Inphi Corporation (NYSE: IPHI), a leader in high-speed data
movement interconnects, today announced financial results for its
second quarter ended June 30, 2020.
GAAP Results
Revenue in the second quarter of 2020 was a record $175.3
million on a U.S. generally accepted accounting principles (GAAP)
basis, up 103.2% year-over-year, compared with $86.3 million in the
second quarter of 2019. The increase was due to higher demand for
Cloud and Telecommunications products as well as the inclusion of
eSilicon revenues as a result of the acquisition that closed on
January 10, 2020.
Gross margin under GAAP in the second quarter of 2020 was 53.0%,
compared with 56.9% in the second quarter of 2019. The decrease was
mainly due to amortization of intangibles, step up value of
inventories related to the eSilicon acquisition and product and
revenue mix.
GAAP operating loss in the second quarter of 2020 was $4.3
million or (2.4%) of revenue, compared to GAAP operating loss in
the second quarter of 2019 of $14.2 million or (16.5%) of revenue.
The decrease in operating loss was mainly due to higher gross
profit, partially offset by higher operating expenses.
GAAP net loss includes a charge of $13.3 million associated with
the extinguishment of approximately $403.5 million in face value of
convertible notes of which $180.4 million were coming due in
December 2020 and $223.1 million were coming due in September 2021.
We paid the principal value in cash and settled the excess spread
in shares of our common stock. In most cases a very small premium
was paid in either cash or stock to induce early extinguishment and
thereby capped any further dilution if the stock price were to
continue to rise before maturity. Approximately, $4.0 million in
cash inducements, advisory fees and other transaction costs were
paid on the debt extinguishment. Approximately, 4.9 million shares
of common stock were also issued at a weighted average price of
$112 per share, of which approximately 3.3 million shares were
already included in the first quarter non-GAAP weighted average
shares calculation using an average stock price of approximately
$78.
GAAP provision for income taxes for the second quarter of 2020
include a one-time benefit of approximately $5.6 million primarily
from the reversal of a previously accrued reserve for transfer
pricing as the result of the formal closure of an income tax audit.
This benefit was offset by a corresponding change in income
tax valuation allowance.
GAAP net loss for the second quarter of 2020 was $24.1 million
or ($0.49) per diluted common share, compared with $20.6 million or
($0.46) per diluted common share in the second quarter of 2019.
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 second quarter of 2020
was 64.1%, compared with 70.1% in the second quarter of 2019.
The decrease was due to product mix, mainly from the sale of
eSilicon products that have a lower margin.
Non-GAAP operating income in the second quarter of 2020 was
$50.3 million, compared with non-GAAP operating income of $16.5
million in the second quarter of 2019. The increase is primarily
due to higher gross profit and higher operating leverage.
Non-GAAP benefit for income taxes for the second quarter of 2020
include a one-time benefit of approximately $5.6 million primarily
from the reversal of a previously accrued reserve for transfer
pricing as the result of the formal closure of an income tax
audit.
Non-GAAP net income in the second quarter of 2020 was $50.9
million, or $0.95 per diluted common share. This includes the
one-time tax benefit referred to above which represents
approximately $0.10 per diluted share as part of the $0.95 per
diluted common share for the second quarter of 2020. This
compares with non-GAAP net income of $16.6 million, or $0.35 per
diluted common share in the second quarter of 2019.
“In Q2 our product offerings were firing on all cylinders.
On a year-over-year basis, our Cloud revenue grew 92% driven by our
PAM4 products inside data centers and our COLORZ solution between
data centers. Our Telecom revenue grew 119% driven by both
our new ASIC and PAM4 for 5G and our coherent solutions for long
haul and metro,” said Ford Tamer, President and CEO of Inphi
Corporation. “We continue to invest in resources both organically
and through strategic acquisitions that can scale Inphi to larger
opportunities ahead. Although we are cautious with regard to the
macro uncertainties, we believe our continued success and breadth
of product cycles will drive sequential growth in the third
quarter.”
