Wolfspeed, Inc. (NYSE: WOLF), formerly known as Cree, Inc.,
today announced revenue of $156.6 million for its first quarter of
fiscal 2022, ended September 26, 2021. This represents a 36%
increase compared to revenue from continuing operations of $115.5
million reported for the first quarter of fiscal 2020, and a 7%
increase compared to the fourth quarter of fiscal 2021. GAAP net
loss from continuing operations for the first quarter of fiscal
2022 was $70.1 million, or $0.60 per diluted share, compared to
GAAP net loss from continuing operations of $75.3 million, or $0.69
per diluted share, for the first quarter of fiscal 2021. On a
non-GAAP basis, net loss from continuing operations for the first
quarter of fiscal 2022 was $23.8 million, or $0.21 per diluted
share, compared to non-GAAP net loss from continuing operations for
the first quarter of fiscal 2021 of $26.5 million, or $0.24 per
diluted share.
"We are pleased to report a solid fiscal first quarter, our
fifth consecutive quarter of revenue growth bolstered by the
rapidly expanding marketplace for Silicon Carbide products. We are
driving the transition to Silicon Carbide-based solutions during a
period of momentous change, which is demonstrated by our expanding
list of customers and formal name change," said Wolfspeed Chief
Executive Officer, Gregg Lowe. "We remain confident that the
business is well positioned to realize its full potential as a
pure-play global semiconductor powerhouse."
Business Outlook:
For its second quarter of fiscal 2022, Wolfspeed targets revenue
in a range of $165 million to $175 million. GAAP net loss is
targeted at $69 million to $73 million, or $0.59 to $0.63 per
diluted share. Non-GAAP net loss is targeted to be in a range of
$19 million to $23 million, or $0.16 to $0.20 per diluted share.
Targeted non-GAAP net loss excludes $50 million of estimated
expenses, net of tax, related to stock-based compensation expense,
amortization or impairment of acquisition-related intangibles,
factory optimization restructuring and start-up costs, net
accretion on convertible notes, interest income from
transaction-related note receivable and project, transformation,
transaction and transition costs.
Quarterly Conference Call:
Wolfspeed will host a conference call at 5:00 p.m. Eastern time
today to review the highlights of the first quarter results and the
fiscal second quarter 2022 business outlook, including significant
factors and assumptions underlying the targets noted above.
The conference call will be available to the public through a
live audio web broadcast via the Internet. For webcast details,
visit Wolfspeed's website at investor.wolfspeed.com/events.cfm.
Supplemental financial information, including the non-GAAP
reconciliation attached to this press release, is available on
Wolfspeed's website at investor.wolfspeed.com/results.cfm.
About Wolfspeed, Inc.
Wolfspeed (NYSE: WOLF) leads the market in the worldwide
adoption of Silicon Carbide and GaN technologies. We provide
industry-leading solutions for efficient energy consumption and a
sustainable future. Wolfspeed’s product families include Silicon
Carbide materials, power-switching devices and RF devices targeted
for various applications such as electric vehicles, fast charging,
5G, renewable energy and storage, and aerospace and defense. We
unleash the power of possibilities through hard work, collaboration
and a passion for innovation. Learn more at www.wolfspeed.com.
Wolfspeed® is a registered trademark of Wolfspeed, Inc.
Non-GAAP Financial Measures:
This press release highlights the Company's financial results on
both a GAAP and a non-GAAP basis. The GAAP results include certain
costs, charges and expenses that are excluded from non-GAAP
results. By publishing the non-GAAP measures, management intends to
provide investors with additional information to further analyze
the Company's performance, core results and underlying trends.
Wolfspeed's management evaluates results and makes operating
decisions using both GAAP and non-GAAP measures included in this
press release. Non-GAAP results are not prepared in accordance with
GAAP and non-GAAP information should be considered a supplement to,
and not a substitute for, financial statements prepared in
accordance with GAAP. Investors and potential investors are
encouraged to review the reconciliation of non-GAAP financial
measures to their most directly comparable GAAP measures attached
to this press release.
