Inphi Corporation (NYSE:IPHI), a leader in high-speed data movement
interconnects, today announced financial results for its second
quarter ended June 30, 2018.
GAAP Results
Revenue in the second quarter of 2018 was $69.8 million on U.S.
generally accepted accounting principles (GAAP) basis, down 17%
year-over-year, compared with $84.4 million in the second quarter
of 2017. The year over year decrease was due to lower demand
for long haul and metro as well as Cortina legacy products.
However, the long haul and metro product revenue grew substantially
from the levels in the first quarter of 2018, resulting in a 16%
sequential corporate revenue growth.
Gross margin under GAAP in the second quarter of 2018 and 2017
was 56.7%.
GAAP loss from operations in the second quarter of 2018 was
$21.9 million or (31.4%) of revenue from operations, compared to
GAAP loss from operations in the second quarter of 2017 of $7.9
million or (9.4%) of revenue.
GAAP net loss for the second quarter of 2018 was $28.5 million,
or ($0.65) per diluted common share, compared with GAAP net loss of
$15.0 million, or ($0.36) per diluted common share in the second
quarter of 2017.
Inphi reports revenue, gross margin, operating expenses, net
income (loss), and earnings per share 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, 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 on a non-GAAP basis in the second quarter of 2018
was 68.4%, compared to 70.3% in the second quarter of 2017.
The decrease was largely due to change in product mix.
Non-GAAP income from operations in the second quarter of 2018
was $7.1 million, or 10.1% of revenue, compared with $17.6 million,
or 20.8% of revenue in the second quarter of 2017. However,
non-GAAP income from operations did see substantial growth from the
first quarter of 2018 to the second quarter of 2018 from negative
3.5% to a positive 10.1%.
Non-GAAP net income in the second quarter of 2018 was $6.6
million, or $0.15 per diluted common share. This compares with
non-GAAP net income of $15.6 million, or $0.35 per diluted common
share in the second quarter of 2017.
“Our 16% sequential increase in revenue in Q2 demonstrates the
recovery of our core long haul and metro business,” said Ford
Tamer, President and CEO of Inphi. “In addition, going from a
non-GAAP net operating loss in Q1, to over 10% operating profit in
Q2 shows our success in managing operating expenses to be in line
with revenue growth and the market environment. We remain
positive on our business outlook as we continue to introduce new
products and grow our “inside data center” revenue as well as
re-engaging with ZTE.”
First Half 2018 ResultsRevenue in the six
months ended June 30, 2018 was $129.9 million, compared with $178.0
million in the six months ended June 30, 2017. GAAP net loss in the
six months ended June 30, 2018 was $51.5 million, or ($1.19) per
diluted share, on approximately 43.3 million diluted weighted
average common shares outstanding. This compares with GAAP net loss
of $26.2 million, or ($0.63) per diluted share, on approximately
41.9 million diluted weighted average common shares outstanding in
the six months ended June 30, 2017.
Non-GAAP net income in the six months ended June 30, 2018 was
$4.6 million, or $0.10 per diluted weighted average common share
outstanding, on approximately 44.6 million diluted weighted average
common shares outstanding. This compares with non-GAAP net income
of $35.2 million in the six months ended June 30, 2017, or $0.79
per diluted weighted average common share outstanding, on
approximately 44.5 million diluted weighted average common shares
outstanding.
Business OutlookThe following statements are
based on the Company’s current expectations for the third quarter
of 2018. 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 2018 is expected to be in a range of $75.5
million to $79.5 million. The midpoint being $77.5 million
including approximately $0.5M forecasted for ZTE.
- GAAP gross margin is expected to be approximately 60.1% to
61.3%.
- Non-GAAP gross margin is expected to be approximately 70.2% to
71.0%.
- Stock-based compensation expense is expected to be in the range
of $17.2 million to $17.4 million.
- GAAP results are expected to be a net loss in a range between a
net loss of $19.5 million to $20.3 million, or ($0.44) – ($0.46)
per basic share, based on 43.95 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 $12.83 million to $13.83
million, or $0.28-$0.30 per diluted share, based on 45.35 million
estimated diluted shares outstanding.