First Half 2020 ResultsRevenue in the six
months ended June 30, 2020 was $314.7 million, compared with $168.5
million in the six months ended June 30, 2019. GAAP net loss in the
six months ended June 30, 2020 was $44.3 million, or ($0.93) per
diluted share, on approximately 47.5 million diluted weighted
average common shares outstanding. This compares with GAAP net loss
of $43.3 million, or ($0.97) per diluted share, on approximately
44.8 million diluted weighted average common shares outstanding in
the six months ended June 30, 2019.
Non-GAAP net income in the six months ended June 30, 2020 was
$82.4 million, or $1.58 per diluted weighted average common share
outstanding, on approximately 52.1 million diluted weighted average
common shares outstanding. This compares with non-GAAP net income
of $32.0 million in the six months ended June 30, 2019, or $0.69
per diluted weighted average common share outstanding, on
approximately 46.5 million diluted weighted average common shares
outstanding.
Business Outlook
The following statements are based on the Company’s current
expectations for the third 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 Q3 2020 is expected to be in the range of $179.0
million to $182.5 million.
- GAAP gross margin is expected to be approximately 55.1% to
56.2%.
- Non-GAAP gross margin is expected to be approximately 63.5% to
64.5%.
- Stock-based compensation expense is expected to be in the range
of $29.0 million to $30.0 million.
- GAAP net loss is expected to be in range between $2.7 million
to $6.3 million, or ($0.05) to ($0.12) per basic share, based on
52.1 million estimated weighted average basic shares
outstanding.
- Non-GAAP net income, excluding stock-based compensation
expense, acquisition expenses, amortization of intangibles and
inventory fair value step up related to acquisitions and noncash
interest on convertible debt, is expected to be in the range of
$45.5 million to $47.9 million, or $0.83 to $0.87 per weighted
average diluted share, based on 55.0 million estimated non-GAAP
weighted average diluted shares outstanding.
Quarterly Conference Call TodayInphi plans to
hold a conference call today at 8:30 a.m. Eastern Time / 5:30 a.m.
Pacific Time with Ford Tamer, President and Chief Executive
Officer, and John Edmunds, Chief Financial Officer, to discuss the
second quarter 2020 results.
The call can be accessed by dialing 765-507-2591, participant
passcode: 9798966. 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 third 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 Q3 2020, growth inside data centers, customer
relationships, the Company’s expectations with respect to the
investment in resources, ability to grow and the 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, including as a result
of the impact of the COVID-19 pandemic, 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, 2019, which are available on the SEC’s website
at www.sec.gov. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date thereof. Inphi Corporation undertakes no obligation to update
forward-looking statements for any reason, except as required by
law, even as new information becomes available or other events
occur in the future.
Inphi, the Inphi logo and Think fast are registered trademarks
of Inphi Corporation. All other trademarks used herein are the
property of their respective owners.
|
|
|
INPHI
CORPORATION |
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS |
|
|
(in thousands of
dollars, except share and per share amounts) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
