Reports 12% quarter over quarter revenue
growth
Inphi Corporation (NYSE: IPHI), a leader in high-speed data
movement interconnects, today announced financial results for its
third quarter ended September 30, 2018.
GAAP Results
Revenue in the third quarter of 2018 was $78.0
million on a U.S. generally accepted accounting principles (GAAP)
basis, down 8% year-over-year, compared with $84.5 million in the
third quarter of 2017. The year over year decrease was due to lower
demand for long haul and metro, ColorZ as well as Cortina legacy
products. However, Data Center, including PAM and ColorZ product
revenue grew substantially from the levels in the second quarter of
2018, resulting in a 12% sequential quarterly revenue growth.
Gross margin under GAAP in the third quarter of
2018 was 55.7%, compared with 49.8% in the third quarter of
2017.
GAAP loss from operations in the third quarter of
2018 was $16.0 million, or 20.6% of revenue, compared to GAAP loss
from operations in the third quarter of 2017 of $52.5 million or
62.1% of revenue.
GAAP net loss for the third quarter of 2018 was $22.7 million,
or ($0.52) per diluted common share, compared with GAAP net loss of
$48.8 million, or ($1.15) per diluted common share in the third
quarter of 2017. GAAP net loss for the second quarter of 2018 was
$28.5 million, or ($0.65) per diluted common share.
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 third quarter of 2018
was 69.4%, compared with 71.4% in the third quarter of 2017. The
slight decrease was largely due to change in product mix.
Non-GAAP income from operations in the third quarter of 2018 was
$13.5 million, or 17.4% of revenue, compared with $17.3 million, or
20.5% of revenue in the third quarter of 2017.
Non-GAAP net income in the third quarter of 2018 was $13.7
million, or $0.30 per diluted common share. This compares with
non-GAAP net income of $15.8 million, or $0.36 per diluted common
share in the third quarter of 2017. Non-GAAP net income in the
second quarter of 2018 was $6.6 million, or $0.15 per diluted
common share.
“We are pleased to report another strong quarter of 12%
sequential growth in revenue and 100% sequential growth in non-GAAP
earnings per share in Q3,” said Dr. Ford Tamer, President and CEO
of Inphi Corporation. “We continue to gain share in our 64Gbaud
TIAs, drivers, coherent DSPs, next-generation data center
interconnects, and DSP-based PAM platforms for connections inside
the data center. Additionally, our business is growing with cloud
customers – in fact the majority of our revenue in Q3 is now coming
from the data center market which is currently driven by North
American customers. We expect our recent product introductions,
strong customer relationships and design win pipeline will continue
to drive revenue growth for the company in Q4, and in the years
ahead.”
Nine Months 2018 ResultsRevenue in the nine
months ended September 30, 2018 was $208.0 million, compared with
$262.5 million in the nine months ended September 30, 2017. GAAP
net loss in the nine months ended September 30, 2018 was $74.1
million, or ($1.70) per diluted share, on approximately 43.5
million diluted weighted average common shares outstanding. This
compares with GAAP net loss of $75.0 million, or ($1.78) per
diluted share, on approximately 42.0 million diluted weighted
average common shares outstanding in the nine months ended
September 30, 2017.
Non-GAAP net income in the nine months ended September 30, 2018
was $18.3 million, or $0.41 per diluted weighted average common
share outstanding, on approximately 44.8 million diluted weighted
average common shares outstanding. This compares with non-GAAP net
income of $50.9 million in the nine months ended September 30,
2017, or $1.15 per diluted weighted average common share
outstanding, on approximately 44.3 million diluted weighted average
common shares outstanding.
Business OutlookThe following statements are
based on the Company’s current expectations for the fourth 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 Q4 2018 is expected to be in a range of $84.3
million to $88.3 million. The midpoint being $86.3 million.
- GAAP gross margin is expected to be approximately 57.2% to
58.8%.
- Non-GAAP gross margin is expected to be approximately 69.5% to
70.5%.
