MACOM Reports Fiscal Third Quarter 2022 Financial Results
LOWELL, MA, July 28, 2022 – MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal third quarter ended July 1, 2022.
Third Quarter Fiscal Year 2022 GAAP Results
•Revenue was $172.3 million, an increase of 12.9%, compared to $152.6 million in the previous year fiscal third quarter and an increase of 4.3% compared to $165.1 million in the prior fiscal quarter;
•Gross margin was 60.7%, compared to 57.2% in the previous year fiscal third quarter and 59.9% in the prior fiscal quarter;
•Operating income was $36.0 million, compared to operating income of $23.7 million in the previous year fiscal third quarter and operating income of $32.6 million in the prior fiscal quarter; and
•Net income was $32.2 million, or $0.45 per diluted share, compared to net income of $15.0 million, or $0.21 per diluted share, in the previous year fiscal third quarter and net income of $29.6 million, or $0.42 per diluted share, in the prior fiscal quarter.
Third Quarter Fiscal Year 2022 Adjusted Non-GAAP Results
•Adjusted gross margin was 62.2%, compared to 60.3% in the previous year fiscal third quarter and 61.7% in the prior fiscal quarter;
•Adjusted operating income was $54.1 million, or 31.4% of revenue, compared to adjusted operating income of $43.9 million, or 28.7% of revenue, in the previous year fiscal third quarter and adjusted operating income of $50.9 million, or 30.8% of revenue, in the prior fiscal quarter; and
•Adjusted net income was $52.1 million, or $0.73 per diluted share, compared to adjusted net income of $40.3 million, or $0.57 per diluted share, in the previous year fiscal third quarter and adjusted net income of $48.4 million, or $0.68 per diluted share, in the prior fiscal quarter.
Management Commentary
“We remain focused on designing compelling products to meet our customers’ needs,” said Stephen G. Daly, President and Chief Executive Officer.
Business Outlook
For the fiscal fourth quarter ending September 30, 2022, MACOM expects revenue to be in the range of $175 million to $180 million. Adjusted gross margin is expected to be between 61.5% and 63.5%, and adjusted earnings per share is expected to be between $0.74 and $0.78 utilizing an anticipated non-GAAP income tax rate of 3% and 71.4 million fully diluted shares outstanding.
Conference Call
MACOM will host a conference call on Thursday, July 28, 2022 at 8:30 a.m. Eastern Time to discuss its fiscal third quarter 2022 financial results and business outlook. Investors and analysts may visit MACOM's Investor Relations website at https://ir.macom.com/events-webcasts to register for a user-specific access code for the live call or to access the live webcast. A replay of the call will be available within 24 hours and remain accessible by all interested parties for approximately 90 days.
About MACOM
MACOM designs and manufactures high-performance semiconductor products for the Telecommunications, Industrial and Defense and Datacenter industries. MACOM services over 6,000 customers annually with a broad product portfolio that incorporates RF, Microwave, Analog and Mixed Signal and Optical semiconductor technologies. MACOM has achieved certification to the IATF16949 automotive standard, the ISO9001 international quality standard and the ISO14001 environmental management standard. MACOM operates facilities across the United States, Europe, Asia and is headquartered in Lowell, Massachusetts.
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements based on MACOM management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include, among others, statements about MACOM’s strategic plans and priorities, our ability to continue to improve our earnings and to ensure business continuity and to be successful in our technology, product development and engineering efforts, acceleration, strength and competitiveness of new product introductions and technology portfolio expansion, MACOM’s profitability, prospects and growth opportunities in our three primary markets, our strategy with respect to adjacent markets, development and process qualification timelines, the potential impact to our business of an economic downturn or recession, continued revenue growth and financial and business improvements and the estimated financial results for our 2022 fiscal fourth quarter and the stated business outlook and future results of operations.
