MaxLinear, Inc. Announces Fourth Quarter 2018 Financial Results
[ Back ]   [ More News ]   [ Home ]
MaxLinear, Inc. Announces Fourth Quarter 2018 Financial Results

Fourth Quarter 2018 Net Revenue of $87.6 million

CARLSBAD, Calif. — (BUSINESS WIRE) — February 5, 2019 — MaxLinear, Inc. (NYSE: MXL), a leading provider of RF, analog and mixed-signal integrated circuits for the connected home, and industrial and multi-market applications, today announced financial results for the fourth quarter ended December 31, 2018.

Fourth Quarter Financial Highlights

GAAP basis:

Non-GAAP basis:

Recent Business Highlights

Management Commentary

“In the fourth quarter, our business performed well overall, highlighted by strong sequential revenue growth from our Infrastructure category. More specifically, in 2018, our wireless backhaul infrastructure business recorded nearly 50% growth. Our Connected Home business also delivered on the beginning of an anticipated recovery, which is now in its early stages. The Industrial and Multi-market business, as expected, was soft, which we believe reflects an overall industry slowdown. These results yielded GAAP net revenue of $87.6 million and net cash flows from operating activities of $24.2 million. These strong operating cash flows enabled us to pre-pay $15.0 million towards our outstanding term-loan debt, which further reduced our net leverage ratio to approximately 1.75 at the end of the fourth quarter,” commented Kishore Seendripu, Ph.D., Chairman and CEO.

“As we begin 2019, we are very excited about the positive early customer feedback regarding the new products launching this year which address the large communications Infrastructure market. Specifically, we have launched our 400G PAM4 DSP plus integrated driver and TIA system solution targeting high speed interconnect data center deployments in the second half of 2019 and our new wireless radio-transceiver targeting the 5G massive MIMO wireless opportunity, slated for sampling in the first half of 2019. These key infrastructure product launches combined with the aforementioned strength in our wireless backhaul business and the beginning of the recovery of our broadband business provide us confidence in our ability to realize our strong mid-term and long-term growth aspirations. Our technology leadership, along with our continued operating expense discipline, strongly position us to be able to navigate a turbulent market environment while supporting our long-term growth initiatives,” continued Dr. Seendripu.

First Quarter 2019 Business Outlook

The company expects revenue in the first quarter 2019 to be approximately $82 million to $87 million, and also estimates the following:

Webcast and Conference Call

MaxLinear will host its fourth quarter financial results conference call today, February 5, 2019 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 February 19, 2019. A replay of the conference call will also be available until February 19, 2019 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13686233.

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 first quarter 2019 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 Quarterly Report on Form 10-Q for the quarter ended September 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 Annual Report on Form 10-K for the year ended December 31, 2018, which we expect to file shortly. All forward-looking statements are based on the estimates, projections and assumptions of management as of February 5, 2019, 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 percentage of revenue, pre-tax margins, effective tax rate, 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; (iii) accruals related to our performance based bonus plan for 2017, which we settled in shares of 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.

We believe that non-GAAP financial measures can provide useful information to both management and investors by excluding certain non-cash and other one-time expenses that are not indicative of our core operating results. Among other uses, our management uses non-GAAP measures to compare our performance relative to forecasts and strategic plans and to benchmark our performance externally against competitors. In addition, management’s incentive compensation will be determined in part using these non-GAAP measures because we believe non-GAAP measures better reflect our core operating performance.

The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:

Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants. Our equity incentive plans are important components of our employee incentive compensation arrangements and are reflected as expenses in our GAAP results. Stock-based compensation expense has been and will continue to be a significant recurring expense for MaxLinear.

Bonuses under our executive and non-executive bonus programs have been excluded from our non-GAAP net income for all periods reported. Bonus payments for the 2017 performance periods were settled through the issuance of shares of common stock under our equity incentive plans in February 2018. We currently expect that bonus awards under our fiscal 2018 program will be settled in common stock in the first quarter of fiscal 2019. While we include the dilutive impact of equity awards in weighted average shares outstanding, the expense associated with stock-based awards reflects a non-cash charge that we exclude from non-GAAP net income.

Expenses incurred in relation to acquisitions include amortization of purchased intangible assets and step-up of inventory to fair value, depreciation of step-up of property and equipment to fair value, acquisition and integration costs primarily consisting of professional and consulting fees.

