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MACOM Reports Revenue of $133.6 Million, Adjusted Gross Margin of 58.1% and Adjusted EPS of $0.46 (non-GAAP) for Fiscal Second Quarter

LOWELL, Mass. — (BUSINESS WIRE) — April 26, 2016 — M/A-COM Technology Solutions Holdings, Inc. (NASDAQ: MTSI) (“MACOM”), a leading supplier of high-performance analog RF, microwave, millimeterwave and photonic semiconductor products, today announced its financial results for its fiscal second quarter ended April 1, 2016.

Second Quarter Fiscal Year 2016 GAAP Results

Second Quarter Fiscal Year 2016 Adjusted Non-GAAP Results

Management Commentary

John Croteau, MACOM's President and Chief Executive Officer, stated, "I am pleased to announce another quarter of solid execution and sequential growth. Strong demand across our end markets enabled us to beat the top end of guidance on revenue and earnings per share.

"Our Network markets once again delivered solid growth across all optical markets fueled by modulator drivers in long/haul metro as well as lasers in access, backhaul and datacenter applications. We also continued to advance our GaN vision and remain on track with our process qualifications. We are rapidly converging on program wins with Tier-1 customers addressing mainstream LTE deployments."

Mr. Croteau concluded, “As we move into the fiscal second half of the year, we remain focused on executing on our three secular growth drivers - Optical, GaN, and Active Antennas - as highlighted at our recent Analyst Day.”

Business Outlook

For the fiscal third quarter ending July 1, 2016, MACOM expects revenue to be in the range of $138.0 million to $142.0 million. Adjusted gross margin is expected to be between 57 and 59 percent, and adjusted earnings per share between $0.49 and $0.52 on an anticipated 56.5 million diluted shares outstanding.

Conference Call

MACOM will host a conference call on Tuesday, April 26, 2016 at 5:00 p.m. Eastern Time to discuss its second fiscal quarter financial results and business outlook. Investors and analysts may join the conference call by dialing 1-877-837-3908 and providing the confirmation code 84787504.

International callers may join the teleconference by dialing +1-973-872-3000 and entering the same confirmation code at the prompt. A telephone replay of the call will be made available beginning two hours after the call and will remain available for 5 business days. The replay number is 1-855-859-2056 with a passcode of 84787504. International callers should dial +1-404-537-3406 and enter the same pass code at the prompt.

Additionally, this conference call will be broadcast live over the Internet and can be accessed by all interested parties in the Investors section of MACOM's website at http://www.macom.com. To listen to the live call, please go to the Investors section of MACOM's website and click on the conference call link at least fifteen minutes prior to the start of the conference call. For those unable to participate during the live broadcast, a replay will be available shortly after the call and will remain available for approximately 30 days.

About MACOM

MACOM Technology Solutions Holdings, Inc. ( www.macom.com) supplies key enabling technologies for the Cloud Connected Apps Economy and Modern Networked Battlefield. Recognized for its broad catalog portfolio of technologies and products, MACOM provides high-performance analog RF, microwave, millimeterwave and photonic semiconductor products for diverse applications ranging from high speed optical, satellite, wired and wireless networks to military and civil radar systems. A pillar of the semiconductor industry, we thrive on more than 60 years of solving our customers' most complex problems as their trusted partner for solutions ranging from RF to Light.

Headquartered in Lowell, Massachusetts, MACOM is certified to the ISO9001 international quality standard and ISO14001 environmental management standard. MACOM has design centers and sales offices throughout North America, Europe, Asia and Australia.

MACOM, M/A-COM, M/A-COM Technology Solutions, M/A-COM Tech, Partners in RF & Microwave, The First Name in Microwave and related logos are trademarks of MACOM. All other trademarks are the property of their respective owners.

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements based on MACOM management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among others, information concerning our stated business outlook and future results of operations, our expectations for execution on our three growth drivers in fiscal year 2016, on our GaN vision and qualification, and on program wins with Tier-1 customers addressing mainstream LTE deployments and any other statements regarding future trends, business strategies, competitive position, industry conditions, acquisitions and market opportunities. Forward-looking statements include all statements that are not historical facts and generally may be identified by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "seeks," "should," "will," "would" or similar expressions and the negatives of those terms.