- Stock-based compensation expense is expected to be in the range
of $16.65 million to $16.85 million.
- GAAP results are expected to be a net loss in a range between a
net loss of $15.7 million to $16.4 million, or a loss of $0.36 –
$0.37 per basic share, based on 44.25 million estimated weighted
average basic shares outstanding.
- Non-GAAP net income, excluding stock-based compensation
expense, amortization of intangibles related to acquisitions and
noncash interest on convertible debt, is expected to be in the
range of $18.6 million to $19.5 million, or $0.41-$0.43 per diluted
share, based on 45.7 million estimated diluted shares
outstanding.
Quarterly Conference Call TodayInphi plans to
hold a conference call today at 4:30 p.m. Eastern Time / 1:30 p.m.
Pacific Time with Ford Tamer, president and chief executive
officer, and John Edmunds, chief financial officer, to discuss the
third quarter 2018 results.
The call can be accessed by dialing 765-507-2591, participant
passcode: 4362537. 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 third 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 fourth 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 and increase in market share, increasing demand in
Q4, growth inside data centers, success of new product
introductions, customer relationships and design wins, and 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
MarkleInphi408-217-7329kmarkle@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 September 30, |
|
Nine Months Ended September 30, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Revenue |
$ |
78,009 |
|
$ |
84,511 |
|
$ |
207,959 |
|
$ |
262,518 |
|
| Cost of revenue |
|
34,547 |
|
|
42,440 |
|
|
92,340 |
|
|
119,099 |
|
| |
|
|
|
|
|
|
|
|
| Gross margin |
|
43,462 |
|
|
42,071 |
|
|
115,619 |
|
|
143,419 |
|
| |
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
| Research
and development |
|
41,558 |
|
|
78,849 |
|
|
127,300 |
|
|
158,574 |
|
| Sales and
marketing |
|
10,819 |
|
|
10,100 |
|
|
32,472 |
|
|
31,580 |
|
| General
and administrative |
|
7,134 |
|
|
5,584 |
|
|
21,767 |
|
|
18,177 |
|
| |
|
|
|
|
|
|
|
|
| Total operating
expenses |
|
59,511 |
|
|
94,533 |
|
|
181,539 |
|
|
208,331 |
|
| |
|
|
|
|
|
|
|
|
| Loss from
operations |
|
(16,049 |
) |
|
(52,462 |
) |
|
(65,920 |
) |
|
(64,912 |
) |
| |
|
|
|
|
|
|
|
|
| Interest expense, net
of other income |
|
(6,819 |
) |
|
(6,486 |
) |
|
(16,606 |
) |
|
(19,453 |
) |
| |
|
|
|
|
|
|
|
|
| Loss from operations
before income taxes |
|
(22,868 |
) |
|
(58,948 |
) |
|
(82,526 |
) |
|
(84,365 |
) |
| Benefit for income
taxes |
|
(203 |
) |
|
(10,182 |
) |
|
(8,406 |
) |
|
(9,359 |
) |
| |
|
|
|
|
|
|
|
|
| Net loss |
$ |
(22,665 |
) |
$ |
(48,766 |
) |
$ |
(74,120 |
) |
$ |
(75,006 |
) |
| |
|
|
|
|
|
|
|
|
| Earnings per
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.52 |
) |
$ |
(1.15 |
) |
$ |
(1.70 |
) |
$ |
(1.78 |
) |
|
Diluted |
$ |
(0.52 |
