QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||
Emerging growth company |
Page No. | |||||||||||
Item 1. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 2. | |||||||||||
Item 6. | |||||||||||
ITEM 1. | FINANCIAL STATEMENTS |
December 31, 2021 | October 1, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, net | |||||||||||
Inventories | |||||||||||
Prepaid and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Deferred income taxes | |||||||||||
Other investments | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current portion of finance lease obligations | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued liabilities | |||||||||||
Total current liabilities | |||||||||||
Finance lease obligations, less current portion | |||||||||||
Financing obligation, less current portion | |||||||||||
Long-term debt | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (see Note 12) | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock | |||||||||||
Treasury stock, at cost | ( | ( | |||||||||
Accumulated other comprehensive income | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Revenue | $ | $ | |||||||||
Cost of revenue | |||||||||||
Gross profit | |||||||||||
Operating expenses: | |||||||||||
Research and development | |||||||||||
Selling, general and administrative | |||||||||||
Total operating expenses | |||||||||||
Income from operations | |||||||||||
Other income (expense): | |||||||||||
Warrant liability expense | ( | ||||||||||
Interest expense, net | ( | ( | |||||||||
Other income (expense), net | ( | ||||||||||
Total other income (expense), net | ( | ||||||||||
Income (loss) before income taxes | ( | ||||||||||
Income tax expense | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Net income (loss) per share: | |||||||||||
Income (loss) per share - Basic | $ | $ | ( | ||||||||
Income (loss) per share - Diluted | $ | $ | ( | ||||||||
Weighted average shares used: | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Unrealized (loss) gain on short term investments, net of tax | ( | ||||||||||
Foreign currency translation (loss) gain, net of tax | ( | ||||||||||
Other comprehensive (loss) income, net of tax | ( | ||||||||||
Total comprehensive income (loss) | $ | $ | ( |
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance as of October 1, 2021 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted common stock and units | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Shares repurchased for tax withholdings on restricted stock awards | ( | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | ( | $ | ( | $ | $ | $ | ( | $ |
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance as of October 2, 2020 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted common stock and units | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Shares repurchased for tax withholdings on equity awards | ( | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for the cashless exercise of warrants | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2021 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and intangibles amortization | |||||||||||
Share-based compensation | |||||||||||
Warrant liability expense | |||||||||||
Deferred financing cost and discount amortization | |||||||||||
Deferred income taxes | |||||||||||
(Gain) loss on equity method investment, net | ( | ||||||||||
Other adjustments, net | ( | ||||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventories | ( | ||||||||||
Prepaid expenses and other assets | |||||||||||
Accounts payable | |||||||||||
Accrued and other liabilities | ( | ( | |||||||||
Income taxes | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Proceeds from sale of equity method investment | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Proceeds from sales and maturities of short-term investments | |||||||||||
Purchases of short-term investments | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Payments on long-term debt | ( | ||||||||||
Payments on finance leases | ( | ( | |||||||||
Proceeds from stock option exercises and employee stock purchases | |||||||||||
Repurchase of common stock - tax withholdings on equity awards | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Foreign currency effect on cash | ( | ||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | ( | ||||||||||
CASH AND CASH EQUIVALENTS — Beginning of period | |||||||||||
CASH AND CASH EQUIVALENTS — End of period | $ | $ |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Revenue by Market: | |||||||||||
Telecommunications | $ | $ | |||||||||
Industrial & Defense | |||||||||||
Data Center | |||||||||||
Total | $ | $ |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Revenue by Geographic Region: | |||||||||||
United States | $ | $ | |||||||||
China | |||||||||||
Asia Pacific, excluding China (1) | |||||||||||
Other Countries (2) | |||||||||||
Total | $ | $ |
December 31, 2021 | October 1, 2021 | $ Change | % Change | ||||||||||||||||||||
Contract liabilities | $ | $ | $ | % |
December 31, 2021 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Aggregate Fair Value | ||||||||||||||||||||
Corporate bonds | $ | $ | $ | ( | $ | ||||||||||||||||||
Commercial paper | ( | ||||||||||||||||||||||
Total short-term investments | $ | $ | $ | ( | $ |
October 1, 2021 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Aggregate Fair Value | ||||||||||||||||||||
Corporate bonds | $ | $ | $ | ( | $ | ||||||||||||||||||
Commercial paper | ( | ||||||||||||||||||||||
Total short-term investments | $ | $ | $ | ( | $ |
December 31, 2021 | October 1, 2021 | |||||||
Less than one year | $ | $ | ||||||
Over one year | ||||||||
Total available-for-sale investments | $ | $ |
Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||
Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data. | ||
Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by us. |
December 31, 2021 | |||||||||||||||||||||||
Fair Value | Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
October 1, 2021 | |||||||||||||||||||||||
Fair Value | Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ |
October 2, 2020 | Net Realized Losses (Gains) Included in Earnings | Sales and Settlements | January 1, 2021 | ||||||||||||||||||||
Common stock warrant liability | $ | $ | $ | ( | $ |
December 31, 2021 | October 1, 2021 | ||||||||||
Raw materials | $ | $ | |||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
Total inventory, net | $ | $ |
December 31, 2021 | October 1, 2021 | ||||||||||
Construction in process | $ | $ | |||||||||
Machinery and equipment | |||||||||||
Leasehold improvements | |||||||||||
Furniture and fixtures | |||||||||||
Computer equipment and software | |||||||||||
Finance lease assets | |||||||||||
Total property and equipment | |||||||||||
Less accumulated depreciation and amortization | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Cost of revenue | $ | $ | |||||||||
Selling, general and administrative | |||||||||||
Total | $ | $ |
December 31, 2021 | October 1, 2021 | ||||||||||
Acquired technology | $ | $ | |||||||||
Customer relationships | |||||||||||
Trade name (indefinite-lived) | |||||||||||
Total | |||||||||||
Less accumulated amortization | ( | ( | |||||||||
Intangible assets — net | $ | $ |
Intangible Assets | |||||||||||||||||||||||||||||
Total Intangible Assets | Acquired Technology | Customer Relationships | Trade Name | Goodwill | |||||||||||||||||||||||||
Balance as of October 1, 2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Currency translation adjustment | ( | ||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | $ | $ |
2022 Remaining | 2023 | 2024 | 2025 | 2026 | Thereafter | Total | |||||||||||||||||