Restructuring charges incurred are related to our restructuring plans which address issues primarily relating to the integration of the Company and acquired businesses or internal operations and primarily include severance and restructuring costs related to exiting certain facilities.

Expenses incurred in relation to our intellectual property and commercial litigation include professional fees incurred.

Income tax benefits and expense adjustments are those that do not affect cash income taxes payable. Effects of the Tax Act were excluded from Non-GAAP effective tax rate.

Reconciliations of non-GAAP measures for the historic periods disclosed in this press release appear below. Because of the inherent uncertainty associated with our ability to project future charges, particularly related to stock-based compensation and its related tax effects as well as potential impairments, we have not provided a reconciliation for non-GAAP guidance provided for the first quarter 2019.

About MaxLinear, Inc.

MaxLinear, Inc. (NYSE: MXL) is a leading provider of radio frequency (RF), analog and mixed-signal integrated circuits for the connected home, wired and wireless infrastructure, and industrial and multi-market applications. MaxLinear is headquartered in Carlsbad, California. For more information, please visit www.maxlinear.com.

MXL is MaxLinear’s registered trademark. Other trademarks appearing herein are the property of their respective owners.

 
 
MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 
Three Months Ended
December 31, 2018   September 30, 2018   December 31, 2017
Net revenue $ 87,627 $ 85,010 $ 113,721
Cost of net revenue 41,727   41,134   61,628  
Gross profit 45,900 43,876 52,093
Operating expenses:
Research and development 29,667 29,047 30,116
Selling, general and administrative 25,208 24,963 26,843
Impairment losses — 2,198 —
Restructuring charges 1,737   236   800  
Total operating expenses 56,612   56,444   57,759  
Loss from operations (10,712 ) (12,568 ) (5,666 )
Interest income 24 17 14
Interest expense (3,194 ) (3,473 ) (4,044 )
Other income (expense), net 229   39   (793 )
Total interest and other expense, net (2,941 ) (3,417 ) (4,823 )
Loss before income taxes (13,653 ) (15,985 ) (10,489 )
Income tax provision (benefit) (13,964 ) (2,050 ) 8,959  
Net income (loss) $ 311   $ (13,935 ) $ (19,448 )
Net income (loss) per share:
Basic $ —   $ (0.20 ) $ (0.29 )
Diluted $ —   $ (0.20 ) $ (0.29 )
Shares used to compute net income (loss) per share:
Basic 69,186   68,742   67,147  
Diluted 71,267   68,742   67,147  
 
 
MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 
Years Ended
December 31, 2018   December 31, 2017
Net revenue $ 384,997 $ 420,318
Cost of net revenue 176,223   212,355  
Gross profit 208,774 207,963
Operating expenses:
Research and development 120,046 112,279
Selling, general and administrative 101,789 105,831
Impairment losses 2,198 2,000
Restructuring charges 3,838   9,524  
Total operating expenses 227,871   229,634  
Loss from operations (19,097 ) (21,671 )
Interest income 78 274
Interest expense (14,255 ) (10,378 )
Other income (expense), net 422   (2,223 )
Total interest and other expense, net (13,755 ) (12,327 )
Loss before income taxes (32,852 ) (33,998 )
Income tax benefit (6,653 ) (24,811 )
Net loss $ (26,199 ) $ (9,187 )
Net loss per share:
Basic $ (0.38 ) $ (0.14 )
Diluted $ (0.38 ) $ (0.14 )
Shares used to compute net loss per share:
Basic 68,490   66,252  
Diluted 68,490   66,252  
 