Forward-looking statements contained in this press release reflect MACOM's current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause those events or our actual activities or results to differ materially from those expressed in any forward-looking statement. Although MACOM believes that the expectations reflected in the forward-looking statements are reasonable, it cannot and does not guarantee future events, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including the potential that the expected rollout of fiber-to-the-home network technology or other new optical or other network technology deployments in China, Japan and other geographies fails to occur, occurs more slowly than we expect or does not result in the amount or type of new business we anticipate, lower than expected demand in the optical network infrastructure market or any or all of our primary end markets or from Huawei or any or all of our large OEM customers based on seasonal effects, macro-economic weakness or otherwise, the potential for increased pricing pressure and ASP erosion based on competitive factors, technology shifts or otherwise, the potential for inventory obsolescence and related write-offs, the expense, business disruption or other impact of any current or future investigations, administrative actions, litigation or enforcement proceedings we may be involved in, the potential loss of access to any in-licensed intellectual property or inability to license technology we may require on reasonable terms, the impact of any claims of intellectual property infringement or misappropriation, which could require us to pay substantial damages for infringement, expend significant resources in prosecuting or defending such matters or developing non-infringing technology, incur material liability for royalty or license payments, or prevent us from selling certain of our products, greater than expected dilutive effect on earnings of our equity issuances, outstanding indebtedness and related interest expense and other costs, our failure to realize the expected economies of scale, lowered production cost and other anticipated benefits of our previously announced GaN intellectual property licensing program or InP laser production capacity expansion program, the potential for defense spending cuts, program delays, cancellations or sequestration, failures or delays by any customer in winning business or to make purchases from us in support of such business, lack of adoption or delayed adoption by customers and industries we serve of Active Antennas, GaN, InP lasers or other solutions offered by us, failures or delays in porting and qualifying GaN or InP process technology to our Lowell fabrication facility or third party facilities, lower than expected utilization and absorption in our manufacturing facilities, lack of success or slower than expected success in our new product development efforts, failure of any announced transaction to close in accordance with its terms, failure to successfully integrate acquired companies, technologies or products or realize synergies associated with acquisitions, the potential that we will experience difficulties in managing the personnel and operations associated with our acquisitions, loss of business due to competitive factors, product or technology obsolescence, customer program shifts or otherwise, lower than anticipated or slower than expected customer acceptance of our new product introductions, the potential for a shift in the mix of products sold in any period toward lower-margin products or a shift in the geographical mix of our revenues, the impact of any executed or abandoned acquisition, divestiture, joint venture, financing or restructuring activity, the impact of supply shortages or other disruptions in our internal or outsourced supply chain, the impact of changes in export, environmental or other laws applicable to us, the relative success of our cost-savings initiatives, as well as those factors described in "Risk Factors" in MACOM's filings with the Securities and Exchange Commission (SEC), including its Quarterly Report on Form 10-Q for the fiscal quarter ended January 1, 2016, as filed with the SEC on January 27, 2016 and its Annual Report on Form 10-K for the fiscal year ended October 2, 2015 as filed with the SEC on November 24, 2015. MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

