Exhibit 99.1
Mindspeed Reports Fiscal Second Quarter 2011 Results
Company Guides Third Quarter Product Revenue Up 7% to 11% Sequentially due to Strength in Optical Infrastructure
NEWPORT BEACH, Calif.--(BUSINESS WIRE)--April 25, 2011--Mindspeed Technologies, Inc. (NASDAQ: MSPD), a leading supplier of semiconductor solutions for network infrastructure applications, today reported results for its fiscal second quarter of 2011, which ended on April 1, 2011.
Fiscal Second Quarter 2011 Financial Highlights:
- Product Revenue: $38.6 million, a sequential increase of 1 percent from the prior fiscal quarter.
- Non-GAAP Gross Margin: 63.1 percent, compared to 62.6 percent in the prior fiscal quarter, excluding patent sales; GAAP Gross Margin: 63.0 percent.
- Non-GAAP Operating Margin: 2 percent, consistent with the prior fiscal quarter, excluding patent sales; GAAP Operating Margin: (1) percent.
- Non-GAAP Diluted Earnings per Share: $0.01, consistent with the prior fiscal quarter, excluding patent sales; GAAP Diluted Loss per Share: $(0.02).
- Cash and cash equivalents of $44.9 million at the end of the fiscal second quarter of 2011.
Product revenue for the fiscal second quarter of 2011 was $38.6 million, a sequential increase of 1 percent, compared to product revenue of $38.0 million in the prior fiscal quarter. Product revenue for the fiscal second quarter of 2011 decreased year-over-year by 4 percent compared to $40.3 million in the fiscal second quarter of 2010.
Product revenue from communications convergence processing solutions contributed 40 percent of fiscal second quarter of 2011 product revenues and decreased 6 percent sequentially from the prior fiscal quarter. Product revenue from high-performance analog products represented 39 percent of fiscal second quarter of 2011 product revenue and increased 6 percent sequentially from the prior fiscal quarter. Wide area networking communications product revenue contributed the remaining 21 percent of fiscal second quarter of 2011 product revenue and increased 10 percent sequentially from the prior fiscal quarter.
Non-GAAP gross margin for the fiscal second quarter of 2011 was $24.3 million, or 63.1 percent, compared to non-GAAP gross margin of $23.8 million, or 62.6 percent, excluding the net effect of $2.5 million in patent sales, in the prior fiscal quarter. Presented on a GAAP basis, gross margin for the fiscal second quarter of 2011 was $24.3 million, or 63.0 percent, compared to $26.3 million, or 64.8 percent, in the prior fiscal quarter, which included the net effect of $2.5 million from patent sales.
Non-GAAP operating expenses for the fiscal second quarter of 2011 were $23.5 million, a sequential increase of 2 percent or $0.5 million, compared to non-GAAP operating expenses of $23.0 million in the prior fiscal quarter. GAAP operating expenses for the fiscal second quarter of 2011 were $24.6 million, a sequential increase of $0.5 million, compared to $24.1 million in the prior fiscal quarter.
Non-GAAP operating income for the fiscal second quarter of 2011 was $0.8 million compared to non-GAAP operating income of $0.8 million, excluding the net effect of $2.5 million in patent sales, in the prior fiscal quarter. On a GAAP basis, operating loss for the fiscal second quarter of 2011 was $0.3 million, compared to operating income of $2.1 million in the prior fiscal quarter, which included the net effect of $2.5 million from patent sales.
Non-GAAP net income for the fiscal second quarter of 2011 was $0.4 million, or $0.01 per share, compared to non-GAAP net income of $0.5 million, or $0.01 per share, excluding the net effect of $2.5 million in patent sales, in the prior fiscal quarter. Presented on a GAAP basis, net loss was $0.8 million, or $(0.02) per share, compared to net income of $1.7 million, or $0.05 per share, in the prior fiscal quarter, which included the net effect of $2.5 million from patent sales. All GAAP net income and earnings per share results include stock-based compensation and related payroll costs and special charges, among other items. Reconciliations of the non-GAAP measures to GAAP measures are included in the accompanying financial data.
