|
September 28,
2013
|
GAAP marketing and
selling expense
|
$
|
19,179
|
|
|
$
|
18,890
|
|
|
$
|
18,918
|
|
Less:
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
1,524
|
|
|
1,180
|
|
|
1,556
|
|
Amortization of
intangible assets
|
1,187
|
|
|
1,187
|
|
|
1,187
|
|
Non-GAAP marketing
and selling expense
|
$
|
16,468
|
|
|
$
|
16,523
|
|
|
$
|
16,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
September 27,
2014
|
|
June 28,
2014
|
|
September 28,
2013
|
GAAP general and
administrative expense
|
$
|
17,754
|
|
|
$
|
19,065
|
|
|
$
|
24,062
|
|
Less:
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
4,867
|
|
|
5,067
|
|
|
5,391
|
|
Certain consulting
costs
|
—
|
|
|
—
|
|
|
4,800
|
|
IPR litigation
costs
|
1,992
|
|
|
3,014
|
|
|
1,902
|
|
Non-GAAP general and
administrative expense
|
$
|
10,895
|
|
|
$
|
10,984
|
|
|
$
|
11,969
|
|
|
|
|
|
|
|
|
|
|
RF MICRO DEVICES,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
|
|
|
|
|
September 27,
2014
|
|
March 29,
2014
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
110,675
|
|
|
$
|
171,898
|
|
Short-term
investments
|
130,603
|
|
|
72,067
|
|
Accounts receivable,
net
|
218,008
|
|
|
137,417
|
|
Inventories
|
159,152
|
|
|
125,703
|
|
Other current
assets
|
43,972
|
|
|
30,333
|
|
Total current
assets
|
662,410
|
|
|
537,418
|
|
|
|
|
|
|
|
Property and
equipment, net
|
207,113
|
|
|
195,996
|
|
Goodwill
|
103,901
|
|
|
103,901
|
|
Intangible assets,
net
|
41,966
|
|
|
54,990
|
|
Long-term
investments
|
2,150
|
|
|
3,841
|
|
Other non-current
assets
|
40,071
|
|
|
24,166
|
|
Total
assets
|
$
|
1,057,611
|
|
|
$
|
920,312
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
189,044
|
|
|
$
|
131,607
|
|
Current portion of
long-term debt, net
|
—
|
|
|
87,263
|
|
Other current
liabilities
|
19,704
|
|
|
1,103
|
|
Total current
liabilities
|
208,748
|
|
|
219,973
|
|
|
|
|
|
|
|
Other long-term
liabilities
|
46,958
|
|
|
23,988
|
|
Total
liabilities
|
255,706
|
|
|
243,961
|
|
|
|
|
|
|
|
Shareholders'
equity
|
801,905
|
|
|
676,351
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
1,057,611
|
|
|
$
|
920,312
|
|
SOURCE RF Micro Devices, Inc.