Revenue |
$ |
175,292 |
|
$ |
86,285 |
|
$ |
314,722 |
|
$ |
168,508 |
|
|
|
Cost of
revenue |
|
82,360 |
|
|
37,176 |
|
|
148,093 |
|
|
71,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
|
92,932 |
|
|
49,109 |
|
|
166,629 |
|
|
96,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Research and development |
|
69,176 |
|
|
44,705 |
|
|
131,869 |
|
|
89,104 |
|
|
|
Sales and marketing |
|
15,024 |
|
|
11,154 |
|
|
29,933 |
|
|
23,033 |
|
|
|
General and administrative |
|
12,991 |
|
|
7,480 |
|
|
25,383 |
|
|
14,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
|
97,191 |
|
|
63,339 |
|
|
187,185 |
|
|
126,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(4,259 |
) |
|
(14,230 |
) |
|
(20,556 |
) |
|
(29,710 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on
early extinguishment of convertible debt |
|
(13,297 |
) |
|
- |
|
|
(13,297 |
) |
|
- |
|
|
|
Interest
expense, net of other income |
|
(6,246 |
) |
|
(6,935 |
) |
|
(10,190 |
) |
|
(12,980 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations before income taxes |
|
(23,802 |
) |
|
(21,165 |
) |
|
(44,043 |
) |
|
(42,690 |
) |
|
|
Provision
(benefit) for income taxes |
|
249 |
|
|
(587 |
) |
|
294 |
|
|
633 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(24,051 |
) |
$ |
(20,578 |
) |
$ |
(44,337 |
) |
$ |
(43,323 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.49 |
) |
$ |
(0.46 |
) |
$ |
(0.93 |
) |
$ |
(0.97 |
) |
|
|
Diluted |
$ |
(0.49 |
) |
$ |
(0.46 |
) |
$ |
(0.93 |
) |
$ |
(0.97 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing earnings per share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
48,928,224 |
|
|
45,191,674 |
|
|
47,477,159 |
|
|
44,823,562 |
|
|
|
Diluted |
|
48,928,224 |
|
|
45,191,674 |
|
|
47,477,159 |
|
|
44,823,562 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
(in thousands of
dollars) |
|
(in thousands of
dollars) |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Cost of
revenue |
$ |
1,986 |
|
$ |
1,674 |
|
$ |
3,897 |
|
$ |
2,479 |
|
|
|
Research and
development |
|
16,432 |
|
|
9,925 |
|
|
29,511 |
|
|
20,657 |
|
|
|
Sales and
marketing |
|
5,261 |
|
|
3,269 |
|
|
10,462 |
|
|
7,417 |
|
|
|
General and
administrative |
|
4,547 |
|
|
3,093 |
|
|
8,385 |
|
|
6,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
28,226 |
|
$ |
17,961 |
|
$ |
52,255 |
|
$ |
36,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INPHI
CORPORATION |
|
CONSOLIDATED
BALANCE SHEETS |
|
(in thousands of
dollars) |
|
(Unaudited) |
|
|
|
June 30, 2020 |
|
December 31, 2019 |
|
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
133,885 |
|
$ |
282,723 |
|
|
Restricted cash |
|
100 |
|
|
- |
|
|
Investments in marketable securities |
|
88,040 |
|
|
140,131 |
|
|
Accounts receivable, net |
|
85,413 |
|
|
60,295 |
|
|
Inventories |
|
90,419 |
|
|
55,013 |
|
|
Prepaid expenses and other current assets |
|
18,175 |
|
|
17,463 |
|
|
Total current assets |
|
416,032 |
|
|
555,625 |
|
|
|
|
|
|
|
|
Property and
equipment, net |
|
109,334 |
|
|
79,563 |
|
|
Goodwill |
|
181,689 |
|
|
104,502 |
|
|
Intangible
assets, net |
|
277,649 |
|
|
168,290 |
|
|
Right of use
asset, net |
|
33,974 |
|
|
33,576 |
|
|
Other
assets, net |
|
32,221 |
|
|
34,450 |
|
|
Total
assets |
$ |
1,050,899 |
|
$ |
976,006 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
$ |
45,159 |
|
$ |
18,771 |
|
|
Accrued expenses and other current liabilities |
|
78,634 |
|
|
51,820 |
|
|
Deferred revenue |
|
5,271 |
|
|
3,719 |
|
|
Convertible debt |
|
48,277 |
|
|