Cash and cash equivalents were $44.9 million at the end of the fiscal second quarter of 2011, a decrease of $0.6 million, compared to $45.6 million at the end of the prior fiscal quarter.
Commentary
“We are experiencing strength in our business driven by our solutions for optical access and optical transport that we believe will drive revenue growth in the second half of fiscal year 2011. We also continue to believe that long-term growth for Mindspeed will be based on our strong design win pipeline for market leading solutions in key global networking initiatives such as optical infrastructure and most significantly our expansion into 4G wireless,” said Raouf Y. Halim, Mindspeed’s chief executive officer.
Outlook
Mindspeed expects fiscal third quarter of 2011 product revenue to grow between 7 and 11 percent sequentially or to be within a range of $41.3 million to $42.8 million. The company expects fiscal third quarter of 2011 non-GAAP gross margin to be within a range of 62.0 to 63.0 percent. The company also expects non-GAAP operating expenses to be approximately $24.0 million in the fiscal third quarter of 2011.
Fiscal Second Quarter 2011 Conference Call
Mindspeed will conduct a conference call announcing its second quarter fiscal 2011 results on Monday, April 25, 2011, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. To listen to the conference call via telephone, call 800-593-9968 (domestic) or 210-795-2680 (international); password: Mindspeed. To listen via the Internet, please visit the Investors section of Mindspeed's web site at www.mindspeed.com. Replay of the conference call will be available via telephone for a period of 30 days beginning one hour after the conference call concludes by calling 800-489-7535 (domestic) or 402-220-2141 (international). Replay will also be available in the Investors section of Mindspeed’s web site at www.mindspeed.com during such 30 day period.
About Mindspeed Technologies
Mindspeed designs, develops and sells semiconductor solutions for communications applications in the wireline and wireless network infrastructure, which includes enterprise networks, broadband access networks (fixed and mobile), and metropolitan and wide area networks. We have organized our solutions for these interrelated and rapidly converging networks into three families. Our communications convergence processing (CCP) products include ultra-low-power, multi-core digital signal processor (DSP) system-on-chip (SoC) products for the fixed and mobile (3G/4G/LTE) carrier infrastructure and residential and enterprise service platforms. Our high-performance analog (HPA) products solve difficult switching, timing and synchronization challenges in next-generation optical networking, enterprise storage and broadcast video transmission applications. Our wide area networking (WAN) communications portfolio helps optimize today's circuit-switched networks. Mindspeed's products are sold to original equipment manufacturers (OEMs) for use in a variety of network infrastructure equipment which serves these markets. To learn more, please visit www.mindspeed.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include statements regarding the company's expectations, goals or intentions, including, but not limited to, the company's long-term growth prospects; the current design win pipeline and our ability to benefit from it; and expected levels of total net revenue, non-GAAP gross margin and non-GAAP operating expenses. These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about the company and are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. These risks and uncertainties include, but are not limited to: fluctuations in our operating results and future operating losses; worldwide political and economic uncertainties and specific conditions in the markets we address; constraints in the supply of