) |
$ |
(1.15 |
) |
$ |
(1.70 |
) |
$ |
(1.78 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Weighted-average shares
used in computing |
|
|
|
|
|
|
|
|
| earnings
per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
43,934,598 |
|
|
42,350,313 |
|
|
43,535,033 |
|
|
42,022,272 |
|
|
Diluted |
|
43,934,598 |
|
|
42,350,313 |
|
|
43,535,033 |
|
|
42,022,272 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30, |
|
Nine Months Ended September 30, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
| |
|
(in thousands of dollars) |
|
(in thousands of dollars) |
| |
|
(Unaudited) |
|
(Unaudited) |
| Cost of revenue |
$ |
636 |
$ |
556 |
$ |
1,810 |
$ |
1,654 |
| Research and
development |
|
9,614 |
|
7,770 |
|
27,853 |
|
20,959 |
| Sales and
marketing |
|
3,702 |
|
2,247 |
|
10,185 |
|
6,048 |
| General and
administrative |
|
2,788 |
|
1,320 |
|
7,661 |
|
3,707 |
| |
|
|
|
|
|
|
|
|
| |
$ |
16,740 |
$ |
11,893 |
$ |
47,509 |
$ |
32,368 |
| INPHI CORPORATION |
| CONSOLIDATED BALANCE SHEETS |
| (in thousands of dollars) |
| (Unaudited) |
| |
| |
|
September 30,2018 |
|
December 31,2017 |
|
Assets |
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and cash
equivalents |
$ |
172,420 |
|
$ |
163,450 |
|
|
Short-term investments in marketable securities |
|
222,561 |
|
|
241,737 |
|
| Accounts
receivable, net |
|
48,440 |
|
|
67,993 |
|
|
Inventories |
|
34,124 |
|
|
31,721 |
|
| Prepaid
expenses and other current assets |
|
8,402 |
|
|
12,208 |
|
| Total
current assets |
|
485,947 |
|
|
517,109 |
|
| |
|
|
|
|
| Property and equipment,
net |
|
67,469 |
|
|
60,344 |
|
| Goodwill |
|
104,502 |
|
|
104,502 |
|
| Identifiable intangible
assets |
|
196,533 |
|
|
222,933 |
|
| Other noncurrent
assets |
|
30,929 |
|
|
12,618 |
|
| Total assets |
$ |
885,380 |
|
$ |
917,506 |
|
| |
|
|
|
|
| Liabilities and
Stockholders’ Equity |
|
|
|
|
| |
|
|
|
|
| Current
liabilities: |
|
|
|
|
| Accounts
payable |
$ |
14,257 |
|
$ |
14,721 |
|
| Accrued
expenses and other current liabilities |
|
38,165 |
|
|
45,326 |
|
| |
|
|
|
|
| Total
current liabilities |
|
52,422 |
|
|
60,047 |
|
| |
|
|
|
|
| Convertible debt |
|
440,997 |
|
|
421,431 |
|
| Other liabilities |
|
14,694 |
|
|
24,627 |
|
| Total
liabilities |
|
508,113 |
|
|
506,105 |
|
| |
|
|
|
|
| Stockholders’
equity: |
|
|
|
|
| Common
stock |
|
44 |
|
|
43 |
|
|
Additional paid-in capital |
|
524,915 |
|
|
484,934 |
|
|
Accumulated deficit |
|
(148,265 |
) |
|
(74,145 |
) |
|
Accumulated other comprehensive income |
|
573 |
|
|
569 |
|
| Total stockholders’
equity |
|
377,267 |
|
|
411,401 |
|
| |
|
|
|
|
| Total liabilities and
stockholders’ equity |
$ |
885,380 |
|
$ |
917,506 |
|
| |
INPHI CORPORATION RECONCILIATION 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, restructuring
expenses, 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 September 30, |
|
Nine Months Ended September 30, |
|
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
