EX-99.1 2 a20191231exhibit991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1
mxla01a01a40.jpg
FOR IMMEDIATE RELEASE

MaxLinear, Inc. Announces Fourth Quarter 2019 Financial Results
Carlsbad, Calif. – February 5, 2020 – 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, 2019.

Fourth Quarter Financial Highlights
GAAP basis:
Net revenue was $70.0 million, down 12% sequentially, and down 20% year-on-year.
GAAP gross margin was 52.3%, compared to 52.4% in the prior quarter, and 52.4% in the year-ago quarter.
GAAP operating expenses were $44.6 million in the fourth quarter 2019, or 64% of net revenue, compared to $45.2 million in the prior quarter, or 57% of net revenue, and $56.6 million in the year-ago quarter, or 65% of net revenue.
GAAP loss from operations was 11% of revenue, compared to loss from operations of 4% in the prior quarter, and loss from operations of 12% in the year-ago quarter.
Net cash flow provided by operating activities was $28.1 million, compared to $21.8 million in the prior quarter, and $24.2 million in the year-ago quarter.
GAAP diluted loss per share was $0.11, compared to diluted loss per share of $0.07 in the prior quarter, and diluted earnings per share of $0.00 in the year-ago quarter.
Non-GAAP basis:
Non-GAAP gross margin was 64.6%. This compares to 63.1% in the prior quarter, and 62.7% in the year-ago quarter.
Non-GAAP operating expenses were $30.0 million, or 43% of revenue, compared to $30.8 million or 38% of revenue in the prior quarter, and $36.7 million or 42% of revenue in the year-ago quarter.
Non-GAAP income from operations was 22% of revenue, compared to 25% in the prior quarter, and 21% in the year-ago quarter.
Non-GAAP diluted earnings per share was $0.16, compared to diluted earnings per share of $0.23 in the prior quarter, and diluted earnings per share of $0.20 in the year-ago quarter.

Management Commentary

“In the fourth quarter, revenue results were in line with our guidance, gross margin was strong, and operating expenses declined on continued discipline. We delivered strong cash flow from operations in the quarter at approximately $28 million. As we enter 2020, we are excited about our new product launches coming to fruition with our new 5G wireless radio, and fiber-optic datacenter high-speed interconnect products expanding into new large, high-growth infrastructure markets. We also secured a new design-win at a major customer for our 5G Wireless radio transceiver, in addition to the tier-1 European OEM design-win in the previous quarter,” commented Kishore Seendripu, Ph.D., Chairman and CEO.

First Quarter 2020 Business Outlook
The company expects revenue in the first quarter 2020 to be approximately $65 million to $70 million. The Company also estimates the following:
GAAP gross margin of approximately 53.5% to 54.0%;
Non-GAAP gross margin of approximately 63.5% to 64.0%;
GAAP operating expenses of approximately $46.5 million to $47.5 million; and
Non-GAAP operating expenses of approximately $32.0 million to $32.5 million.

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Webcast and Conference Call
MaxLinear will host its fourth quarter financial results conference call today, February 5, 2020 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 https://investors.maxlinear.com, and will be archived and available after the call at https://investors.maxlinear.com until February 19, 2020. A replay of the conference call will also be available until February 19, 2020 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13697877.

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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 specifically our current guidance for first quarter 2020 revenue, gross margins, and operating expenses) and statements concerning expectations of potential developments in our target markets, including management’s views with respect to the prospects for and trends in our connected home and 5G wireless and fiber-optic high-speed interconnect infrastructure 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 such as the 5G wireless and fiber-optic data center high-speed interconnect infrastructure markets but also existing markets such as connected home; uncertainties concerning the outcome of global trade negotiations, export control limitations, and heightened geopolitical risks generally; uncertainties arising from the impact of novel coronavirus on the market; 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; our reliance on a limited number of third party manufacturers; 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; 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, 2019, 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, 2019, which we expect to file shortly. All forward-looking statements are based on the estimates, projections and assumptions of management as of February 5, 2020, 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, 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 2019, which we currently intend to settle in shares of our common stock; (iii) accruals related to our performance based bonus plan for 2018 which we settled in shares of common stock in 2019; (iv) amortization of purchased intangible assets; (v) depreciation of fixed assets step-up; (vi) professional fees and settlement costs related to our previously disclosed IP and commercial litigation matters; (vii) severance and other restructuring charges; (viii) non-cash income tax benefits and expenses and effects of the 2017 Tax Cuts and Jobs Act, or Tax Act, as applicable; and (ix) non-recurring gain on reversal of liability. 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