wafers and other product components from our third-party manufacturers; fluctuations in the price of our common stock; cash requirements and terms and availability of financing; loss of or diminished demand from one or more key customers or distributors; our ability to attract and retain qualified personnel; doing business internationally and our ability to successfully and cost effectively establish and manage operations in foreign jurisdictions; pricing pressures and other competitive factors; successful development and introduction of new products; lengthy sales cycles; order and shipment uncertainty; our ability to obtain design wins and develop revenues from them; the expense of and our ability to defend our intellectual property against infringement claims by others; product defects and bugs; business acquisitions and investments; and our ability to utilize our net operating loss carryforwards and certain other tax attributes. Risks and uncertainties that could cause the company's actual results to differ from those set forth in any forward-looking statement are discussed in more detail under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2010,, as well as similar disclosures in the company's subsequent SEC filings. Forward-looking statements contained in this press release are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
MINDSPEED TECHNOLOGIES, INC. |
| |
Consolidated Condensed Statements of Operations |
| (unaudited, in thousands, except per share amounts) |
| | | |
| Three Months Ended | | Six Months Ended |
| April 1, 2011 | | December 31, 2010 | | April 2, 2010 | | April 1, 2011 | | April 2, 2010 |
| | | | | | | | | |
| Net revenue: | | | | | | | | | |
| Product | $ | 38,553 | | | $ | 38,043 | | | $ | 40,253 | | | $ | 76,596 | | | $ | 77,279 |
| Intellectual property | | - | | | | 2,500 | | | | - | | | | 2,500 | | | | - |
| Total net revenue | | 38,553 | | | | 40,543 | | | | 40,253 | | | | 79,096 | | | | 77,279 |
| Cost of goods sold (a) | | 14,283 | | | | 14,281 | | | | 14,333 | | | | 28,564 | | | | 27,796 |
| Gross margin | | 24,270 | | | | 26,262 | | | | 25,920 | | | | 50,532 | | | | 49,483 |
| | | | | | | | | |
| Operating expenses: | | | | | | | | | |
| Research and development (a) | | 14,525 | | | | 13,923 | | | | 12,221 | | | | 28,448 | | | | 24,809 |
| Selling, general and administrative (a) | | 10,079 | | | | 10,211 | | | | 10,391 | | | | 20,290 | | | | 20,025 |
| Special charges (b) | | - | | | | (18 | ) | | | (71 | ) | | | (18 | ) | | | 789 |
| Total operating expenses | | 24,604 | | | | 24,116 | | | | 22,541 | | | | 48,720 | | | | 45,623 |
| | | | | | | | | |
| Operating income/(loss) | | (334 | ) | | | 2,146 | | | | 3,379 | | | | 1,812 | | | | 3,860 |
| | | | | | | | | |
| Other expense, net | | 440 | | | | 398 | | | | 198 | | | | 838 | | | | 823 |
| | | | | | | | | |
| Income/(loss) before income taxes | | (774 | ) | | | 1,748 | | | | 3,181 | | | | 974 | | | | 3,037 |
| | | | | | | | | |
| Provision (benefit) for income taxes | | (15 | ) | | | 49 | | | | 42 | | | | 34 | | | | 58 |
| | | | | | | | | |
| Net income/(loss) | $ | (759 | ) | | $ | 1,699 | | | $ | 3,139 | | | $ | 940 | | | $ | 2,979 |
| | | | | | | | | |
| Net income/(loss) per share: | | | | | | | | | |
| Basic | $ | (0.02 | ) | | $ | 0.05 | | | $ | 0.11 | | | $ | 0.03 | | | $ | 0.10 |
| Diluted | $ | (0.02 | ) | | $ | 0.05 | | | $ | 0.10 | | | $ | 0.03 | | | $ | 0.10 |
| | | | | | | | | |
| Weighted-average number of shares used in per share computation: | | | | | | | | |
| Basic | | 32,133 | | | | 31,908 | | | | 29,362 | | | | 32,021 | | | | 28,931 |
| Diluted | | 32,133 | | | | 32,870 | | | | 30,687 | | | | 33,032 | | | | 29,922 |
(a) Includes stock-based compensation expense and related payroll costs.
(b) Special charges consists of tangible and intangible asset impairments and restructuring charges.
