Inphi Corporation (NYSE: IPHI), a leader in high-speed data
movement interconnects, today announced financial results for its
fourth quarter and fiscal year ended December 31, 2019.
GAAP Results
Revenue in the fourth quarter of 2019 was a record $102.9
million on a U.S. generally accepted accounting principles (GAAP)
basis, up 18.9% year-over-year, compared with $86.5 million in the
fourth quarter of 2018. The increase was due to higher demand for
datacenter products.
Gross margin under GAAP in the fourth quarter of 2019 was 59.9%,
compared with 57.2% in the fourth quarter of 2018. The increase was
mainly due to product and revenue mix.
GAAP operating loss in the fourth quarter of 2019 was $8.8
million or (8.6%) of revenue, compared to GAAP operating loss in
the fourth quarter of 2018 of $8.2 million or (9.5%) of revenue.
The slight increase in operating loss was mainly due to higher
operating expenses, partially offset by higher gross profit.
GAAP net loss for the fourth quarter of 2019 was $13.4 million
or ($0.29) per diluted common share, compared with $21.6 million or
($0.49) per diluted common share in the fourth quarter of 2018.
Inphi reports gross profit, 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 gross
profit, operating expenses, operating income, 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 fourth quarter of 2019
was 69.2%, compared with 69.3% in the fourth quarter of
2018.
Non-GAAP operating income in the fourth quarter of 2019 was
$23.4 million, compared with non-GAAP operating income of $20.5
million in the fourth quarter of 2018. The increase is primarily
due to higher gross profit, partially offset by higher operating
expenses.
Non-GAAP net income in the fourth quarter of 2019 was $23.1
million, or $0.47 per diluted common share. This compares with
non-GAAP net income of $20.5 million, or $0.45 per diluted common
share in the fourth quarter of 2018.
“We are very pleased to deliver record Q4 results driven by
strength in our cloud market segment,” said Ford Tamer, President
and CEO of Inphi Corporation. “On 24% year-on-year revenue growth
for 2019 we generated 87% non-GAAP EPS growth, demonstrating
continued leverage in our operating model. We enter 2020 with the
close of the eSilicon acquisition and a strong product offering to
serve our customers’ growth and support their success. We
expect our organic revenue momentum to continue in Q1 and through
the balance of the year.”
Year Ended 2019 ResultsRevenue in the year
ended December 31, 2019 was $365.6 million, compared with $294.5
million in the year ended December 31, 2018. GAAP net loss in the
year ended December 31, 2019 was $72.9 million, or ($1.61) per
diluted common share, on approximately 45.2 million diluted
weighted average common shares outstanding. This compares with GAAP
net loss of $95.8 million, or ($2.19) per diluted common share, on
approximately 43.7 million diluted weighted average common shares
outstanding in the year ended December 31, 2018.
Non-GAAP net income in the year ended December 31, 2019 was
$76.6 million, or $1.61 per diluted common share, on approximately
47.6 million non-GAAP diluted weighted average common shares
outstanding. This compares with non-GAAP net income of $38.8
million in the year ended December 31, 2018, or $0.86 per diluted
common share, on approximately 45.0 million diluted weighted
average common shares outstanding.
Business OutlookThe following statements are
based on the Company’s current expectations for the first quarter
of 2020 and include the impact of eSilicon, which closed on January
10, 2020. Due to strong product cycles, among other factors
in both Telecom and Cloud, we anticipate sequential organic revenue
growth in the first quarter of 2020 compared to the fourth quarter
of 2019. We continue to expect eSilicon will contribute
between $80 to $120 million in revenue in 2020 and contribute to
the mid-teens in percentage of revenue in the first quarter of
2020. 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 Q1 2020 is expected to be in the range of $130.4
million to $134.4 million.
- GAAP gross margin is expected to be approximately 50.9% to
52.3%.
- Non-GAAP gross margin is expected to be approximately 64.2% to
65.2%.
- Stock-based compensation expense is expected to be in the range
of $19 million to $20 million.