These forward-looking statements reflect MACOM’s current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause those events or our actual activities or results to differ materially from those indicated by the forward-looking statements, including any failure to anticipate demand for our products; risks related to any weakening of economic conditions, including as a result of the COVID-19 pandemic; our dependence on a limited number of customers; our ability to develop new products and achieve market acceptance of those products; component shortages or other disruptions in our supply chain, including as a result of the COVID-19 pandemic; and those other factors described in “Risk Factors” in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Discussion Regarding the Use of Historical and Forward-Looking Non-GAAP Financial Measures
In addition to United States Generally Accepted Accounting Principles (“GAAP”) reporting, MACOM provides investors with financial measures that have not been calculated in accordance with GAAP, such as: non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP income from operations and operating margin, adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP diluted shares, non-GAAP income tax rate, non-GAAP interest expense and non-GAAP free cash flow. In this release or elsewhere, we may alternatively refer to such non-GAAP measures as “adjusted” measures. This non-GAAP information excludes the effect, where applicable, of intangible amortization expense, share-based compensation expense, warrant liability expense, non-cash interest, loss on debt extinguishment, equity method investment gains and losses and the tax effect of each non-GAAP adjustment.
Management believes these excluded items are not reflective of our underlying performance and uses these non-GAAP financial measures to: evaluate our ongoing operating performance and compare it against prior periods, make operating decisions, forecast future periods, evaluate potential acquisitions, compare our operating performance against peer companies and assess certain compensation programs. The exclusion of these items from our non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent or unusual. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors to help them evaluate the results of our ongoing operations and enable more meaningful period-to-period comparisons. These non-GAAP measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial data attached to this press release. We have not provided a reconciliation with respect to any forward-looking non-GAAP financial data presented because we do not have and cannot reliably estimate certain key inputs required to calculate the most comparable GAAP financial data, such as future acquisition costs, the possibility and impact of any litigation costs, changes in our GAAP effective tax rate and impairment charges. We believe these unknown inputs are likely to have a significant impact on any estimate of the comparable GAAP financial data.
Investors are cautioned against placing undue reliance on non-GAAP financial measures and are urged to review and consider carefully the adjustments made by management to the most directly comparable GAAP financial measures. Non-GAAP financial measures may have limited value as analytical tools because they may exclude certain expenses that some investors consider important in evaluating our operating performance or ongoing business performance. Further, non-GAAP financial measures may have limited value for purposes of drawing comparisons between companies because different companies may calculate similarly titled non-GAAP financial measures in different ways because non-GAAP measures are not based on any comprehensive set of accounting rules or principles.
Additional information and management’s assessment regarding why certain items are excluded from our non-GAAP measures are summarized below:
Amortization Expense – is related to acquired intangible assets which are based upon valuation methodologies, and are generally amortized over the expected life of the intangible asset at the time of acquisition, which may result in amortization amounts that vary over time. This non-cash expense is not considered by management in making operating decisions.
Share-Based Compensation Expense – includes share-based compensation expense for awards that are equity and liability classified on our balance sheet and the related employer tax expense at vesting. Share-based compensation expense is partially outside of our control due to factors such as stock price volatility and interest rates, which may be unrelated to our operating performance during the period in which the expense is incurred. It is an expense based upon valuation methodologies and assumptions that vary over time, and the amount of the expense can vary significantly between companies. Share-based compensation expense amounts are not considered by management in making operating decisions.
Warrant Liability Expense – is associated with mark-to-market fair value adjustments, which are largely based on the value of our common stock, which may vary from period to period due to factors such as stock price volatility. We believe these amounts are not correlated to future business operations and do not reflect our ongoing operations.
Non-cash Interest, Net – includes amounts associated with the amortization of the discount on our convertible notes and the amortization of certain fees associated with the establishment or amendment of our term loans and convertible notes that are being amortized over the life of the agreements. We believe these amounts are non-cash in nature, are not correlated to future business operations and do not reflect our ongoing operations.
Equity Method Investment Gains and Losses – primarily includes non-cash gains and losses associated with a non-marketable equity investment we had in Ampere Computing Holdings LLC and the $118.2 million cash gain on the sale of this investment in December 2021. We believe these items are not correlated to future business operations and including such amounts does not reflect our ongoing operations.
Loss on Debt Extinguishment – includes the write-off of unamortized deferred financing costs associated with the paydown of our term loans. We believe these non-cash amounts are not correlated to future business operations and do not reflect on our ongoing operations.