MINDSPEED TECHNOLOGIES, INC. |
| |
Reconciliation of Non-GAAP Measures to GAAP Measures |
| (unaudited, in thousands, except per share amounts) |
| | | |
| Three Months Ended | | Six Months Ended |
| April 1,
2011 | | December 31,
2010 | | April 2,
2010 | | April 1,
2011 | | April 2,
2010 |
| | | | | | | | | |
| Reconciliation of Non-GAAP Gross Margin to GAAP Gross Margin | | | | | | | | | |
| Non-GAAP gross margin | $ | 24,315 | | | $ | 26,305 | | | $ | 25,958 | | | $ | 50,620 | | | $ | 49,553 | |
| Items excluded from non-GAAP gross margin: | | | | | | | | | |
| Stock-based compensation and related payroll costs | | 45 | | | | 43 | | | | 38 | | | | 88 | | | | 70 | |
| Gross margin | $ | 24,270 | | | $ | 26,262 | | | $ | 25,920 | | | $ | 50,532 | | | $ | 49,483 | |
| | | | | | | | | |
| Reconciliation of Non-GAAP Research and Development Expenses to GAAP Research and Development Expenses | | | | |
| Non-GAAP research and development expenses | $ | 14,196 | | | $ | 13,608 | | | $ | 11,994 | | | $ | 27,804 | | | $ | 24,275 | |
| Items excluded from non-GAAP research and development expenses: | | | | | | | | | |
| Stock-based compensation and related payroll costs | | 329 | | | | 315 | | | | 227 | | | | 644 | | | | 534 | |
| Research and development expenses | $ | 14,525 | | | $ | 13,923 | | | $ | 12,221 | | | $ | 28,448 | | | $ | 24,809 | |
| | | | | | | | | |
| Reconciliation of Non-GAAP Selling, General and Administrative Expenses to GAAP Selling, General and Administrative Expenses | | |
| Non-GAAP selling, general and administrative expenses | $ | 9,351 | | | $ | 9,390 | | | $ | 9,307 | | | $ | 18,741 | | | $ | 18,326 | |
| Items excluded from non-GAAP selling, general and administrative expenses: | | | | | | | |
| Stock-based compensation and related payroll costs | | 728 | | | | 821 | | | | 1,084 | | | | 1,549 | | | | 1,685 | |
| Employee option exchange costs (c) | | - | | | | - | | | | - | | | | - | | | | 14 | |
| Selling, general and administrative expenses | $ | 10,079 | | | $ | 10,211 | | | $ | 10,391 | | | $ | 20,290 | | | $ | 20,025 | |
| | | | | | | | | |
| Reconciliation of Non-GAAP Operating Expenses to GAAP Operating Expenses | | | | | | | |
| Non-GAAP operating expenses | $ | 23,547 | | | $ | 22,998 | | | $ | 21,301 | | | $ | 46,545 | | | $ | 42,601 | |
| Items excluded from non-GAAP operating expenses: | | | | | | | | | |
| Stock-based compensation and related payroll costs | | 1,057 | | | | 1,136 | | | | 1,311 | | | | 2,193 | | | | 2,219 | |
| Special charges | | - | | | | (18 | ) | | | (71 | ) | | | (18 | ) | | | 789 | |
| Employee option exchange costs (c) | | - | | | | - | | | | - | | | | - | | | | 14 | |
| Operating expenses | $ | 24,604 | | | $ | 24,116 | | | $ | 22,541 | | | $ | 48,720 | | | $ | 45,623 | |
| | | | | | | | | |
| Reconciliation of Non-GAAP Operating Income to GAAP Operating Income/(Loss) | | | | | | | |
| Non-GAAP operating income | $ | 768 | | | $ | 3,307 | | | $ | 4,657 | | | $ | 4,075 | | | $ | 6,952 | |
| Items excluded from non-GAAP operating income/(loss): | | | | | | | | | |
| Stock-based compensation and related payroll costs | | 1,102 | | | | 1,179 | | | | 1,349 | | | | 2,281 | | | | 2,289 | |
| Special charges | | - | | | | (18 | ) | | | (71 | ) | | | (18 | ) | | | 789 | |
| Employee option exchange costs (c) | | - | | | | - | | | | - | | | | - | | | | 14 | |