In addition to GAAP reporting, MACOM provides investors with adjusted non-GAAP financial information. Adjusted items include revenue, gross profit, gross margin, operating margin, operating income, net income, earnings per share, Adjusted EBITDA and other data calculated on a non-GAAP basis. This non-GAAP information excludes non-consulting agreement related discontinued operations, the impact of fair value accounting in merger and acquisitions (M&A) of businesses, M&A costs, including acquisition and related integration costs, certain cost savings from synergies expected from M&A activities, income and expenses from transition services related to M&A activities, expected amortization of acquisition-related intangibles, share-based and other non-cash compensation expense, certain cash compensation, restructuring charges, impairment charges, litigation settlement and costs, changes in the carrying values of assets and liabilities measured at fair value, contingent consideration, amortization of debt discounts and issuance costs, debt settlement costs, other non-cash expenses, earn-out costs, restructuring costs and certain income tax items. The non-GAAP information includes consulting agreement related revenue associated with the Automotive business divestiture. Management does not believe that the adjusted items are reflective of MACOM's underlying performance. The adjustment of these and other similar items from MACOM's non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual. These and other similar items are also excluded from Adjusted EBITDA, which is non-GAAP earnings before interest, income taxes, depreciation and amortization. MACOM believes this adjusted non-GAAP financial information provides additional insight into these items and MACOM's performance and has, therefore, chosen to provide this information to investors for a consistent basis of comparison and to help them evaluate the results of MACOM's operations and enable more meaningful period to period comparisons. These adjusted non-GAAP measures may be different than similar measures used by other companies and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and adjusted non-GAAP financial data used in this earnings release is included in the supplemental financial data attached to this press release.

           

M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per share data)

 
Three Months Ended Six Months Ended
April 1,   January 1,   April 3, April 1,   April 3,
2016 2016 2015 2016 2015
Revenue $ 133,579 $ 115,774 $ 102,431 $ 249,353 $ 198,987
Cost of revenue 68,054   55,456   55,717   123,510   104,854  
Gross profit 65,525   60,318   46,714   125,843   94,133  
Operating expenses:
Research and development 26,203 25,322 20,439 51,525 39,221
Selling, general and administrative 34,617 34,686 28,247 69,303 53,475
Impairment charges 11,005 11,005
Restructuring charges 851   157   413   1,008   413  
Total operating expenses 72,676   60,165   49,099   132,841   93,109  
Income (loss) from operations (7,151 ) 153   (2,385 ) (6,998 ) 1,024  
Other income (expense):
Warrant liability expense (4,201 ) (14,878 ) (5,609 ) (19,079 ) (16,217 )
Interest expense, net (4,408 ) (4,346 ) (4,723 ) (8,754 ) (9,446 )
Other income (expense), net (81 ) 100   (1,376 ) 19   (1,001 )
Total other income (expense) (8,690 ) (19,124 ) (11,708 ) (27,814 ) (26,664 )
 
Loss before income taxes (15,841 ) (18,971 ) (14,093 ) (34,812 ) (25,640 )
Income tax benefit (3,796 ) (2,201 ) (2,917 ) (5,997 ) (4,500 )
Loss from continuing operations (12,045 ) (16,770 ) (11,176 ) (28,815 ) (21,140 )
Income from discontinued operations 1,396   1,199   3,639   2,595   7,297  
Net loss $ (10,649 ) $ (15,571 ) $ (7,537 ) $ (26,220 ) $ (13,843 )
 
Net income (loss) per share:
Basic:
Loss from continuing operations $ (0.23 ) $ (0.32 ) $ (0.22 ) $ (0.54 ) $ (0.43 )
Income from discontinued operations 0.03   0.02   0.07   0.05   0.15  
Loss per share - basic $ (0.20 ) $ (0.29 ) $ (0.15 ) $ (0.49 ) $ (0.28 )
 
Diluted:
Loss from continuing operations $ (0.23 ) $ (0.32 ) $ (0.22 ) $ (0.54 ) $ (0.43 )
Income from discontinued operations 0.03   0.02   0.07   0.05   0.15  
Loss per share - diluted $ (0.20 ) $ (0.29 ) $ (0.15 ) $ (0.49 ) $ (0.28 )
 
Shares - Basic 53,228   53,015   50,593   53,122   49,100  
Shares - Diluted 53,228   53,015   50,593   53,122   49,100  
 
           

M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)