Tax Effect of Non-GAAP Adjustments – includes adjustments to arrive at an estimate of our non-GAAP income tax rate associated with our non-GAAP income over a period of time. We determine our non-GAAP income tax rate using applicable rates in taxing jurisdictions and assessing certain factors including our historical and forecast earnings by jurisdiction, discrete items, cash taxes paid in relation to our non-GAAP net income before income taxes and our ability to realize tax assets. We generally assess this non-GAAP income tax rate quarterly
and have utilized 5% for fiscal year 2021 and our first fiscal quarter of fiscal year 2022 and 3% for our second and third fiscal quarters of fiscal year 2022. Our historical effective income tax rate under GAAP has varied significantly from our non-GAAP income tax rate due primarily to changes in fair values of the common stock warrant liability, which are excluded from our adjusted net income and are neither deductible nor taxable for tax purposes, gains or losses associated with our equity method investment in a private business, income taxed in foreign jurisdictions at generally lower tax rates, intangible impairments, research and development tax credits and merger expenses. We believe it is beneficial for management to review our non-GAAP income tax rate on a consistent basis over periods of time. Items such as those noted above may have a significant impact on our GAAP income tax expense and associated effective tax rate over time.
Adjusted EBITDA – is a calculation that adds depreciation expense to our adjusted income from operations. Management reviews and utilizes this measure for operational analysis purposes. We believe competitors and others in the financial industry also utilize this measure for analysis purposes.
Free Cash Flow – is a calculation that starts with cash flow from operating activities and reduces this amount by our capital expenditures in the applicable period. Management reviews and utilizes this measure for cash flow analysis purposes. We believe competitors and others in the financial industry also utilize this measure for analyzing a company’s cash flow.
Incremental Shares – is the number of potential shares of common stock issuable upon the exercise of stock options, restricted stock, restricted stock units and warrants that were not included in the calculation of our GAAP diluted shares, as the impact would have been anti-dilutive. We believe competitors and others in the financial industry utilize this measure for analysis purposes.
* * *
Company Contact:
MACOM Technology Solutions Holdings, Inc.
Stephen Ferranti
Vice President, Strategic Initiatives and Investor Relations
P: 978-656-2977
E: stephen.ferranti@macom.com
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share data)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| July 1, 2022 | April 1, 2022 | July 2, 2021 | July 1, 2022 | July 2, 2021 | |||||||||||||||||||||||||
| Revenue | $ | 172,259 | $ | 165,147 | $ | 152,622 | $ | 497,027 | $ | 451,709 | |||||||||||||||||||
| Cost of revenue | 67,717 | 66,158 | 65,353 | 199,353 | 200,065 | ||||||||||||||||||||||||
| Gross profit | 104,542 | 98,989 | 87,269 | 297,674 | 251,644 | ||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| Research and development | 37,625 | 35,455 | 33,610 | 108,550 | 105,165 | ||||||||||||||||||||||||
| Selling, general and administrative | 30,914 | 30,963 | 29,985 | 93,481 | 91,758 | ||||||||||||||||||||||||
| Total operating expenses | 68,539 | 66,418 | 63,595 | 202,031 | 196,923 | ||||||||||||||||||||||||
| Income from operations | 36,003 | 32,571 | 23,674 | 95,643 | 54,721 | ||||||||||||||||||||||||
| Other (expense) income: | |||||||||||||||||||||||||||||
| Warrant liability expense | — | — | — | — | (11,130) | ||||||||||||||||||||||||