| Operating income/(loss) | $ | (334 | ) | | $ | 2,146 | | | $ | 3,379 | | | $ | 1,812 | | | $ | 3,860 | |
| | | | | | | | | |
| |
| |
MINDSPEED TECHNOLOGIES, INC. |
| |
Reconciliation of Non-GAAP Measures to GAAP Measures |
| (unaudited, in thousands, except per share amounts) |
| | | |
| Three Months Ended | | Six Months Ended |
| April 1,
2011 | | December 31,
2010 | | April 2,
2010 | | April 1,
2011 | | April 2,
2010 |
| | | | | | | | | |
| Reconciliation of Non-GAAP Other Expense, Net to GAAP Other Expense, Net | | | | | | | |
| Non-GAAP other expense, net | $ | (339 | ) | | $ | (297 | ) | | $ | (99 | ) | | $ | (636 | ) | | $ | (489 | ) |
| Items excluded from non-GAAP other income/(expense), net: | | | | | | | | | |
| Non-cash interest expense on convertible senior notes (d) | | (101 | ) | | | (101 | ) | | | (99 | ) | | | (202 | ) | | | (334 | ) |
| Other expense, net | $ | (440 | ) | | $ | (398 | ) | | $ | (198 | ) | | $ | (838 | ) | | $ | (823 | ) |
| | | | | | | | | |
| Reconciliation of Non-GAAP Net Income to GAAP Net Income/(Loss) | | | | | | | | | |
| Non-GAAP net income | $ | 444 | | | $ | 2,961 | | | $ | 4,516 | | | $ | 3,405 | | | $ | 6,405 | |
| Items excluded from non-GAAP net income: | | | | | | | | | |
| Stock-based compensation and related payroll costs | | 1,102 | | | | 1,179 | | | | 1,349 | | | | 2,281 | | | | 2,289 | |
| Special charges | | - | | | | (18 | ) | | | (71 | ) | | | (18 | ) | | | 789 | |
| Employee option exchange costs (c) | | - | | | | - | | | | - | | | | - | | | | 14 | |
| Non-cash interest expense on convertible senior notes (d) | | 101 | | | | 101 | | | | 99 | | | | 202 | | | | 334 | |
| Net income/(loss) | $ | (759 | ) | | $ | 1,699 | | | $ | 3,139 | | | $ | 940 | | | $ | 2,979 | |
| | | | | | | | | |
| Reconciliation of Non-GAAP Net Income Per Share to GAAP Net Income/(Loss) Per Share | | | | | | |
| Net income per share, basic: | | | | | | | | | |
| Non-GAAP net income | $ | 0.01 | | | $ | 0.09 | | | $ | 0.15 | | | $ | 0.11 | | | $ | 0.22 | |
| Adjustments | | (0.03 | ) | | | (0.04 | ) | | | (0.04 | ) | | | (0.08 | ) | | | (0.12 | ) |
| Net income/(loss) | $ | (0.02 | ) | | $ | 0.05 | | | $ | 0.11 | | | $ | 0.03 | | | $ | 0.10 | |
| | | | | | | | | |
| Net income per share, diluted: | | | | | | | | | |
| Non-GAAP net income | $ | 0.01 | | | $ | 0.09 | | | $ | 0.15 | | | $ | 0.10 | | | $ | 0.21 | |
| Adjustments | | (0.03 | ) | | | (0.04 | ) | | | (0.05 | ) | | | (0.07 | ) | | | (0.11 | ) |
| Net income/(loss) | $ | (0.02 | ) | | $ | 0.05 | | | $ | 0.10 | | | $ | 0.03 | | | $ | 0.10 | |
| | | | | | | | | |
| Reconciliation of Shares used in Non-GAAP diluted shares to GAAP diluted shares | | | | | | | |
| Non-GAAP diluted shares | | 33,183 | | | | 32,870 | | | | 30,687 | | | | 33,032 | | | | 29,922 | |
| The effect of dilutive potential common shares due to reporting Non-GAAP net income | | (1,050 | ) | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| GAAP diluted shares | | 32,133 | | | | 32,870 | | | | 30,687 | | | | 33,032 | | | | 29,922 | |
(c) Employee option exchange costs consist of the costs incurred to implement and account for the employee option exchange program.
(d) Non-cash interest expense on convertible senior notes represents the amortization of debt discounts recorded in accordance with FASB ASC 470-20, related to the Company’s 6.5% convertible senior notes.
