Inphi Corporation (NYSE:IPHI), a leader in high-speed data movement
interconnects, today announced financial results for its second
quarter ended June 30, 2017.
GAAP Results
Revenue from continuing operations in the second
quarter of 2017 was $84.4 million on a U.S. generally accepted
accounting principles (GAAP) basis, up 39% year-over-year, compared
with $60.5 million in the second quarter of 2016. This
revenue growth reflects an increase in demand for ColorZ inter-data
center solutions and coherent DSP products from the ClariPhy
acquisition.
Gross margin from continuing operations under GAAP
in the second quarter of 2017 was 56.7%, compared with 68.2% in the
second quarter of 2016. The decrease in gross margin was primarily
due to amortization of acquired intangibles, amortization of
inventory step up fair value related to the acquisition of ClariPhy
and change in the product mix.
GAAP loss from continuing operations in the second
quarter of 2017 was $7.9 million or (9.4%) of revenue from
continuing operations, compared to GAAP income from continuing
operations in the second quarter of 2016 of $4.0 million or 6.6% of
revenue from continuing operations.
GAAP net loss from continuing operations for the
second quarter of 2017 was $15.0 million, or ($0.36) per diluted
common share, compared with GAAP net income from continuing
operations of $0.9 million, or $0.02 per diluted common share in
the second quarter of 2016.
Inphi reports revenue, gross margin, operating
expenses, net income (loss), and earnings per share from continuing
operations in accordance with GAAP and on a non-GAAP basis. A
reconciliation of the GAAP to non-GAAP revenue, gross margin,
operating expenses, net income, earnings per share from continuing
operations, as well as a description of the items excluded from the
non-GAAP calculations, is included in the financial statements
portion of this press release.
Non-GAAP Results
Gross margin from continuing operations on a
non-GAAP basis in the second quarter of 2017 was 70.3%, compared to
73.6% in the second quarter of 2016. The decrease was largely
due to change in product mix.
Non-GAAP income from continuing operations in the
second quarter of 2017 was $17.6 million, or 20.8% of revenue from
continuing operations, compared with $14.8 million, or 24.4% of
revenue from continuing operations in the second quarter of
2016.
Non-GAAP net income from continuing operations in
the second quarter of 2017 was $15.6 million, or $0.35 per diluted
common share. This compares with non-GAAP net income from
continuing operations of $13.8 million, or $0.32 per diluted common
share in the second quarter of 2016.
"We executed in Q2 according to plan, with ColorZ
continuing its ramp, crossing 10,000 cumulative unit shipments with
excellent quality in live field operation,” said Ford Tamer,
President and CEO of Inphi Corporation. “We need to continue to be
patient regarding a full demand resumption in China metro and long
haul. Our design win momentum is increasing with customers
worldwide, across our 50G PAM4, 100G PAM4, our new metro coherent
DSP and our 64 Gigabaud - 16/64QAM capable TiA and driver product
lines,” he said.
First Half 2017 ResultsRevenue
from continuing operations in the six months ended June 30, 2017
was $178.0 million, compared with $114.6 million in the six months
ended June 30, 2016. GAAP net loss from continuing operations in
the six months ended June 30, 2017 was $26.2 million, or ($0.63)
per diluted share, on approximately 41.9 million diluted weighted
average common shares outstanding. This compares with GAAP net
income from continuing operations of $0.9 million, or $0.02 per
diluted share, on approximately 43.7 million diluted weighted
average common shares outstanding in the six months ended June 30,
2016.
Non-GAAP net income from continuing operations in
the six months ended June 30, 2017 was $35.2 million, or $0.79 per
diluted weighted average common share outstanding, on approximately
44.5 million diluted weighted average common shares outstanding.
This compares with non-GAAP net income from continuing operations
of $25.1 million in the six months ended June 30, 2016, or $0.57
per diluted weighted average common share outstanding, on
approximately 43.7 million diluted weighted average common shares
outstanding.
Business OutlookThe following
statements are based on the Company’s current expectations for the
third quarter of 2017. These statements are forward-looking and
actual results may differ materially. A reconciliation between the
GAAP and Non-GAAP outlook is included at the end of this press
release.