 
April 1, October 2,
2016 2015
ASSETS
Current assets:
Cash and cash equivalents $ 58,187 $ 122,312
Short term investments 23,632 39,557
Accounts receivable, net 91,604 83,950
Inventories 106,972 79,943
Deferred income taxes (1) 31,431
Income tax receivable 16,077 15,854
Prepaids and other current assets 11,553   11,172
Total current assets 308,025 384,219
Property and equipment, net 99,637 83,759
Goodwill and intangible assets, net 397,370 337,012
Deferred income taxes 83,909 48,239
Other long-term assets 11,457   13,022
TOTAL ASSETS $ 900,398   $ 866,251
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of debt obligations $ 4,499 $ 4,058
Accounts payable, accrued liabilities and other 78,335   67,418
Total current liabilities 82,834 71,476
Long-term debt obligations, less current portion 341,396 340,504
Common stock warrant liability 40,901 21,822
Deferred income taxes 13,920
Long-term liabilities and other 7,339   7,916
Total liabilities 486,390 441,718
Stockholders' equity 414,008   424,533
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 900,398   $ 866,251
 

(1) During the second quarter of fiscal 2016, we early-adopted Accounting Standards Update (ASU) No. 2015-17, Balance Sheet Classification of Deferred Taxes, and applied ASU 2015-17 on a prospective basis. This standard requires that all deferred tax assets and liabilities, and any related valuation allowance, be classified as noncurrent on the balance sheet. As of the second quarter of fiscal 2016, we included $31.4 million of current deferred income tax assets with our noncurrent deferred income tax assets; no adjustments were made to deferred tax liabilities.

 

M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

 
        Six Months Ended
April 1,     April 3,
2016 2015
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (26,220 ) $ (13,843 )
Adjustments to reconcile net loss to net operating cash 77,452 61,947
Change in operating assets and liabilities (16,134 ) (46,672 )
Net cash from operating activities 35,098   1,432  
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of businesses, net (85,516 ) (208,369 )
Purchases, sales and maturities of investments 15,596
Gain on disposition of business 3,750
Strategic investments (250 )
Purchases of property and equipment (16,962 ) (14,036 )
Acquisition of intellectual property (777 ) (1,587 )
Net cash used in investing activities (83,909 ) (224,242 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of notes payable (1,750 ) (1,750 )
Proceeds from stock offering 127,959
Payment of assumed debt (9,120 ) (1,232 )
Proceeds from stock option exercises and employee stock purchases 3,071 2,871
Repurchase of common stock (6,152 ) (4,924 )
Borrowings on revolving facility 100,000
Payments on revolving facility (100,000 )
Other adjustments (1,195 ) (39 )
Net cash from financing activities (15,146 ) 122,885  
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (168 )
NET CHANGE IN CASH AND CASH EQUIVALENTS (64,125 ) (99,925 )
CASH AND CASH EQUIVALENTS — Beginning of period 122,312   173,895  
CASH AND CASH EQUIVALENTS — End of period $ 58,187   $ 73,970  
 
               

M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(unaudited and in thousands, except per share data)

           
Three Months Ended         Six Months Ended
April 1, 2016     January 1, 2016     April 3, 2015         April 1, 2016     April 3, 2015
Amount       Amount       Amount   Amount       Amount  
Revenue - GAAP $ 133,579   $ 115,774   $ 102,431   $ 249,353   $ 198,987  
Adjusted Revenue (NonGAAP) $ 133,579   $ 115,774   $ 102,431   $ 249,353   $ 198,987  
 
Amount   % Revenue     Amount   % Revenue     Amount   % Revenue         Amount   % Revenue     Amount   % Revenue
Gross Profit - GAAP $ 65,525 49.1 $ 60,318 52.1 $ 46,714 45.6 $ 125,843 50.5 $ 94,133 47.3
Intangible amortization expense 6,642 5.0 7,167 6.2 7,347 7.2 13,809 5.5 12,706 6.4
Non-cash compensation expense 500 0.4 491 0.4 577 0.6 991 0.4 919 0.5
Equity-based compensation 191 0.1 51 179 0.2 242 0.1 237 0.1
Impairment charges 1,950 1.5 1,950 0.8
Acquisition FMV step-up expense (inventory/fixed assets) 2,646 2.0 (226 ) (0.2 ) 3,538 3.5 2,420 1.0 4,373 2.2
Third-party engineering costs 305 0.3 1,229 0.6
Integration costs and synergy savings 102     0.1       158     0.1       356     0.3           260     0.1       352     0.2  
Adjusted Gross Profit (NonGAAP) $ 77,556     58.1       $ 67,959     58.7       $ 59,016     57.6           $ 145,515     58.4       $ 113,949     57.3  
 