Non-GAAP Measures
We provide non-GAAP measures as a supplement to financial results based on GAAP. A detailed reconciliation of the non-GAAP results to the most directly comparable GAAP measures is set forth above under the heading “Reconciliation of Non-GAAP Measures to GAAP Measures.” Investors are encouraged to review the accompanying press release reconciliations. We believe the presentation of non-GAAP measures provides investors with additional insight into underlying operating results and prospects for the future by excluding stock-based compensation and related payroll costs, costs related to our employee option exchange program, the effects of special charges such as asset impairments and restructuring charges and/or non-cash interest expense on our convertible senior notes. We have historically reported similar financial measures and believe that the inclusion of comparative numbers provides consistency in our financial reporting.
We also discuss certain non-GAAP measures excluding patent sales as a supplement to financial results based on GAAP. The sale of patents in the fiscal first quarter of 2011 impacted our net revenue. Information needed to reconcile our non-GAAP financial measures excluding the impact of patent sales is provided within the text of our earnings release.
We use non-GAAP gross margin, research and development expenses, selling, general and administrative expenses, operating expenses, operating income, other expense, net, net income and net income per share internally to evaluate our operating performance and to determine certain components of management compensation. In addition, we use these non-GAAP measures for internal budgets and forecasts. We believe that these non-GAAP measures can be useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. We also use certain non-GAAP measures excluding patent sales for the same reasons that we use the underlying non-GAAP measures.
Non-GAAP gross margin and research and development expenses exclude stock-based compensation expense and related payroll costs. Non-GAAP selling, general and administrative expenses exclude stock-based compensation and related payroll costs and employee option exchange costs. Non-GAAP operating expenses exclude stock-based compensation expense and related payroll costs, special charges and employee option exchange costs. Non-GAAP operating income excludes stock-based compensation expense and related payroll costs, special charges and employee option exchange costs. Non-GAAP other expense, net, excludes non-cash interest expense on our convertible senior notes. Non-GAAP net income and non-GAAP net income per share exclude stock-based compensation expense and related payroll costs, special charges, employee option exchange costs and non-cash interest expense on our convertible senior notes. Non-GAAP net income per share, diluted, also includes the effect of dilutive potential common shares due to reporting Non-GAAP net income. We further exclude patent sales from non-GAAP net revenue.
We exclude stock-based compensation and related payroll costs from non-GAAP measures because we believe that excluding these costs can enhance the understanding of our performance. We exclude special charges and costs related to our employee option exchange program and non-cash interest expense on our convertible senior notes because they include restructuring charges, asset impairments or other significant discrete items that may not be indicative of our ongoing operations or economic performance. We exclude patents in order to provide investors with the ability to compare our current financial results with those of previous periods and provide consistency in our financial reporting.
We do not provide forward-looking GAAP measures or a reconciliation of the forward-looking non-GAAP measures to GAAP measures because of our inability to project special charges, asset impairments, employee separation costs and stock-based compensation and related payroll costs.
The non-GAAP financial measures we provide have certain limitations because they do not reflect all of the costs associated with the operation of our business as determined in accordance with GAAP. The non-GAAP measures are in addition to, and not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. We endeavor to compensate for the limitations of these non-GAAP measures by providing GAAP financial statements, descriptions of the reconciling items and a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures so that investors can appropriately incorporate the non-GAAP measures and their limitations into their analyses. For complete information on stock-based compensation and related payroll costs, our employee option exchange program, special charges and non-cash interest expense on our convertible senior notes, please see our financial statements and “Management’s Discussion and Analysis of Results of Operations and Financial Condition” that will be included in the periodic report we expect to file with the SEC with respect to the financial periods discussed herein.
