LOWELL, Mass. — (BUSINESS WIRE) — April 25, 2017 — MACOM Technology Solutions Holdings, Inc. (NASDAQ: MTSI) (“MACOM”), a leading supplier of high-performance RF, microwave, millimeterwave and lightwave semiconductor products, today announced its financial results for its fiscal second quarter ended March 31, 2017.
Second Quarter Fiscal Year 2017 GAAP Results
- Revenue was $186.1 million, an increase of 39.3%, compared to $133.6 million in the previous year fiscal second quarter and an increase of 22.6% compared to $151.8 million in the prior fiscal quarter;
- Gross profit was $68.9 million, an increase of 5.1%, compared to $65.5 million in the previous year fiscal second quarter and a decrease of 12.3% compared to $78.5 million in the prior fiscal quarter;
- Gross margin was 37.0%, compared to 49.1% in the previous year fiscal second quarter and 51.7% in the prior fiscal quarter;
- Operating loss was $33.6 million, compared to $7.2 million in the previous year fiscal second quarter and operating income of $10.5 million in the prior fiscal quarter; and
- Net loss from continuing operations was $134.3 million, resulting in $2.21 loss per diluted share, compared to a net loss from continuing operations of $12.0 million, or $0.23 loss per diluted share, in the previous year fiscal second quarter and net loss from continuing operations of $2.2 million, or $0.04 loss per diluted share, in the prior fiscal quarter.
- The net loss from continuing operations of $134.3 million for the fiscal second quarter of 2017 includes expenses related to the January 26, 2017 acquisition of Applied Micro Circuits Corporation (“AppliedMicro”) such as the amortization of inventory stepped up to fair value, recorded as cost of revenue, transaction expenses and change in control payments to former AppliedMicro employees, recorded as selling general and administrative expenses, as well as establishing a deferred tax asset valuation allowance of $88.0 million, recorded as income tax expense.
Second Quarter Fiscal Year 2017 Adjusted Non-GAAP Results
- Adjusted gross margin was 58.5%, compared to 58.1% in the previous year fiscal second quarter and 57.2% in the prior fiscal quarter;
- Adjusted operating income was $48.6 million, or 26.1% of revenue, compared to $32.4 million, or 24.3% of revenue, in the previous year fiscal second quarter and $41.0 million, or 27.0% of revenue, in the prior fiscal quarter;
- Adjusted net income was $39.4 million, or $0.63 per diluted share, compared to adjusted net income of $25.7 million, or $0.46 per diluted share, in the previous year fiscal second quarter and adjusted net income of $31.8 million, or $0.57 per diluted share, in the prior fiscal quarter; and
- Adjusted EBITDA was $56.7 million, compared to $39.0 million for the previous year fiscal second quarter and $48.4 million for the prior fiscal quarter.
Management Commentary
John Croteau, MACOM's President and Chief Executive Officer, stated, “We had yet another quarter of solid execution, achieving the top end of guidance for revenue and adjusted earnings per share. Aerospace & Defense and Multi-market were both up sequentially and year on year.
Networks was also up sequentially with and without the contribution of Applied Micro, with strong growth in Cloud Data Centers more than offsetting cyclical weakness in our carrier-based optical businesses. We are excited about the opportunity in Cloud Data Centers which is now a separate and distinct secular growth driver for MACOM and believe we are uniquely positioned in one of the highest growth markets of the electronics industry.”
Mr. Croteau concluded, “Also during the quarter, the AppliedMicro integration has gone exceptionally well. The opportunity for our combined businesses has exceeded our expectations, elevating our strategic status at many of the Cloud Data Center customers.”
Business Outlook
For the fiscal third quarter ending June 30, 2017, we expect revenue to be in the range of $194 million to $198 million. Adjusted gross margin is expected to be between 58% and 61%, and adjusted earnings per share between $0.67 and $0.71, on an anticipated 66.3 million fully diluted shares outstanding.
Conference Call
MACOM will host a conference call on Tuesday, April 25, 2017 at 5:00
p.m. Eastern Time to discuss its fiscal second quarter 2017 financial
results and business outlook. Investors and analysts may join the
conference call by dialing 1-877-837-3908 and providing the passcode
2993987.