 
MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
Three Months Ended
December 31, 2018   September 30, 2018   December 31, 2017
Operating Activities
Net income (loss) $ 311 $ (13,935 ) $ (19,448 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization and depreciation 19,125 19,767 20,236
Impairment losses — 2,198 —
Amortization of inventory step-up — — 9,715
Amortization of debt issuance costs and discount 287 287 287
Stock-based compensation 7,999 7,940 7,770
Deferred income taxes (8,827 ) 304 16,650
(Gain) loss on disposal of property and equipment 430 — (33 )
(Gain) loss on foreign currency (268 ) (184 ) 738
Excess tax benefits on stock-based awards (820 ) (93 ) (1,961 )
Impairment of leasehold improvements 35 — —
Changes in operating assets and liabilities:
Accounts receivable (867 ) 25,016 9,492
Inventory 19 2,581 543
Prepaid expenses and other assets 1,905 712 (424 )
Accounts payable, accrued expenses and other current liabilities 648 (10,606 ) (2,494 )
Accrued compensation 2,387 2,671 1,351
Deferred revenue and deferred profit — — (12,862 )
Accrued price protection liability 2,036 (5,662 ) (6,658 )
Other long-term liabilities (227 ) (275 ) (1,159 )
Net cash provided by operating activities 24,173 30,721 21,743
Investing Activities
Purchases of property and equipment (1,412 ) (1,609 ) (3,070 )
Proceeds from sale of property and equipment —   —   30  
Net cash used in investing activities (1,412 ) (1,609 ) (3,040 )
Financing Activities
Repayment of debt (15,000 ) (35,000 ) (20,000 )
Net proceeds from issuance of common stock 2,732 91 2,960
Minimum tax withholding paid on behalf of employees for restricted stock units (2,606 ) (1,178 ) (1,718 )
Net cash used in financing activities (14,874 ) (36,087 ) (18,758 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,939 ) 103   371  
Increase (decrease) in cash, cash equivalents and restricted cash 5,948 (6,872 ) 316
Cash, cash equivalents and restricted cash at beginning of period 68,243   75,115   74,096  
Cash, cash equivalents and restricted cash at end of period $ 74,191   $ 68,243   $ 74,412  
 
 
MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
Years Ended
December 31, 2018   December 31, 2017
Operating Activities
Net loss $ (26,199 ) $ (9,187 )
Adjustments to reconcile net loss to cash provided by operating activities:
Amortization and depreciation 79,027 66,738
Impairment losses 2,198 2,000
Provision for losses on accounts receivable — 133
Accretion of investment discounts, net — (60 )
Amortization of inventory step-up — 25,557
Amortization of debt issuance costs and discount 1,148 763
Stock-based compensation 31,721 32,668
Deferred income taxes (12,144 ) (31,767 )
Loss on disposal of property and equipment 430 168
Loss on sale of available-for-sale securities — 38
(Gain) loss on foreign currency (809 ) 2,153
Excess tax benefits on stock-based awards (2,028 ) (8,559 )
Impairment of leasehold improvements 735 —
Changes in operating assets and liabilities:
Accounts receivable 6,595 (4,377 )
Inventory 11,696 (1,788 )
Prepaid expenses and other assets 5,833 1,272
Accounts payable, accrued expenses and other current liabilities 1,161 (1,918 )
Accrued compensation 8,961 1,567
Deferred revenue and deferred profit (138 ) (1,629 )
Accrued price protection liability (5,117 ) 6,395
Other long-term liabilities (381 ) (5,103 )
Net cash provided by operating activities 102,689 75,064
Investing Activities
Purchases of property and equipment (7,825 ) (7,468 )
Proceeds from sale of property and equipment — 30
Purchases of intangible assets — (5,378 )
Cash used in acquisition, net of cash acquired — (473,304 )
Purchases of available-for-sale securities — (30,577 )
Maturities of available-for-sale securities —   84,546  
Net cash used in investing activities (7,825 ) (432,151 )
Financing Activities
Proceeds from issuance of debt — 416,846
Repayment of debt (93,000 ) (70,000 )
Repurchases of common stock — (334 )
Net proceeds from issuance of common stock 6,839 12,052
Minimum tax withholding paid on behalf of employees for restricted stock units (7,623 ) (11,543 )
Net cash provided by (used in) financing activities (93,784 ) 347,021
Effect of exchange rate changes on cash and cash equivalents (1,301 ) 1,582  
Decrease in cash, cash equivalents and restricted cash (221 ) (8,484 )
Cash, cash equivalents and restricted cash at beginning of period 74,412   82,896  
Cash, cash equivalents and restricted cash at end of period $ 74,191   $ 74,412  
 
 
MAXLINEAR, INC.
UNAUDITED GAAP CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
     