Change in Estimate:
As a result of the LED Business Divestiture and the Company's
continued investment in 200mm technology, the Company evaluated the
useful lives applied to certain machinery and equipment assets by
considering industry standards and reviewing the assets' historical
and estimated future use. In the first quarter of fiscal 2022, the
Company increased the expected useful lives of these assets by two
to five years to more closely reflect the estimated economic lives
of those assets. This change in estimate was applied prospectively
effective for the first quarter of fiscal 2022 and resulted in a
decrease in depreciation expense of $8.4 million for the first
quarter of fiscal 2022. Approximately $7.1 million of the decrease
in depreciation expense resulted in a reduction of inventory as of
September 26, 2021 and will impact cost of revenue, net in future
periods as the inventory is relieved. The remaining $1.3 million of
reduced depreciation expense resulted in the following: (1) an
improvement in gross profit of $0.5 million; (2) an improvement in
both loss before income taxes and net loss of $1.3 million; and (3)
an improvement in basic and diluted loss per share of $0.01 per
share.
Forward Looking Statements:
The schedules attached to this release are an integral part of
the release. This press release contains forward-looking statements
involving risks and uncertainties, both known and unknown, that may
cause Wolfspeed’s actual results to differ materially from those
indicated in the forward-looking statements. Forward-looking
statements by their nature address matters that are, to different
degrees, uncertain, such as statements about our plans to grow the
business and our ability to achieve our targets for the second
quarter of fiscal 2022 and beyond. Actual results could differ
materially due to a number of factors, including but not limited
to, risks relating to the ongoing COVID-19 pandemic, including the
risk of new and different government restrictions that limit our
ability to do business, the risk of infection in our workforce and
subsequent impact on our ability to conduct business, the risk that
our supply chain, including our contract manufacturers, or customer
demand may be negatively impacted, the risk posed by vaccine
resistance and the emergence of fast-spreading variants, the risk
that the COVID-19 pandemic will lead to a global recession and the
potential for costs associated with our operations during the
fiscal 2022 second quarter and future quarters to be greater than
we anticipate as a result of all of these factors; the risk that we
may not obtain sufficient orders to achieve our targeted revenues;
price competition in key markets; the risk that we may experience
production difficulties that preclude us from shipping sufficient
quantities to meet customer orders or that result in higher
production costs, lower yields and lower margins; our ability to
lower costs; the risk that our results will suffer if we are unable
to balance fluctuations in customer demand and capacity, including
bringing on additional capacity on a timely basis to meet customer
demand; the risk that longer manufacturing lead times may cause
customers to fulfill their orders with a competitor's products
instead; product mix; risks associated with the ramp-up of
production of our new products, and our entry into new business
channels different from those in which we have historically
operated; risks associated with our factory optimization plan and
construction of a new device fabrication facility, including design
and construction delays and cost overruns, issues in installing and
qualifying new equipment and ramping production, poor production
process yields and quality control, and potential increases to our
restructuring costs; the risk that we or our channel partners are
not able to develop and expand customer bases and accurately
anticipate demand from end customers, which can result in increased
inventory and reduced orders as we experience wide fluctuations in
supply and demand; the risk that the economic and political
uncertainty caused by the tariffs imposed by the United States on
Chinese goods, and corresponding Chinese tariffs and currency
devaluation in response, may negatively impact demand for our
products; risks related to international sales and purchases;
ongoing uncertainty in global economic conditions, infrastructure