- Revenue in Q3 2017 is expected to be in a range of $82.4
million to $86.4 million. The midpoint being $84.4 million or
flat with Q2 2017.
- GAAP gross margin is expected to be approximately 59.5% to
61.0%.
- Non-GAAP gross margin is expected to be approximately 70.9% to
71.9%.
- Stock-based compensation expense is expected to be in the range
of $11.5 million to $12.5 million.
- GAAP results are expected to be a net loss in a range between a
net loss of $14.9 million to a net loss of $17.6 million, or
($0.35) – ($0.42) per basic share, based on 42.4 million estimated
weighted average basic shares outstanding.
- Non-GAAP net income, excluding stock-based compensation
expense, amortization of intangibles and inventory step up fair
value related to acquisitions and noncash interest on convertible
debt, is expected to be in the range of $14.4 million to $16.1
million, or $0.33-$0.37 per diluted share, based on 44.0 million
estimated diluted shares outstanding.
Quarterly Conference Call
TodayInphi plans to hold a conference call today at 5:00
p.m. Eastern Time / 2:00 p.m. Pacific Time with Ford Tamer,
president and chief executive officer, and John Edmunds, chief
financial officer, to discuss the second quarter 2017
results.
The call can be accessed by dialing 844-459-2451;
international callers should dial 765-507-2591, participant
passcode: 59302810. Please dial-in ten minutes prior to the
scheduled conference call time. A live and archived webcast of the
call will be available on Inphi’s website at
http://investors.inphi.com for up to 30 days after the
call.
About InphiInphi Corporation is a
leader in high-speed data movement. We move big data - fast,
throughout the globe, between data centers, and inside data
centers. Inphi's expertise in signal integrity results in
reliable data delivery, at high speeds, over a variety of
distances. As data volumes ramp exponentially due to video
streaming, social media, cloud-based services, and wireless
infrastructure, the need for speed has never been greater.
That's where we come in. Customers rely on Inphi's solutions to
develop and build out the Service Provider and Cloud
infrastructures, and data centers of tomorrow. To learn more
about Inphi, visit www.inphi.com.
Cautionary Note Concerning Forward-Looking
StatementsStatements in the press release and certain
matters to be discussed on the second quarter of 2017 conference
call regarding Inphi Corporation, which are not historical facts,
are “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may be identified by terms such as outlook, believe,
expect, may, will, provide, continue, could, and should, and the
negative of these terms or other similar expressions. These
statements include statements relating to: the Company’s business
outlook and current expectations for 2017, including with respect
to the third quarter of 2017, revenue, gross margin, stock-based
compensation expense, operating performance, net income or loss,
and earnings per share; the Company’s expectations regarding growth
opportunities in 2017 and 2018, including in the long haul, metro
and inter- and intra-data center markets; the Company’s plans
regarding ColorZ; the impact of inventory accumulation and recovery
of the metro and long haul markets in China and their effects on
revenue; “increase in momentum” or acceleration of design win
activity; and benefits of using non-GAAP financial measures.
These statements are based on current expectations and
assumptions that are subject to risks and uncertainties. Actual
results could differ materially from those anticipated as a result
of various factors, including: the Company’s ability to sustain
profitable operations due to its history of losses and accumulated
deficit; dependence on a limited number of customers for a
substantial portion of revenue and lack of long-term purchase
commitments from our customers; product defects; risk related to
intellectual property matters, lengthy sales cycle and competitive
selection process; lengthy and expensive qualification processes;
ability to develop new or enhanced products in a timely manner;
development of the markets that the Company targets; market demand
for the Company’s products; reliance on third parties to
manufacture, assemble and test products; ability to compete; and
other risks inherent in fabless semiconductor businesses. In
addition, actual results could differ materially due to changes in
tax rates or tax benefits available, changes in government
regulation, changes in claims that may or may not be asserted, as
well as changes in pending litigation. For a discussion of these
and other related risks, please refer to Inphi Corporation’s recent
SEC filings, including its Annual Report on Form 10-K for the year
ended December 31, 2016, which are available on the SEC’s website
at www.sec.gov. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date thereof. Inphi Corporation undertakes no obligation to update
forward-looking statements for any reason, except as required by
law, even as new information becomes available or other events
occur in the future.
