Fourth Quarter 2018 Business Outlook
The Company expects revenue in the fourth quarter to be in the range of $85 million to $89 million, and also estimates the following:
- GAAP and non-GAAP gross margin of approximately 52.5% and 63.0%, respectively.
- GAAP and non-GAAP operating expenses of approximately $56.0 million and $37.25 million, respectively.
Webcast and Conference Call
MaxLinear will host its third quarter financial results conference call today, October 30, 2018 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access this call, dial US toll free: 1-877-407-3109 / International: 1-201-493-6798. A live webcast of the conference call will be accessible from the investor relations section of the MaxLinear website at http://investors.maxlinear.com, and will be archived and available after the call at http://investors.maxlinear.com until November 13, 2018. A replay of the conference call will also be available until November 13, 2018 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13653123.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning our future financial performance (including our current guidance for fourth quarter 2018 revenue, gross margins, and operating expense and statements concerning expectations of potential developments in our target markets, including management’s views with respect to trends in our DOCSIS and Connected Home markets. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking statements are based on management’s current, preliminary expectations and are subject to various risks and uncertainties. Risks and uncertainties affecting our business and future operating results include, without limitation, intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; uncertainties concerning how end user markets for our products will develop, including in particular new markets we are entering but also existing markets such as cable; potential uncertainties arising from continued consolidation among cable television and satellite operators in our target markets and continued consolidation among competitors within the semiconductor industry generally; our ability to develop and introduce new and enhanced products on a timely basis and achieve market acceptance of those products, particularly as we seek to expand outside of our historic markets; potential decreases in average selling prices for our products; risks relating to intellectual property protection and the prevalence of intellectual property litigation in our industry; the impact on our financial condition of the indebtedness arising from the Exar transaction; our reliance on a limited number of third party manufacturers; and our lack of long-term supply contracts and dependence on limited sources of supply. In addition to these risks and uncertainties, investors should review the risks and uncertainties contained in our filings with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 20, 2018, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, and our Current Reports on Form 8-K, as well as the information to be set forth under the caption “Risk Factors” in MaxLinear’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, which we expect to file shortly. All forward-looking statements are based on the estimates, projections and assumptions of management as of October 30, 2018, and MaxLinear is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.
Use of Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements presented
on a basis consistent with GAAP, we disclose certain non-GAAP financial
measures, including non-GAAP gross margin, operating expenses, operating
expenses as a percentage of revenue, income from operations as a
percentage of revenue, net income, and diluted earnings per share. These
supplemental measures exclude the effects of (i) stock-based
compensation expense; (ii) accruals related to our performance based
bonus plan for 2018, which we currently intend to settle in shares of
our common stock in 2019; (iii) accruals related to our performance
based bonus plan for 2017, which we settled in shares of our common
stock in 2018; (iv) amortization of purchased intangible assets and
inventory step up; (v) depreciation of fixed assets step-up; (vi)
acquisition and integration costs related to 2017 acquisitions; (vii)
professional fees and settlement costs related to our previously
disclosed IP and commercial litigation matters; (viii) impairment losses
on acquired intangible assets; (ix) severance and other restructuring
charges; and (x) non-cash income tax benefits and expenses and effects
of the Tax Act. These non-GAAP measures are not in accordance with and
do not serve as an alternative for GAAP. We believe that these non-GAAP
measures have limitations in that they do not reflect all of the amounts
associated with our GAAP results of operations. These non-GAAP measures
should only be viewed in conjunction with corresponding GAAP measures.
We compensate for the limitations of non-GAAP financial measures by
relying upon GAAP results to gain a complete picture of our performance.