Research and Development - GAAP $ 26,203 19.6 $ 25,322 21.9 $ 20,439 20.0 $ 51,525 20.7 $ 39,221 19.7
Non-cash compensation expense (1,742 ) (1.3 ) (2,142 ) (1.9 ) (1,563 ) (1.5 ) (3,884 ) (1.6 ) (2,568 ) (1.3 )
Equity-based compensation (1,061 ) (0.8 ) (894 ) (0.8 ) (669 ) (0.7 ) (1,955 ) (0.8 ) (1,188 ) (0.6 )
Acquisition FMV step-up expense (inventory/fixed assets) (204 ) (0.2 ) (204 ) (0.2 ) (204 ) (0.2 ) (408 ) (0.2 ) (408 ) (0.2 )
Integration costs and synergy savings (133 ) (0.1 ) (597 ) (0.5 ) (137 ) (0.1 ) (730 ) (0.3 ) (308 ) (0.2 )
Third-party engineering costs                     305     0.3                     1,229     0.6  
Adjusted Research and Development (NonGAAP) $ 23,063     17.3       $ 21,485     18.6       $ 18,171     17.7           $ 44,548     17.9       $ 35,978     18.1  
 
Selling, General and Administrative - GAAP $ 34,617 25.9 $ 34,686 30.0 $ 28,247 27.6 $ 69,303 27.8 $ 53,475 26.9
Earn-out costs (26 ) 196 0.2 170 0.1
Intangible amortization expense (6,304 ) (4.7 ) (4,423 ) (3.8 ) (3,096 ) (3.0 ) (10,727 ) (4.3 ) (4,149 ) (2.1 )
Non-cash compensation expense (4,210 ) (3.2 ) (7,383 ) (6.4 ) (7,558 ) (7.4 ) (11,592 ) (4.6 ) (9,953 ) (5.0 )
Equity-based compensation (705 ) (0.5 ) (462 ) (0.4 ) (501 ) (0.5 ) (1,167 ) (0.5 ) (818 ) (0.4 )
Acquisition FMV step-up expense (inventory/fixed assets) (28 ) (28 ) (28 ) (56 ) (56 )
Litigation related costs (232 ) (0.2 ) (108 ) (0.1 ) (206 ) (0.2 ) (340 ) (0.1 ) (766 ) (0.4 )
Transaction expenses (102 ) (0.1 ) (3,111 ) (2.7 ) 530 0.5 (3,213 ) (1.3 ) (4,106 ) (2.1 )
Integration costs and synergy savings (919 )   (0.7 )     (571 )   (0.5 )     (282 )   (0.3 )         (1,491 )   (0.6 )     (578 )   (0.3 )
Adjusted Selling, General and Administrative (NonGAAP) $ 22,091     16.5       $ 18,796     16.2       $ 17,106     16.7           $ 40,887     16.4       $ 33,049     16.6  
                                                 