development or customer demand that could negatively affect product
demand, collectability of receivables and other related matters as
consumers and businesses may defer purchases or payments, or
default on payments; risks resulting from the concentration of our
business among few customers, including the risk that customers may
reduce or cancel orders or fail to honor purchase commitments; the
risk that our investments may experience periods of significant
market value and interest rate volatility causing us to recognize
fair value losses on our investment; the risk posed by managing an
increasingly complex supply chain that has the ability to supply a
sufficient quantity of raw materials, subsystems and finished
products with the required specifications and quality; the risk we
may be required to record a significant charge to earnings if our
remaining goodwill or amortizable assets become impaired; risks
relating to confidential information theft or misuse, including
through cyber-attacks or cyber intrusion; our ability to complete
development and commercialization of products under development;
the rapid development of new technology and competing products that
may impair demand or render our products obsolete; the potential
lack of customer acceptance for our products; risks associated with
ongoing litigation; the risk that customers do not maintain their
favorable perception of our brand and products, resulting in lower
demand for our products; the risk that our products fail to perform
or fail to meet customer requirements or expectations, resulting in
significant additional costs; issues, delays or complications in
completing required transition activities to allow the Company's
now divested LED Products business to operate under the SMART
Global Holdings, Inc. (SGH) portfolio of businesses after the
closing, including incurring unanticipated costs to complete such
activities; risks associated with strategic transactions, including
the possibility that we may not realize the full purchase price
contemplated in connection with the sale of our former LED Products
or Lighting Products business units; and other factors discussed in
our filings with the Securities and Exchange Commission (SEC),
including our report on Form 10-K for the fiscal year ended June
27, 2021, and subsequent reports filed with the SEC. These
forward-looking statements represent Wolfspeed's judgment as of the
date of this release. Except as required under the U.S. federal
securities laws and the rules and regulations of the SEC, Wolfspeed
disclaims any intent or obligation to update any forward-looking
statements after the date of this release, whether as a result of
new information, future events, developments, changes in
assumptions or otherwise.
Wolfspeed® is a registered trademark of Wolfspeed, Inc.
WOLFSPEED, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited)
Three months ended
(in millions of U.S. Dollars, except per
share data)
September 26, 2021
September 27, 2020
Revenue, net
$156.6
$115.5
Cost of revenue, net
107.2
80.0
Gross profit
49.4
35.5
Gross margin percentage
32
%
31
%
Operating expenses:
Research and development
49.9
41.2
Sales, general and administrative
49.0
44.0
Amortization or impairment of
acquisition-related intangibles
3.6
3.6
(Gain) loss on disposal or impairment of
other assets
(0.2
)
0.3
Other operating expense
12.8
8.6
Total operating expense
115.1
97.7
Operating loss
(65.7
)
(62.2
)
Operating loss percentage
(42
)%
(54
)%
Non-operating expense, net
4.1
13.9
Loss before income taxes
(69.8
)
(76.1
)
Income tax expense (benefit)
0.3
(0.8
)
Net loss from continuing
operations
(70.1
)
(75.3
)
Net loss from discontinued operations
—
(108.8
)
Net loss
(70.1
)
(184.1
)
Net income from discontinued operations
attributable to noncontrolling interest
—
0.3
Net loss attributable to controlling
interest
($70.1
)
($184.4
)
Basic and diluted loss per
share
Continuing operations
($0.60
)
($0.69
)
Net loss attributable to controlling
interest
($0.60
)
($1.68
)
Weighted average shares - basic and
diluted (in thousands)
115,919
109,705
WOLFSPEED, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in millions of U.S. Dollars)
September 26, 2021
June 27, 2021
Assets
Current assets:
Cash, cash equivalents, and short-term
investments
$857.8
$1,154.6
Accounts receivable, net
106.4
95.9
Inventories
183.0
166.6
Income taxes receivable
6.5
6.4
Prepaid expenses
33.3
25.7
Other current assets