Amortization expense | $ | $ |
December 31, 2021 | October 1, 2021 | ||||||||||||||||
Principal Balance | Effective Interest Rate | Principal Balance | Effective Interest Rate | ||||||||||||||
LIBOR plus | $ | % | $ | % | |||||||||||||
% | % | ||||||||||||||||
Total principal amount outstanding | |||||||||||||||||
Less: Unamortized discount on term loans and deferred financing costs | ( | ( | |||||||||||||||
Less: Unamortized discount on convertible notes | ( | ||||||||||||||||
Total long-term debt | $ | $ |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Numerator: | |||||||||||
Net income (loss) attributable to common stockholders | $ | $ | ( | ||||||||
Denominator: | |||||||||||
Weighted average common shares outstanding-basic | |||||||||||
Dilutive effect of stock options, restricted stock and restricted stock units | |||||||||||
Weighted average common shares outstanding-diluted | |||||||||||
Net income (loss) to common stockholders per share-Basic: | $ | $ | ( | ||||||||
Net income (loss) to common stockholders per share-Diluted: | $ | $ | ( |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Cost of revenue | $ | $ | |||||||||
Research and development | |||||||||||
Selling, general and administrative | |||||||||||
Total share-based compensation expense | $ | $ |
Number of shares (in thousands) | Weighted- Average Grant Date Fair Value | ||||||||||
Balance as of October 1, 2021 | $ | ||||||||||
Granted | |||||||||||
Vested and released | ( | ||||||||||
Forfeited, canceled or expired | ( | ||||||||||
Balance as of December 31, 2021 | $ |
Three Months Ended | |||||
December 31, 2021 | |||||
Grant date stock price | $ | 66.12 | |||
Average stock price at the start of the performance period | $ | 64.11 | |||
Risk free interest rate | % | ||||
Years to maturity | |||||
Expected volatility rate | % | ||||
Expected dividend yield | — |
Number of Shares | Weighted-Average Exercise Price per Share | Weighted-Average Remaining Contractual Term (in Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Options outstanding as of October 1, 2021 | $ | ||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Forfeited, canceled or expired | |||||||||||||||||||||||
Options outstanding as of December 31, 2021 | $ | $ | |||||||||||||||||||||
Options vested and exercisable as of December 31, 2021 |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Income tax expense | $ | $ | |||||||||
Effective income tax rate | % | ( | % |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | $ | $ | |||||||||
Non-cash activities: | |||||||||||
Operating lease right-of-use assets obtained in exchange for new lease liabilities | $ | ||||||||||
Non-cash capital expenditures | $ | ||||||||||
Issuance of common stock for the cashless exercise of warrants | $ |
December 31, 2021 | October 1, 2021 | |||||||||||||
United States | $ | $ | ||||||||||||
Europe (1) | ||||||||||||||
Other Countries (2) | ||||||||||||||
Total | $ | $ |
Three Months Ended | |||||||||||
Revenue | December 31, 2021 | January 1, 2021 | |||||||||
Customer A | % | ||||||||||
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Revenue | $ | 159,620 | $ | 148,504 | |||||||
Cost of revenue (1) | 65,477 | 68,242 | |||||||||
Gross profit | 94,143 | 80,262 | |||||||||
Operating expenses: | |||||||||||
Research and development (1) | 35,470 | 36,936 | |||||||||
Selling, general and administrative (1) | 31,604 | 31,252 | |||||||||
Total operating expenses | 67,074 | 68,188 | |||||||||
Income from operations | 27,069 | 12,074 | |||||||||
Other income (expense): | |||||||||||
Warrant liability expense (2) | — | (11,130) | |||||||||
Interest expense | (1,693) | (4,734) | |||||||||
Other income (expense), net (3) | 114,908 | (4,504) | |||||||||
Total other income (expense), net | 113,215 | (20,368) | |||||||||
Income (loss) before income taxes | 140,284 | (8,294) | |||||||||
Income tax expense | 1,457 | 674 | |||||||||
Net income (loss) | $ | 138,827 | $ | (8,968) |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
(a) Intangible amortization expense: | |||||||||||
Cost of revenue | $ | 2,505 | $ | 3,877 | |||||||
Selling, general and administrative | 6,782 | 8,116 | |||||||||
(b) Share-based compensation expense: | |||||||||||
Cost of revenue | $ | 1,033 | $ | 871 | |||||||
Research and development | 3,599 | 3,554 | |||||||||
Selling, general and administrative | 5,317 | 5,706 |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Revenue | 100.0 | % | 100.0 | % | |||||||
Cost of revenue | 41.0 | 46.0 | |||||||||
Gross profit | 59.0 | 54.0 | |||||||||
Operating expenses: | |||||||||||
Research and development | 22.2 | 24.9 | |||||||||
Selling, general and administrative | 19.8 | 21.0 | |||||||||
Total operating expenses | 42.0 | 45.9 | |||||||||
Income from operations | 17.0 | 8.1 | |||||||||
Other income (expense): | |||||||||||
Warrant liability expense | — | (7.5) | |||||||||
Interest expense | (1.1) | (3.2) | |||||||||
Other income (expense), net | 72.0 | (3.0) | |||||||||
Total other income (expense), net | 70.9 | (13.7) | |||||||||
Income (loss) before income taxes | 87.9 | (5.6) | |||||||||
Income tax expense | 0.9 | 0.5 | |||||||||
Net income (loss) | 87.0 | % | (6.0) | % |
Three Months Ended | |||||||||||||||||||||||
December 31, 2021 | January 1, 2021 | % Change | |||||||||||||||||||||
Telecom | $ | 55,822 | $ | 51,532 | 8.3 | % | |||||||||||||||||
Industrial & Defense | 73,146 | 61,618 | 18.7 | % | |||||||||||||||||||
Data Center | 30,652 | 35,354 | (13.3) | % | |||||||||||||||||||
Total | $ | 159,620 | $ | 148,504 | 7.5 | % | |||||||||||||||||
Telecom | 35.0 | % | 34.7 | % | |||||||||||||||||||
Industrial & Defense | 45.8 | % | 41.5 | % | |||||||||||||||||||
Data Center | 19.2 | % | 23.8 | % | |||||||||||||||||||
Total | 100.0 | % | 100.0 | % |
Three Months Ended | |||||||||||
December 31, 2021 | January 1, 2021 | ||||||||||
Income tax expense | 1,457 | 674 | |||||||||
Effective income tax rate | 1.0 | % | (8.1) | % |
Three Months Ended | ||||||||||||||
December 31, 2021 | January 1, 2021 | |||||||||||||
Cash and cash equivalents, beginning of period | $ | 156,537 | $ | 129,441 | ||||||||||
Net cash provided by operating activities | 34,104 | 34,780 | ||||||||||||
Net cash provided by (used in) investing activities | 105,737 | (24,769) | ||||||||||||
Net cash used in financing activities | (22,900) | (11,479) | ||||||||||||
Foreign currency effect on cash | (82) | 755 | ||||||||||||
Cash and cash equivalents, end of period | $ | 273,396 | $ | 128,728 |
Period | Total Number of Shares (or Units) Purchased (1) | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | |||||||||||||||||||
October 2, 2021-October 29, 2021 | 142,844 | $ | 68.88 | — | — | ||||||||||||||||||
October 30, 2021-November 26, 2021 | 239,511 | 74.64 | — | — | |||||||||||||||||||
November 27, 2021-December 31, 2021 | 535 | 76.28 | — | — | |||||||||||||||||||
Total | 382,890 | $ | 72.49 | — | — |
Exhibit Number | Description | ||||||||||
3.1 | |||||||||||
3.2 | |||||||||||
31.1 | |||||||||||
31.2 | |||||||||||
32.1 | |||||||||||
101 | The following material from the Quarterly Report on Form 10-Q of MACOM Technology Solutions Holdings, Inc. for the fiscal quarter ended December 31, 2021, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Loss, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements and (vii) document and entity information, tagged as blocks of text and including detailed tags. | ||||||||||
104 | The cover page for the Quarterly Report on Form 10-Q of MACOM Technology Solutions Holdings, Inc. for the fiscal quarter ended December 31, 2021, formatted in Inline XBRL and included as Exhibit 101 | ||||||||||