December 31, 2018 September 30, 2018 December 31, 2017
Assets
Current assets:
Cash and cash equivalents $ 73,142 $ 67,185 $ 71,872
Short-term restricted cash 645 349 1,476
Accounts receivable, net 59,491 58,633 66,099
Inventory 41,738 41,757 53,434
Prepaid expenses and other current assets 5,595   6,329   8,423
Total current assets 180,611 174,253 201,304
Long-term restricted cash 404 709 1,064
Property and equipment, net 18,404 19,413 22,658
Intangible assets, net 244,900 261,813 315,045
Goodwill 238,330 238,330 237,992
Deferred tax assets 51,518 42,691 39,878
Other long-term assets 4,664   4,935   6,921
Total assets $ 738,831   $ 742,144   $ 824,862
 
Liabilities and stockholders’ equity
Current liabilities $ 70,567 $ 66,464 $ 76,386
Long-term debt 255,757 270,470 347,609
Other long-term liabilities 12,571 12,816 13,443
Total stockholders’ equity 399,936   392,394   387,424
Total liabilities and stockholders’ equity $ 738,831   $ 742,144   $ 824,862
 
 
MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
(in thousands, except per share data)
 
Three Months Ended
December 31, 2018   September 30, 2018   December 31, 2017
GAAP gross profit $ 45,900 $ 43,876 $ 52,093
Stock-based compensation 132 131 101
Performance based equity 56 53 35
Amortization of inventory step-up — — 9,715
Amortization of purchased intangible assets 8,875 8,969 8,465
Depreciation of fixed asset step-up —   95   112  
Non-GAAP gross profit 54,963 53,124 70,521
 
GAAP R&D expenses 29,667 29,047 30,116
Stock-based compensation (4,399 ) (4,726 ) (4,349 )
Performance based equity (1,254 ) (1,517 ) (1,031 )
Amortization of purchased intangible assets — — (97 )
Depreciation of fixed asset step-up (76 ) (321 ) (297 )
Non-GAAP R&D expenses 23,938 22,483 24,342
 
GAAP SG&A expenses 25,208 24,963 26,843
Stock-based compensation (3,481 ) (3,070 ) (3,105 )
Performance based equity (948 ) (785 ) (937 )
Amortization of purchased intangible assets (7,994 ) (7,994 ) (8,760 )
Depreciation of fixed asset step-up (2 ) (12 ) (20 )
Acquisition and integration costs — — (54 )
IP litigation costs, net (3 ) (19 ) (38 )
Non-GAAP SG&A expenses 12,780 13,083 13,929
 
GAAP Impairment losses — 2,198 —
Impairment losses —   (2,198 ) —  
Non-GAAP Impairment losses — — —
 
GAAP restructuring expenses 1,737 236 800
Restructuring charges (1,737 ) (236 ) (800 )
Non-GAAP restructuring expenses — — —
 
GAAP loss from operations (10,712 ) (12,568 ) (5,666 )
Total non-GAAP adjustments 28,957   30,126   37,916  
Non-GAAP income from operations 18,245 17,558 32,250
 
GAAP and non-GAAP interest and other income (expense), net (2,941 ) (3,417 ) (4,823 )
 
GAAP loss before income taxes (13,653 ) (15,985 ) (10,489 )
Total non-GAAP adjustments 28,957   30,126   37,916  
Non-GAAP income before income taxes 15,304 14,141 27,427
 
GAAP income tax provision (benefit) (13,964 ) (2,050 ) 8,959
Adjustment for non-cash tax benefits/expenses and effects of the Tax Act 15,035   3,040   (7,853 )
Non-GAAP income tax provision 1,071 990 1,106
 
GAAP net income (loss) 311 (13,935 ) (19,448 )
Total non-GAAP adjustments before income taxes 28,957 30,126 37,916
Less: total tax adjustments 15,035   3,040   (7,853 )
Non-GAAP net income $ 14,233   $ 13,151   $ 26,321  
 
Shares used in computing non-GAAP basic net income per share 69,186   68,742   67,147  
Shares used in computing non-GAAP diluted net income per share 71,267   70,634   70,175  
Non-GAAP basic net income per share $ 0.21   $ 0.19   $ 0.39  
Non-GAAP diluted net income per share $ 0.20   $ 0.19   $ 0.38  
 
 
MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
(in thousands, except per share data)
 