- GAAP net loss is expected to be in range between $21.4 million
to $27.3 million, or ($0.46) to ($0.59) per basic share, based on
46.1 million estimated weighted average basic shares
outstanding.
- Non-GAAP net income, excluding stock-based compensation
expense, acquisition expenses, 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
$21.5 million to $26.1 million, or $0.42 to $0.52 per weighted
average diluted share, based on 50.6 million estimated non-GAAP
weighted average 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
fourth quarter 2019 results.
The call can be accessed by dialing (765) 507-2591, participant
passcode: 3853299. 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://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
StatementsThese 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 2020, including with respect to the first quarter
of 2020, revenue, gross margin, stock-based compensation expense,
operating performance, net income or loss, and earnings per share;
the Company’s expectations regarding growth opportunities, success
of our growth strategy strength of the cloud market, increasing
demand in Q1 2020, growth inside data centers, customer
relationships, the Company’s expectations regarding the benefits of
the eSilicon acquisition 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 target markets; market demand for the Company’s
products; reliance on third parties to manufacture, assemble and
test products; ability to compete; the ability to effectively
integrate eSilicon 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 demand, 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, 2018, 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 December 31, |
|
Year Ended December 31, |
|
|
| |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
| Revenue |
$ |
102,896 |
|
$ |
86,531 |
|
$ |
365,635 |
|
$ |
294,490 |
|
|
|
| Cost of
revenue |
|
41,297 |
|
|
37,005 |
|
|
152,814 |
|
|
129,345 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Gross
profit |
|
61,599 |
|
|
49,526 |
|
|
212,821 |
|
|
165,145 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
49,876 |
|
|
40,624 |
|
|
183,875 |
|
|
167,924 |
|
|
|
| Sales
and marketing |
|
12,378 |
|
|
10,608 |
|
|
47,722 |
|
|
43,080 |
|
|
|
|
General and administrative |
|
8,194 |
|
|
6,535 |
|
|
30,672 |
|
|
28,302 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Total
operating expenses |
|
70,448 |
|
|
57,767 |
|
|
262,269 |
|
|
239,306 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Loss from
operations |
|
(8,849 |
) |
|
(8,241 |
) |
|
(49,448 |
) |
|
(74,161 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Interest
expense, net of other income |
|
(5,415 |
) |
|
(13,195 |
) |
|
(23,067 |
) |
|
(29,801 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Loss from
operations before income taxes |
|
(14,264 |
) |
|
(21,436 |
) |
|
(72,515 |
) |
|
(103,962 |
) |
|
|
| Provision
(benefit) for income taxes |
|
(856 |
) |
|
195 |
|
|
396 |
|
|
(8,211 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Net
loss |
$ |
(13,408 |
) |
$ |
(21,631 |
) |
$ |
(72,911 |
) |
$ |
(95,751 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.29 |
) |
$ |
(0.49 |
) |
$ |
(1.61 |
) |
$ |
(2.19 |
) |
|
|
|
Diluted |
$ |
(0.29 |
) |
$ |
(0.49 |
) |
$ |
(1.61 |
) |
$ |
(2.19 |
) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing |
|
|
|
|
|
|
|
|
|
|
|
earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
45,728,736 |
|
|