43.2
27.9
Current assets held for sale
1.7
1.6
Total current assets
1,231.9
1,478.7
Property and equipment, net
1,343.3
1,292.3
Goodwill
359.2
359.2
Intangible assets, net
136.5
140.5
Long-term receivables
140.0
138.4
Deferred tax assets
1.0
1.0
Other assets
36.9
35.5
Long-term assets of discontinued
operations
—
1.2
Total assets
$3,248.8
$3,446.8
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable and accrued expenses
$247.7
$381.1
Accrued contract liabilities
25.6
22.9
Income taxes payable
0.4
0.4
Finance lease liabilities
8.7
5.2
Other current liabilities
36.6
38.6
Current liabilities of discontinued
operations
—
0.6
Total current liabilities
319.0
448.8
Long-term liabilities:
Convertible notes, net
834.4
823.9
Deferred tax liabilities
2.7
2.5
Finance lease liabilities - long-term
9.9
10.0
Other long-term liabilities
43.4
44.5
Long-term liabilities of discontinued
operations
—
0.6
Total long-term liabilities
890.4
881.5
Shareholders’ equity:
Common stock
0.1
0.1
Additional paid-in-capital
3,670.6
3,676.8
Accumulated other comprehensive income
1.9
2.7
Accumulated deficit
(1,633.2
)
(1,563.1
)
Total shareholders’ equity
2,039.4
2,116.5
Total liabilities and shareholders’
equity
$3,248.8
$3,446.8
WOLFSPEED, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited)
Three months ended
(in millions of U.S. Dollars)
September 26, 2021
September 27, 2020
Operating activities:
Net loss
($70.1
)
($184.1
)
Net loss from discontinued operations
—
(108.8
)
Net loss from continuing operations
(70.1
)
(75.3
)
Adjustments to reconcile net loss from
continuing operations to cash (used in) provided by operating
activities:
Depreciation and amortization
34.6
27.4
Amortization of debt issuance costs and
discount, net of non-cash capitalized interest
5.1
9.4
Stock-based compensation
14.6
13.7
Loss on disposal or impairment of
long-lived assets
0.8
0.2
Amortization of premium/discount on
investments
1.7
1.5
Realized gain on sale of investments
(0.2
)
—
Loss on equity investment
—
3.4
Foreign exchange gain on equity
investment
—
(0.5
)
Deferred income taxes
0.2
0.3
Changes in operating assets and
liabilities:
Accounts receivable, net
(10.5
)
11.4
Inventories
(22.5
)
(11.0
)
Prepaid expenses and other assets
1.2
5.3
Accounts payable, trade
(5.2
)
(2.7
)
Accrued salaries and wages and other
liabilities
(14.9
)
17.4
Accrued contract liabilities
2.7
0.2
Net cash (used in) provided by operating
activities of continuing operations
(62.5
)
0.7
Net cash used in operating activities of
discontinued operations
—
(0.3
)
Cash (used in) provided by operating
activities
(62.5
)
0.4
Investing activities:
Purchases of property and equipment
(259.3
)
(113.5
)
Purchases of patent and licensing
rights
(1.0
)
(1.2
)
Proceeds from sale of property and
equipment
0.5
0.6
Purchases of short-term investments
(8.7
)
(61.7
)
Proceeds from maturities of short-term
investments
77.2
157.8
Proceeds from sale of short-term
investments
108.5
3.2
Reimbursement of property and equipment
purchases from long-term incentive agreement
50.8
—
Net cash used in investing activities of
continuing operations
(32.0
)
(14.8
)
Net cash used in investing activities of
discontinued operations
—
(1.2
)
Cash used in investing
activities
(32.0
)
(16.0
)
Financing activities:
Proceeds from long-term debt
borrowings
20.0
—
Payments on long-term debt borrowings,
including finance lease obligations
(20.1
)
(0.1
)
Proceeds from issuance of common stock
0.7
16.5
Tax withholding on vested equity
awards
(22.5
)
(12.8
)
Commitment fee on long-term incentive
agreement
(1.0
)
(0.5
)
Cash (used in) provided by financing
activities
(22.9
)
3.1
Effects of foreign exchange changes on
cash and cash equivalents
(0.1
)
0.1
Net change in cash and cash
equivalents
(117.5
)
(12.4
)
Cash and cash equivalents, beginning of
period
379.0
448.8
Cash and cash equivalents, end of
period
$261.5
$436.4
Wolfspeed, Inc. Non-GAAP Measures of
Financial Performance
To supplement the Company's consolidated financial statements
presented in accordance with generally accepted accounting
principles, or GAAP, Wolfspeed uses non-GAAP measures of certain
components of financial performance. These non-GAAP measures
include non-GAAP gross margin, non-GAAP operating (loss) income,
non-GAAP non-operating income (expense), net, non-GAAP net (loss)
income from continuing operations, non-GAAP diluted (loss) earnings
per share from continuing operations and free cash flow.