Inphi, the Inphi logo and Think fast are registered
trademarks of Inphi Corporation. All other trademarks used herein
are the property of their respective owners.
INPHI CORPORATION |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(in thousands of dollars, except share and per share
amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
Revenue |
$ |
84,423 |
|
$ |
60,524 |
|
$ |
178,007 |
|
$ |
114,615 |
|
|
Cost of revenue |
|
36,588 |
|
|
19,275 |
|
|
76,659 |
|
|
36,396 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
47,835 |
|
|
41,249 |
|
|
101,348 |
|
|
78,219 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research
and development |
|
39,437 |
|
|
27,321 |
|
|
79,725 |
|
|
51,308 |
|
|
Sales and
marketing |
|
10,539 |
|
|
5,809 |
|
|
21,480 |
|
|
11,594 |
|
|
General
and administrative |
|
5,798 |
|
|
4,120 |
|
|
12,593 |
|
|
9,077 |
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
55,774 |
|
|
37,250 |
|
|
113,798 |
|
|
71,979 |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
|
(7,939 |
) |
|
3,999 |
|
|
(12,450 |
) |
|
6,240 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
of other income |
|
(6,657 |
) |
|
(2,753 |
) |
|
(12,967 |
) |
|
(5,416 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes |
|
(14,596 |
) |
|
1,246 |
|
|
(25,417 |
) |
|
824 |
|
|
Provision (benefit) for
income taxes |
|
371 |
|
|
303 |
|
|
823 |
|
|
(29 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from
continuing operations |
|
(14,967 |
) |
|
943 |
|
|
(26,240 |
) |
|
853 |
|
|
Net loss from
discontinued operations, net of tax |
|
- |
|
|
(412 |
) |
|
- |
|
|
(102 |
) |
|
Net income (loss) |
$ |
(14,967 |
) |
$ |
531 |
|
$ |
(26,240 |
) |
$ |
751 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations |
$ |
(0.36 |
) |
$ |
0.02 |
|
$ |
(0.63 |
) |
$ |
0.02 |
|
|
Net loss
from discontinued operations |
|
- |
|
|
(0.01 |
) |
|
- |
|
|
- |
|
|
|
$ |
(0.36 |
) |
$ |
0.01 |
|
$ |
(0.63 |
) |
$ |
0.02 |
|
|
Diluted |
|
|
|
|
|
|
|
|
|
Net
income (loss) from continuing operations |
$ |
(0.36 |
) |
$ |
0.02 |
|
$ |
(0.63 |
) |
$ |
0.02 |
|
|
Net loss
from discontinued operations |
|
- |
|
|
(0.01 |
) |
|
- |
|
|
- |
|
|
|
$ |
(0.36 |
) |
$ |
0.01 |
|
$ |
(0.63 |
) |
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
used in computing |
|
|
|
|
|
|
|
|
|
earnings
per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
42,137,084 |
|
|
40,412,319 |
|
|
41,855,510 |
|
|
40,085,260 |
|
|
Diluted |
|
42,137,084 |
|
|
43,838,488 |
|
|
41,855,510 |
|
|
43,680,317 |
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents details of stock-based compensation
expense included in each functional line item in the consolidated
statements of operations above:
INPHI CORPORATION |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands of dollars, except share and per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
(in thousands of dollars) |
|
|
(Unaudited) |
Cost of revenue |
$ |
537 |
|
$ |
426 |
|
$ |
1,098 |
|
$ |
761 |
|
Research and
development |
|
7,274 |
|
|
4,684 |
|
|
13,189 |
|
|
8,398 |
|
Sales and
marketing |
|
2,119 |
|
|
952 |
|
|
3,801 |
|
|
1,728 |
|
General and
administrative |
|
1,315 |
|
|
662 |
|
|
2,387 |
|
|
1,835 |
|
Discontinued
operations |
|
- |
|
|
1,056 |
|
|
- |
|
|
2,010 |
|
|
|
|
|
|
|
|
|
|
|
$ |
11,245 |
|
$ |
7,780 |
|
$ |
20,475 |
|
$ |
14,732 |
|
|
|
|
|
|
|
|
|
|
INPHI CORPORATION |
|
CONSOLIDATED BALANCE SHEETS |
|
(in thousands of dollars) |
|
(Unaudited) |
|
|
|
June 30,
2017 |
|
December 31, 2016 |