44,152,932 |
|
|
45,226,717 |
|
|
43,690,581 |
|
|
|
|
Diluted |
|
45,728,736 |
|
|
44,152,932 |
|
|
45,226,717 |
|
|
43,690,581 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| 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 December 31, |
|
Year Ended December 31, |
|
|
| |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
| |
|
(in thousands of
dollars) |
|
(in thousands of
dollars) |
|
|
| |
|
(Unaudited) |
|
(Unaudited) |
|
|
| Cost of
revenue |
$ |
1,776 |
|
$ |
717 |
|
$ |
6,208 |
|
$ |
2,527 |
|
|
|
| Research and
development |
|
11,311 |
|
|
9,544 |
|
|
42,265 |
|
|
37,397 |
|
|
|
| Sales and
marketing |
|
3,832 |
|
|
3,285 |
|
|
15,561 |
|
|
13,470 |
|
|
|
| General and
administrative |
|
3,339 |
|
|
2,829 |
|
|
12,821 |
|
|
10,490 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
$ |
20,258 |
|
$ |
16,375 |
|
$ |
76,855 |
|
$ |
63,884 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| INPHI
CORPORATION |
|
| CONSOLIDATED
BALANCE SHEETS |
|
| (in thousands of
dollars) |
|
| (Unaudited) |
|
| |
|
December 31, 2019 |
|
December 31, 2018 |
|
|
Assets |
|
|
|
|
|
| Current
assets: |
|
|
|
|
|
| Cash
and cash equivalents |
$ |
282,723 |
|
$ |
172,018 |
|
|
|
Investments in marketable securities |
|
140,131 |
|
|
235,339 |
|
|
|
Accounts receivable, net |
|
60,295 |
|
|
61,271 |
|
|
|
Inventories |
|
55,013 |
|
|
33,052 |
|
|
|
Prepaid expenses and other current assets |
|
17,463 |
|
|
9,600 |
|
|
|
Total current assets |
|
555,625 |
|
|
511,280 |
|
|
| |
|
|
|
|
|
| Property and
equipment, net |
|
79,563 |
|
|
70,740 |
|
|
|
Goodwill |
|
104,502 |
|
|
104,502 |
|
|
| Intangible
assets, net |
|
168,290 |
|
|
180,447 |
|
|
| Right of use
assets, net |
|
33,576 |
|
|
- |
|
|
| Other
assets, net |
|
34,450 |
|
|
22,904 |
|
|
| Total
assets |
$ |
976,006 |
|
$ |
889,873 |
|
|
| |
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
| |
|
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
18,771 |
|
$ |
15,891 |
|
|
|
Accrued expenses and other current liabilities |
|
51,820 |
|
|
43,120 |
|
|
|
Deferred revenue |
|
3,719 |
|
|
5,432 |
|
|
|
Convertible debt |
|
217,467 |
|
|
- |
|
|
| |
|
|
|
|
|
|
Total current liabilities |
|
291,777 |
|
|
64,443 |
|
|
| |
|
|
|
|
|
| Convertible
debt |
|
258,711 |
|
|
447,825 |
|
|
| Other
liabilities |
|
78,917 |
|
|
10,911 |
|
|
| Total
liabilities |
|
629,405 |
|
|
523,179 |
|
|
| |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Common stock |
|
46 |
|
|
44 |
|
|
|
Additional paid-in capital |
|
587,862 |
|
|
536,157 |
|
|
|
Accumulated deficit |
|
(242,807 |
) |
|
(169,896 |
) |
|
|
Accumulated other comprehensive income |
|
1,500 |
|
|
389 |
|
|
| Total
stockholders’ equity |
|
346,601 |
|
|
366,694 |
|
|
| |
|
|
|
|
|
| Total
liabilities and stockholders’ equity |
$ |
976,006 |
|
$ |
889,873 |
|
|
| |
|
|
|
|
|
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, loss on claim settlements, non-cash interest expense
related to convertible debt, unrealized gain or loss on equity
investments, lease expense on building not occupied 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 December 31, |
|
Year Ended December 31, |
|
|
| |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
| GAAP
gross profit to Non-GAAP gross profit |
|
|
|
|
|
|
|
|
|
|
| GAAP gross
profit |
$ |
61,599 |
|
$ |
49,526 |
|
$ |
212,821 |
|
$ |
165,145 |
|
|
|
| Adjustments
to GAAP gross profit: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
1,776 |
|
(a) |
717 |
|
(a) |