Reconciliation to the nearest GAAP measure of all historical
non-GAAP measures included in this press release can be found in
the tables included with this press release.
Non-GAAP measures presented in this press release are not in
accordance with or an alternative to measures prepared in
accordance with GAAP and may be different from non-GAAP measures
used by other companies. In addition, these non-GAAP measures are
not based on any comprehensive set of accounting rules or
principles. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with Wolfspeed's results of
operations as determined in accordance with GAAP. These non-GAAP
measures should only be used to evaluate Wolfspeed's results of
operations in conjunction with the corresponding GAAP measures.
Wolfspeed believes that these non-GAAP measures, when shown in
conjunction with the corresponding GAAP measures, enhance
investors' and management's overall understanding of the Company's
current financial performance and the Company's prospects for the
future, including cash flows available to pursue opportunities to
enhance shareholder value. In addition, because Wolfspeed has
historically reported certain non-GAAP results to investors, the
Company believes the inclusion of non-GAAP measures provides
consistency in the Company's financial reporting.
For its internal budgeting process, and as discussed further
below, Wolfspeed's management uses financial statements that do not
include the items listed below and the income tax effects
associated with the foregoing. Wolfspeed's management also uses
non-GAAP measures, in addition to the corresponding GAAP measures,
in reviewing the Company's financial results.
Wolfspeed excludes the following items from one or more of its
non-GAAP measures when applicable:
Stock-based compensation expense. This expense consists of
expenses for stock options, restricted stock, performance stock
awards and employee stock purchases through its Employee Stock
Purchase Program. Wolfspeed excludes stock-based compensation
expenses from its non-GAAP measures because they are non-cash
expenses that Wolfspeed does not believe are reflective of ongoing
operating results.
Amortization or impairment of acquisition-related intangibles.
Wolfspeed incurs amortization or impairment of acquisition-related
intangibles in connection with acquisitions. Wolfspeed excludes
these items because they arise from Wolfspeed's prior acquisitions
and have no direct correlation to the ongoing operating results of
Wolfspeed's business.
Factory optimization restructuring. In May 2019, the Company
started a significant, multi-year factory optimization plan to be
anchored by a state-of-the-art, automated 200mm Silicon Carbide
device fabrication facility. In September 2019, the Company
announced the intent to build the new fabrication facility in
Marcy, New York to complement the factory expansion underway at its
U.S. campus headquarters in Durham, North Carolina. As part of the
plan, the Company will incur restructuring costs associated with
the movement of equipment as well as disposals on certain
long-lived assets. Because these charges relate to assets which had
been retired prior to the end of their estimated useful lives,
Wolfspeed does not believe these costs are reflective of ongoing
operating results. Similarly, Wolfspeed does not consider the
realized net losses on sale of assets relating to the restructuring
to be reflective of ongoing operating results.
Severance and other restructuring. These costs relate to the
Company's realignment of certain resources as part of the Company's
transition to a more focused semiconductor company. Wolfspeed does
not believe these costs are reflective of ongoing operating
results.
Project, transformation and transaction costs. The Company has
incurred professional services fees and other costs associated with
completed and potential acquisitions and divestitures, as well as
internal transformation programs focused on optimizing the
Company's administrative processes. Wolfspeed excludes these items
because Wolfspeed believes they are not reflective of the ongoing
operating results of Wolfspeed's business.
Factory optimization start-up costs. As part of the factory
optimization plan, the Company has incurred and will incur start-up
costs. Wolfspeed does not believe these costs are reflective of
ongoing operating results. In fiscal 2022, these costs will include
an estimated $80.0 million of start-up and pre-production related
costs associated with the Company ramping production at its new
device fabrication facility in Marcy, New York.