Years Ended
December 31, 2018   December 31, 2017
GAAP gross profit $ 208,774 $ 207,963
Stock-based compensation 489 332
Performance based equity 234 139
Amortization of inventory step-up — 25,557
Amortization of purchased intangible assets 35,781 25,316
Depreciation of fixed asset step-up 303 337
Deferred profit eliminated in purchase price accounting —   4,682  
Non-GAAP gross profit 245,581 264,326
 
GAAP R&D expenses 120,046 112,279
Stock-based compensation (17,953 ) (16,190 )
Performance based equity (5,208 ) (4,001 )
Amortization of purchased intangible assets — (386 )
Depreciation of fixed asset step-up (1,050 ) (1,618 )

Non-GAAP R&D expenses

95,835 90,084
 
GAAP SG&A expenses 101,789 105,831
Stock-based compensation (13,279 ) (11,016 )
Performance based equity (3,512 ) (2,514 )
Amortization of purchased intangible assets (31,976 ) (28,827 )
Depreciation of fixed asset step-up (36 ) (106 )
Acquisition and integration costs — (10,062 )
IP litigation costs, net (83 ) (272 )
Non-GAAP SG&A expenses 52,903 53,034
 
GAAP impairment losses 2,198 2,000
Impairment losses (2,198 ) (2,000 )
Non-GAAP impairment losses — —
 
GAAP restructuring expenses 3,838 9,524
Restructuring charges (3,838 ) (9,524 )
Non-GAAP restructuring expenses — —
 
GAAP loss from operations (19,097 ) (21,671 )
Total non-GAAP adjustments 115,940   142,879  
Non-GAAP income from operations 96,843 121,208
 
GAAP and non-GAAP interest and other income (expense), net (13,755 ) (12,327 )
 
GAAP loss before income taxes (32,852 ) (33,998 )
Total non-GAAP adjustments 115,940   142,879  
Non-GAAP income before income taxes 83,088 108,881
 
GAAP income tax benefit (6,653 ) (24,811 )
Adjustment for non-cash tax benefits/expenses and effects of the Tax Act 12,469   32,433  
Non-GAAP income tax provision 5,816 7,622
 
GAAP net loss (26,199 ) (9,187 )
Total non-GAAP adjustments before income taxes 115,940 142,879
Less: total tax adjustments 12,469   32,433  

Non-GAAP net income

$ 77,272   $ 101,259  
 
Shares used in computing non-GAAP basic net income per share 68,490   66,252  
Shares used in computing non-GAAP diluted net income per share 70,709   69,665  
Non-GAAP basic net income per share $ 1.13   $ 1.53  
Non-GAAP diluted net income per share $ 1.09   $ 1.45  
 
 
MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
 
Three Months Ended
December 31, 2018   September 30, 2018   December 31, 2017
GAAP gross profit 52.4 % 51.6 % 45.8 %
Stock-based compensation 0.2 % 0.2 % 0.1 %
Performance based equity 0.1 % 0.1 % — %
Amortization of inventory step-up — % — % 8.5 %
Amortization of purchased intangible assets 10.1 % 10.6 % 7.4 %
Depreciation of fixed asset step-up — % 0.1 % 0.2 %
Non-GAAP gross profit 62.7 % 62.5 % 62.0 %
 
GAAP R&D expenses 33.9 % 34.2 % 26.5 %
Stock-based compensation (5.0 )% (5.6 )% (3.8 )%
Performance based equity (1.4 )% (1.8 )% (1.0 )%
Amortization of purchased intangible assets — % — % (0.1 )%
Depreciation of fixed asset step-up (0.1 )% (0.5 )% (0.2 )%
Non-GAAP R&D expenses 27.3 % 26.4 % 21.4 %
 
GAAP SG&A expenses 28.8 % 29.4 % 23.6 %
Stock-based compensation (4.0 )% (3.6 )% (2.7 )%
Performance based equity (1.1 )% (0.9 )% (1.0 )%
Amortization of purchased intangible assets (9.1 )% (9.4 )% (7.7 )%
Depreciation of fixed asset step-up — % — % — %
Acquisition and integration costs — % — % — %
IP litigation costs, net — % — % — %
Non-GAAP SG&A expenses 14.6 % 15.4 % 12.2 %
 
GAAP Impairment losses — % 2.6 % — %
Impairment losses — % (2.6 )% — %
Non-GAAP Impairment losses — % — % — %
 