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expenses in our GAAP results. Stock-based compensation expense has been and will continue to be a significant recurring expense for MaxLinear. 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.
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 2018 performance periods were settled through the issuance of shares of common stock under our equity incentive plans in February 2019. We currently expect that bonus awards under our fiscal 2019 program will be settled in common stock in the first quarter of fiscal 2020.
Expenses incurred (gains recognized) in relation to acquisitions include amortization of purchased intangible assets, depreciation of step-up of property and equipment to fair value, and non-recurring gain on reversal of liability for an assumed indemnification obligation.
Restructuring charges incurred are related to our restructuring plans which eliminate redundancies 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, as applicable.
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 2020.
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. Investor Relations Contact:
Steven Litchfield
Tel: 949-333-0080
slitchfield@maxlinear.com



4


MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)


 
Three Months Ended
 
December 31, 2019
 
September 30, 2019
 
December 31, 2018
Net revenue
$
70,018

 
$
80,020

 
$
87,627

Cost of net revenue
33,394

 
38,116

 
41,727

Gross profit
36,624

 
41,904

 
45,900

Operating expenses:
 
 
 
 
 
Research and development
23,467

 
23,174

 
29,667

Selling, general and administrative
20,924

 
21,920

 
25,208

Restructuring charges
159

 
144

 
1,737

Total operating expenses
44,550

 
45,238

 
56,612

Loss from operations
(7,926
)
 
(3,334
)
 
(10,712
)
Interest income
222

 
214

 
24

Interest expense
(2,587
)
 
(2,718
)
 
(3,194
)
Other income (expense), net
(498
)
 
1,098

 
229

Total interest and other income (expense), net
(2,863
)
 
(1,406
)
 
(2,941
)
Loss before income taxes
(10,789
)
 
(4,740
)
 
(13,653
)
Income tax benefit
(2,685
)
 
(26
)
 
(13,964
)
Net income (loss)
$
(8,104
)
 
$
(4,714
)
 
$
311

Net income (loss) per share:
 
 
 
 
 
Basic
$
(0.11
)
 
$
(0.07
)
 
$

Diluted
$
(0.11
)
 
$
(0.07
)
 
$

Shares used to compute net income (loss) per share:
 
 
 
 
 
Basic
71,746

 
71,366

 
69,186

Diluted
71,746

 
71,366

 
71,267



5


MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)



 
Twelve Months Ended
 
December 31, 2019
 
December 31, 2018
Net revenue
$
317,180

 
$
384,997

Cost of net revenue
149,495

 
176,223

Gross profit
167,685

 
208,774

Operating expenses:
 
 
 
Research and development
98,344

 
120,046

Selling, general and administrative
88,762

 
101,789

Impairment losses

 
2,198

Restructuring charges
2,636

 
3,838

Total operating expenses
189,742

 
227,871

Loss from operations
(22,057
)
 
(19,097
)
Interest income
775

 
78

Interest expense
(11,133
)
 
(14,255
)
Other income (expense), net
(69
)
 
422

Total interest and other income (expense), net
(10,427
)
 
(13,755
)
Loss before income taxes
(32,484
)
 
(32,852
)
Income tax benefit
(12,586
)
 
(6,653
)
Net loss
$
(19,898
)
 
$
(26,199
)
Net loss per share:
 
 
 
Basic
$
(0.28
)
 
$
(0.38
)
Diluted
$
(0.28
)
 