Transition service agreement costs. As a result of the sale of
the Lighting Products business unit, the Company is providing
certain information technology services under a transition services
agreement which will not be reimbursed. Wolfspeed excludes the
costs of these services because Wolfspeed believes they are not
reflective of the ongoing operating results of Wolfspeed's
business.
Net changes in fair value of investment in ENNOSTAR. Prior to
the Company liquidating its interests in fiscal 2021, the Company's
common stock ownership investment in ENNOSTAR, Inc. was accounted
for utilizing the fair value option. As such, changes in fair value
were recognized in income, including fluctuations due to the
exchange rate between the New Taiwan Dollar and the United States
Dollar. Wolfspeed excluded the impact of these gains or losses from
its non-GAAP measures because they were non-cash impacts.
Additionally, Wolfspeed excluded the impact of dividends received,
if any, on its ENNOSTAR investment as Wolfspeed does not believe it
was reflective of its ongoing operating results.
Interest income on transaction-related note receivable. In
connection with the completed sale of the LED Products business
unit to SGH and its wholly owned acquisition subsidiary CreeLED,
Inc. (CreeLED and collectively with SGH, SMART), the Company
received an unsecured promissory note issued to the Company by SGH
in the amount of $125 million (the Purchase Price Note). Interest
income on the Purchase Price Note is excluded because Wolfspeed
believes it is not reflective of the ongoing operating results of
Wolfspeed's business.
Accretion on convertible notes, net of capitalized interest. The
issuance of the Company's convertible senior notes in August 2018
and April 2020 results in interest accretion on the convertible
notes' issue costs and discount. Wolfspeed considers these items as
either limited in term or having no impact on the Company's cash
flows, and therefore has excluded such items to facilitate a review
of current operating performance and comparisons to the Company's
past operating performance.
Loss on Wafer Supply Agreement. In connection with the completed
sale of the LED Products business unit to SMART, the Company
entered into a Wafer Supply and Fabrication Services Agreement (the
Wafer Supply Agreement), pursuant to which the Company supplies
CreeLED with certain Silicon Carbide materials and fabrication
services for up to four years. Wolfspeed excludes the financial
impact of this agreement because Wolfspeed believes it is not
reflective of the ongoing operating results of Wolfspeed's
business.
Income tax adjustment. This amount reconciles GAAP tax (benefit)
expense to a calculated non-GAAP tax (benefit) expense utilizing a
non-GAAP tax rate. The non-GAAP tax rate estimates an appropriate
tax rate if the listed non-GAAP items were excluded. This
reconciling item adjusts non-GAAP net (loss) income from continuing
operations to the amount it would be if the calculated non-GAAP tax
rate was applied to non-GAAP (loss) income before income taxes.
Wolfspeed may incur some of these same expenses, including
income taxes associated with these expenses, in future periods. In
addition to the non-GAAP measures discussed above, Wolfspeed also
uses free cash flow as a measure of operating performance and
liquidity. Free cash flow represents operating cash flows from
continuing operations less net purchases of property and equipment
and patent and licensing rights. Wolfspeed considers free cash flow
to be an operating performance and a liquidity measure that
provides useful information to management and investors about the
amount of cash generated by the business after the purchases of
property and equipment, a portion of which can then be used to,
among other things, invest in Wolfspeed's business, make strategic
acquisitions and strengthen the balance sheet. A limitation of the
utility of free cash flow as a measure of operating performance and
liquidity is that it does not represent the residual cash flow
available to the company for discretionary expenditures, as it
excludes certain mandatory expenditures such as debt service.
WOLFSPEED, INC.