6,208 |
|
(a) |
2,527 |
|
(a) |
|
|
Acquisition related expenses |
|
- |
|
|
- |
|
|
- |
|
|
3 |
|
(b) |
|
|
Amortization of inventory step-up |
|
- |
|
|
- |
|
|
- |
|
|
1,166 |
|
(c) |
|
|
Amortization of intangibles |
|
7,815 |
|
(d) |
9,724 |
|
(d) |
36,987 |
|
(d) |
32,846 |
|
(d) |
|
|
Depreciation on step-up values of fixed assets |
|
2 |
|
(e) |
(12 |
) |
(e) |
(25 |
) |
(e) |
(48 |
) |
(e) |
|
|
Restructuring expenses |
|
- |
|
|
- |
|
|
- |
|
|
106 |
|
(f) |
|
| Non-GAAP
gross profit |
$ |
71,192 |
|
$ |
59,955 |
|
$ |
255,991 |
|
$ |
201,745 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP
operating expenses to non-GAAP operating expenses |
|
|
|
|
|
|
|
|
|
|
| GAAP
research and development |
$ |
49,876 |
|
$ |
40,624 |
|
$ |
183,875 |
|
$ |
167,924 |
|
|
|
| Adjustments
to GAAP research and development: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(11,311 |
) |
(a) |
(9,544 |
) |
(a) |
(42,265 |
) |
(a) |
(37,397 |
) |
(a) |
|
|
Acquisition related expenses |
|
- |
|
|
- |
|
|
- |
|
|
(607 |
) |
(b) |
|
|
Depreciation on step-up values of fixed assets |
|
(164 |
) |
(e) |
(109 |
) |
(e) |
(518 |
) |
(e) |
(402 |
) |
(e) |
|
|
Restructuring expenses |
|
- |
|
|
- |
|
|
- |
|
|
(885 |
) |
(f) |
|
| Non-GAAP
research and development |
$ |
38,401 |
|
$ |
30,971 |
|
$ |
141,092 |
|
$ |
128,633 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP sales
and marketing |
$ |
12,378 |
|
$ |
10,608 |
|
$ |
47,722 |
|
$ |
43,080 |
|
|
|
| Adjustments
to GAAP sales and marketing: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(3,832 |
) |
(a) |
(3,285 |
) |
(a) |
(15,561 |
) |
(a) |
(13,470 |
) |
(a) |
|
|
Acquisition related expenses |
|
- |
|
|
- |
|
|
- |
|
|
(259 |
) |
(b) |
|
|
Amortization of intangibles |
|
(2,432 |
) |
(d) |
(2,431 |
) |
(d) |
(9,725 |
) |
(d) |
(9,726 |
) |
(d) |
|
|
Depreciation on step-up values of fixed assets |
|
(3 |
) |
(e) |
(4 |
) |
(e) |
(10 |
) |
(e) |
(64 |
) |
(e) |
|
|
Restructuring expenses |
|
- |
|
|
- |
|
|
- |
|
|
(367 |
) |
(f) |
|
| Non-GAAP
sales and marketing |
$ |
6,111 |
|
$ |
4,888 |
|
$ |
22,426 |
|
$ |
19,194 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP general
and administrative |
$ |
8,194 |
|
$ |
6,535 |
|
$ |
30,672 |
|
$ |
28,302 |
|
|
|
| Adjustments
to GAAP general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(3,339 |
) |
(a) |
(2,829 |
) |
(a) |
(12,821 |
) |
(a) |
(10,490 |
) |
(a) |
|
|
Acquisition related expenses |
|
(1,015 |
) |
(b) |
- |
|
|
(1,015 |
) |
(b) |
(6 |
) |
(b) |
|
|
Amortization of intangibles |
|
(69 |
) |
(d) |
(116 |
) |
(d) |
(417 |
) |
(d) |
(464 |
) |
(d) |
|
|
Depreciation on step-up values of fixed assets |
|
(6 |
) |
(e) |
(6 |
) |
(e) |
(20 |
) |
(e) |
(56 |
) |
(e) |
|
|
Restructuring expenses |
|
- |
|
|
- |
|
|
- |
|
|
(133 |
) |
(f) |
|
|
Expense on lease that was not yet occupied |
|
(462 |
) |
(g) |
- |
|
|
(462 |
) |
(g) |
- |
|
|
|
| Loss
on claim settlement from ClariPhy acquisition |
|
- |
|
|
- |
|
|
(400 |
) |
(h) |
(2,250 |
) |
(h) |
|
| Non-GAAP
general and administrative |
$ |
3,303 |
|
$ |
3,584 |
|
$ |
15,537 |
|
$ |
14,903 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Non-GAAP
total operating expenses |
$ |
47,815 |
|
$ |
39,443 |
|
$ |
179,055 |
|
$ |
162,730 |
|
|
|
| Non-GAAP
income from operations |
$ |
23,377 |
|
$ |
20,512 |
|
$ |
76,936 |
|
$ |
39,015 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP
net loss to non-GAAP net income |
|
|
|
|
|
|
|
|
|
|
| GAAP net
