Exhibit 99.1
Mindspeed Reports Fiscal Fourth Quarter 2012 Results
- Revenue exceeds revised guidance, reaching $36.3 million
- First commercial deployment of LTE small cells using Mindspeed SoCs set to deploy this December quarter in Korea
- Restructuring plans on track to accelerate profitability
NEWPORT BEACH, Calif.--(BUSINESS WIRE)--November 5, 2012--Mindspeed Technologies, Inc. (NASDAQ: MSPD), a leading supplier of semiconductor solutions for network infrastructure applications, today reported results for its fiscal fourth quarter of 2012. For the quarter ended September 28, 2012, Mindspeed recorded net sales of $36.3 million and a loss per share of $0.09 on a non-GAAP basis, or a loss per share of $0.21 on a GAAP basis.
Product revenue from high-performance analog (HPA) products represented 49 percent of fiscal fourth quarter 2012 product revenue and increased six percent sequentially from the prior quarter, marking another quarter of record revenue from this product group. Product revenue from communications convergence processing (CCP) solutions contributed 39 percent of fiscal fourth quarter 2012 product revenue and decreased two percent sequentially from the prior quarter. Wide area networking (WAN) product revenue accounted for the remaining 12 percent.
Non-GAAP operating loss for the fiscal fourth quarter of 2012 was $3.0 million, compared to a non-GAAP operating loss of $3.9 million in the prior fiscal quarter. GAAP operating loss for the fiscal fourth quarter of 2012 was $8.2 million, compared to a GAAP operating loss of $13.2 million in the prior fiscal quarter. Non-GAAP net loss for the fiscal fourth quarter of 2012 was $3.7 million, or $0.09 per share, compared to a non-GAAP net loss of $4.7 million, or $0.12 per share, in the prior quarter. GAAP net loss in the fiscal fourth quarter of 2012 was $8.2 million, or $0.21 per share, compared to a GAAP net loss of $6.9 million, or $0.18 per share, in the prior quarter.
Non-GAAP results exclude asset impairments, stock-based compensation and related payroll costs, acquisition-related costs, integration costs, revaluation of contingent consideration and restructuring charges, among other items. Reconciliations of the non-GAAP measures to GAAP measures are included in the accompanying financial data.
“As our business continues to transition to strengthening markets in high-performance analog solutions, communication processors and wireless, we continue to deliver sequential revenue growth,” said Raouf Y. Halim, Mindspeed’s chief executive officer. “We expect this trend to continue as our end markets stabilize and strategic initiatives ramp within the small cell basestation market and with growing fiber deployments.”
Outlook
Mindspeed forecasts total net product revenue in the range of $36.5 to $37.5 million. The company expects fiscal first quarter of 2013 non-GAAP gross margin to be between 58-59 percent and anticipates non-GAAP operating expenses to be approximately $22.0 to $22.5 million in the fiscal first quarter of 2013. These forecasts exclude the benefit of the $6.0 million sale of non-core intellectual property, announced in a separate release today.
Fiscal Fourth Quarter 2012 Conference Call
Mindspeed will conduct a conference call announcing its fiscal fourth quarter of 2012 results today at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. To listen to the conference call via telephone, call 877-303-3204 (domestic) or 253-237-1154 (international). To listen via the Internet, please visit the Investors section of Mindspeed's web site at http://www.mindspeed.com. A replay of the conference call will be available via telephone for a period of five days, beginning one hour after the conference call concludes by calling 855-859-2056 (domestic) or 404-537-3406 (international). Conference ID # 58939661 is required to access the replay. The replay will also be available in the Investors section of Mindspeed's web site at http://www.mindspeed.com for a period of thirty days after the conference call.
About Mindspeed Technologies
Mindspeed Technologies (NASDAQ: MSPD) is a leading provider of network infrastructure semiconductor solutions to the communications industry. The company's low-power system-on-chip (SoC) products are helping to drive video, voice and data applications in worldwide fiber-optic networks and enable advanced processing for 3G and long-term evolution (LTE) mobile networks. The company's high-performance analog products are used in a variety of optical, enterprise, industrial and video transport systems. Mindspeed's products are sold to original equipment manufacturers (OEMs) around the globe.
To learn more, please visit www.mindspeed.com. Company news and updates are also posted at www.twitter.com/mindspeed.
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 below 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 asset impairments, stock-based compensation and related payroll costs, profit in acquired inventory, amortization of acquired intangible assets, non-recurring legal and settlement costs, employee separation costs, acquisition-related costs, integration costs, revaluation of contingent consideration, 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 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 exclude stock-based compensation and related payroll costs and non-cash interest expense on our convertible senior notes from non-GAAP measures because we believe that excluding these costs can enhance the understanding of our performance. We exclude profit in acquired inventory to facilitate comparability of gross profit between periods and to better reflect continuing operations of the acquired company. We exclude asset impairments, employee separation costs, non-recurring legal and settlement costs, restructuring charges, acquisition-related costs, and integration costs because they include significant discrete items that may not be indicative of our ongoing operations or economic performance.
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 restructuring charges, 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 asset impairments, stock-based compensation and related payroll costs, profit in acquired inventory, amortization of acquired intangible assets, non-recurring legal and settlement costs, employee separation costs, restructuring charges, acquisition-related costs, integration costs, revaluation of contingent consideration 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.