| Interest expense, net | (845) | (1,389) | (5,526) | (3,928) | (15,111) | ||||||||||||||||||||||||
| Other income (expense), net | 13 | (55) | (2,661) | 114,866 | (4,287) | ||||||||||||||||||||||||
| Total other (expense) income | (832) | (1,444) | (8,187) | 110,938 | (30,528) | ||||||||||||||||||||||||
| Income before income taxes | 35,171 | 31,127 | 15,487 | 206,581 | 24,193 | ||||||||||||||||||||||||
| Income tax expense | 2,937 | 1,569 | 482 | 5,962 | 3,349 | ||||||||||||||||||||||||
| Net income | $ | 32,234 | $ | 29,558 | $ | 15,005 | $ | 200,619 | $ | 20,844 | |||||||||||||||||||
| Net income per share: | |||||||||||||||||||||||||||||
| Income per share - Basic | $ | 0.46 | $ | 0.42 | $ | 0.22 | $ | 2.88 | $ | 0.31 | |||||||||||||||||||
| Income per share - Diluted | $ | 0.45 | $ | 0.42 | $ | 0.21 | $ | 2.82 | $ | 0.30 | |||||||||||||||||||
| Weighted average common shares: | |||||||||||||||||||||||||||||
| Shares - Basic | 69,946 | 69,788 | 68,732 | 69,712 | 68,331 | ||||||||||||||||||||||||
| Shares - Diluted | 71,060 | 71,107 | 70,880 | 71,130 | 70,282 | ||||||||||||||||||||||||
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)
| July 1, 2022 | October 1, 2021 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 132,170 | $ | 156,537 | |||||||
| Short-term investments | 404,169 | 188,365 | |||||||||
| Accounts receivable, net | 106,594 | 84,570 | |||||||||
| Inventories | 110,228 | 82,699 | |||||||||
| Prepaid and other current assets | 12,344 | 9,365 | |||||||||
| Total current assets | 765,505 | 521,536 | |||||||||
| Property and equipment, net | 122,498 | 120,526 | |||||||||
| Goodwill and intangible assets, net | 371,247 | 398,925 | |||||||||
| Deferred income taxes | 37,519 | 39,516 | |||||||||
| Other long-term assets | 36,301 | 53,642 | |||||||||
| Total assets | $ | 1,333,070 | $ | 1,134,145 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of finance lease obligations | $ | 977 | $ | 958 | |||||||
| Accounts payable | 42,725 | 28,712 | |||||||||
| Accrued liabilities | 57,731 | 63,374 | |||||||||
| Total current liabilities | 101,433 | 93,044 | |||||||||
| Finance lease obligations, less current portion | 27,292 | 28,037 | |||||||||
| Financing obligation | 9,544 | 8,720 | |||||||||
| Long-term debt obligations | 565,509 | 492,097 | |||||||||
| Other long-term liabilities | 33,652 | 40,511 | |||||||||
| Total liabilities | 737,430 | 662,409 | |||||||||
Stockholders’ equity | 595,640 | 471,736 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,333,070 | $ | 1,134,145 | |||||||
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
| Nine Months Ended | |||||||||||
| July 1, 2022 | July 2, 2021 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | 200,619 | $ | 20,844 | |||||||
| Depreciation and intangible asset amortization | 43,052 | 52,854 | |||||||||
| Share-based compensation | 30,260 | 26,841 | |||||||||
| Gain on equity method investment, net | (114,908) | 287 | |||||||||
| Warrant liability expense | — | 11,130 | |||||||||
| Deferred income taxes | 2,110 | 2,200 | |||||||||
| Other adjustments, net | 1,196 | 11,007 | |||||||||
| Accounts receivable | (22,024) | (25,735) | |||||||||
| Inventories | (27,529) | 8,089 | |||||||||
| Change in other operating assets and liabilities | 4,213 | 85 | |||||||||
| Net cash provided by operating activities | 116,989 | 107,602 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Proceeds from sale of equity method investment | 127,750 | — | |||||||||
| Purchases of property and equipment | (18,818) | (12,926) | |||||||||
| Sales, purchases and maturities of investments | (220,764) | 38,970 | |||||||||
| Proceeds from sale of assets | 23 | 280 | |||||||||
| Net cash (used in) provided by investing activities | (111,809) | 26,324 | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from convertible notes, net of issuance costs | — | 444,249 | |||||||||