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. | ||||||||
Dated: January 27, 2022 | By: | /s/ Stephen G. Daly | ||||||
Stephen G. Daly | ||||||||
President and Chief Executive Officer (Principal Executive Officer) | ||||||||
Dated: January 27, 2022 | By: | /s/ John F. Kober | ||||||
John F. Kober | ||||||||
Senior Vice President and Chief Financial Officer (Principal Accounting and Principal Financial Officer) |
Date: | January 27, 2022 | ||||
/s/ Stephen G. Daly | |||||
Stephen G. Daly | |||||
President and Chief Executive Officer (Principal Executive Officer) |
Date: | January 27, 2022 | ||||
/s/ John F. Kober | |||||
John F. Kober | |||||
SVP and Chief Financial Officer | |||||
(Principal Financial Officer) |
Date: | January 27, 2022 | ||||
By: | /s/ Stephen G. Daly | ||||
Stephen G. Daly | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
By: | /s/ John F. Kober | ||||
John F. Kober | |||||
SVP and Chief Financial Officer | |||||
(Principal Financial Officer) |
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Jan. 01, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (138,827) | $ 8,968 |
Unrealized (loss) gain on short term investments, net of tax | (616) | 176 |
Foreign currency translation (loss) gain, net of tax | (325) | 953 |
Other comprehensive (loss) income, net of tax | (941) | 1,129 |
Total comprehensive income (loss) | $ 137,886 | $ (7,839) |
Supplemental Cash Flow Information |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | SUPPLEMENTAL CASH FLOW INFORMATION The following is a summary of supplemental cash flow information for the periods presented (in thousands):
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Supplemental Cash Flow Information |
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Schedule of Supplemental Cash Flow Information Regarding Non-cash Investing and Financing Activities | The following is a summary of supplemental cash flow information for the periods presented (in thousands):
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Supplemental Cash Flow Information - Schedule of Supplemental Cash Flow Information Regarding Non-cash Investing and Financing Activities - USD ($) |
3 Months Ended | |
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Dec. 31, 2021 |
Jan. 01, 2021 |
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Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 1,197,000 | $ 4,586,000 |
Cash paid for income taxes | 178,000 | 249,000 |
Operating lease right-of-use assets obtained in exchange for new lease liabilities | 280,000 | 717,000 |
Non-cash capital expenditures | 1,618,000 | 350,000 |
Issuance of common stock for the cashless exercise of warrants | $ 0 | $ 36,442,000 |
Summary of Significant Accounting Policies |
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Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited Interim Financial Information—The accompanying unaudited, condensed consolidated financial statements have been prepared according to the rules and regulations of the United States (the “U.S.”) Securities and Exchange Commission (the “SEC”) and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the condensed consolidated balance sheets, condensed consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows of MACOM Technology Solutions Holdings, Inc. (“MACOM”, the “Company”, “us”, “we” or “our”) for the periods presented. We prepare our interim financial information using the same accounting principles we use for our annual audited consolidated financial statements. Certain information and note disclosures normally included in the annual audited consolidated financial statements have been condensed or omitted in accordance with prescribed SEC rules. We believe that the disclosures made in our condensed consolidated financial statements and the accompanying notes are adequate to make the information presented not misleading. The condensed consolidated balance sheet as of October 1, 2021 is as reported in our audited consolidated financial statements as of that date. Our accounting policies are described in the notes to our October 1, 2021 consolidated financial statements, which were included in our Annual Report on Form 10-K for our fiscal year ended October 1, 2021 filed with the SEC on November 15, 2021 (the “2021 Annual Report on Form 10-K”). We recommend that the financial statements included in this Quarterly Report on Form 10-Q be read in conjunction with the consolidated financial statements and notes included in our 2021 Annual Report on Form 10-K. Principles of Consolidation—The accompanying condensed consolidated financial statements include our accounts and the accounts of our majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. We have a 52- or 53-week fiscal year ending on the Friday closest to the last day of September. Fiscal years 2022 and 2021 each include 52 weeks. To offset the effect of holidays, for fiscal years in which there are 53 weeks, we include the extra week arising in such fiscal years in the first fiscal quarter. Use of Estimates—The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities during the reporting periods, the reported amounts of revenue and expenses during the reporting periods, and the disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, we base estimates and assumptions on historical experience, currently available information and various other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates and assumptions. The accounting policies which our management believes involve the most significant application of judgment or involve complex estimation, are inventories and associated reserves; goodwill and long-lived asset valuations and associated impairment assessments; revenue reserves; share-based compensation valuations and income taxes. Recent Accounting Pronouncements—Our Recent Accounting Pronouncements are described in our 2021 Annual Report on Form 10-K. Pronouncements Adopted in Fiscal Year 2022 In August 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liability and equity, including convertible instruments and contracts on an entity’s own equity. The standard reduces the number of models used to account for convertible instruments, removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and requires the if-converted method for calculation of diluted earnings per share for all convertible instruments. We early adopted this standard effective October 2, 2021 using the modified retrospective approach transition method. Therefore, the condensed consolidated financial statements for the three months ended December 31, 2021 are presented under the new standard, while the comparative period presented is not adjusted and continues to be reported in accordance with the Company's historical accounting policy. Refer to Note 8 - Debt for the impact of adoption on our 2026 Convertible Notes (as defined below). Pronouncements for Adoption in Subsequent Periods In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to applying the guidance on contract modifications, hedge accounting, and other transactions, to simplify the accounting for transitioning from the London Interbank Offered Rate, and other interbank offered rates expected to be discontinued, to alternative reference rates. The guidance in this update was effective upon its issuance. If elected, the guidance is to be applied prospectively through December 31, 2022. We are currently evaluating the effect the potential adoption of this ASU will have on our consolidated financial statements, including, but not limited to, our Credit Agreement (defined below). For additional information regarding our Credit Agreement, refer to Note 8 - Debt.