$
(0.38
)
Shares used to compute net loss per share:
 
 
 
Basic
71,005

 
68,490

Diluted
71,005

 
68,490




6


MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)


 
Three Months Ended
 
December 31, 2019
 
September 30, 2019
 
December 31, 2018
Operating Activities
 
 
 
 
 
Net income (loss)
$
(8,104
)
 
$
(4,714
)
 
$
311

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
 
Amortization and depreciation
16,473

 
16,419

 
19,125

Amortization of debt issuance costs and accretion of discount on debt and leases
404

 
380

 
287

Stock-based compensation
7,747

 
8,359

 
7,999

Deferred income taxes
(3,238
)
 
(1,379
)
 
(8,827
)
Loss on disposal of property and equipment

 

 
430

Impairment of leasehold improvements

 

 
35

Impairment of leased right-of-use assets
7,058

 

 

Gain on extinguishment of lease liabilities
(7,557
)
 

 

(Gain) loss on foreign currency
430

 
(183
)
 
(268
)
Excess tax benefits on stock-based awards
(192
)
 
(61
)
 
(820
)
Changes in operating assets and liabilities:
 
 
 
 
 
Accounts receivable
5,930

 
280

 
(867
)
Inventory
6,224

 
5,108

 
19

Prepaid expenses and other assets
2,889

 
960

 
(2,857
)
Leased right-of-use assets
109

 
1,309

 

Accounts payable, accrued expenses and other current liabilities
2,692

 
(6,313
)
 
5,410

Accrued compensation
607

 
730

 
2,387

Accrued price protection liability
(1,097
)
 
2,291

 
2,036

Lease liabilities
(1,655
)
 
(2,183
)
 

Other long-term liabilities
(613
)
 
749

 
(227
)
Net cash provided by operating activities
28,107

 
21,752

 
24,173

Investing Activities
 
 
 
 
 
Purchases of property and equipment
(2,989
)
 
(1,219
)
 
(1,412
)
Purchases of intangible assets

 
(86
)
 

Net cash used in investing activities
(2,989
)
 
(1,305
)
 
(1,412
)
Financing Activities
 
 
 
 
 
Repayment of debt

 
(20,000
)
 
(15,000
)
Net proceeds from issuance of common stock
2,382

 
288

 
2,732

Minimum tax withholding paid on behalf of employees for restricted stock units
(820
)
 
(1,339
)
 
(2,606
)
Net cash provided by (used in) financing activities
1,562

 
(21,051
)
 
(14,874
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(87
)
 
90

 
(1,939
)
Increase (decrease) in cash, cash equivalents and restricted cash
26,593

 
(514
)
 
5,948

Cash, cash equivalents and restricted cash at beginning of period
66,524

 
67,038

 
68,243

Cash, cash equivalents and restricted cash at end of period
$
93,117

 
$
66,524

 
$
74,191


7


MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)



 
Twelve Months Ended
 
December 31, 2019
 
December 31, 2018
Operating Activities
 
 
 
Net loss
$
(19,898
)
 
$
(26,199
)
Adjustments to reconcile net loss to cash provided by operating activities:
 
 
 
Amortization and depreciation
66,401

 
79,027

Impairment losses

 
2,198

Amortization of debt issuance costs and accretion of discount on debt and leases
1,577

 
1,148

Stock-based compensation
32,060

 
31,721

Deferred income taxes
(15,693
)
 
(12,144
)
Loss on disposal of property and equipment
46

 
430

Impairment of leasehold improvements
1,442

 
735

Impairment of long-lived assets
9,240

 

Gain on extinguishment of lease liabilities
(10,437
)
 

(Gain) loss on foreign currency
760

 
(809
)
Excess tax benefits on stock-based awards
(4,064
)
 
(2,028
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
9,090

 
6,595

Inventory
10,195

 
11,696

Prepaid expenses and other assets
3,805

 
1,071

Leased right-of-use assets
3,044

 