| Payments of long-term debt | — | (545,321) | |||||||||
| Payments on finance leases | (726) | (1,012) | |||||||||
| Proceeds from stock option exercises and employee stock purchases | 8,052 | 5,774 | |||||||||
| Repurchase of common stock - tax withholdings on equity awards | (35,935) | (23,404) | |||||||||
| Net cash used in financing activities | (28,609) | (119,714) | |||||||||
| Foreign currency effect on cash | (938) | 481 | |||||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (24,367) | 14,693 | |||||||||
| CASH AND CASH EQUIVALENTS — Beginning of period | 156,537 | 129,441 | |||||||||
| CASH AND CASH EQUIVALENTS — End of period | $ | 132,170 | $ | 144,134 | |||||||
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
(unaudited and in thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| July 1, 2022 | April 1, 2022 | July 2, 2021 | July 1, 2022 | July 2, 2021 | ||||||||||||||||||||||||||||
| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||
| Gross profit - GAAP | $ | 104,542 | 60.7 | $ | 98,989 | 59.9 | $ | 87,269 | 57.2 | $ | 297,674 | 59.9 | $ | 251,644 | 55.7 | |||||||||||||||||
| Amortization expense | 1,778 | 1.0 | 1,778 | 1.1 | 3,806 | 2.5 | 6,061 | 1.2 | 11,490 | 2.5 | ||||||||||||||||||||||
| Share-based compensation expense | 887 | 0.5 | 1,143 | 0.7 | 927 | 0.6 | 3,431 | 0.7 | 3,436 | 0.8 | ||||||||||||||||||||||
| Adjusted gross profit (Non-GAAP) | $ | 107,207 | 62.2 | $ | 101,910 | 61.7 | $ | 92,002 | 60.3 | $ | 307,166 | 61.8 | $ | 266,570 | 59.0 | |||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| July 1, 2022 | April 1, 2022 | July 2, 2021 | July 1, 2022 | July 2, 2021 | ||||||||||||||||||||||||||||
| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||
| Operating expenses - GAAP | $ | 68,539 | 39.8 | $ | 66,418 | 40.2 | $ | 63,595 | 41.7 | $ | 202,031 | 40.6 | $ | 196,923 | 43.6 | |||||||||||||||||
| Amortization expense | (6,276) | (3.6) | (6,277) | (3.8) | (7,601) | (5.0) | (19,334) | (3.9) | (23,317) | (5.2) | ||||||||||||||||||||||
| Share-based compensation expense | (9,167) | (5.3) | (9,125) | (5.5) | (7,854) | (5.1) | (29,584) | (6.0) | (30,500) | (6.8) | ||||||||||||||||||||||
| Adjusted operating expenses (Non-GAAP) | $ | 53,096 | 30.8 | $ | 51,016 | 30.9 | $ | 48,140 | 31.5 | $ | 153,113 | 30.8 | $ | 143,106 | 31.7 | |||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| July 1, 2022 | April 1, 2022 | July 2, 2021 | July 1, 2022 | July 2, 2021 | ||||||||||||||||||||||||||||
| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||
| Income from operations - GAAP | $ | 36,003 | 20.9 | $ | 32,571 | 19.7 | $ | 23,674 | 15.5 | $ | 95,643 | 19.2 | $ | 54,721 | 12.1 | |||||||||||||||||
| Amortization expense | 8,054 | 4.7 | 8,054 | 4.9 | 11,407 | 7.5 | 25,395 | 5.1 | 34,807 | 7.7 | ||||||||||||||||||||||
| Share-based compensation expense | 10,054 | 5.8 | 10,268 | 6.2 | 8,781 | 5.8 | 33,015 | 6.6 | 33,936 | 7.5 | ||||||||||||||||||||||
| Adjusted income from operations (Non-GAAP) | $ | 54,111 | 31.4 | $ | 50,893 | 30.8 | $ | 43,862 | 28.7 | $ | 154,053 | 31.0 | $ | 123,464 | 27.3 | |||||||||||||||||
| Depreciation expense | 5,918 | 3.4 | 5,792 | 3.5 | 5,834 | 3.8 | 17,657 | 3.6 | 18,047 | 4.0 | ||||||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 60,029 | 34.8 | $ | 56,685 | 34.3 | $ | 49,696 | 32.6 | $ | 171,710 | 34.5 | $ | 141,511 | 31.3 | |||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| July 1, 2022 | April 1, 2022 | July 2, 2021 | July 1, 2022 | July 2, 2021 | ||||||||||||||||||||||||||||
| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||
| Net income - GAAP | $ | 32,234 | 18.7 | $ | 29,558 | 17.9 | $ | 15,005 | 9.8 | $ | 200,619 | 40.4 | $ | 20,844 | 4.6 | |||||||||||||||||
| Amortization expense | 8,054 | 4.7 | 8,054 | 4.9 | 11,407 | 7.5 | 25,395 | 5.1 | 34,807 | 7.7 | ||||||||||||||||||||||