Quarterly Conference Call TodayInphi plans to
hold a conference call today at 5:30 p.m. Eastern Time / 2:30 p.m.
Pacific Time with Ford Tamer, president and chief executive
officer, and John Edmunds, chief financial officer, to discuss the
second quarter 2018 results.
The call can be accessed by dialing 765-507-2591, participant
passcode: 7182027. 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
https://www.inphi.com/investors/ 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 2018 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 2018, including with respect
to the third quarter of 2018, revenue, gross margin, stock-based
compensation expense, operating performance, net income or loss,
and earnings per share; the Company’s expectations regarding growth
opportunities, increasing demand in Q3, growth inside data centers,
slow demand in the metro and long haul markets 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, 2017, 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.
Corporate Contact:Kim
Markle
Inphi
408-217-7329
kmarkle@inphi.com
Investor Contact:Deborah
Stapleton650-815-1239deb@stapleton.com
| |
| 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, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Revenue |
$ |
69,814 |
|
$ |
84,423 |
|
$ |
129,950 |
|
$ |
178,007 |
|
| Cost of revenue |
|
30,203 |
|
|
36,588 |
|
|
57,793 |
|
|
76,659 |
|
| |
|
|
|
|
|
|
|
|
| Gross margin |
|
39,611 |
|
|
47,835 |
|
|
72,157 |
|
|
101,348 |
|
| |
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
| Research
and development |
|
42,804 |
|
|
39,437 |
|
|
85,742 |
|
|
79,725 |
|
| Sales and
marketing |
|
10,311 |
|
|
10,539 |
|
|
21,653 |
|
|
21,480 |
|
| General
and administrative |
|
8,415 |
|
|
5,798 |
|
|
14,633 |
|
|
12,593 |
|
| |
|
|
|
|
|
|
|
|
| Total operating
expenses |
|
61,530 |
|
|
55,774 |
|
|
122,028 |
|
|
113,798 |
|
| |
|
|
|
|
|
|
|
|
| Loss from
operations |
|
(21,919 |
) |
|
(7,939 |
) |
|
(49,871 |
) |
|
(12,450 |
) |
| |
|
|
|
|
|
|
|
|
| Interest expense, net
of other income |
|
(6,487 |
) |
|
(6,657 |
) |
|
(9,787 |
) |
|
(12,967 |
) |
| |
|
|
|
|
|
|
|
|
| Loss from operations
before income taxes |
|
(28,406 |
) |
|
(14,596 |
) |
|
(59,658 |
) |
|
(25,417 |
) |
| Provision (benefit) for
income taxes |
|
58 |
|
|
371 |
|
|
(8,203 |
) |
|
823 |
|
| |
|
|
|
|
|
|
|
|
| Net loss |
$ |
(28,464 |
) |
$ |
(14,967 |
) |
$ |
(51,455 |
) |
$ |
(26,240 |
) |
| |
|
|
|
|
|
|
|
|
| Earnings per
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.65 |
) |
$ |
(0.36 |
) |
$ |
(1.19 |
) |
$ |
(0.63 |
) |
|
Diluted |
$ |
(0.65 |
) |
$ |
(0.36 |
) |
$ |
(1.19 |
) |
$ |
(0.63 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Weighted-average shares
used in computing earnings per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
43,661,325 |
|
|
42,137,084 |
|
|
43,331,906 |
|
|
41,855,510 |
|
|
Diluted |
|
43,661,325 |
|
|
42,137,084 |
|
|
43,331,906 |
|
|
41,855,510 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| The
following table presents details of stock-based compensation