| GAAP gross
margin to Non-GAAP gross margin |
|
|
|
|
|
|
|
|
|
| GAAP gross margin |
$ |
43,462 |
|
$ |
42,071 |
|
$ |
115,619 |
|
$ |
143,419 |
|
|
| Adjustments to GAAP
gross margin: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
636 |
|
(a) |
556 |
|
(a) |
1,810 |
|
(a) |
1,654 |
|
(a) |
|
Acquisition related expenses |
|
- |
|
|
20 |
|
(b) |
3 |
|
(b) |
123 |
|
(b) |
|
Amortization of inventory step-up |
|
302 |
|
(c) |
294 |
|
(c) |
1,166 |
|
(c) |
9,304 |
|
(c) |
|
Amortization of intangibles |
|
9,724 |
|
(d) |
7,250 |
|
(d) |
23,122 |
|
(d) |
21,750 |
|
(d) |
|
Depreciation on step-up values of fixed assets |
|
(10 |
) |
(e) |
(19 |
) |
(e) |
(36 |
) |
(e) |
12 |
|
(e) |
|
Impairment of certain developed technology |
|
- |
|
|
10,174 |
|
(f) |
- |
|
|
10,174 |
|
(f) |
|
Restructuring expenses |
|
- |
|
|
- |
|
|
106 |
|
(g) |
- |
|
|
| Non-GAAP gross
margin |
$ |
54,114 |
|
$ |
60,346 |
|
$ |
141,790 |
|
$ |
186,436 |
|
|
| |
|
|
|
|
|
|
|
|
|
| GAAP operating
expenses to Non-GAAP operating expenses |
|
|
|
|
|
|
|
|
|
| GAAP research and
development |
$ |
41,558 |
|
$ |
78,849 |
|
$ |
127,300 |
|
$ |
158,574 |
|
|
| Adjustments to GAAP
research and development: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(9,614 |
) |
(a) |
(7,770 |
) |
(a) |
(27,853 |
) |
(a) |
(20,959 |
) |
(a) |
|
Acquisition related expenses |
|
- |
|
|
(384 |
) |
(b) |
(607 |
) |
(b) |
(1,472 |
) |
(b) |
|
Depreciation on step-up values of fixed assets |
|
(120 |
) |
(e) |
(247 |
) |
(e) |
(293 |
) |
(e) |
(551 |
) |
(e) |
|
Impairment of in-process research and development |
|
- |
|
|
(36,840 |
) |
(f) |
- |
|
|
(36,840 |
) |
(f) |
|
Restructuring expenses |
|
- |
|
|
- |
|
|
(885 |
) |
(g) |
- |
|
|
| Non-GAAP research and
development |
$ |
31,824 |
|
$ |
33,608 |
|
$ |
97,662 |
|
$ |
98,752 |
|
|
| |
|
|
|
|
|
|
|
|
|
| GAAP sales and
marketing |
$ |
10,819 |
|
$ |
10,100 |
|
$ |
32,472 |
|
$ |
31,580 |
|
|
| Adjustments to GAAP
sales and marketing: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(3,702 |
) |
(a) |
(2,247 |
) |
(a) |
(10,185 |
) |
(a) |
(6,048 |
) |
(a) |
|
Acquisition related expenses |
|
- |
|
|
(179 |
) |
(b) |
(259 |
) |
(b) |
(593 |
) |
(b) |
|
Amortization of intangibles |
|
(2,432 |
) |
(d) |
(2,431 |
) |
(d) |
(7,295 |
) |
(d) |
(7,293 |
) |
(d) |
|
Depreciation on step-up values of fixed assets |
|
(19 |
) |
(e) |
(19 |
) |
(e) |
(60 |
) |
(e) |
(75 |
) |
(e) |
|
Restructuring expenses |
|
- |
|
|
- |
|
|
(367 |
) |
(g) |
- |
|
|
| Non-GAAP sales and
marketing |
$ |
4,666 |
|
$ |
5,224 |
|
$ |
14,306 |
|
$ |
17,571 |
|
|
| |
|
|
|
|
|
|
|
|
|
| GAAP general and
administrative |
$ |
7,134 |
|
$ |
5,584 |
|
$ |
21,767 |
|
$ |
18,177 |
|
|
| Adjustments to GAAP
general and administrative: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(2,788 |
) |
(a) |
(1,320 |
) |
(a) |
(7,661 |
) |
(a) |
(3,707 |
) |
(a) |
|
Acquisition related expenses |
|
- |
|
|
