MaxLinear, Inc. Announces Fourth Quarter 2016 Financial Results

MaxLinear, Inc. Announces Fourth Quarter 2016 Financial Results and the Acquisition of Marvell's G.hn Business

MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
(in thousands, except per share data)

	Years Ended
	December 31, 2016			December 31, 2015
GAAP cost of net revenue	$	157,842		$	144,937
Stock-based compensation	(210		)	(213		)
Performance based equity	10			(256		)
Amortization of inventory step-up	(5,641		)	(14,244		)
Amortization of purchased intangible assets	(8,512		)	(4,202		)
Impairment of production masks	—			(153		)
Non-GAAP cost of net revenue	143,489			125,869

GAAP R&D expenses	97,745			85,405
Stock-based compensation	(13,681		)	(11,739		)
Incentive award compensation	(722		)	(1,466		)
Performance based equity	(4,707		)	(4,032		)
Amortization of purchased intangible assets	(386		)	(405		)
Severance charges	—			(862		)
Restricted merger proceeds and contingent consideration	(694		)	(834		)
Non-GAAP R&D expenses	77,555			66,067

GAAP SG&A expenses	64,454			77,981
Stock-based compensation	(7,014		)	(5,744		)
Incentive award compensation	(137		)	(106		)
Performance based equity	(2,951		)	(2,086		)
Amortization of purchased intangible assets	(6,952		)	(24,989		)
Acquisition and integration costs	(2,424		)	(5,362		)
Restricted merger proceeds and contingent consideration	(220		)	(129		)
Severance charges	—			(456		)
IP litigation costs, net	(699		)	(1,460		)
Non-GAAP SG&A expenses	44,057			37,649

GAAP IPR&D impairment losses	1,300			21,600
IPR&D impairment losses	(1,300		)	(21,600		)
Non-GAAP IPR&D impairment losses	—			—

GAAP restructuring expenses	3,432			14,086
Restructuring charges	(3,432		)	(14,086		)
Non-GAAP restructuring expenses	—			—

GAAP income (loss) before income taxes	63,690			(42,906		)
Total non-GAAP adjustments	59,672			114,424
Non-GAAP income before income taxes	123,362			71,518

GAAP income tax expense (benefit)	2,398			(575		)
Tax impact of non-GAAP adjustments	(151		)	(224		)
Release of valuation allowance due to net deferred liability acquired	—			1,757
Non-GAAP income tax expense	2,247			958

GAAP net income (loss)	$	61,292		$	(42,331	)
Total non-GAAP adjustments before income taxes	59,672			114,424
Total tax adjustments	(151		)	1,533
Non-GAAP net income	$	121,115		$	70,560

Shares used in computing non-GAAP basic net income per share	63,781			53,378
Shares used in computing GAAP diluted net income (loss) per share	67,653			53,378
Dilutive common stock equivalents	—			1,962
Shares used in computing non-GAAP diluted net income per share	67,653			55,340
Non-GAAP basic net income per share	$	1.90		$	1.32
Non-GAAP diluted net income per share	$	1.79		$	1.28

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