MINDSPEED TECHNOLOGIES, INC. |
| |
Consolidated Condensed Balance Sheets |
| (unaudited, in thousands) |
| | | |
| April 1, 2011 | | October 1, 2010 |
| | | |
| ASSETS | | | |
| Current Assets | | | |
| Cash and cash equivalents | $ | 44,908 | | $ | 43,685 |
| Receivables, net | | 19,248 | | | 25,678 |
| Inventories | | 12,596 | | | 10,205 |
| Deferred tax assets | | 2,340 | | | 2,264 |
| Prepaid expenses and other current assets | | 3,117 | | | 3,035 |
| Total current assets | | 82,209 | | | 84,867 |
| | | |
| Property, plant and equipment, net | | 14,284 | | | 12,700 |
| Licensed intangibles | | 13,567 | | | 9,887 |
| Other assets | | 1,391 | | | 1,230 |
| Total assets | $ | 111,451 | | $ | 108,684 |
| | | |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | |
| Current Liabilities | | | |
| Accounts payable | $ | 10,781 | | $ | 9,303 |
| Accrued compensation and benefits | | 6,150 | | | 9,336 |
| Accrued income taxes | | 1,283 | | | 1,503 |
| Deferred income on sales to distributors | | 5,774 | | | 5,199 |
| Deferred revenue | | 558 | | | 658 |
| Restructuring | | 212 | | | 710 |
| Other current liabilities | | 5,270 | | | 4,396 |
| Total current liabilities | | 30,028 | | | 31,105 |
| | | |
| Convertible senior notes – long term | | 14,012 | | | 13,810 |
| Other liabilities | | 1,623 | | | 2,133 |
| Total liabilities | | 45,663 | | | 47,048 |
| | | |
| Stockholders' equity | | 65,788 | | | 61,636 |
| Total liabilities and stockholders' equity | $ | 111,451 | | $ | 108,684 |
MINDSPEED TECHNOLOGIES, INC. |
| |
Consolidated Condensed Statements of Cash Flows |
| (unaudited, in thousands) |
| |
| Six Months Ended |
| April 1,
2011 | | April 2,
2010 |
| | | |
| Cash Flows From Operating Activities | | | |
| Net income/(loss) | $ | 940 | | | $ | 2,979 | |
| Adjustments required to reconcile net income/(loss) to net cash provided by operating activities: | | | |
| Depreciation and amortization | | 2,572 | | | | 2,422 | |
| Amortization of license agreements | | 1,135 | | | | 443 | |
| Restructuring charges | | (18 | ) | | | 789 | |
| Stock-based compensation | | 2,212 | | | | 2,217 | |
| Inventory provisions | | 181 | | | | 1,025 | |
| Amortization of debt discount on convertible debt | | 223 | | | | 347 | |
| Other non-cash items, net | | 4 | | | | 215 | |
| Changes in assets and liabilities: | | | |
| Receivables | | 6,442 | | | | (7,398 | ) |
| Inventories | | (2,572 | ) | | | 2,392 | |
| Accounts payable | | 1,931 | | | | 111 | |
| Deferred income on sales to distributors | | 575 | | | | 2,126 | |
| Restructuring charges | | (491 | ) | | | (770 | ) |
| Accrued compensation and benefits | | (3,229 | ) | | | 88 | |
| Accrued expenses and other current liabilities | | (213 | ) | | | 438 | |
| Other | | (190 | ) | | | (531 | ) |
| | | |
| Net cash provided by operating activities | | 9,502 | | | | 6,893 | |
| | | |
| Cash Flows From Investing Activities | | | |
| Purchases of property, plant and equipment | | (3,920 | ) | | | (2,308 | ) |
| Payments under license agreements | | (5,009 | ) | | | (739 | ) |
| | | |
| Net cash used in investing activities | | (8,929 | ) | | | (3,047 | ) |
| | | |
| Cash Flows From Financing Activities | | | |
| Gross proceeds from sale of equity | | - | | | | 18,300 | |
| Offering costs from sale of equity | | - | | | | (1,307 | ) |