Accounts payable, accrued expenses and other current liabilities
1,261

 
5,923

Accrued compensation
2,021

 
8,961

Deferred revenue and deferred profit

 
(138
)
Accrued price protection liability
(3,966
)
 
(5,117
)
Lease liabilities
(8,142
)
 

Other long-term liabilities
(394
)
 
(381
)
Net cash provided by operating activities
78,348

 
102,689

Investing Activities
 
 
 
Purchases of property and equipment
(6,887
)
 
(7,825
)
Purchases of intangible assets
(86
)
 

Net cash used in investing activities
(6,973
)
 
(7,825
)
Financing Activities
 
 
 
Repayment of debt
(50,000
)
 
(93,000
)
Net proceeds from issuance of common stock
8,603

 
6,839

Minimum tax withholding paid on behalf of employees for restricted stock units
(11,986
)
 
(7,623
)
Net cash used in financing activities
(53,383
)
 
(93,784
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
934

 
(1,301
)
Increase (decrease) in cash, cash equivalents and restricted cash
18,926

 
(221
)
Cash, cash equivalents and restricted cash at beginning of period
74,191

 
74,412

Cash, cash equivalents and restricted cash at end of period
$
93,117

 
$
74,191



8


MAXLINEAR, INC.
UNAUDITED GAAP CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)


 
December 31, 2019
 
September 30, 2019
 
December 31, 2018 (1)
Assets
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
92,708

 
$
66,115

 
$
73,142

Short-term restricted cash
349

 
345

 
645

Accounts receivable, net
50,411

 
56,339

 
59,491

Inventory
31,510

 
37,642

 
41,738

Prepaid expenses and other current assets
6,792

 
4,679

 
10,357

Total current assets
181,770

 
165,120

 
185,373

Long-term restricted cash
60

 
64

 
404

Property and equipment, net
16,613

 
15,204

 
18,404

Leased right-of-use assets
10,978

 
18,719

 

Intangible assets, net
187,971

 
202,217

 
244,900

Goodwill
238,330

 
238,330

 
238,330

Deferred tax assets
67,284

 
64,046

 
51,518

Other long-term assets
2,785

 
3,065

 
4,664

Total assets
$
705,791

 
$
706,765

 
$
743,593

 
 
 
 
 
 
Liabilities and stockholders’ equity
 
 
 
 
 
Current liabilities
$
66,562

 
$
63,119

 
$
75,329

Long-term lease liabilities
9,335

 
14,995

 
4,097

Long-term debt
206,909

 
206,622

 
255,757

Other long-term liabilities
8,065

 
8,678

 
8,474

Stockholders’ equity
414,920

 
413,351

 
399,936

Total liabilities and stockholders’ equity
$
705,791

 
$
706,765

 
$
743,593

_____________
(1) Certain balances have been reclassified to conform to current period presentation.

9


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


 
Three Months Ended
 
December 31, 2019
 
September 30, 2019
 
December 31, 2018
GAAP gross profit
$
36,624

 
$
41,904

 
$
45,900

Stock-based compensation
149

 
151

 
132

Performance based equity
(21
)
 

 
56

Amortization of purchased intangible assets
8,513

 
8,477

 
8,875

Non-GAAP gross profit
45,265

 
50,532

 
54,963

 
 
 
 
 
 
GAAP R&D expenses
23,467

 
23,174

 
29,667

Stock-based compensation
(3,955
)
 
(4,155
)
 
(4,399
)
Performance based equity
(421
)
 
(45
)
 
(1,254
)
Depreciation of fixed asset step-up

 

 
(76
)
Non-GAAP R&D expenses
19,091

 
18,974

 
23,938

 
 
 
 
 
 
GAAP SG&A expenses
20,924

 
21,920

 
25,208

Stock-based compensation
(3,643
)
 
(4,068
)
 
(3,481
)
Performance based equity
(604
)
 
(279
)
 
(948
)
Amortization of purchased intangible assets
(5,723
)
 
(5,722
)
 
(7,994
)
Depreciation of fixed asset step-up

 

 
(2
)
IP litigation costs, net
3

 
(71
)
 