loss |
$ |
(13,408 |
) |
$ |
(21,631 |
) |
$ |
(72,911 |
) |
$ |
(95,751 |
) |
|
|
| Adjusting
items to GAAP net loss: |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses related to stock-based |
|
|
|
|
|
|
|
|
|
|
|
compensation expense |
|
20,258 |
|
(a) |
16,375 |
|
(a) |
76,855 |
|
(a) |
63,884 |
|
(a) |
|
|
Acquisition related expenses |
|
1,015 |
|
(b) |
- |
|
|
1,015 |
|
(b) |
875 |
|
(b) |
|
|
Amortization of inventory fair value step-up |
|
- |
|
|
- |
|
|
- |
|
|
1,166 |
|
(c) |
|
|
Amortization of intangibles related to purchase price |
|
10,316 |
|
(d) |
12,271 |
|
(d) |
47,129 |
|
(d) |
43,036 |
|
(d) |
|
|
Depreciation on step-up values of fixed assets |
|
175 |
|
(e) |
107 |
|
(e) |
523 |
|
(e) |
474 |
|
(e) |
|
|
Restructuring expenses |
|
- |
|
|
- |
|
|
- |
|
|
1,491 |
|
(f) |
|
|
Expense on lease that was not yet occupied |
|
462 |
|
(g) |
- |
|
|
462 |
|
(g) |
- |
|
|
|
| Loss
on claim settlement from ClariPhy acquisition |
|
- |
|
|
- |
|
|
400 |
|
(h) |
2,250 |
|
(h) |
|
| Loss
on claim settlement from Exactik disposition |
|
- |
|
|
- |
|
|
296 |
|
(i) |
- |
|
|
|
| Loss
on retirement of certain property and equipment from
acquisitions |
|
- |
|
|
- |
|
|
7 |
|
(j) |
66 |
|
(j) |
|
|
Impairment of investment |
|
- |
|
|
7,000 |
|
(k) |
- |
|
|
7,000 |
|
(k) |
|
| Net
unrealized and realized gain on equity investment |
|
(1,049 |
) |
(l) |
(66 |
) |
(l) |
(3,126 |
) |
(l) |
(2,440 |
) |
(l) |
|
|
Accretion and amortization expense on convertible debt |
|
7,338 |
|
(m) |
6,828 |
|
(m) |
28,353 |
|
(m) |
26,394 |
|
(m) |
|
|
Valuation allowance and tax effect of the |
|
|
|
|
|
|
|
|
|
|
|
adjustments above from GAAP to non-GAAP |
|
(2,029 |
) |
(n) |
(354 |
) |
(n) |
(2,432 |
) |
(n) |
(9,635 |
) |
(n) |
|
| Non-GAAP net
income |
$ |
23,078 |
|
$ |
20,530 |
|
$ |
76,571 |
|
$ |
38,810 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Shares used
in computing non-GAAP basic earnings per share |
|
45,728,736 |
|
|
44,152,932 |
|
|
45,226,717 |
|
|
43,690,581 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Shares used
in computing non-GAAP diluted earnings per share before offsetting
shares from call option |
|
51,298,035 |
|
|
45,516,402 |
|
|
48,766,301 |
|
|
44,986,718 |
|
|
|
| Offsetting
shares from call option |
|
2,225,969 |
|
|
- |
|
|
1,176,787 |
|
|
- |
|
|
|
| Shares used
in computing non-GAAP diluted earnings per share |
|
49,072,066 |
|
|
45,516,402 |
|
|
47,589,514 |
|
|
44,986,718 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Non-GAAP
earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.50 |
|
$ |
0.46 |
|
$ |
1.69 |
|
$ |
0.89 |
|
|
|
|
Diluted |
$ |
0.47 |
|
$ |
0.45 |
|
$ |
1.61 |
|
$ |
0.86 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| GAAP gross
profit as a % of revenue |
|
59.9 |
% |
|
57.2 |
% |
|
58.2 |
% |
|
56.1 |
% |
|
|
| Stock-based
compensation |
|
1.7 |
% |
|
0.8 |
% |
|
1.7 |
% |
|
0.9 |
% |
|
|
| Amortization
of inventory fair value step-up and intangibles |
|
7.6 |
% |
|
11.3 |
% |
|
10.1 |
% |
|
11.5 |
% |
|
|
| Non-GAAP
gross profit as a % of revenue |
|
69.2 |
% |
|
69.3 |
% |
|
70.0 |
% |
|
68.5 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
|
- 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 acquisitions. The transition costs also include short-term
cash retention bonus payments to ClariPhy employees that were part
of the merger 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 expense on building lease not yet occupied.