(3 |
) |
(b) |
(6 |
) |
(b) |
(753 |
) |
(b) |
|
Amortization of intangibles |
|
(116 |
) |
(d) |
(116 |
) |
(d) |
(348 |
) |
(d) |
(348 |
) |
(d) |
|
Depreciation on step-up values of fixed assets |
|
(16 |
) |
(e) |
81 |
|
(e) |
(50 |
) |
(e) |
212 |
|
(e) |
|
Restructuring expenses |
|
- |
|
|
- |
|
|
(133 |
) |
(g) |
- |
|
|
| Loss on
claim settlement from ClariPhy acquisition |
|
(125 |
) |
(h) |
- |
|
|
(2,250 |
) |
(h) |
- |
|
|
| Non-GAAP general and
administrative |
$ |
4,089 |
|
$ |
4,226 |
|
$ |
11,319 |
|
$ |
13,581 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Non-GAAP total
operating expenses |
$ |
40,579 |
|
$ |
43,058 |
|
$ |
123,287 |
|
$ |
129,904 |
|
|
| Non-GAAP income from
operations |
$ |
13,535 |
|
$ |
17,288 |
|
$ |
18,503 |
|
$ |
56,532 |
|
|
| |
|
|
|
|
|
|
|
|
|
| GAAP net loss
to Non-GAAP net income |
|
|
|
|
|
|
|
|
|
| GAAP net loss |
$ |
(22,665 |
) |
$ |
(48,766 |
) |
$ |
(74,120 |
) |
$ |
(75,006 |
) |
|
| Adjusting items to GAAP
net loss: |
|
|
|
|
|
|
|
|
|
| Operating
expenses related to stock-based compensation expense |
|
16,740 |
|
(a) |
11,893 |
|
(a) |
47,509 |
|
(a) |
32,368 |
|
(a) |
|
Acquisition related expenses |
|
- |
|
|
586 |
|
(b) |
875 |
|
(b) |
2,941 |
|
(b) |
|
Amortization of inventory fair value step-up |
|
302 |
|
(c) |
294 |
|
(c) |
1,166 |
|
(c) |
9,304 |
|
(c) |
|
Amortization of intangibles related to purchase price |
|
12,272 |
|
(d) |
9,797 |
|
(d) |
30,765 |
|
(d) |
29,391 |
|
(d) |
|
Depreciation on step-up values of fixed assets |
|
145 |
|
(e) |
166 |
|
(e) |
367 |
|
(e) |
426 |
|
(e) |
|
Impairment of certain intangibles from ClariPhy acquisition |
|
- |
|
|
47,014 |
|
(f) |
- |
|
|
47,014 |
|
(f) |
|
Restructuring expenses |
|
- |
|
|
- |
|
|
1,491 |
|
(g) |
- |
|
|
| Loss on
claim settlement from ClariPhy acquisition |
|
125 |
|
(h) |
- |
|
|
2,250 |
|
(h) |
- |
|
|
| Loss on
retirement of certain property and equipment from acquisitions |
|
66 |
|
(i) |
- |
|
|
66 |
|
(i) |
77 |
|
(i) |
|
Unrealized loss (gain) on equity investment |
|
482 |
|
(j) |
- |
|
|
(2,374 |
) |
(j) |
- |
|
|
| Accretion
and amortization expense on convertible debt |
|
6,713 |
|
(k) |
6,250 |
|
(k) |
19,566 |
|
(k) |
18,218 |
|
(k) |
| Valuation
allowance and tax effect of the adjustments above from GAAP to
non-GAAP |
|
(494 |
) |
(l) |
(11,480 |
) |
(l) |
(9,281 |
) |
(l) |
(13,800 |
) |
(l) |
| Non-GAAP net
income |
$ |
13,686 |
|
$ |
15,754 |
|
$ |
18,280 |
|
$ |
50,933 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Shares used in
computing non-GAAP basic earnings per share |
|
43,934,598 |
|
|
42,350,313 |
|
|
43,535,033 |
|
|
42,022,272 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Shares used in
computing non-GAAP diluted earnings per share before offsetting
shares from call option |
|
45,210,493 |
|
|
44,016,382 |
|
|
44,808,725 |
|
|
44,587,466 |
|
|
| Offsetting shares from
call option |
|
- |
|
|
- |
|
|
- |
|
|
268,389 |