GAAP restructuring expenses 2.0 % 0.3 % 0.7 %
Restructuring charges (2.0 )% (0.3 )% (0.7 )%
Non-GAAP restructuring expenses — % — % — %
 
GAAP loss from operations (12.2 )% (14.8 )% (5.0 )%
Total non-GAAP adjustments 33.0 % 35.4 % 33.3 %
Non-GAAP income from operations 20.8 % 20.7 % 28.3 %
 
GAAP and non-GAAP interest and other income (expense), net (3.4 )% (4.0 )% (4.2 )%
 
GAAP loss before income taxes (15.6 )% (18.8 )% (9.2 )%
Total non-GAAP adjustments before income taxes 33.0 % 35.4 % 33.3 %
Non-GAAP income before income taxes 17.5 % 16.6 % 24.1 %
 
GAAP income tax provision (benefit) (15.9 )% (2.4 )% 7.9 %
Adjustment for non-cash tax benefits/expenses and the effects of the Tax Act 17.2 % 3.6 % (7.0 )%
Non-GAAP income tax provision 1.2 % 1.2 % 0.9 %
 
GAAP net income (loss) 0.4 % (16.4 )% (17.1 )%
Total non-GAAP adjustments before income taxes 33.0 % 35.4 % 33.3 %
Less: total tax adjustments 17.2 % 3.6 % (7.0 )%
Non-GAAP net income 16.2 % 15.5 % 23.1 %
 
 
MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
 
Years Ended
December 31, 2018   December 31, 2017
GAAP gross profit 54.2 % 49.5 %
Stock-based compensation 0.1 % 0.1 %
Performance based equity 0.1 % — %
Amortization of inventory step-up — % 6.0 %
Amortization of purchased intangible assets 9.3 % 6.0 %
Depreciation of fixed asset step-up 0.1 % 0.2 %
Deferred profit eliminated in purchase price accounting — % 1.1 %
Non-GAAP gross profit 63.8 % 62.9 %
 
GAAP R&D expenses 31.2 % 26.7 %
Stock-based compensation (4.7 )% (3.9 )%
Performance based equity (1.4 )% (1.0 )%
Amortization of purchased intangible assets — % (0.1 )%
Depreciation of fixed asset step-up (0.3 )% (0.3 )%
Non-GAAP R&D expenses 24.9 % 21.4 %
 
GAAP SG&A expenses 26.4 % 25.2 %
Stock-based compensation (3.4 )% (2.6 )%
Performance based equity (0.9 )% (0.6 )%
Amortization of purchased intangible assets (8.3 )% (6.9 )%
Depreciation of fixed asset step-up — % — %
Acquisition and integration costs — % (2.4 )%
IP litigation costs, net — % (0.1 )%
Non-GAAP SG&A expenses 13.7 % 12.6 %
 
GAAP Impairment losses 0.6 % 0.5 %
Impairment losses (0.6 )% (0.5 )%
Non-GAAP Impairment losses — % — %
 
GAAP restructuring expenses 1.0 % 2.3 %
Restructuring charges (1.0 )% (2.3 )%
Non-GAAP restructuring expenses — % — %
 
GAAP loss from operations (5.0 )% (5.2 )%
Total non-GAAP adjustments 30.1 % 34.0 %
Non-GAAP income from operations 25.2 % 28.8 %
 
GAAP and non-GAAP interest and other income (expense), net (3.6 )% (2.9 )%
 
GAAP loss before income taxes (8.5 )% (8.1 )%
Total non-GAAP adjustments before income taxes 30.1 % 34.0 %
Non-GAAP income before income taxes 21.6 % 25.9 %
 
GAAP income tax benefit (1.7 )% (5.9 )%
Adjustment for non-cash tax benefits/expenses and the effects of the Tax Act 3.2 % 7.7 %
Non-GAAP income tax provision 1.5 % 1.8 %
 
GAAP net loss (6.8 )% (2.2 )%
Total non-GAAP adjustments before income taxes 30.1 % 34.0 %
Less: total tax adjustments 3.2 % 7.7 %
Non-GAAP net income 20.1 % 24.1 %


Contact:

MaxLinear, Inc. Investor Relations Contact:
Steven Litchfield
Tel: 949-333-0080
Email Contact