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Revenue |
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Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | REVENUE Disaggregation of Revenue We disaggregate revenue from contracts with customers by markets and geography, as we believe it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The following tables present our revenue disaggregated by markets and geography (in thousands):
(1)Asia Pacific primarily represents Taiwan, Japan, Singapore, Thailand, South Korea, Australia and Malaysia. (2)No country or region represented greater than 10% of our total revenue as of the dates presented, other than the United States, China and Asia Pacific region as presented above. Contract Balances We record contract assets or contract liabilities depending on the timing of revenue recognition, billings and cash collections on a contract-by-contract basis. Our contract liabilities primarily relate to deferred revenue, including advanced consideration received from customers for contracts prior to the transfer of control to the customer, and therefore revenue is subsequently recognized upon delivery of products and services. The following table presents the changes in contract liabilities during the three months ended December 31, 2021 (in thousands, except percentage):
As of December 31, 2021 and October 1, 2021, $0.7 million and $0.9 million, respectively, of our contract liabilities, were recorded as other long-term liabilities on our balance sheet with the remainder recorded as accrued liabilities. During the three months ended December 31, 2021, we recognized net sales of $0.4 million that were included in the contract liabilities balance as of the beginning of the period. The increase in contract liabilities during the three months ended December 31, 2021, as shown in the table above, was primarily related to deferral of revenue for invoiced products and services prior to when certain of our customers obtained control of the product and or services
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Investments |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | INVESTMENTS All investments are short-term in nature and are invested in corporate bonds and commercial paper, and are classified as available-for-sale. The amortized cost, gross unrealized holding gains or losses and fair value of our available-for-sale investments by major investment type are summarized in the tables below (in thousands):
The contractual maturities of available-for-sale investments were as follows (in thousands):
We have determined that the gross unrealized losses on available for sale securities as of December 31, 2021 and October 1, 2021 are temporary in nature and/or do not relate to credit loss, and therefore there is no expense for credit losses recorded in our condensed consolidated statements of operations. Unrealized gains and losses on available-for-sale investments are reported as a separate component of stockholders’ equity within accumulated other comprehensive income. Other Investments — As of December 31, 2021, we held a non-marketable equity investment in Series B preferred stock of a privately held manufacturing corporation with preferred liquidation rights over other equity shares. As the equity securities do not have a readily determinable fair value and do not qualify for the practical expedient under Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, we have elected to account for this investment at cost less any impairment. We evaluate this investment for impairment at each balance sheet date. As of December 31, 2021 and October 1, 2021, the carrying value of this investment was $2.5 million and is classified as a long-term investment. As of October 1, 2021, also included in long-term investments was a non-controlling investment of less than 10% in the outstanding equity of a private company, Ampere Computing Holdings LLC (“Ampere”), that was acquired in conjunction with our divestiture of our compute business during our fiscal year 2018. This investment’s carrying value was updated quarterly based on our proportionate share of the gains or losses, as well as any changes in Ampere's equity, utilizing the equity method. As of October 1, 2021, the carrying value of this investment was $12.8 million. During the three months ended December 31, 2021 and January 1, 2021, we recorded our proportionate share of the losses on this investment of $3.3 million and $4.8 million, respectively, in Other income (expense), net in our condensed consolidated statements of operations. On December 23, 2021, we sold our investment in Ampere to one of Ampere’s other limited liability company members, pursuant to the terms of a previously negotiated call option included in Ampere’s limited liability company agreement, as amended and restated (the “LLC Agreement”), in exchange for a predetermined fixed price as set forth in the LLC Agreement of approximately $127.8 million in cash consideration. As of December 23, 2021, the carrying value of this investment was approximately $9.5 million. As a result of this transaction, during the fiscal quarter ended December 31, 2021, we recorded a gain of $118.2 million in Other income (expense), net in our condensed consolidated statements of operations.
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | FAIR VALUE We group our financial assets and liabilities measured at fair value on a recurring basis in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis We measure certain assets and liabilities at fair value on a recurring basis such as our financial instruments. There have been no transfers between Level 1, 2 or 3 assets or liabilities during the three months ended December 31, 2021. Assets and liabilities measured at fair value on a recurring basis consist of the following (in thousands):
All common stock warrants were exercised during the three months ended January 1, 2021. During the three months ended January 1, 2021, the change in the fair value of the warrant liability, classified within Level 3 of the fair value hierarchy, consist of the following (in thousands):
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES Inventories consist of the following (in thousands):
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Property, Plant and Equipment |
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Property, Plant and Equipment | PROPERTY AND EQUIPMENT Property and equipment consists of the following (in thousands):
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Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | INTANGIBLE ASSETS Amortization expense related to intangible assets is as follows (in thousands):
Intangible assets consist of the following (in thousands):
A summary of the activity in gross intangible assets and goodwill is as follows (in thousands):
As of December 31, 2021, our estimated amortization of our intangible assets in future fiscal years was as follows (in thousands):
Accumulated amortization for acquired technology and customer relationships were $169.9 million and $183.4 million, respectively, as of December 31, 2021, and $167.3 million and $176.7 million, respectively, as of October 1, 2021.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT The following represents the outstanding balances and effective interest rates of our borrowings as of December 31, 2021 and October 1, 2021, (in thousands, except percentages):