(3
)
Non-GAAP SG&A expenses
10,957

 
11,780

 
12,780

 
 
 
 
 
 
GAAP restructuring expenses
159

 
144

 
1,737

Restructuring charges
(159
)
 
(144
)
 
(1,737
)
Non-GAAP restructuring expenses

 

 

 
 
 
 
 
 
GAAP loss from operations
(7,926
)
 
(3,334
)
 
(10,712
)
Total non-GAAP adjustments
23,143

 
23,112

 
28,957

Non-GAAP income from operations
15,217

 
19,778

 
18,245

 
 
 
 
 
 
GAAP and non-GAAP interest and other income (expense), net
(2,863
)
 
(1,406
)
 
(2,941
)
Non-recurring gain on reversal of liability

 
(1,006
)
 

Non-GAAP interest and other income (expense), net
(2,863
)
 
(2,412
)
 
(2,941
)
 
 
 
 
 
 
GAAP loss before income taxes
(10,789
)
 
(4,740
)
 
(13,653
)
Total non-GAAP adjustments
23,143

 
22,106

 
28,957

Non-GAAP income before income taxes
12,354

 
17,366

 
15,304

 
 
 
 
 
 
GAAP income tax benefit
(2,685
)
 
(26
)
 
(13,964
)
Adjustment for non-cash tax benefits/expenses and effects of the Tax Act
3,303

 
894

 
15,035

Non-GAAP income tax provision
618

 
868

 
1,071

 
 
 
 
 
 
GAAP net income (loss)
(8,104
)
 
(4,714
)
 
311

Total non-GAAP adjustments before income taxes
23,143

 
22,106

 
28,957

Less: total tax adjustments
3,303

 
894

 
15,035

Non-GAAP net income
$
11,736

 
$
16,498

 
$
14,233

 
 
 
 
 
 
Shares used in computing non-GAAP basic net income per share
71,746

 
71,366

 
69,186

Shares used in computing non-GAAP diluted net income per share
72,707

 
72,506

 
71,267

Non-GAAP basic net income per share
$
0.16

 
$
0.23

 
$
0.21

Non-GAAP diluted net income per share
$
0.16

 
$
0.23

 
$
0.20


10


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


 
Twelve Months Ended
 
December 31, 2019
 
December 31, 2018
GAAP gross profit
$
167,685

 
$
208,774

Stock-based compensation
577

 
489

Performance based equity
52

 
234

Amortization of purchased intangible assets
33,892

 
35,781

Depreciation of fixed asset step-up

 
303

Non-GAAP gross profit
202,206

 
245,581

 
 
 
 
GAAP R&D expenses
98,344

 
120,046

Stock-based compensation
(16,545
)
 
(17,953
)
Performance based equity
(1,391
)
 
(5,208
)
Depreciation of fixed asset step-up
(6
)
 
(1,050
)
Non-GAAP R&D expenses
80,402

 
95,835

 
 
 
 
GAAP SG&A expenses
88,762

 
101,789

Stock-based compensation
(14,938
)
 
(13,279
)
Performance based equity
(1,822
)
 
(3,512
)
Amortization of purchased intangible assets
(23,035
)
 
(31,976
)
Depreciation of fixed asset step-up

 
(36
)
IP litigation costs, net
(81
)
 
(83
)
Non-GAAP SG&A expenses
48,886

 
52,903

 
 
 
 
GAAP impairment losses

 
2,198

Impairment losses

 
(2,198
)
Non-GAAP impairment losses

 

 
 
 
 
GAAP restructuring expenses
2,636

 
3,838

Restructuring charges
(2,636
)
 
(3,838
)
Non-GAAP restructuring expenses

 

 
 
 
 
GAAP loss from operations
(22,057
)
 
(19,097
)
Total non-GAAP adjustments
94,975

 
115,940

Non-GAAP income from operations
72,918

 
96,843

 
 
 
 
GAAP and non-GAAP interest and other income (expense), net
(10,427
)
 