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
$ |
162,290 |
|
$ |
144,867 |
|
Short-term investments in marketable securities |
|
218,636 |
|
|
249,476 |
|
Accounts
receivable, net |
|
63,253 |
|
|
49,999 |
|
Inventories |
|
34,456 |
|
|
32,039 |
|
Prepaid
expenses and other current assets |
|
24,076 |
|
|
23,139 |
|
Total
current assets |
|
502,711 |
|
|
499,520 |
|
|
|
|
|
|
|
Property and equipment,
net |
|
55,356 |
|
|
44,471 |
|
Goodwill |
|
104,441 |
|
|
105,077 |
|
Identifiable intangible
assets |
|
300,588 |
|
|
327,063 |
|
Other noncurrent
assets |
|
11,868 |
|
|
14,464 |
|
Total assets |
$ |
974,964 |
|
$ |
990,595 |
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts
payable |
$ |
21,014 |
|
$ |
14,039 |
|
Accrued
expenses and other current liabilities |
|
43,021 |
|
|
48,601 |
|
Deferred
revenue |
|
5,776 |
|
|
3,630 |
|
|
|
|
|
|
|
Total
current liabilities |
|
69,811 |
|
|
66,270 |
|
|
|
|
|
|
|
Convertible debt |
|
408,825 |
|
|
396,857 |
|
Other liabilities |
|
55,678 |
|
|
64,944 |
|
Total
liabilities |
|
534,314 |
|
|
528,071 |
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
Common
stock |
|
42 |
|
|
41 |
|
Additional paid-in capital |
|
465,286 |
|
|
459,928 |
|
Retained
earnings (accumulated deficit) (1) |
|
(25,481 |
) |
|
1,976 |
|
Accumulated other comprehensive income |
|
803 |
|
|
579 |
|
Total stockholders’
equity |
|
440,650 |
|
|
462,524 |
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
$ |
974,964 |
|
$ |
990,595 |
|
|
|
|
|
|
|
(1) The accumulated deficit in 2017 includes the
cumulative effect of accounting change of $1,217. |
|
|
|
|
|
|
|
|
|
INPHI CORPORATIONRECONCILIATION OF
GAAP TO NON-GAAP MEASURES(in
thousands of dollars, except share and per share amounts)
To supplement the financial data presented on a
GAAP basis, the Company discloses certain non-GAAP financial
measures, which exclude stock-based compensation, legal, transition
costs and other expenses, purchase price fair value adjustments
related to acquisitions, non-cash interest expense related to
convertible debt, indirect expenses associated with discontinued
operations and deferred tax asset valuation allowance. These
non-GAAP financial measures are not in accordance with GAAP. These
results should only be used to evaluate the Company’s results of
operations in conjunction with the corresponding GAAP measures. The
Company believes that its non-GAAP financial information provides
useful information to management and investors regarding financial
and business trends relating to its financial condition and results
of operations because it excludes charges or benefits that
management considers to be outside of the Company’s core operating
results. The Company believes that the non-GAAP measures of
gross margin, income from operations, net income and earnings per
share, in combination with the Company’s financial results
calculated in accordance with GAAP, provide investors with
additional perspective and a more meaningful understanding of the
Company’s ongoing operating performance. In addition, the Company’s
management uses these non-GAAP measures to review and assess the
financial performance of the Company, to determine executive
officer incentive compensation and to plan and forecast performance
in future periods. The Company’s non-GAAP measurements are
not prepared in accordance with GAAP, and are not an alternative to
GAAP financial information, and may be calculated differently than
non-GAAP financial information disclosed by other companies.