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 loss on settlement of claim from the Exactik
business disposal. 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 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.
- Reflects the impairment of non-marketable equity
investment. 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 and realized 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 -FIRST QUARTER
2020 GUIDANCE |
|
| (in thousands of
dollars, except share and per share amounts) |
|
| (Unaudited) |
|
| |
|
|
|
|
|
| |
|
Three Months Ending March 31, 2020 |
|
|
|
|
High |
|
Low |
|
| Estimated
GAAP net loss |
$ |
(21,400 |
) |
$ |
(27,300 |
) |
|
| Adjusting
items to estimated GAAP net loss: |
|
|
|
|
|
|
Operating expenses related to stock-based |
|
|
|
|
|
|
compensation expense |
|
19,000 |
|
|
20,000 |
|
|
|
Amortization of intangibles |
|
17,800 |
|
|
17,800 |
|
|
|
Amortization of step up values of acquired inventories |
|
1,500 |
|
|
1,500 |
|
|
|
Amortization of step up values of acquired property and
equipment |
200 |
|
|
200 |
|
|
|
Acquisition related expenses |
|
2,500 |
|
|
2,500 |
|
|
|
Amortization of convertible debt interest cost |
|
7,200 |
|
|
7,200 |
|
|
|
Noncash expense on lease not yet occupied |
|
775 |
|
|
775 |
|
|
|
Others |
|
125 |
|
|
125 |
|
|
| Tax
effect of GAAP to non-GAAP adjustments |
|
(1,600 |
) |
|
(1,300 |
) |
|
| Estimated
non-GAAP net income |
$ |
26,100 |
|
$ |
21,500 |
|
|
| |
|
|
|
|
|
| Shares used
in computing estimated non-GAAP diluted earnings per share |
|
50,600,000 |
|
|
50,600,000 |
|
|
| |
|
|
|
|
|
| Estimated
non-GAAP diluted earnings per share |
$ |
0.52 |
|
$ |
0.42 |
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Revenue |
$ |
134,400 |
|
$ |
130,400 |
|
|
| |
|
|
|
|
|
| GAAP gross
profit |
$ |
70,300 |
|
$ |
66,400 |
|
|
| as a
% of revenue |
|
52.3 |
% |
|
50.9 |
% |
|
| Adjusting
items to estimated GAAP gross profit: |
|
|
|
|
|
|
Stock-based compensation |
|
2,000 |
|
|
2,000 |
|
|
| Fixed
assets depreciation step up |
|
10 |
|
|
10 |
|
|
|
Amortization of intangibles |
|
15,300 |
|
|
15,300 |
|
|
| Estimated
non-GAAP gross profit |
$ |
87,610 |
|
$ |
83,710 |
|
|
| as a
% of revenue |
|
65.2 |
% |
|
64.2 |
% |
|
| |
|
|
|
|
|
Corporate Contact:
Kim Markle
408-217-7329
kmarkle@inphi.com
Investor Contact:
Vernon P. Essi, Jr.
408-606-6524
vessi@inphi.com
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