expense included in each functional line item in the consolidated
statements of operations above: |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(in thousands of dollars) |
|
(in thousands of dollars) |
| |
|
(Unaudited) |
|
(Unaudited) |
| Cost of revenue |
$ |
605 |
|
$ |
537 |
|
$ |
1,174 |
|
$ |
1,098 |
|
| Research and
development |
|
9,741 |
|
|
7,274 |
|
|
18,239 |
|
|
13,189 |
|
| Sales and
marketing |
|
3,241 |
|
|
2,119 |
|
|
6,483 |
|
|
3,801 |
|
| General and
administrative |
|
2,629 |
|
|
1,315 |
|
|
4,873 |
|
|
2,387 |
|
| |
|
|
|
|
|
|
|
|
| |
$ |
16,216 |
|
$ |
11,245 |
|
$ |
30,769 |
|
$ |
20,475 |
|
| |
|
|
|
|
|
|
|
|
| |
|
| INPHI CORPORATION |
|
| CONSOLIDATED BALANCE SHEETS |
|
| (in thousands of dollars) |
|
| (Unaudited) |
|
| |
|
June 30,2018 |
|
December 31,2017 |
|
|
Assets |
|
|
|
|
|
| Current assets: |
|
|
|
|
|
| Cash and
cash equivalents |
$ |
155,142 |
|
$ |
163,450 |
|
|
|
Short-term investments in marketable securities |
|
228,639 |
|
|
241,737 |
|
|
| Accounts
receivable, net |
|
54,087 |
|
|
67,993 |
|
|
|
Inventories |
|
33,849 |
|
|
31,721 |
|
|
| Prepaid
expenses and other current assets |
|
13,946 |
|
|
12,208 |
|
|
| Total
current assets |
|
485,663 |
|
|
517,109 |
|
|
| |
|
|
|
|
|
| Property and equipment,
net |
|
68,978 |
|
|
60,344 |
|
|
| Goodwill |
|
104,502 |
|
|
104,502 |
|
|
| Identifiable intangible
assets |
|
213,754 |
|
|
222,933 |
|
|
| Other noncurrent
assets |
|
30,961 |
|
|
12,618 |
|
|
| Total assets |
$ |
903,858 |
|
$ |
917,506 |
|
|
| |
|
|
|
|
|
| Liabilities and
Stockholders’ Equity |
|
|
|
|
|
| |
|
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
| Accounts
payable |
$ |
16,219 |
|
$ |
14,721 |
|
|
| Accrued
expenses and other current liabilities |
|
49,250 |
|
|
45,326 |
|
|
| |
|
|
|
|
|
| Total
current liabilities |
|
65,469 |
|
|
60,047 |
|
|
| |
|
|
|
|
|
| Convertible debt |
|
434,284 |
|
|
421,431 |
|
|
| Other liabilities |
|
21,653 |
|
|
24,627 |
|
|
| Total
liabilities |
|
521,406 |
|
|
506,105 |
|
|
| |
|
|
|
|
|
| Stockholders’
equity: |
|
|
|
|
|
| Common
stock |
|
44 |
|
|
43 |
|
|
|
Additional paid-in capital |
|
507,575 |
|
|
484,934 |
|
|
|
Accumulated deficit |
|
(125,600 |
) |
|
(74,145 |
) |
|
|
Accumulated other comprehensive income |
|
433 |
|
|
569 |
|
|
| Total stockholders’
equity |
|
382,452 |
|
|
411,401 |
|
|
| |
|
|
|
|
|
| Total liabilities and
stockholders’ equity |
$ |
903,858 |
|
$ |
917,506 |
|
|
| |
|
|
|
|
|
INPHI
CORPORATIONRECONCILATION 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, impairment of certain intangibles, non-cash interest
expense related to convertible debt, unrealized gain or loss on
equity investments, loss on claim settlement 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, |
|
|
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
| GAAP gross
margin to Non-GAAP gross margin |
|
|
|
|
|
|
|
|
|
|
| GAAP gross margin |
$ |
39,611 |
|
$ |
47,835 |
|
$ |
72,157 |
|
$ |
101,348 |
|
|
|
| Adjustments to GAAP