217,467 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
177,341 |
|
|
291,777 |
|
|
|
|
|
|
|
|
Convertible
debt |
|
455,246 |
|
|
258,711 |
|
|
Other
liabilities |
|
68,901 |
|
|
78,917 |
|
|
Total liabilities |
|
701,488 |
|
|
629,405 |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Common stock |
|
52 |
|
|
46 |
|
|
Additional paid-in capital |
|
634,729 |
|
|
587,862 |
|
|
Accumulated deficit |
|
(287,144 |
) |
|
(242,807 |
) |
|
Accumulated other comprehensive income |
|
1,774 |
|
|
1,500 |
|
|
Total
stockholders’ equity |
|
349,411 |
|
|
346,601 |
|
|
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
$ |
1,050,899 |
|
$ |
976,006 |
|
|
|
|
|
|
|
|
INPHI CORPORATIONRECONCILIATION OF GAAP
TO NON-GAAP MEASURES(in thousands of dollars, except share
and per share amounts)
To supplement the financial data presented on a GAAP basis, the
Company discloses certain non-GAAP financial measures, which
exclude stock-based compensation, legal, transition costs and other
expenses, purchase price fair value adjustments related to
acquisitions, non-cash interest expense and loss on
extinguishment 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 June 30, |
|
Six Months Ended June 30, |
|
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
GAAP
gross margin to Non-GAAP gross margin |
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin |
$ |
92,932 |
|
$ |
49,109 |
|
$ |
166,629 |
|
$ |
96,740 |
|
|
|
Adjustments
to GAAP gross margin: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
1,986 |
|
(a) |
1,674 |
|
(a) |
3,897 |
|
(a) |
2,479 |
|
(a) |
|
Amortization of inventory step-up |
|
2,063 |
|
(b) |
- |
|
|
4,339 |
|
(b) |
- |
|
|
|
Amortization of intangibles |
|
15,081 |
|
(c) |
9,724 |
|
(c) |
26,464 |
|
(c) |
19,448 |
|
(c) |
|
Depreciation on step-up values of fixed assets |
|
214 |
|
(d) |
(12 |
) |
(d) |
430 |
|
(d) |
(24 |
) |
(d) |
|
Non-GAAP
gross margin |
$ |
112,276 |
|
$ |
60,495 |
|
$ |
201,759 |
|
$ |
118,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
operating expenses to Non-GAAP operating expenses |
|
|
|
|
|
|
|
|
|
|
GAAP
research and development |
$ |
69,176 |
|
$ |
44,705 |
|
$ |
131,869 |
|
$ |
89,104 |
|
|
|
Adjustments
to GAAP research and development: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(16,432 |
) |
(a) |
(9,925 |
) |
(a) |
(29,511 |
) |
(a) |
(20,657 |
) |
(a) |
|
Depreciation on step-up values of fixed assets |
|
(102 |
) |
(d) |
(110 |
) |
(d) |
(124 |
) |
(d) |
(197 |
) |
(d) |
|
Acquisition related expenses |
|
(3,011 |
) |
(e) |
- |
|
|
(9,403 |
) |
(e) |
- |
|
|
|
Non-GAAP
research and development |
$ |
49,631 |
|
$ |
34,670 |
|
$ |
92,831 |
|
$ |
68,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales
and marketing |
$ |
15,024 |
|
$ |
11,154 |
|
$ |
29,933 |
|
$ |
23,033 |
|
|
|
Adjustments
to GAAP sales and marketing: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(5,261 |
) |
(a) |
(3,269 |
) |
(a) |
(10,462 |
) |
(a) |
(7,417 |
) |
(a) |
|
Amortization of intangibles |
|
(2,431 |
) |
(c) |
(2,431 |
) |
(c) |
(4,863 |
) |
(c) |
(4,862 |
) |
(c) |
|
Depreciation on step-up values of fixed assets |
|
(20 |
) |
(d) |
(2 |
) |
(d) |
(21 |
) |
(d) |
(5 |
) |
(d) |
|
Acquisition related expenses |
|
(16 |
) |
(e) |
- |
|
|
(677 |
) |
(e) |
- |
|
|
|
Non-GAAP
sales and marketing |
$ |
7,296 |
|
$ |
5,452 |
|
$ |
13,910 |
|
$ |
10,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general
and administrative |
$ |
12,991 |
|
$ |
7,480 |
|
$ |
25,383 |
|
$ |
14,313 |
|
|
|
Adjustments
to GAAP general and administrative: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