| Extinguishment of convertible debt | | - | | | | (10,500 | ) |
| Payments made on capital lease obligations | | (274 | ) | | | (249 | ) |
| Borrowings under line of credit | | - | | | | 7,000 | |
| Payments made on borrowings under line of credit | | - | | | | (7,000 | ) |
| Repurchase of restricted stock for income tax withholding | | (291 | ) | | | (192 | ) |
| Proceeds from equity compensation programs | | 1,256 | | | | 474 | |
| | | |
| Net cash provided by financing activities | | 691 | | | | 6,526 | |
| | | |
| Effect of foreign currency exchange rates on cash | | (41 | ) | | | 85 | |
| | | |
| Net increase in cash and cash equivalents | | 1,223 | | | | 10,457 | |
| Cash and cash equivalents at beginning of period | | 43,685 | | | | 20,891 | |
| | | |
| Cash and cash equivalents at end of period | $ | 44,908 | | | $ | 31,348 | |
MINDSPEED TECHNOLOGIES, INC. |
| |
Selected Corporate Data |
| (unaudited, in thousands) |
| | | |
| Three Months Ended | | Six Months Ended |
| April 1,
2011 | | December 31,
2010 | | April 2,
2010 | | April 1,
2011 | | April 2,
2010 |
| | | | | | | | | |
| Gross margin % | | 63 | % | | | 65 | % | | | 64 | % | | | 64 | % | | | 64 | % |
| | | | | | | | | |
| Cash provided by/(used in): | | | | | | | | | |
| Operating activities | $ | 2,197 | | | $ | 7,305 | | | $ | 4,884 | | | $ | 9,502 | | | $ | 6,893 | |
| Investing activities | | (2,827 | ) | | | (6,102 | ) | | | (2,239 | ) | | | (8,929 | ) | | | (3,047 | ) |
| Financing activities | | 40 | | | | 651 | | | | 17,161 | | | | 691 | | | | 6,526 | |
| Effect of foreign currency on cash | | (60 | ) | | | 19 | | | | 61 | | | | (41 | ) | | | 85 | |
| Net increase/(decrease) in cash | $ | (650 | ) | | $ | 1,873 | | | $ | 19,867 | | | $ | 1,223 | | | $ | 10,457 | |
| | | | | | | | | |
| Depreciation | $ | 1,370 | | | $ | 1,202 | | | $ | 1,230 | | | $ | 2,572 | | | $ | 2,422 | |
| Capital expenditures | | 2,634 | | | | 6,102 | | | | 1,315 | | | | 8,736 | | | | 3,148 | |
| | | | | | | | | |
| Net revenue by region: | | | | | | | | | |
| Americas | $ | 7,796 | | | $ | 12,031 | | | $ | 7,888 | | | $ | 19,827 | | | $ | 16,506 | |
| Europe | | 3,343 | | | | 3,340 | | | | 3,508 | | | | 6,683 | | | | 5,860 | |
| Asia-Pacific | | 27,414 | | | | 25,172 | | | | 28,857 | | | | 52,586 | | | | 54,913 | |
| $ | 38,553 | | | $ | 40,543 | | | $ | 40,253 | | | $ | 79,096 | | | $ | 77,279 | |
| | | | | | | | | |
| Net revenue by product line: | | | | | | | | | |
| Communications convergence processing products | $ | 15,569 | | | $ | 16,625 | | | $ | 16,168 | | | $ | 32,194 | | | $ | 30,123 | |
| High-performance analog products | | 14,949 | | | | 14,104 | | | | 13,531 | | | | 29,053 | | | | 25,111 | |
| WAN communications products | | 8,035 | | | | 7,314 | | | | 10,554 | | | | 15,349 | | | | 22,045 | |
| Total net product revenue | | 38,553 | | | | 38,043 | | | | 40,253 | | | | 76,596 | | | | 77,279 | |
| Intellectual property | | - | | | | 2,500 | | | | - | | | | 2,500 | | | | - | |
| Total net revenue | $ | 38,553 | | | $ | 40,543 | | | $ | 40,253 | | | $ | 79,096 | | | $ | 77,279 | |
CONTACT:
Press Relations Contact:
Magnet PR Group
Carolyn Fromm, 949.651.9539
carolyn@magnetprgroup.com
or
Investor Relations Contact:
Mindspeed Technologies, Inc.
Andrea D. Williams, (949) 579-3111