gross margin: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
605 |
|
(a) |
537 |
|
(a) |
1,174 |
|
(a) |
1,098 |
|
(a) |
|
|
Acquisition related expenses |
|
(7 |
) |
(b) |
44 |
|
(b) |
3 |
|
(b) |
103 |
|
(b) |
|
|
Amortization of inventory step-up |
|
864 |
|
(c) |
3,693 |
|
(c) |
864 |
|
(c) |
9,010 |
|
(c) |
|
|
Amortization of intangibles |
|
6,699 |
|
(d) |
7,250 |
|
(d) |
13,398 |
|
(d) |
14,500 |
|
(d) |
|
|
Depreciation on step-up values of fixed assets |
|
(12 |
) |
(e) |
15 |
|
(e) |
(26 |
) |
(e) |
31 |
|
(e) |
|
|
Restructuring expenses |
|
- |
|
|
- |
|
|
106 |
|
(f) |
- |
|
|
|
| Non-GAAP gross
margin |
$ |
47,760 |
|
$ |
59,374 |
|
$ |
87,676 |
|
$ |
126,090 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP operating
expenses to Non-GAAP operating expenses |
|
|
|
|
|
|
|
|
|
|
| GAAP research and
development |
$ |
42,804 |
|
$ |
39,437 |
|
$ |
85,742 |
|
$ |
79,725 |
|
|
|
| Adjustments to GAAP
research and development: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(9,741 |
) |
(a) |
(7,274 |
) |
(a) |
(18,239 |
) |
(a) |
(13,189 |
) |
(a) |
|
|
Acquisition related expenses |
|
(302 |
) |
(b) |
(418 |
) |
(b) |
(607 |
) |
(b) |
(1,088 |
) |
(b) |
|
|
Depreciation on step-up values of fixed assets |
|
(40 |
) |
(e) |
(150 |
) |
(e) |
(173 |
) |
(e) |
(304 |
) |
(e) |
|
|
Restructuring expenses |
|
- |
|
|
- |
|
|
(885 |
) |
(f) |
- |
|
|
|
| Non-GAAP research and
development |
$ |
32,721 |
|
$ |
31,595 |
|
$ |
65,838 |
|
$ |
65,144 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP sales and
marketing |
$ |
10,311 |
|
$ |
10,539 |
|
$ |
21,653 |
|
$ |
21,480 |
|
|
|
| Adjustments to GAAP
sales and marketing: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(3,241 |
) |
(a) |
(2,119 |
) |
(a) |
(6,483 |
) |
(a) |
(3,801 |
) |
(a) |
|
|
Acquisition related expenses |
|
(117 |
) |
(b) |
(179 |
) |
(b) |
(259 |
) |
(b) |
(414 |
) |
(b) |
|
|
Amortization of intangibles |
|
(2,432 |
) |
(d) |
(2,431 |
) |
(d) |
(4,863 |
) |
(d) |
(4,862 |
) |
(d) |
|
|
Depreciation on step-up values of fixed assets |
|
(18 |
) |
(e) |
(27 |
) |
(e) |
(41 |
) |
(e) |
(56 |
) |
(e) |
|
|
Restructuring expenses |
|
(8 |
) |
(f) |
- |
|
|
(367 |
) |
(f) |
- |
|
|
|
| Non-GAAP sales and
marketing |
$ |
4,495 |
|
$ |
5,783 |
|
$ |
9,640 |
|
$ |
12,347 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP general and
administrative |
$ |
8,415 |
|
$ |
5,798 |
|
$ |
14,633 |
|
$ |
12,593 |
|
|
|
| Adjustments to GAAP
general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(2,629 |
) |
(a) |
(1,315 |
) |
(a) |
(4,873 |
) |
(a) |
(2,387 |
) |
(a) |
|
|
Acquisition related expenses |
|
(3 |
) |
(b) |
(29 |
) |
(b) |
(6 |
) |
(b) |
(750 |
) |
(b) |
|
|
Amortization of intangibles |
|
(116 |
) |
(d) |
(116 |
) |
(d) |
(232 |
) |
(d) |
(232 |
) |
(d) |
|
|
Depreciation on step-up values of fixed assets |
|
(75 |
) |
(e) |
62 |
|
(e) |
(34 |
) |
(e) |
131 |
|
(e) |
|
|
Restructuring expenses |
|
- |
|
|
- |
|
|
(133 |
) |
(f) |
- |
|
|
|
| Loss on
claim settlement from ClariPhy acquisition |
|
(2,125 |
) |
(h) |
- |
|
|