(4,547 |
) |
(a) |
(3,093 |
) |
(a) |
(8,385 |
) |
(a) |
(6,166 |
) |
(a) |
|
Amortization of intangibles |
|
(70 |
) |
(c) |
(116 |
) |
(c) |
(140 |
) |
(c) |
(232 |
) |
(c) |
|
Depreciation on step-up values of fixed assets |
|
2 |
|
(d) |
(4 |
) |
(d) |
(128 |
) |
(d) |
(9 |
) |
(d) |
|
Acquisition related expenses |
|
(2,674 |
) |
(e) |
- |
|
|
(4,991 |
) |
(e) |
- |
|
|
|
Expense on lease that was not yet occupied |
|
(692 |
) |
(f) |
- |
|
|
(1,247 |
) |
(f) |
- |
|
|
|
Loss on claim settlement from ClariPhy acquisition |
|
- |
|
|
(400 |
) |
(g) |
- |
|
|
(400 |
) |
(g) |
|
Non-GAAP
general and administrative |
$ |
5,010 |
|
$ |
3,867 |
|
$ |
10,492 |
|
$ |
7,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
total operating expenses |
$ |
61,937 |
|
$ |
43,989 |
|
$ |
117,233 |
|
$ |
86,505 |
|
|
|
Non-GAAP
income from operations |
$ |
50,339 |
|
$ |
16,506 |
|
$ |
84,526 |
|
$ |
32,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
net loss to Non-GAAP net income |
|
|
|
|
|
|
|
|
|
|
GAAP net
loss |
$ |
(24,051 |
) |
$ |
(20,578 |
) |
$ |
(44,337 |
) |
$ |
(43,323 |
) |
|
|
Adjusting
items to GAAP net loss: |
|
|
|
|
|
|
|
|
|
|
Operating expenses related to stock-based compensation expense |
|
28,226 |
|
(a) |
17,961 |
|
(a) |
52,255 |
|
(a) |
36,719 |
|
(a) |
|
Amortization of inventory step-up |
|
2,063 |
|
(b) |
- |
|
|
4,339 |
|
(b) |
- |
|
|
|
Amortization of intangibles related to purchase price |
|
17,582 |
|
(c) |
12,271 |
|
(c) |
31,467 |
|
(c) |
24,542 |
|
(c) |
|
Depreciation on step-up values of fixed assets |
|
334 |
|
(d) |
104 |
|
(d) |
703 |
|
(d) |
187 |
|
(d) |
|
Acquisition related expenses |
|
5,701 |
|
(e) |
- |
|
|
15,071 |
|
(e) |
- |
|
|
|
Expense on lease that was not yet occupied |
|
692 |
|
(f) |
- |
|
|
1,247 |
|
(f) |
|
|
|
Loss on claim settlement from ClariPhy acquisition |
|
- |
|
|
400 |
|
(g) |
- |
|
|
400 |
|
(g) |
|
Accretion and amortization expense on convertible debt |
|
8,540 |
|
(h) |
7,006 |
|
(h) |
15,931 |
|
(h) |
13,805 |
|
(h) |
|
Loss on early extinguishment of convertible debt |
|
13,297 |
|
(i) |
- |
|
|
13,297 |
|
(i) |
- |
|
|
|
Net realized and unrealized loss (gain) on equity investment |
|
(2,676 |
) |
(j) |
347 |
|
(j) |
(6,743 |
) |
(j) |
75 |
|
(j) |
|
Loss on retirement of certain property and equipment from ClariPhy
acquisition |
|
- |
|
|
- |
|
|
40 |
|
(k) |
- |
|
|
|
Loss on claim settlement from Exactik disposition |
|
- |
|
|
296 |
|
(l) |
- |
|
|
296 |
|
(l) |
|
Valuation allowance and tax effect of the adjustments above from
GAAP to non-GAAP |
|
1,241 |
|
(m) |
(1,216 |
) |
(m) |
(837 |
) |
(m) |
(700 |
) |
(m) |
|
Non-GAAP net
income |
$ |
50,949 |
|
$ |
16,591 |
|
$ |
82,433 |
|
$ |
32,001 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used
in computing non-GAAP basic earnings per share |
|
48,928,224 |
|
|
45,191,674 |
|
|
47,477,159 |
|
|
44,823,562 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used
in computing non-GAAP diluted earnings per share before offsetting
shares from call option |
|
55,067,012 |
|
|
47,700,457 |
|
|
53,800,332 |
|
|
46,920,852 |
|
|
|
Offsetting
shares from call option |
|
1,456,642 |
|
|
787,128 |
|
|
1,714,647 |
|
|
393,564 |
|
|
|
Shares used
in computing non-GAAP diluted earnings per share |
|
53,610,370 |
|
|
46,913,329 |
|
|
52,085,685 |
|
|
46,527,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
earnings per share: |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.04 |
|
$ |
0.37 |
|
$ |
1.74 |
|
$ |
0.71 |
|
|
|
Diluted |
$ |
0.95 |
|
$ |