Amount   % Revenue     Amount   % Revenue     Amount   % Revenue         Amount   % Revenue     Amount   % Revenue
Total operating expenses - GAAP $ 72,676 54.4 $ 60,165 52.0 $ 49,099 47.9 $ 132,841 53.3 $ 93,109 46.8
Intangible amortization expense (6,304 ) (4.7 ) (4,423 ) (3.8 ) (3,096 ) (3.0 ) (10,727 ) (4.3 ) (4,149 ) (2.1 )
Non-cash compensation expense (5,951 ) (4.5 ) (9,525 ) (8.2 ) (9,121 ) (8.9 ) (15,477 ) (6.2 ) (12,521 ) (6.3 )
Equity-based compensation (1,766 ) (1.3 ) (1,356 ) (1.2 ) (1,170 ) (1.1 ) (3,122 ) (1.3 ) (2,006 ) (1.0 )
Acquisition FMV step-up expense (inventory/fixed assets) (232 ) (0.2 ) (232 ) (0.2 ) (232 ) (0.2 ) (464 ) (0.2 ) (464 ) (0.2 )
Contingent consideration and earn-out costs (26 ) 196 0.2 170 0.1
Impairment charges (11,005 ) (8.2 ) (11,005 ) (4.4 )
Restructuring charges (851 ) (0.6 ) (157 ) (0.1 ) (413 ) (0.4 ) (1,008 ) (0.4 ) (413 ) (0.2 )
Integration costs and synergy savings (1,053 ) (0.8 ) (1,168 ) (1.0 ) (419 ) (0.4 ) (2,221 ) (0.9 ) (886 ) (0.4 )
Litigation related costs (232 ) (0.2 ) (108 ) (0.1 ) (206 ) (0.2 ) (340 ) (0.1 ) (766 ) (0.4 )
Transaction expenses (102 ) (0.1 ) (3,111 ) (2.7 ) 530 0.5 (3,213 ) (1.3 ) (4,106 ) (2.1 )
Third-party engineering                     305     0.3                     1,229     0.6  
Adjusted Total Operating Expenses (NonGAAP) $ 45,154     33.8       $ 40,281     34.8       $ 35,277     34.4           $ 85,434     34.3       $ 69,027     34.7  
 
Income (loss) from operations - GAAP $ (7,151 ) (5.4 ) $ 153 0.1 $ (2,385 ) (2.3 ) $ (6,998 ) (2.8 ) $ 1,024 0.5
Intangible amortization expense 12,946 9.7 11,590 10.0 10,446 10.2 24,536 9.8 16,858 8.5
Non-cash compensation expense 6,452 4.8 10,016 8.7 9,698 9.5 16,468 6.6 13,440 6.8
Equity-based compensation 1,957 1.5 1,407 1.2 1,349 1.3 3,364 1.3 2,243 1.1
Contingent consideration and earn-out costs 26 (196 ) (0.2 ) (170 ) (0.1 )
Impairment charges 12,955 9.7 12,955 5.2
Restructuring charges 851 0.6 157 0.1 413 0.4 1,008 0.4 413 0.2
Acquisition FMV step-up expense (inventory/fixed assets) 2,878 2.2 6 3,770 3.7 2,884 1.2 4,837 2.4
Litigation related costs 232 0.2 108 0.1 206 0.2 340 0.1 766 0.6
Transaction expenses 102 0.1 3,111 2.7 (530 ) (0.5 ) 3,213 1.3 4,106 0.4
Integration costs and synergy savings 1,154     0.9       1,326     1.1       772     0.8           2,480     1.0       1,235     2.1  
Adjusted Income (Loss) from Operations (NonGAAP) $ 32,402     24.3       $ 27,678     23.9       $ 23,739     23.2           $ 60,080     24.1       $ 44,922     22.6  
Depreciation expense 4,840 3.6 3,903 3.4 3,702 3.6 8,743 3.5 7,089 3.6
Other income, net 1,792     1.3       1,954     1.7                     3,746     1.5            
Adjusted EBITDA $ 39,034     29.2       $ 33,535     29.0       $ 27,441     26.8           $ 72,569     29.1       $ 52,011     26.1  
 
Interest expense- GAAP $ 4,478 3.4 $ 4,475 3.9 $ 4,723 4.6 $ 8,953 3.6 $ 9,446 4.7
Non-cash interest expense (425 )   (0.3 )     (398 )   (0.3 )     (403 )   (0.4 )         (823 )   (0.3 )     (842 )   (0.4 )
Adjusted Interest Expense (NonGAAP) $ 4,053     3.0       $ 4,077     3.5       $ 4,320     4.2           $ 8,130     3.3       $ 8,604     4.3  
 