(2,125 |
) |
(h) |
- |
|
|
|
| Non-GAAP general and
administrative |
$ |
3,467 |
|
$ |
4,400 |
|
$ |
7,230 |
|
$ |
9,355 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Non-GAAP total
operating expenses |
$ |
40,683 |
|
$ |
41,778 |
|
$ |
82,708 |
|
$ |
86,846 |
|
|
|
| Non-GAAP income from
operations |
$ |
7,077 |
|
$ |
17,596 |
|
$ |
4,968 |
|
$ |
39,244 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP net loss
to Non-GAAP net income |
|
|
|
|
|
|
|
|
|
|
| GAAP net loss |
$ |
(28,464 |
) |
$ |
(14,967 |
) |
$ |
(51,455 |
) |
$ |
(26,240 |
) |
|
|
| Adjusting items to GAAP
net loss: |
|
|
|
|
|
|
|
|
|
|
| Operating
expenses related to stock-based |
|
|
|
|
|
|
|
|
|
|
|
compensation expense |
|
16,216 |
|
(a) |
11,245 |
|
(a) |
30,769 |
|
(a) |
20,475 |
|
(a) |
|
|
Acquisition related expenses |
|
415 |
|
(b) |
670 |
|
(b) |
875 |
|
(b) |
2,355 |
|
(b) |
|
|
Amortization of inventory fair value step-up |
|
864 |
|
(c) |
3,693 |
|
(c) |
864 |
|
(c) |
9,010 |
|
(c) |
|
|
Amortization of intangibles related to purchase price |
|
9,247 |
|
(d) |
9,797 |
|
(d) |
18,493 |
|
(d) |
19,594 |
|
(d) |
|
|
Depreciation on step-up values of fixed assets |
|
121 |
|
(e) |
130 |
|
(e) |
222 |
|
(e) |
260 |
|
(e) |
|
|
Restructuring expenses |
|
8 |
|
(f) |
- |
|
|
1,491 |
|
(f) |
- |
|
|
|
| Loss on
retirement of certain property and equipment from ClariPhy
acquisition |
|
- |
|
|
33 |
|
(g) |
- |
|
|
77 |
|
(g) |
|
| Loss on
claim settlement from ClariPhy acquisition |
|
2,125 |
|
(h) |
- |
|
|
2,125 |
|
(h) |
- |
|
|
|
|
Unrealized loss (gain) on equity investment |
|
166 |
|
(i) |
- |
|
|
(2,856 |
) |
(i) |
- |
|
|
|
| Accretion
and amortization expense on convertible debt |
|
6,523 |
|
(j) |
6,073 |
|
(j) |
12,853 |
|
(j) |
11,968 |
|
(j) |
|
| Valuation
allowance and tax effect of the adjustments above from |
|
|
|
|
|
|
|
|
|
|
| GAAP to
non-GAAP |
|
(657 |
) |
(k) |
(1,043 |
) |
(k) |
(8,787 |
) |
(k) |
(2,320 |
) |
(k) |
|
| Non-GAAP net
income |
$ |
6,564 |
|
$ |
15,631 |
|
$ |
4,594 |
|
$ |
35,179 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Shares used in
computing non-GAAP basic earnings per share |
|
43,661,325 |
|
|
42,137,084 |
|
|
43,331,906 |
|
|
41,855,510 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Shares used in
computing non-GAAP diluted earnings per share before
offsetting shares from call option |
|
44,884,548 |
|
|
44,051,591 |
|
|
44,604,497 |
|
|
44,870,267 |
|
|
|
| Offsetting shares from
call option |
|
- |
|
|
3,145 |
|
|
- |
|
|
402,583 |
|
|
|
| Shares used in
computing non-GAAP diluted earnings per share |
|
44,884,548 |
|
|
44,048,446 |
|
|
44,604,497 |
|
|
44,467,684 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Non-GAAP earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
$ |
0.37 |
|
$ |
0.11 |
|
$ |
0.84 |
|
|
|
|
Diluted |
$ |
0.15 |
|
$ |
0.35 |
|
$ |
0.10 |
|
$ |
0.79 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP gross margin as a
% of revenue |
|
56.7 |
% |
|
56.7 |
% |
|
55.5 |
% |
|
56.9 |
% |
|
|
| Stock-based
compensation |