| Share-based compensation expense | 10,054 | 5.8 | 10,268 | 6.2 | 8,781 | 5.8 | 33,015 | 6.6 | 33,936 | 7.5 | ||||||||||||||||||||||
| Warrant liability expense | — | — | — | — | — | — | — | — | 11,130 | 2.5 | ||||||||||||||||||||||
| Non-cash interest, net | 412 | 0.2 | 411 | 0.2 | 4,070 | 2.7 | 1,281 | 0.3 | 5,467 | 1.2 | ||||||||||||||||||||||
| Equity method investment loss (gain), net | — | — | — | — | 2,025 | 1.3 | (114,908) | (23.1) | 287 | 0.1 | ||||||||||||||||||||||
| Loss on debt extinguishment | — | — | — | — | 647 | 0.4 | — | — | 4,488 | 1.0 | ||||||||||||||||||||||
| Tax effect of non-GAAP adjustments | 1,326 | 0.8 | 73 | — | (1,639) | (1.1) | 464 | 0.1 | (2,367) | (0.5) | ||||||||||||||||||||||
| Adjusted net income (Non-GAAP) | $ | 52,080 | 30.2 | $ | 48,364 | 29.3 | $ | 40,296 | 26.4 | $ | 145,866 | 29.3 | $ | 108,592 | 24.0 | |||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| July 1, 2022 | April 1, 2022 | July 2, 2021 | July 1, 2022 | July 2, 2021 | ||||||||||||||||||||||||||||
| Net income | Income per diluted share | Net income | Income per diluted share | Net income | Income per diluted share | Net income | Income per diluted share | Net income | Income per diluted share | |||||||||||||||||||||||
| Net income - GAAP diluted | $ | 32,234 | $ | 0.45 | $ | 29,558 | $ | 0.42 | $ | 15,005 | $ | 0.21 | $ | 200,619 | $ | 2.82 | $ | 20,844 | $ | 0.30 | ||||||||||||
| Adjusted net income (Non-GAAP) | $ | 52,080 | $ | 0.73 | $ | 48,364 | $ | 0.68 | $ | 40,296 | $ | 0.57 | $ | 145,866 | $ | 2.05 | $ | 108,592 | $ | 1.54 | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| July 1, 2022 | April 1, 2022 | July 2, 2021 | July 1, 2022 | July 2, 2021 | ||||||||||||||||||||||||||||
| Shares | Shares | Shares | Shares | Shares | ||||||||||||||||||||||||||||
| Diluted shares - GAAP | 71,060 | 71,107 | 70,880 | 71,130 | 70,282 | |||||||||||||||||||||||||||
| Incremental shares | — | — | — | — | 117 | |||||||||||||||||||||||||||
| Adjusted diluted shares (Non-GAAP) | 71,060 | 71,107 | 70,880 | 71,130 | 70,399 | |||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| July 1, 2022 | April 1, 2022 | July 2, 2021 | July 1, 2022 | July 2, 2021 | ||||||||||||||||||||||||||||
| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||
| Interest expense, net - GAAP | $ | 845 | 0.5 | $ | 1,389 | 0.8 | $ | 5,526 | 3.6 | $ | 3,928 | 0.8 | $ | 15,111 | 3.3 | |||||||||||||||||
| Non-cash interest expense | (412) | (0.2) | (412) | (0.2) | (4,070) | (2.7) | (1,281) | (0.3) | (5,467) | (1.2) | ||||||||||||||||||||||
| Adjusted interest expense (Non-GAAP) | $ | 433 | 0.3 | $ | 977 | 0.6 | $ | 1,456 | 1.0 | $ | 2,647 | 0.5 | $ | 9,644 | 2.1 | |||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| July 1, 2022 | April 1, 2022 | July 2, 2021 | July 1, 2022 | July 2, 2021 | ||||||||||||||||||||||||||||
| Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||
| Cash flow from operations | $ | 40,392 | 23.4 | $ | 42,493 | 25.7 | $ | 44,881 | 29.4 | $ | 116,989 | 23.5 | $ | 107,602 | 23.8 | |||||||||||||||||
| Capital expenditures | (6,634) | (3.9) | (7,089) | (4.3) | (5,598) | (3.7) | (18,818) | (3.8) | (12,926) | (2.9) | ||||||||||||||||||||||
| Free cash flow (Non-GAAP) | $ | 33,758 | 19.6 | $ | 35,404 | 21.4 | $ | 39,283 | 25.7 | $ | 98,171 | 19.8 | $ | 94,676 | 21.0 | |||||||||||||||||
| Free cash flow as a percentage of Adjusted net income (Non-GAAP) | 64.8 | % | 73.2 | % | 97.5 | % | 67.3 | % | 87.2 | % | ||||||||||||||||||||||
RECONCILIATION OF DEBT ACTIVITY
(unaudited and in thousands)
| Long-term debt obligations | |||||
| Balance as of October 1, 2021 | $ | 492,097 | |||
Reclassification of convertible notes from stockholders' equity | 72,177 | ||||
| Other activity | 1,235 | ||||
| Balance as of July 1, 2022 | $ | 565,509 | |||