Net income (loss) - GAAP $ (10,649 ) (8.0 ) $ (15,571 ) (13.4 ) $ (7,537 ) (7.4 ) $ (26,220 ) (10.5 ) $ (13,843 ) (7.0 )
Discontinued operations (1,396 ) (1.0 ) (1,199 ) (1.0 ) (3,639 ) (3.6 ) (2,595 ) (1.0 ) (7,297 ) (3.7 )
Intangible amortization expense 12,946 9.7 11,590 10.0 10,446 10.2 24,536 9.8 16,858 8.5
Non-cash compensation expense 6,452 4.8 10,016 8.7 9,698 9.5 16,468 6.6 13,440 6.8
Equity-based compensation 1,957 1.5 1,407 1.2 1,349 1.3 3,364 1.3 2,243 1.1
Impairment of minority investment 3,500 3.4 3,500 1.8
Contingent consideration 26 (196 ) (0.2 ) (2,000 ) (2.0 ) (170 ) (0.1 ) (2,000 ) (1.0 )
Consulting agreement 1,875 1.4 1,875 1.6 3,750 1.5
Impairment charges 12,955 9.7 12,955 5.2
Restructuring charges 851 0.6 157 0.1 413 0.4 1,008 0.4 413 0.2
Warrant liability (gain) expense 4,201 3.1 14,879 12.9 5,609 5.5 19,080 7.7 16,217 8.1
Non-cash interest expense 425 0.3 398 0.3 403 0.4 823 0.3 842 0.4
Acquisition FMV step-up expense (inventory/fixed assets) 2,878 2.2 6 3,770 3.7 2,884 1.2 4,837 2.4
Litigation related costs 232 0.2 108 0.1 206 0.2 340 1.0 766 0.6
Integration costs and synergy savings 1,152 0.9 1,306 1.1 772 0.8 2,457 0.1 1,235 0.4
Transaction expenses 102 0.1 3,111 2.7 (530 ) (0.5 ) 3,213 1.3 4,106 2.1
Tax effect of non-GAAP adjustments (8,327 ) (6.2 ) (6,054 ) (5.2 ) (5,830 ) (5.7 ) (14,381 ) (5.8 ) (9,948 ) (5.0 )
Transition services for divested business and other                     (124 )   (0.1 )                   (499 )   (0.3 )
Adjusted Net Income (NonGAAP) $ 25,680     19.2       $ 21,833     18.9       $ 16,506     16.1           $ 47,512     19.1       $ 30,870     15.5  
                                                 
Three Months Ended Six Months Ended
April 1, 2016     January 1, 2016     April 3, 2015         April 1, 2016     April 3, 2015

Net Income
(Loss)

 

Income (loss)
per diluted
share

   

Net Income
(Loss)

 

Income (loss)
per diluted
share

   

Net Income
(Loss)

 

Income (loss)
per diluted
share

       

Net Income
(Loss)

 

Income (loss)
per diluted
share

   

Net Income
(Loss)

 

Income (loss)
per diluted
share

 
GAAP $ (10,649 )   $ (0.20 )     $ (15,571 )   $ (0.29 )     $ (7,537 )   $ (0.15 )         $ (26,220 )   $ (0.49 )     $ (13,843 )   $ (0.28 )
 
Adjusted (NonGAAP) $ 25,680     $ 0.46       $ 21,833     $ 0.40       $ 16,506     $ 0.31           $ 47,512     $ 0.86       $ 30,870     $ 0.61  
 
Shares         Shares         Shares             Shares         Shares    
Diluted Shares - GAAP 53,228 53,015 50,593 53,122 49,100
Incremental stock options, warrants, restricted stock and units 2,139           1,996           1,908               2,081           1,815      
Adjusted Diluted Shares (NonGAAP) 55,367           55,011           52,501               55,203           50,915      
 



Contact:

Company Contact:
M/A-COM Technology Solutions Holdings, Inc.
Robert J. McMullan, 978-656-2753
Senior Vice President and Chief Financial Officer
Email Contact
or
Investor Relations Contact:
Shelton Group
Leanne K. Sievers, 949-224-3874
EVP, Investor Relations
Email Contact