(13,755
)
Non-recurring gain on reversal of liability
(1,006
)
 

Non-GAAP interest and other income (expense), net
(11,433
)
 
(13,755
)
 
 
 
 
GAAP loss before income taxes
(32,484
)
 
(32,852
)
Total non-GAAP adjustments
93,969

 
115,940

Non-GAAP income before income taxes
61,485

 
83,088

 
 
 
 
GAAP income tax benefit
(12,586
)
 
(6,653
)
Adjustment for non-cash tax benefits/expenses and effects of the Tax Act
16,296

 
12,469

Non-GAAP income tax provision
3,710

 
5,816

 
 
 
 
GAAP net loss
(19,898
)
 
(26,199
)
Total non-GAAP adjustments before income taxes
93,969

 
115,940

Less: total tax adjustments
16,296

 
12,469

Non-GAAP net income
$
57,775

 
$
77,272

 
 
 
 
Shares used in computing non-GAAP basic net income per share
71,005

 
68,490

Shares used in computing non-GAAP diluted net income per share
72,381

 
70,709

Non-GAAP basic net income per share
$
0.81

 
$
1.13

Non-GAAP diluted net income per share
$
0.80

 
$
1.09



11


MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES


 
Three Months Ended
 
December 31, 2019
 
September 30, 2019
 
December 31, 2018
GAAP gross profit
52.3
 %
 
52.4
 %
 
52.4
 %
Stock-based compensation
0.2
 %
 
0.2
 %
 
0.2
 %
Performance based equity
 %
 
 %
 
0.1
 %
Amortization of purchased intangible assets
12.2
 %
 
10.6
 %
 
10.1
 %
Non-GAAP gross profit
64.6
 %
 
63.1
 %
 
62.7
 %
 
 
 
 
 
 
GAAP R&D expenses
33.5
 %
 
29.0
 %
 
33.9
 %
Stock-based compensation
(5.6
)%
 
(5.2
)%
 
(5.0
)%
Performance based equity
(0.6
)%
 
(0.1
)%
 
(1.4
)%
Depreciation of fixed asset step-up
 %
 
 %
 
(0.1
)%
Non-GAAP R&D expenses
27.3
 %
 
23.7
 %
 
27.3
 %
 
 
 
 
 
 
GAAP SG&A expenses
29.9
 %
 
27.4
 %
 
28.8
 %
Stock-based compensation
(5.2
)%
 
(5.1
)%
 
(4.0
)%
Performance based equity
(0.9
)%
 
(0.3
)%
 
(1.1
)%
Amortization of purchased intangible assets
(8.2
)%
 
(7.2
)%
 
(9.1
)%
Depreciation of fixed asset step-up
 %
 
 %
 
 %
IP litigation costs, net
 %
 
(0.1
)%
 
 %
Non-GAAP SG&A expenses
15.6
 %
 
14.7
 %
 
14.6
 %
 
 
 
 
 
 
GAAP restructuring expenses
0.2
 %
 
0.2
 %
 
2.0
 %
Restructuring charges
(0.2
)%
 
(0.2
)%
 
(2.0
)%
Non-GAAP restructuring expenses
 %
 
 %
 
 %
 
 
 
 
 
 
GAAP loss from operations
(11.3
)%
 
(4.2
)%
 
(12.2
)%
Total non-GAAP adjustments
33.1
 %
 
28.9
 %
 
33.0
 %
Non-GAAP income from operations
21.7
 %
 
24.7
 %
 
20.8
 %
 
 
 
 
 
 
GAAP interest and other income (expense), net
(4.1
)%
 
(1.8
)%
 
(3.4
)%
Nonrecurring gain on reversal of liability
 %
 
(1.3
)%
 
 %
Non-GAAP interest and other income (expense), net
(4.1
)%
 
(3.0
)%
 
(3.4
)%
 
 
 
 
 
 
GAAP loss before income taxes
(15.4
)%
 
(5.9
)%
 
(15.6
)%
Total non-GAAP adjustments before income taxes
33.1
 %
 
27.6
 %
 
33.0
 %
Non-GAAP income before income taxes
17.6
 %
 
21.7
 %
 
17.5
 %
 
 
 