|
0.9 |
% |
|
0.6 |
% |
|
0.9 |
% |
|
0.6 |
% |
|
|
| Amortization of
inventory fair value step-up and intangibles |
|
10.8 |
% |
|
13.0 |
% |
|
11.1 |
% |
|
13.3 |
% |
|
|
| Non-GAAP gross margin
as a % of revenue |
|
68.4 |
% |
|
70.3 |
% |
|
67.5 |
% |
|
70.8 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
|
- 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.
- Reflects the legal, transition costs and other expenses related
to acquisition. The transition costs also include short-term
cash retention bonus payments to ClariPhy employees that were part
of the purchase agreement when the Company acquired 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.
- 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.
- 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.
- 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.
- Reflects restructuring expenses incurred. 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.
- 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.
- Reflects the loss on settlement of certain customer claims 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.
- Reflects the unrealized gain or loss on equity
investments. 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.
- 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.
- 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 2018 GUIDANCE |
|
| (in thousands of dollars, except share and per share
amounts) |
|
| (Unaudited) |
|
| |
|
|
|
|
|
| |
|
Three Months Ending September
30, 2018 |
|
|
|
|
High |
|
Low |
|
| Estimated GAAP net
loss |
$ |
(19,500 |
) |
$ |
(20,300 |
) |
|
| Adjusting items to
estimated GAAP net loss: |
|
|
|
|
|
| Operating
expenses related to stock-based compensation expense |
|
17,400 |
|
|
17,200 |
|
|
| Amortization of intangibles and fair value step up on acquired
inventories |
9,685 |
|
|
9,685 |
|
|
| Other
acquisition and transition related expenses |
|
400 |
|
|
400 |
|
|
|
Amortization of convertible debt interest cost |
|
6,525 |
|
|
6,525 |
|
|
| Tax
effect of GAAP to non-GAAP adjustments |
|
(680 |
) |
|
(680 |
) |
|
| Estimated non-GAAP net
income |
$ |
13,830 |
|
$ |
12,830 |
|
|
| |
|
|
|
|
|
| Shares used in
computing estimated non-GAAP diluted earnings per share |
|
45,350,000 |
|
|
45,350,000 |
|
|
| |
|
|
|
|
|
| Estimated non-GAAP
diluted earnings per share |
$ |
0.30 |
|
$ |
0.28 |
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Revenue |
$ |
79,500 |
|
$ |
75,500 |
|
|
| |
|
|
|
|
|
| GAAP gross
margin |
$ |
48,750 |
|
$ |
45,400 |
|
|
| as a % of
revenue |
|
61.3 |
% |
|
60.1 |
% |
|
| Adjusting items to
estimated GAAP gross margin: |
|
|
|
|
|
|
Stock-based compensation |
|
700 |
|
|
600 |
|
|
| Inventory
step up, fixed assets depreciation step up and acquisition related
expenses |
|
300 |
|
|
300 |
|
|
|
Amortization of intangibles |
|
6,700 |
|
|
6,700 |
|
|
| Estimated non-GAAP
gross margin |
$ |
56,450 |
|
$ |
53,000 |
|
|
| as a % of
revenue |
|
71.0 |
% |
|
70.2 |
% |
|
| |
|
|
|
|
|
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