Reconciliation of GAAP to
Non-GAAP Measures
(in millions of U.S. Dollars,
except per share amounts and percentages)
(unaudited)
Non-GAAP Gross Margin
Three months ended
September 26, 2021
September 27, 2020
GAAP gross profit
$49.4
$35.5
GAAP gross margin percentage
32
%
31
%
Adjustments:
Stock-based compensation expense
3.1
3.4
Factory optimization restructuring
—
1.0
Non-GAAP gross profit
$52.5
$39.9
Non-GAAP gross margin percentage
34
%
35
%
Non-GAAP Operating Loss
Three months ended
September 26, 2021
September 27, 2020
GAAP operating loss
($65.7
)
($62.2
)
GAAP operating loss percentage
(42
)%
(54
)%
Adjustments:
Stock-based compensation expense:
Cost of revenue, net
3.1
3.4
Research and development
2.4
2.4
Sales, general and administrative
9.1
7.9
Total stock-based compensation expense
14.6
13.7
Amortization or impairment of
acquisition-related intangibles
3.6
3.6
Factory optimization restructuring
2.6
2.6
Severance and other restructuring
—
2.8
Project, transformation and transaction
costs
2.9
1.2
Factory optimization start-up costs
8.6
3.0
Transition service agreement costs
—
2.3
Total adjustments to GAAP operating
loss
32.3
29.2
Non-GAAP operating loss
($33.4
)
($33.0
)
Non-GAAP operating loss percentage
(21
)%
(29
)%
Non-GAAP Non-Operating Income
(Expense), net
Three months ended
September 26, 2021
September 27, 2020
GAAP non-operating expense, net
($4.1
)
($13.9
)
Adjustments:
Net changes in the fair value of ENNOSTAR
investment
—
2.9
Interest income on transaction-related
note receivable
(1.1
)
—
Accretion on convertible notes, net of
capitalized interest
5.1
9.4
Loss on Wafer Supply Agreement
0.8
—
Non-GAAP non-operating income (expense),
net
$0.7
($1.6
)
Non-GAAP Net Loss
Three months ended
September 26, 2021
September 27, 2020
GAAP net loss from continuing
operations
($70.1
)
($75.3
)
Adjustments:
Stock-based compensation expense
14.6
13.7
Amortization or impairment of
acquisition-related intangibles
3.6
3.6
Factory optimization restructuring
2.6
2.6
Severance and other restructuring
—
2.8
Project, transformation and transaction
costs
2.9
1.2
Factory optimization start-up costs
8.6
3.0
Transition service agreement costs
—
2.3
Net changes in the fair value of ENNOSTAR
investment
—
2.9
Interest income on transaction-related
note receivable
(1.1
)
—
Accretion on convertible notes, net of
capitalized interest
5.1
9.4
Loss on Wafer Supply Agreement
0.8
—
Total adjustments to GAAP net loss from
continuing operations before provision for income taxes
37.1
41.5
Income tax adjustment - benefit
(expense)
9.2
7.3
Non-GAAP net loss from continuing
operations
($23.8
)
($26.5
)
Non-GAAP diluted loss per share from
continuing operations
($0.21
)
($0.24
)
Non-GAAP weighted average shares (in
thousands)
115,919
109,705
Free Cash Flow
Three months ended
September 26, 2021
September 27, 2020
Net cash (used in) provided by operating
activities from continuing operations
($62.5
)
$0.7
Less: PP&E spending, net of
reimbursements from long-term incentive agreement
(208.5
)
(113.5
)
Less: Patents spending
(1.0
)
(1.2
)
Total free cash flow
($272.0
)
($114.0
)
WOLFSPEED, INC.
Business Outlook Unaudited
GAAP to Non-GAAP Reconciliation
Three Months Ended
(in millions of U.S. Dollars)
December 26, 2021
GAAP net loss outlook range
($73) to ($69)
Adjustments:
Stock-based compensation expense
14
Amortization or impairment of
acquisition-related intangibles
4
Factory optimization restructuring and
start-up costs
17
Accretion on convertible notes, net of
capitalized interest
5
Interest income on transaction-related
note receivable
(1)
Project, transformation, transaction and
transition costs
3
Total adjustments to GAAP net loss before
provision for income taxes
42
Income tax adjustment
8
Non-GAAP net loss outlook range
($23) to ($19)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211027006073/en/
Tyler Gronbach Wolfspeed, Inc. Vice President, Investor
Relations Phone: 919-407-4820 investorrelations@wolfspeed.com
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