RECONCILIATION OF
GAAP NET INCOME TO NON-GAAP
NET INCOME |
|
|
(in thousands of dollars, except share and per share
amounts) |
|
|
(Unaudited) |
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
GAAP gross
margin to Non-GAAP gross margin |
|
|
|
|
|
|
|
|
|
|
GAAP gross margin |
$ |
47,835 |
|
$ |
41,249 |
|
$ |
101,348 |
|
$ |
78,219 |
|
|
|
Adjustments to GAAP
gross margin: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
537 |
|
(a) |
426 |
|
(a) |
1,098 |
|
(a) |
761 |
|
(a) |
|
Acquisition related expenses |
|
44 |
|
(b) |
- |
|
|
103 |
|
(b) |
47 |
|
(b) |
|
Amortization of inventory step-up |
|
3,693 |
|
(c) |
- |
|
|
9,010 |
|
(c) |
241 |
|
(c) |
|
Amortization of intangibles |
|
7,250 |
|
(d) |
2,875 |
|
(d) |
14,500 |
|
(d) |
5,750 |
|
(d) |
|
Depreciation on step-up values of fixed assets |
|
15 |
|
(e) |
24 |
|
(e) |
31 |
|
(e) |
46 |
|
(e) |
|
Non-GAAP gross
margin |
$ |
59,374 |
|
$ |
44,574 |
|
$ |
126,090 |
|
$ |
85,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses to Non-GAAP operating expenses |
|
|
|
|
|
|
|
|
|
|
GAAP research and
development |
$ |
39,437 |
|
$ |
27,321 |
|
$ |
79,725 |
|
$ |
51,308 |
|
|
|
Adjustments to GAAP
research and development: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(7,274 |
) |
(a) |
(4,684 |
) |
(a) |
(13,189 |
) |
(a) |
(8,398 |
) |
(a) |
|
Acquisition related expenses |
|
(418 |
) |
(b) |
- |
|
|
(1,088 |
) |
(b) |
(368 |
) |
(b) |
|
Depreciation on step-up values of fixed assets |
|
(150 |
) |
(e) |
(66 |
) |
(e) |
(304 |
) |
(e) |
(122 |
) |
(e) |
|
Indirect
expenses associated with discontinued operations |
|
- |
|
|
(816 |
) |
(f) |
- |
|
|
(1,632 |
) |
(f) |
|
Non-GAAP research and
development |
$ |
31,595 |
|
$ |
21,755 |
|
$ |
65,144 |
|
$ |
40,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and
marketing |
$ |
10,539 |
|
$ |
5,809 |
|
$ |
21,480 |
|
$ |
11,594 |
|
|
|
Adjustments to GAAP
sales and marketing: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(2,119 |
) |
(a) |
(952 |
) |
(a) |
(3,801 |
) |
(a) |
(1,728 |
) |
(a) |
|
Acquisition related expenses |
|
(179 |
) |
(b) |
- |
|
|
(414 |
) |
(b) |
(193 |
) |
(b) |
|
Amortization of intangibles |
|
(2,431 |
) |
(d) |
(204 |
) |
(d) |
(4,862 |
) |
(d) |
(408 |
) |
(d) |
|
Depreciation on step-up values of fixed assets |
|
(27 |
) |
(e) |
(22 |
) |
(e) |
(56 |
) |
(e) |
(43 |
) |
(e) |
|
Non-GAAP sales and
marketing |
$ |
5,783 |
|
$ |
4,631 |
|
$ |
12,347 |
|
$ |
9,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and
administrative |
$ |
5,798 |
|
$ |
4,120 |
|
$ |
12,593 |
|
$ |
9,077 |
|
|
|
Adjustments to GAAP
general and administrative: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(1,315 |
) |
(a) |
(662 |
) |
(a) |
(2,387 |
) |
(a) |
(1,835 |
) |
(a) |
|
Acquisition related expenses |
|
(29 |
) |
(b) |
- |
|
|
(750 |
) |
(b) |
(37 |
) |
(b) |
|
Amortization of intangibles |
|
(116 |
) |
(d) |
(46 |
) |
(d) |
(232 |
) |
(d) |
(92 |
) |
(d) |
|
Depreciation on step-up values of fixed assets |
|
62 |
|
(e) |
(5 |
) |
(e) |
131 |
|
(e) |
(7 |
) |
(e) |
|
Non-GAAP general and
administrative |
$ |
4,400 |
|
$ |
3,407 |
|
$ |
9,355 |
|
$ |
7,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total
operating expenses |
$ |
41,778 |
|
$ |
29,793 |
|
$ |
86,846 |
|
$ |
57,116 |
|
|
|
Non-GAAP income from
operations |
$ |
17,596 |
|
$ |
14,781 |
|
$ |
39,244 |
|
$ |
27,948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss) to Non-GAAP net income |
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