Term Loans As of December 31, 2021, we are party to a credit agreement, dated as of May 8, 2014, with a syndicate of lenders and Goldman Sachs Bank USA, as administrative agent (as amended on February 13, 2015, August 31, 2016, March 10, 2017, May 19, 2017, May 2, 2018 and May 9, 2018, the “Credit Agreement”). As of December 31, 2021, the Credit Agreement consisted of term loans with an initial aggregate principal amount of $700.0 million (the “Term Loans”) that will mature in May 2024 and bear interest at: (i) for LIBOR loans for any interest period, a rate per annum equal to the LIBOR rate as determined by the administrative agent, plus an applicable margin of 2.25%; and (ii) for base rate loans, a rate per annum equal to the greater of (a) the prime rate quoted in the print edition of the Wall Street Journal, Money Rates Section, (b) the federal funds rate plus one-half of 1.00% and (c) the LIBOR rate applicable to a one-month interest period plus 1.00% (but, in each case, not less than 1.00%), plus an applicable margin of 1.25%. As of December 31, 2021, there are no minimum principal repayments on the Term Loans until fiscal year 2024 when the remaining principal balance of $120.8 million becomes due. The fair value of the Term Loans was estimated to be approximately $120.3 million as of December 31, 2021 and was determined using Level 2 inputs, including a quoted price from a financial institution. As of December 31, 2021, approximately $0.8 million of deferred financing costs remain unamortized related to the Term Loans and is recorded as a direct reduction of the recognized debt liabilities in our accompanying condensed consolidated balance sheet. The Term Loans are secured by a first priority lien on substantially all of our assets and provide that we must comply with certain financial and non-financial covenants. 2026 Convertible Notes On March 25, 2021, we issued 0.25% convertible senior notes due in fiscal year 2026, pursuant to an indenture dated as of such date (the “Indenture”), between the Company and U.S. Bank National Association, as trustee, with an aggregate principal amount of $400.0 million (the “Initial Notes”), and on April 6, 2021, we issued an additional $50.0 million aggregate principal amount (the “Additional Notes”) (together, the “2026 Convertible Notes”). The aggregate principal balance of the 2026 Convertible Notes is $450.0 million. The 2026 Convertible Notes will mature on March 15, 2026, unless earlier converted, redeemed or repurchased. The Additional Notes were issued and sold to the initial purchaser of the Initial Notes, pursuant to the option to purchase the Additional Notes granted by the Company to the initial purchaser and have the same terms as the Initial Notes. Holders of the 2026 Convertible Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2025 in multiples of $1,000 principal amount, only under the following circumstances: (i) during any fiscal quarter commencing after the fiscal quarter ending on July 2, 2021 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price for the notes on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the “trading price” (as defined in the Indenture) per $1,000 principal amount of the notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the notes on each such trading day; (iii) if we call such notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the applicable redemption date; or (iv) upon the occurrence of specified corporate events described in the Indenture. On or after December 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes in multiples of $1,000 principal amount, regardless of the foregoing circumstances. The initial conversion rate for the 2026 Convertible Notes is 12.1767 shares of common stock per $1,000 principal amount of the notes, equivalent to an initial conversion price of approximately $82.12 per share of common stock. The conversion rate will be subject to adjustment upon the occurrence of certain specified events in the Indenture. In November 2021, we made an irrevocable election to pay cash for the aggregate principal amount of notes to be converted. Upon conversion of the 2026 Convertible Notes, we are required to pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted (subject to, and in accordance with, the settlement provisions of the Indenture). We may not redeem the notes prior to March 20, 2024. We may redeem for cash all or any portion of the notes, at our option, on or after March 20, 2024 if the last reported sale price per share of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, to, but not including, the redemption date. The Indenture does not contain any financial or operating covenants or restrictions on the payments of dividends, the making of investments, the incurrence of indebtedness or the purchase or prepayment of securities by us or any of our subsidiaries. Prior to the adoption of ASU 2020-06 on October 2, 2021, the proceeds from the issuance of the 2026 Convertible Notes were allocated between the conversion feature recorded as equity and the liability for the notes themselves. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2026 Convertible Notes. The difference of $80.7 million between the principal amount of the 2026 Convertible Notes and the liability component (the “Debt Discount”) was amortized to interest expense using the effective interest method over the term of the 2026 Convertible Notes until the adoption of ASU 2020-06. The equity component of the 2026 Convertible Notes was included in additional paid-in capital in the consolidated balance sheet and was not to be remeasured as long as it continued to meet the conditions for equity classification. Prior to the adoption of ASU 2020-06, to account for the transaction costs related to the 2026 Convertible Notes, we allocated the total amount incurred of approximately $5.7 million to the liability and equity components of the 2026 Convertible Notes based on the proportion of the proceeds allocated to the debt and equity components. Issuance costs attributable to the liability component were approximately $4.7 million, were recorded as additional Debt Discount and were amortized to interest expense over the contractual terms of the 2026 Convertible Notes. Issuance costs attributable to the equity component were approximately $1.0 million and were recorded as a reduction of additional paid in capital in stockholders’ equity. In connection with the adoption of ASU 2020-06, we reclassified $72.2 million, consisting of $73.1 million of principal and issuance costs of $0.9 million, previously allocated to the conversion feature, from additional paid-in capital to long-term debt on our condensed consolidated balance sheet as of October 2, 2021. The reclassification was recorded to combine the two legacy units of account into a single instrument classified as a liability. We also recognized a cumulative effect adjustment of $7.5 million to accumulated deficit on our condensed consolidated balance sheet as of October 2, 2021, that was primarily driven by the derecognition of interest expense related to the accretion of the Debt Discount as required under the legacy accounting guidance. Under ASU 2020-06, we will no longer incur non-cash interest expense related to the accretion of the debt discount associated with the embedded conversion option. For the three months ended December 31, 2021, total interest expense for the 2026 Convertible Notes was $0.3 million. The fair value of our 2026 Convertible Notes, including the conversion feature, was $529.3 million as of December 31, 2021 and was determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input. There are no future minimum principal payments under the notes as of December 31, 2021; the full amount of $450.0 million is due in fiscal year 2026.
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Financing Obligation |
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Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Financing Obligation | FINANCING OBLIGATIONOn July 17, 2020, we entered into a power purchase agreement, which includes installation of electric power and thermal energy producing systems at our fabrication facility in Lowell, Massachusetts. We do not own these systems, however, we control the use of the assets during construction and operation. As of December 31, 2021 and October 1, 2021, we capitalized $9.4 million and $8.9 million, respectively, to property and equipment, net and recorded a corresponding liability of $9.4 million and $8.9 million, respectively, primarily to Financing obligation, less current portion on our condensed consolidated balance sheet. The financing obligation was calculated based on future fixed payments allocated to the power generator of $16.8 million over the 15-year term, discounted at an implied discount rate of 7.7%, and the remaining future minimum payments are for power purchases. In total, we have $27.2 million in fixed payments associated with the power purchase agreement which is expected to commence in fiscal 2022 and has a 15-year term. |
Stockholders' Equity |
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Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS' EQUITY We have authorized 10 million shares of $0.001 par value preferred stock and 300 million shares of $0.001 par value common stock as of December 31, 2021. Common Stock Warrants—In March 2012, we issued warrants to purchase 1,281,358 shares of common stock for $14.05 per share. During the fiscal quarter ended January 1, 2021, the holders of the warrants made cashless exercises of 1,281,358 shares at an exercise price of $14.05 per share, resulting in the issuance of 857,631 shares of common stock. During the three months ended January 1, 2021, we recorded the changes in the estimated fair value of the warrants in the accompanying statements of operations. See Note 4 - Fair Value for additional information. See Note 11 - Earnings (Loss) Per Share for impact of the common stock warrants on loss per share.