0.35 |
|
$ |
1.58 |
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin as a % of revenue |
|
53.0 |
% |
|
56.9 |
% |
|
52.9 |
% |
|
57.4 |
% |
|
|
Stock-based
compensation |
|
1.1 |
% |
|
1.9 |
% |
|
1.2 |
% |
|
1.5 |
% |
|
|
Amortization
of inventory fair value step-up and intangibles |
|
10.0 |
% |
|
11.3 |
% |
|
10.0 |
% |
|
11.5 |
% |
|
|
Non-GAAP
gross margin as a % of revenue |
|
64.1 |
% |
|
70.1 |
% |
|
64.1 |
% |
|
70.4 |
% |
|
|
(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 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. (c) Reflects the fair value
amortization of intangibles related to 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.
(d) 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. (e) Reflects the legal,
transition costs and other expenses related to acquisitions.
The transition costs also include short-term cash retention bonus
payments to eSilicon employees. 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. (f) 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.(g) 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.(h) Reflects the accretion and amortization
expense on convertible debt. The Company excludes these items
when it evaluates the continuing operational performance of the
Company as management believes this GAAP measure is not indicative
of its core operating performance.(i) Reflects the loss on
early extinguishment of 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.(j) 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.(k) 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.(l) 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.(m) 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
2020 GUIDANCE |
|
(in thousands of
dollars, except share and per share amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ending September 30, 2020 |
|
|
|
High |
|
Low |
|
Estimated GAAP net loss |
$ |
(2,700 |
) |
$ |
(6,300 |
) |
|
Adjusting
items to estimated GAAP net loss: |
|
|
|
|
|
Operating expenses related to stock-based compensation expense |
|
30,000 |
|
|
29,000 |
|
|
Amortization of intangibles |
|
14,900 |
|
|
14,900 |
|
|
Amortization of step up values of acquired inventories |
|
350 |
|
|
350 |
|
|
Amortization of step up values of acquired property and
equipment |
340 |
|
|
340 |
|
|
Acquisition related expenses |
|
700 |
|
|
700 |
|
|
Amortization of convertible debt interest cost |
|
6,650 |
|
|
6,650 |
|
|
Noncash expense on lease not yet occupied |
|
340 |
|
|
340 |
|
|
Tax effect of GAAP to non-GAAP adjustments |
|
(2,700 |
) |
|
(480 |
) |
|
Estimated
non-GAAP net income |
$ |
47,880 |
|
$ |
45,500 |
|
|
|
|
|
|
|
|
Shares used
in computing estimated non-GAAP diluted earnings per share |
|
55,000,000 |
|
|
55,000,000 |
|
|
|
|
|
|
|
|
Estimated
non-GAAP diluted earnings per share |
$ |
0.87 |
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
182,500 |
|
$ |
179,000 |
|
|
|
|
|
|
|
|
GAAP gross
margin |
$ |
102,520 |
|
$ |
98,600 |
|
|
as a % of revenue |
|
56.2 |
% |
|
55.1 |
% |
|
Adjusting
items to estimated GAAP gross margin: |
|
|
|
|
|
Stock-based compensation |
|
2,150 |
|
|
2,050 |
|
|
Amortization of step up values of acquired inventories |
|
350 |
|
|
350 |
|
|
Fixed assets depreciation step up |
|
220 |
|
|
220 |
|
|
Amortization of intangibles |
|
12,400 |
|
|
12,400 |
|
|
Estimated
non-GAAP gross margin |
$ |
117,640 |
|
$ |
113,620 |
|
|
as a % of revenue |
|
64.5 |
% |
|
63.5 |
% |
|
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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