from continuing operations |
$ |
(14,967 |
) |
$ |
943 |
|
$ |
(26,240 |
) |
$ |
853 |
|
|
|
Adjusting items to GAAP
net income (loss): |
|
|
|
|
|
|
|
|
|
|
Operating
expenses related to stock-based |
|
|
|
|
|
|
|
|
|
|
compensation expense |
|
11,245 |
|
(a) |
6,724 |
|
(a) |
20,475 |
|
(a) |
12,722 |
|
(a) |
|
Acquisition related expenses |
|
670 |
|
(b) |
- |
|
|
2,355 |
|
(b) |
645 |
|
(b) |
|
Amortization of inventory fair value step-up |
|
3,693 |
|
(c) |
- |
|
|
9,010 |
|
(c) |
241 |
|
(c) |
|
Amortization of intangibles related to purchase price |
|
9,797 |
|
(d) |
3,125 |
|
(d) |
19,594 |
|
(d) |
6,250 |
|
(d) |
|
Depreciation on step-up values of fixed assets |
|
130 |
|
(e) |
117 |
|
(e) |
260 |
|
(e) |
218 |
|
(e) |
|
Indirect
expenses associated with discontinued operations |
|
- |
|
|
816 |
|
(f) |
- |
|
|
1,632 |
|
(f) |
|
Loss on
retirement of certain property and equipment from ClariPhy
acquisition |
|
33 |
|
(g) |
- |
|
|
77 |
|
(g) |
- |
|
|
|
Accretion
and amortization expense on convertible debt |
|
6,073 |
|
(h) |
2,628 |
|
(h) |
11,968 |
|
(h) |
5,006 |
|
(h) |
|
Valuation
allowance and tax effect of the adjustments above from |
|
|
|
|
|
|
|
|
|
|
GAAP to
non-GAAP |
|
(1,043 |
) |
(i) |
(539 |
) |
(i) |
(2,320 |
) |
(i) |
(2,462 |
) |
(i) |
|
Non-GAAP net
income |
$ |
15,631 |
|
$ |
13,814 |
|
$ |
35,179 |
|
$ |
25,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing non-GAAP basic earnings per share |
|
42,137,084 |
|
|
40,412,319 |
|
|
41,855,510 |
|
|
40,085,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing non-GAAP diluted earnings per share before
offsetting shares from call option |
|
44,051,591 |
|
|
43,838,488 |
|
|
44,870,267 |
|
|
43,680,317 |
|
|
|
Offsetting shares from
call option |
|
3,145 |
|
|
- |
|
|
402,583 |
|
|
- |
|
|
|
Shares used in
computing non-GAAP diluted earnings per share |
|
44,048,446 |
|
|
43,838,488 |
|
|
44,467,684 |
|
|
43,680,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per
share: |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.37 |
|
$ |
0.34 |
|
$ |
0.84 |
|
$ |
0.63 |
|
|
|
Diluted |
$ |
0.35 |
|
$ |
0.32 |
|
$ |
0.79 |
|
$ |
0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin as a
% of revenue |
|
56.7 |
% |
|
68.2 |
% |
|
56.9 |
% |
|
68.2 |
% |
|
|
Stock-based
compensation |
|
0.6 |
% |
|
0.7 |
% |
|
0.6 |
% |
|
0.7 |
% |
|
|
Amortization of
inventory fair value step-up and intangibles |
|
13.0 |
% |
|
4.7 |
% |
|
13.3 |
% |
|
5.3 |
% |
|
|
Non-GAAP gross margin
as a % of revenue |
|
70.3 |
% |
|
73.6 |
% |
|
70.8 |
% |
|
74.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Reflects the stock-based compensation expense recorded
relating to stock based awards. The Company excludes this item when
it evaluates the continuing operational performance of the Company
as management believes this GAAP measure is not indicative of its
core operating performance.(b) Reflects the legal, transition
costs and other expenses related to acquisitions. The
transition costs also include short-term cash retention bonus
payments to Cortina and ClariPhy employees that were part of the
purchase agreement when the Company acquired Cortina and
ClariPhy. The Company excludes this item when it evaluates
the continuing operational performance of the Company as management
believes this GAAP measure is not indicative of its core operating
performance.(c) Reflects the cost of goods sold fair value
amortization of inventory step-up related to acquisitions.