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Earnings (Loss) Per Share |
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Earnings (Loss) Per Share | EARNINGS (LOSS) PER SHARE The following table sets forth the computation for basic and diluted net income (loss) per share of common stock (in thousands, except per share data):
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Commitments and Contingencies |
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Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIESFrom time to time, we may be subject to commercial disputes, employment issues, claims by other companies in the industry that we have infringed their intellectual property rights and other similar claims and litigation. Any such claims may lead to future litigation and material damages and defense costs. We were not involved in any material pending legal proceedings during the fiscal quarter ended December 31, 2021. |
Share-Based Compensation |
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Share-Based Compensation | SHARE-BASED COMPENSATION Stock Plans As of December 31, 2021, we had 5.4 million shares available for issuance under our 2021 Omnibus Incentive Plan (the “2021 Plan”), which replaced our 2012 Omnibus Incentive Plan (as amended and restated) (the “2012 Plan”), and 1.4 million shares available for issuance under our 2021 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”), which replaced our 2012 Employee Stock Purchase Plan. We have outstanding awards under the 2021 Plan, as well as the 2012 Plan. Following the adoption of the 2021 Plan, no additional awards have been or will be made under the 2012 Plan. Under the 2021 Plan, we have the ability to issue incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), unrestricted stock awards, stock units (including restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”)), performance awards, cash awards, and other share-based awards to employees, directors, consultants and advisors. The ISOs and NSOs must be granted at an exercise price, and the SARs must be granted at a base value, per share of not less than 100% of the closing price of a share of our common stock on the date of grant (or, if no closing price is reported on that date, the closing price on the immediately preceding date on which a closing price was reported) (110% in the case of certain ISOs). Options granted under the 2012 Plan primarily vested based on certain market-based and performance-based criteria and generally have a term of four years to seven years. Certain of the share-based awards granted and outstanding as of December 31, 2021 are subject to accelerated vesting upon a change in control of the Company. Incentive Stock Units Outside of the equity plans described above, we also grant incentive stock units (“ISUs”) to certain of our international employees which typically vest over or four years and for which the fair value is determined by our underlying stock price, which are classified as liabilities and settled in cash upon vesting. As of December 31, 2021 and October 1, 2021, the fair value of outstanding awards was $9.2 million and $8.9 million, respectively, and the associated accrued compensation liability was $5.4 million and $6.2 million, respectively. During the three months ended December 31, 2021 and January 1, 2021, we recorded an expense for ISU awards of $1.4 million and $3.0 million, respectively. These expenses are not included in the share-based compensation expense totals below. Share-Based Compensation The following table shows a summary of share-based compensation expense included in the condensed consolidated statements of operations (in thousands):
As of December 31, 2021, the total unrecognized compensation costs related to RSAs, RSUs and PRSUs was $71.2 million, which we expect to recognize over a weighted-average period of 2.3 years. As of December 31, 2021, total unrecognized compensation cost related to our Employee Stock Purchase Plan was $0.6 million. Restricted Stock, Restricted Stock Units and Performance-Based Restricted Stock Unit Awards A summary of stock award activity for the three months ended December 31, 2021 is as follows:
Stock awards that vested during the three months ended December 31, 2021 and January 1, 2021 had combined fair values of $69.9 million and $31.0 million, respectively, as of the vesting date. RSUs granted generally vest over a period of three or four years. We granted 161,349 market-based PRSUs during the three months ended December 31, 2021, at a weighted average grant date fair value of $89.82 per share, or $14.5 million. Recipients may earn between 0% and 200% of the target number of shares granted, based on our achievement of total shareholder return in comparison to a selected group of peer companies over a three-year performance period. The fair value of these awards was estimated using a Monte Carlo simulation and share-based compensation expense is recognized ratably over the service period, based on the grant date fair value of the awards subject to the market condition. The significant assumptions used in the Monte Carlo simulation to calculate the fair value of these market-based PRSUs are as follows:
Stock Options A summary of stock option activity for the three months ended December 31, 2021 is as follows (in thousands, except per share amounts and contractual term):
Aggregate intrinsic value represents the difference between our closing stock price on December 31, 2021 and the exercise price of outstanding, in-the-money options. The total intrinsic value of options exercised was $11.0 million for the three months ended December 31, 2021 and was $0.3 million for the three months ended January 1, 2021.
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Income Taxes |
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Income Taxes | INCOME TAXES We are subject to income tax in the U.S. as well as other tax jurisdictions in which we conduct business. Earnings from non-U.S. activities are subject to local country income tax and may also be subject to current U.S. income tax. For interim periods, we record a tax provision or benefit based upon the estimated effective tax rate expected for the full fiscal year, adjusted for material discrete taxation matters arising during the interim periods. Our quarterly tax provision or benefit, and its quarterly estimate of the annual effective tax rate, are subject to significant variation due to several factors. These factors include items such as: variability in accurately predicting pre-tax income/loss, the mix of jurisdictions in which we operate, intercompany transactions, changes in how we do business, tax law developments, and relative changes in permanent tax benefits or expenses. The provision for income taxes and effective income tax rate are as follows (in thousands, except percentages):
The difference between the U.S. federal statutory income tax rate of 21% and our effective income tax rates for the three months ended December 31, 2021 and January 1, 2021 was primarily driven by the continuation of a full valuation allowance against any expense or benefit associated with income or losses in the U.S. and income taxed in foreign jurisdictions generally at lower tax rates and where a valuation allowance does not apply. The gain on the sale of our equity interest in Ampere during the three months ended December 31, 2021 has been offset by our NOL carryforwards. We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making this determination, we consider available positive and negative evidence. We look at factors that may impact the valuation of our deferred tax asset including results of recent operations, future reversals of existing taxable temporary differences, projected future taxable income, and tax-planning strategies. We have determined that there was not sufficient objectively verifiable positive evidence to offset our significant negative objective evidence, therefore, we concluded that a full valuation allowance is appropriate for our U.S. deferred tax assets. Our negative objective evidence consists primarily of adjusted cumulative losses in the U.S. over the three-year period ended December 31, 2021. Our deferred income tax asset balance as of December 31, 2021 and October 1, 2021 is primarily attributable to an initial $39.8 million deferred asset generated from an intra-entity transfer of a license for intellectual property during the fiscal quarter ended September 27, 2019. We expect this deferred tax asset to amortize over the life of the intellectual property. There were no unrecognized tax benefits as of December 31, 2021 and October 1, 2021. It is our policy to recognize any interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the fiscal quarter ended December 31, 2021, we did not make any accrual or payment of interest or penalties, nor did we make any payment
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Geographic and Significant Customer Information |
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Geographic and Significant Customer Information | GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION We have one reportable operating segment that designs, develops, manufactures and markets semiconductors and modules. The determination of the number of reportable operating segments is based on the chief operating decision maker’s (“CODM”) use of financial information provided for the purposes of assessing performance and making operating decisions. The Company's CODM is its President and Chief Executive Officer. In evaluating financial performance and making operating decisions, the CODM primarily uses consolidated metrics. The Company assesses its determination of operating segments at least annually. We continue to evaluate our internal reporting structure and the potential impact of any changes on our segment reporting. For information about our revenue in different geographic regions, based upon customer locations, see Note 2 - Revenue. Information about net property and equipment in different geographic regions is presented below (in thousands):
(1)Europe primarily represents Finland, France, Germany, Ireland and Italy. (2)Other than the United States and Europe, no country or region represented greater than 10% of the total net property and equipment as of the dates presented. The following is a summary of customer concentrations as a percentage of revenue and accounts receivable as of and for the periods presented:
Customer A did not represent more than 10% of our revenue in the three months ended December 31, 2021. No other customer represented more than 10% of revenue or accounts receivable in the periods presented in the accompanying condensed consolidated financial statements. For the three months ended December 31, 2021 and January 1, 2021, our top ten customers represented 44% and 55% of total revenue, respectively.