|
|
| Shares used in
computing non-GAAP diluted earnings per share |
|
45,210,493 |
|
|
44,016,382 |
|
|
44,808,725 |
|
|
44,319,077 |
|
|
| |
|
|
|
|
|
|
|
|
|
| Non-GAAP earnings per
share: |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.31 |
|
$ |
0.37 |
|
$ |
0.42 |
|
$ |
1.21 |
|
|
|
Diluted |
$ |
0.30 |
|
$ |
0.36 |
|
$ |
0.41 |
|
$ |
1.15 |
|
|
| |
|
|
|
|
|
|
|
|
|
| GAAP gross margin as a
% of revenue |
|
55.7 |
% |
|
49.8 |
% |
|
55.6 |
% |
|
54.6 |
% |
|
| Stock-based
compensation |
|
0.8 |
% |
|
0.7 |
% |
|
0.9 |
% |
|
0.6 |
% |
|
| Amortization of
inventory fair value step-up and intangibles |
|
12.9 |
% |
|
20.9 |
% |
|
11.7 |
% |
|
15.8 |
% |
|
| Non-GAAP gross margin
as a % of revenue |
|
69.4 |
% |
|
71.4 |
% |
|
68.2 |
% |
|
71.0 |
% |
|
| (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 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. |
| (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 the impairment
of in-process research and development and developed technology
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. |
| (g) |
|
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. |
| (h) |
|
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. |
| (i) |
|
Reflects the loss on
disposal of certain property and equipment from the 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. |
| (j) |
|
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. |
| (k) |
|
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. |
| (l) |
|
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
-FOURTH QUARTER 2018 GUIDANCE |
| (in thousands of dollars, except share and per share
amounts) |
| (Unaudited) |
| |
|
|
|
|
| |
|
Three Months Ending December 31,
2018 |
| |
|
High |
|
Low |
| Estimated GAAP net
loss |
$ |
(15,730 |
) |
$ |
(16,450 |
) |
| Adjusting items to
estimated GAAP net loss: |
|
|
|
|
| Operating
expenses related to stock-based compensation expense |
|
16,850 |
|
|
16,650 |
|
|
Amortization of intangibles |
|
12,250 |
|
|
12,250 |
|
|
Amortization of convertible debt interest cost |
|
6,700 |
|
|
6,700 |
|
| Tax
effect of GAAP to non-GAAP adjustments |
|
(600 |
) |
|
(600 |
) |
| Estimated non-GAAP net
income |
$ |
19,470 |
|
$ |
18,550 |
|
| |
|
|
|
|
| Shares used in
computing estimated non-GAAP diluted earnings per share |
|
45,650,000 |
|
|
45,650,000 |
|
| |
|
|
|
|
| Estimated non-GAAP
diluted earnings per share |
$ |
0.43 |
|
$ |
0.41 |
|
| |
|
|
|
|
| |
|
|
|
|
| Revenue |
$ |
88,300 |
|
$ |
84,300 |
|
| |
|
|
|
|
| GAAP gross margin |
$ |
51,900 |
|
$ |
48,240 |
|
| as a % of
revenue |
|
58.8 |
% |
|
57.2 |
% |
| Adjusting items to
estimated GAAP gross margin: |
|
|
|
|
|
Stock-based compensation |
|
650 |
|
|
650 |
|
|
Amortization of intangibles |
|
9,700 |
|
|
9,700 |
|
| Estimated non-GAAP
gross margin |
$ |
62,250 |
|
$ |
58,590 |
|
| as a % of
revenue |
|
70.5 |
% |
|
69.5 |
% |
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