 
 
 
GAAP income tax benefit
(3.8
)%
 
 %
 
(15.9
)%
Adjustment for non-cash tax benefits/expenses and the effects of the Tax Act
4.7
 %
 
1.1
 %
 
17.2
 %
Non-GAAP income tax provision
0.9
 %
 
1.1
 %
 
1.2
 %
 
 
 
 
 
 
GAAP net income (loss)
(11.6
)%
 
(5.9
)%
 
0.4
 %
Total non-GAAP adjustments before income taxes
33.1
 %
 
27.6
 %
 
33.0
 %
Less: total tax adjustments
4.7
 %
 
1.1
 %
 
17.2
 %
Non-GAAP net income
16.8
 %
 
20.6
 %
 
16.2
 %

12


MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES


 
Twelve Months Ended
 
December 31, 2019
 
December 31, 2018
GAAP gross profit
52.9
 %
 
54.2
 %
Stock-based compensation
0.2
 %
 
0.1
 %
Performance based equity
 %
 
0.1
 %
Amortization of purchased intangible assets
10.7
 %
 
9.3
 %
Depreciation of fixed asset step-up
 %
 
0.1
 %
Non-GAAP gross profit
63.8
 %
 
63.8
 %
 
 
 
 
GAAP R&D expenses
31.0
 %
 
31.2
 %
Stock-based compensation
(5.2
)%
 
(4.7
)%
Performance based equity
(0.4
)%
 
(1.4
)%
Depreciation of fixed asset step-up
 %
 
(0.3
)%
Non-GAAP R&D expenses
25.3
 %
 
24.9
 %
 
 
 
 
GAAP SG&A expenses
28.0
 %
 
26.4
 %
Stock-based compensation
(4.7
)%
 
(3.4
)%
Performance based equity
(0.6
)%
 
(0.9
)%
Amortization of purchased intangible assets
(7.3
)%
 
(8.3
)%
Depreciation of fixed asset step-up
 %
 
 %
IP litigation costs, net
 %
 
 %
Non-GAAP SG&A expenses
15.4
 %
 
13.7
 %
 
 
 
 
GAAP impairment losses
 %
 
0.6
 %
Impairment losses
 %
 
(0.6
)%
Non-GAAP impairment losses
 %
 
 %
 
 
 
 
GAAP restructuring expenses
0.8
 %
 
1.0
 %
Restructuring charges
(0.8
)%
 
(1.0
)%
Non-GAAP restructuring expenses
 %
 
 %
 
 
 
 
GAAP loss from operations
(7.0
)%
 
(5.0
)%
Total non-GAAP adjustments
29.9
 %
 
30.1
 %
Non-GAAP income from operations
23.0
 %
 
25.2
 %
 
 
 
 
GAAP interest and other income (expense), net
(3.3
)%
 
(3.6
)%
Nonrecurring gain on reversal of liability
(0.3
)%
 
 %
Non-GAAP interest and other income (expense), net
(3.6
)%
 
(3.6
)%
 
 
 
 
GAAP loss before income taxes
(10.2
)%
 
(8.5
)%
Total non-GAAP adjustments before income taxes
29.6
 %
 
30.1
 %
Non-GAAP income before income taxes
19.4
 %
 
21.6
 %
 
 
 
 
GAAP income tax benefit
(4.0
)%
 
(1.7
)%
Adjustment for non-cash tax benefits/expenses and the effects of the Tax Act
5.1
 %
 
3.2
 %
Non-GAAP income tax provision
1.2
 %
 
1.5
 %
 
 
 
 
GAAP net loss
(6.3
)%
 
(6.8
)%
Total non-GAAP adjustments before income taxes
29.6
 %
 
30.1
 %
Less: total tax adjustments
5.1
 %
 
3.2
 %
Non-GAAP net income
18.2
 %
 
20.1
 %


13