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Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation—The accompanying condensed consolidated financial statements include our accounts and the accounts of our majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Period | We have a 52- or 53-week fiscal year ending on the Friday closest to the last day of September. Fiscal years 2022 and 2021 each include 52 weeks. To offset the effect of holidays, for fiscal years in which there are 53 weeks, we include the extra week arising in such fiscal years in the first fiscal quarter. |
Use of Estimates | Use of Estimates—The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities during the reporting periods, the reported amounts of revenue and expenses during the reporting periods, and the disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, we base estimates and assumptions on historical experience, currently available information and various other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates and assumptions. The accounting policies which our management believes involve the most significant application of judgment or involve complex estimation, are inventories and associated reserves; goodwill and long-lived asset valuations and associated impairment assessments; revenue reserves; share-based compensation valuations and income taxes. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements—Our Recent Accounting Pronouncements are described in our 2021 Annual Report on Form 10-K. Pronouncements Adopted in Fiscal Year 2022 In August 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liability and equity, including convertible instruments and contracts on an entity’s own equity. The standard reduces the number of models used to account for convertible instruments, removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and requires the if-converted method for calculation of diluted earnings per share for all convertible instruments. We early adopted this standard effective October 2, 2021 using the modified retrospective approach transition method. Therefore, the condensed consolidated financial statements for the three months ended December 31, 2021 are presented under the new standard, while the comparative period presented is not adjusted and continues to be reported in accordance with the Company's historical accounting policy. Refer to Note 8 - Debt for the impact of adoption on our 2026 Convertible Notes (as defined below). Pronouncements for Adoption in Subsequent Periods In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to applying the guidance on contract modifications, hedge accounting, and other transactions, to simplify the accounting for transitioning from the London Interbank Offered Rate, and other interbank offered rates expected to be discontinued, to alternative reference rates. The guidance in this update was effective upon its issuance. If elected, the guidance is to be applied prospectively through December 31, 2022. We are currently evaluating the effect the potential adoption of this ASU will have on our consolidated financial statements, including, but not limited to, our Credit Agreement (defined below). For additional information regarding our Credit Agreement, refer to Note 8 - Debt.
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Revenue (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables present our revenue disaggregated by markets and geography (in thousands):
(1)Asia Pacific primarily represents Taiwan, Japan, Singapore, Thailand, South Korea, Australia and Malaysia. (2)No country or region represented greater than 10% of our total revenue as of the dates presented, other than the United States, China and Asia Pacific region as presented above.
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Contract with Customer, Asset and Liability | The following table presents the changes in contract liabilities during the three months ended December 31, 2021 (in thousands, except percentage):
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Investments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Contractual Maturities of Investments | The contractual maturities of available-for-sale investments were as follows (in thousands):
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Debt Securities, Available-for-sale | The amortized cost, gross unrealized holding gains or losses and fair value of our available-for-sale investments by major investment type are summarized in the tables below (in thousands):
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Fair Value (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis consist of the following (in thousands):
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Changes in Liabilities with Inputs Classified within Level 3 of Fair Value | During the three months ended January 1, 2021, the change in the fair value of the warrant liability, classified within Level 3 of the fair value hierarchy, consist of the following (in thousands):
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Inventories | Inventories consist of the following (in thousands):
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Property, Plant and Equipment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Property, Plant and Equipment | Property and equipment consists of the following (in thousands):
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Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Amortization Expense of Intangible Assets | Amortization expense related to intangible assets is as follows (in thousands):
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Summary of Intangible Assets | Intangible assets consist of the following (in thousands):
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Summary of Activity in Intangible Assets and Goodwill | A summary of the activity in gross intangible assets and goodwill is as follows (in thousands):
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Summary of Estimated Amortization of Intangible Assets in Future Fiscal Years | As of December 31, 2021, our estimated amortization of our intangible assets in future fiscal years was as follows (in thousands):
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Remained Outstanding on Term Loans | The following represents the outstanding balances and effective interest rates of our borrowings as of December 31, 2021 and October 1, 2021, (in thousands, except percentages):
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Earnings (Loss) Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation for Basic and Diluted Net Loss Per Share of Common Stock | The following table sets forth the computation for basic and diluted net income (loss) per share of common stock (in thousands, except per share data):
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Share-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effects of Stock-Based Compensation Expense Related to Stock-Based Awards to Employees and Nonemployees | The following table shows a summary of share-based compensation expense included in the condensed consolidated statements of operations (in thousands):
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Summary of Restricted Stock, Restricted Stock Unit and Performance-based Restricted Stock Unit Activity | A summary of stock award activity for the three months ended December 31, 2021 is as follows:
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Schedule of Share-Based Payment Award, Market Based Restricted Stock Awards, Valuation Assumptions | The significant assumptions used in the Monte Carlo simulation to calculate the fair value of these market-based PRSUs are as follows:
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Share-based Payment Arrangement, Option, Activity | A summary of stock option activity for the three months ended December 31, 2021 is as follows (in thousands, except per share amounts and contractual term):
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Geographic and Significant Customer Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-lived Assets by Geographic Areas | Information about net property and equipment in different geographic regions is presented below (in thousands):
(1)Europe primarily represents Finland, France, Germany, Ireland and Italy. (2)Other than the United States and Europe, no country or region represented greater than 10% of the total net property and equipment as of the dates presented.
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Schedule of Revenue by Major Customers by Reporting Segments | The following is a summary of customer concentrations as a percentage of revenue and accounts receivable as of and for the periods presented:
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Investments - Summary of Available for Sale Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Oct. 01, 2021 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 204,936 | $ 188,371 |
Gross Unrealized Holding Gains | 48 | 172 |
Gross Unrealized Holding Losses | 670 | 178 |
Aggregate Fair Value | 204,314 | 188,365 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 89,230 | 73,653 |
Gross Unrealized Holding Gains | 48 | 151 |
Gross Unrealized Holding Losses | 617 | 171 |
Aggregate Fair Value | 88,661 | 73,633 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 115,706 | 114,718 |
Gross Unrealized Holding Gains | 0 | 21 |
Gross Unrealized Holding Losses | 53 | 7 |
Aggregate Fair Value | $ 115,653 | $ 114,732 |