The Company excludes these items when it evaluates the continuing
operational performance of the Company as management believes this
GAAP measure is not indicative of its core operating
performance.(d) Reflects the fair value amortization of
intangibles related to acquisitions. The Company excludes
these items when it evaluates the continuing operational
performance of the Company as management believes this GAAP measure
is not indicative of its core operating performance.(e)
Reflects the fair value depreciation of fixed assets related
to acquisitions. The Company excludes these items when it
evaluates the continuing operational performance of the Company as
management believes this GAAP measure is not indicative of its core
operating performance.(f) Reflects indirect expenses which
includes engineering software tools and lease expenses associated
with discontinued operations. The Company excludes these
items when it evaluates the continuing operational performance of
the Company as management believes this GAAP measure is not
indicative of its continuing operating performance.(g)
Reflects the loss on disposal of certain property and
equipment from the ClariPhy acquisition. The Company excludes
these items when it evaluates the continuing operational
performance of the Company as management believes this GAAP measure
is not indicative of its core operating performance.(h)
Reflects the accretion and amortization expense on
convertible debt. The Company excludes these items when it
evaluates the continuing operational performance of the Company as
management believes this GAAP measure is not indicative of its core
operating performance.(i) Reflects the change in valuation
allowance and delta in interim period tax allocation from GAAP to
non-GAAP related to non-GAAP adjustments. The Company excludes this
item when it evaluates the continuing operational performance of
the Company as management believes this GAAP measure is not
indicative of its core operating performance.
INPHI CORPORATION |
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURES
-THIRD QUARTER 2017 GUIDANCE |
|
(in thousands of dollars, except share and per share
amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ending September
30, 2017 |
|
|
|
High |
|
Low |
|
Estimated GAAP net
loss |
$ |
(14,900 |
) |
$ |
(17,600 |
) |
|
Adjusting items to
estimated GAAP net loss: |
|
|
|
|
|
Operating
expenses related to stock-based |
|
|
|
|
|
compensation expense |
|
11,500 |
|
|
12,500 |
|
|
Amortization of intangibles and fair value step up on acquired
inventories |
11,390 |
|
|
11,390 |
|
|
Other
acquisition and transition related expenses |
|
660 |
|
|
660 |
|
|
Amortization of convertible debt interest cost |
|
6,100 |
|
|
6,100 |
|
|
Tax
effect of GAAP to non-GAAP adjustments |
|
1,360 |
|
|
1,360 |
|
|
Estimated non-GAAP net
income |
$ |
16,110 |
|
$ |
14,410 |
|
|
|
|
|
|
|
|
Shares used in
computing estimated non-GAAP diluted earnings per share |
|
44,049,000 |
|
|
44,049,000 |
|
|
|
|
|
|
|
|
Estimated non-GAAP
diluted earnings per share |
$ |
0.37 |
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
86,400 |
|
$ |
82,400 |
|
|
|
|
|
|
|
|
GAAP gross margin |
$ |
52,740 |
|
$ |
49,040 |
|
|
as a % of
revenue |
|
61.0 |
% |
|
59.5 |
% |
|
Adjusting items to
estimated GAAP gross margin: |
|
|
|
|
|
Stock-based compensation |
|
600 |
|
|
600 |
|
|
Inventory
step up, fixed assets depreciation step up and acquisition
related expenses |
|
1,520 |
|
|
1,520 |
|
|
Amortization of intangibles |
|
7,250 |
|
|
7,250 |
|
|
Estimated non-GAAP
gross margin |
$ |
62,110 |
|
$ |
58,410 |
|
|
as a % of
revenue |
|
71.9 |
% |
|
70.9 |
% |
|
|
|
|
|
|
|
Corporate Contact:
Kim Markle
Inphi
408-217-7329
kmarkle@inphi.com
Investor Contact:
Deborah Stapleton
650-815-1239
deb@stapleton.com
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