Investments - Summary of Contractual Maturities of Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Oct. 01, 2021 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Less than one year | $ 132,074 | $ 120,590 |
Over one year | 72,240 | 67,775 |
Total available-for-sale investments | $ 204,314 | $ 188,365 |
Fair Value - Changes in Assets and Liabilities with Inputs Classified within Level 3 of Fair Value (Details) - Common stock warrant liability $ in Thousands |
3 Months Ended |
---|---|
Jan. 01, 2021
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of period | $ 25,312 |
Net Realized Losses (Gains) Included in Earnings | 11,130 |
Sales and Settlements | (36,442) |
Balance at end of period | $ 0 |
Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Oct. 01, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 55,657 | $ 50,950 |
Work-in-process | 10,452 | 9,201 |
Finished goods | 22,429 | 22,548 |
Total inventory, net | $ 88,538 | $ 82,699 |
Property Plant and Equipment - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Jan. 01, 2021 |
Oct. 01, 2021 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 5,900 | $ 6,200 | |
Accumulated depreciation | 189,408 | $ 184,465 | |
Finance Lease, Right-of-Use Asset, Accumulated Amortization | $ 4,500 | $ 4,900 |
Intangible Assets - Summary of Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Jan. 01, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 9,287 | $ 11,993 |
Cost of Revenue | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 2,505 | 3,877 |
Selling, General and Administrative | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 6,782 | $ 8,116 |
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Oct. 01, 2021 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Trade name (indefinite-lived) | $ 3,400 | $ 3,400 |
Total | 428,704 | 428,704 |
Less accumulated amortization | (353,306) | (344,019) |
Intangible assets — net | 75,398 | 84,685 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 179,434 | 179,434 |
Less accumulated amortization | (169,900) | (167,300) |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 245,870 | 245,870 |
Less accumulated amortization | $ (183,400) | $ (176,700) |
Intangible Assets - Summary of Activity in Intangible Assets and Goodwill (Details) $ in Thousands |
3 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Goodwill and Intangible Assets [Roll Forward] | |
Beginning Balance | $ 428,704 |
Currency translation adjustment | 0 |
Intangible Assets, Net (Including Goodwill) | 313,898 |
Ending Balance | 428,704 |
Goodwill [Roll Forward] | |
Balance at beginning of period | 314,240 |
Currency translation adjustment | (342) |
Balance at end of period | 313,898 |
Trade Names | |
Indefinite Lived Intangible Assets Rollforward [Roll Forward] | |
Beginning Balance | 3,400 |
Currency translation adjustment | 0 |
Ending Balance | 3,400 |
Developed technology | |
Finite-lived Intangible Assets [Roll Forward] | |
Beginning Balance | 179,434 |
Currency translation adjustment | 0 |
Ending Balance | 179,434 |
Customer relationships | |
Finite-lived Intangible Assets [Roll Forward] | |
Beginning Balance | 245,870 |
Currency translation adjustment | 0 |
Ending Balance | $ 245,870 |
Intangible Assets - Summary of Estimated Amortization of Intangible Assets (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 Remaining | $ 24,146 |
2022 | 26,048 |
2023 | 15,410 |
2024 | 3,490 |
2025 | 1,644 |
Thereafter | 1,260 |
Total | $ 71,998 |
Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Oct. 01, 2021 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ 353,306 | $ 344,019 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | 169,900 | 167,300 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ 183,400 | $ 176,700 |
Debt - Schedule of Remaining Outstanding Balances on Term Loans (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Oct. 01, 2021 |
|
Principal Balance | ||
Long-term debt | $ 570,766 | $ 570,766 |
Total long-term debt | $ 564,686 | 492,097 |
Long-term Debt | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.25% | |
Principal Balance | ||
Long-term debt | $ 120,766 | 120,766 |
Less: Unamortized discount on term loans and deferred financing costs | $ (6,080) | $ (5,567) |
Effective Interest Rate | ||
Effective interest rate | 2.34% | 2.33% |
Convertible Debt | ||
Principal Balance | ||
Long-term debt | $ 450,000 | $ 450,000 |
Less: Unamortized discount on term loans and deferred financing costs | $ 0 | $ (73,102) |
Effective Interest Rate | ||
Effective interest rate | 0.25% | 4.25% |
Financing Obligation (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Oct. 01, 2021 |
|
Long-term Purchase Commitment [Line Items] | ||
Property and equipment, net capitalized | $ 9.4 | $ 8.9 |
Financing obligation for property, plant and equipment | 9.4 | $ 8.9 |
Future fixed payment | $ 16.8 | |
Power generator life term | 15 years | |
Implied discount rate | 7.70% | |
Purchase Commitment | ||
Long-term Purchase Commitment [Line Items] | ||
Fixed payments | $ 27.2 |
Stockholders' Equity - Additional Information (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Mar. 31, 2012 |
|
Equity [Abstract] | ||
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, par value (in usd per share) | $ 0.001 | |
Common stock, shares authorized | 300,000,000 | |
Common stock, par value (in usd per share) | $ 0.001 | |
Class of Warrant or Right [Line Items] | ||
Common stock warrants (in shares) | 1,281,358 | |
Conversion of Stock, Shares Issued | 857,631 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | 1,281,358 | |
Common stock warrants per share (in usd per share) | $ 14.05 |
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Jan. 01, 2021 |
|
Earnings Per Share [Abstract] | ||
Fair Value Adjustment of Warrants | $ 0 | $ 11,130 |
Numerator: | ||
Net income (loss) | 138,827 | (8,968) |
Net income (loss) attributable to common stockholders | $ 138,827 | $ (8,968) |
Denominator: | ||
Weighted average common shares outstanding-basic | 69,400,000 | 67,756,000 |
Dilutive effect of options and warrants (in shares) | 1,824,000 | 0 |
Weighted average common shares outstanding-diluted | 71,224,000 | 67,756,000 |
Earnings Per Share, Basic [Abstract] | ||
Income (loss) per share - Basic (usd per share) | $ 2.00 | $ (0.13) |
Number of antidilutive shares of common stock excluded from the calculation (in shares) | 2,004,621 |
Share-Based Compensation - Effects of Stock-Based Compensation Expense Related to Stock-Based Awards to Employees and Non-Employees (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Jan. 01, 2021 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 9,949 | $ 10,131 |
Cost of Revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | 1,033 | 871 |
Research and Development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | 3,599 | 3,554 |
Selling, General and Administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 5,317 | $ 5,706 |
Share-Based Compensation - Summary of Restricted Stock, Restricted Stock Unit and Performance-based Restricted Stock Unit Activity (Details) shares in Thousands |
3 Months Ended |
---|---|
Dec. 31, 2021
$ / shares
shares
| |
Number of shares (in thousands) | |
Balance at beginning of period (in shares) | shares | 2,351 |
Granted (in shares) | shares | 913 |
Vested and released (in shares) | shares | (969) |
Forfeited, canceled or expired (in shares) | shares | (40) |
Balance at end of period (in shares) | shares | 2,255 |
Weighted- Average Grant Date Fair Value | |
Balance at beginning of period (in usd per share) | $ / shares | $ 24.57 |
Granted (in usd per share) | $ / shares | 53.08 |
Vested and released (in usd per share) | $ / shares | 22.99 |
Forfeited, canceled or expired (in usd per share) | $ / shares | 27.54 |
Balance at end of period (in usd per share) | $ / shares | $ 36.73 |
Share-Based Compensation - Fair Value of Market-Based PRSUs (Details) - Restricted Stock Units (RSUs) |
3 Months Ended |
---|---|
Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk free interest rate | 0.80% |
Years to maturity | 3 years |
Expected volatility rate | 57.80% |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Jan. 01, 2021 |
Oct. 01, 2021 |
|
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 1,457 | $ 674 | |
Effective income tax rate | 1.00% | (8.10%) | |
Effective tax rate | 21.00% | ||
Deferred tax assets | $ 39,800 | $ 39,800 | |
Unrecognized tax benefit | $ 0 | $ 0 |
Geographic and Significant Customer Information - Additional Information (Details) - segment |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Jan. 01, 2021 |
|
Revenue from External Customer [Line Items] | ||
Number of reportable operating segment | 1 | |
Top Ten Customers | Revenue | Customer Concentration Risk | ||
Revenue from External Customer [Line Items] | ||
Concentration risk, percentage | 44.00% | 55.00% |
Geographic and Significant Customer Information - Summary of Different Geographic Regions (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Oct. 01, 2021 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 120,773 | $ 120,526 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | 104,732 | 103,527 |
Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | 12,295 | 12,766 |
Other Countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 3,746 | $ 4,233 |
Geographic and Significant Customer Information - Summary of Customer Concentrations as Percentage of Revenue and Accounts Receivable (Details) |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Jan. 01, 2021 |
|
Customer Concentration Risk | Revenue | Customer A | ||
Revenue from External Customer [Line Items] | ||
Concentration risk, percentage | 0.00% | 14.00% |
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