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 our expectations, goals or intentions, including, but not limited to: our current assessment of the demand environment and trends in our target markets, including the HPA and small cell basestation markets; and our current expectations for fiscal first quarter 2013 net product 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 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. Our business is subject to numerous risks and uncertainties that could adversely affect investors in our securities, including fluctuations in our operating results and the potential for future operating losses; loss of or diminished demand from one or more key distributors; our ability to successfully develop and introduce new products; pricing pressures; our ability to achieve non-GAAP operating profitability within currently anticipated times, if at all; our ability to successfully integrate acquired businesses and products, including with respect to our recent acquisition of Picochip; and the potential for intellectual property litigation. Additional risks and uncertainties that could cause our actual results to differ from those set forth in any forward-looking statements are discussed in more detail under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2011, our most recent Quarterly Report on Form 10-Q and our future filings with the SEC.
| MINDSPEED TECHNOLOGIES, INC. |
| CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS |
| (unaudited, in thousands, except per share amounts) |
| | | | | | | | | | | |
| | Three Months Ended | | | Year Ended |
| | September 28, | | June 29, | | September 30, | | | September 28, | | September 30, |
| | | 2012 | | | | 2012 | | | | 2011 | | | | | 2012 | | | | 2011 | |
| | | | | | | | | | | |
| Net revenue: | | | | | | | | | | | |
| Products | | $ | 36,264 | | | $ | 35,451 | | | $ | 40,777 | | | | $ | 140,415 | | | $ | 159,589 | |
| Intellectual property | | | - | | | | - | | | | - | | | | | 591 | | | | 2,500 | |
| Total net revenue | | | 36,264 | | | | 35,451 | | | | 40,777 | | | | | 141,006 | | | | 162,089 | |
| Cost of goods sold (a), (c) | | | 15,253 | | | | 18,186 | | | | 15,761 | | | | | 62,497 | | | | 60,292 | |
| Gross margin | | | 21,011 | | | | 17,265 | | | | 25,016 | | | | | 78,509 | | | | 101,797 | |
| | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | |
| Research and development (a) | | | 17,667 | | | | 18,105 | | | | 15,649 | | | | | 68,520 | | | | 59,174 | |
| Selling, general and administrative (a) | | | 10,823 | | | | 11,610 | | | | 10,794 | | | | | 44,843 | | | | 42,118 | |
| Acquisition-related costs (b) | | | 29 | | | | 680 | | | | - | | | | | 3,777 | | | | - | |
| Restructuring charges | | | 704 | | | | 78 | | | | 1,050 | | | | | 2,054 | | | | 1,032 | |
| Total operating expenses | | | 29,223 | | | | 30,473 | | | | 27,493 | | | | | 119,194 | | | | 102,324 | |
| | | | | | | | | | | |
| Operating loss | | | (8,212 | ) | | | (13,208 | ) | | | (2,477 | ) | | | | (40,685 | ) | | | (527 | ) |
| | | | | | | | | | | |
| Other income, net | | | 22 | | | | 6,519 | | | | 21 | | | | | 6,193 | | | | 13 | |
| | | | | | | | | | | |
| Loss before income taxes | | | (8,190 | ) | | | (6,689 | ) | | | (2,456 | ) | | | | (34,492 | ) | | | (514 | ) |
| | | | | | | | | | | |
| (Benefit)/provision for income taxes | | | (28 | ) | | | 165 | | | | (297 | ) | | | | 359 | | | | 241 | |
| | | | | | | | | | | |
| Net loss | | $ | (8,162 | ) | | $ | (6,854 | ) | | $ | (2,159 | ) | | | $ | (34,851 | ) | | $ | (755 | ) |
| | | | | | | | | | | |
| Net loss per share: | | | | | | | | | | | |
| Basic | | $ | (0.21 | ) | | $ | (0.18 | ) | | $ | (0.07 | ) | | | $ | (0.95 | ) | | $ | (0.02 | ) |
| Diluted (c) | | $ | (0.21 | ) | | $ | (0.18 | ) | | $ | (0.07 | ) | | | $ | (0.95 | ) | | $ | (0.02 | ) |
| | | | | | | | | | | |
| Weighted-average number of shares used in per share computation: | | | | | | | | | | | |
| Basic | | | 39,169 | | | | 38,784 | | | | 32,675 | | | | | 36,787 | | | | 32,279 | |
| Diluted | | | 39,169 | | | | 38,784 | | | | 32,675 | | | | | 36,787 | | | | 32,279 | |
| |
| (a) Includes stock-based compensation expense and related payroll costs. |
| |
| (b) Acquisition-related costs are professional fees incurred related to the acquisition of Picochip. |
| |
| (c) Cost of goods sold for the three fiscal months ended June 29, 2012 and fiscal year ended September 28, 2012 includes impairment of manufacturing-related licenses and assets. |
| |
| MINDSPEED TECHNOLOGIES, INC. |
| Reconciliation of Non-GAAP Measures to GAAP Measures |
| (unaudited, in thousands, except per share amounts) |
| | | | | | | | | | | |
| | Three Months Ended | | | Year Ended |
| | September 28, | | June 29, | | September 30, | | | September 28, | | September 30, |
| | | 2012 | | | | 2012 | | | | 2011 | | | | | 2012 | | | | 2011 | |
| | | | | | | | | | | |
| Reconciliation of Non-GAAP Gross Margin to GAAP Gross Margin | | | | | | | | | | | |
| Non-GAAP gross margin | | $ | 21,372 | | | $ | 21,458 | | | $ | 25,086 | | | | $ | 83,661 | | | $ | 102,025 | |
| Items excluded from non-GAAP gross margin: | | | | | | | | | | | |
| Asset impairments (c) | | | - | | | | 3,385 | | | | - | | | | | 3,385 | | | | - | |
| Stock-based compensation and related payroll costs | | | 91 | | | | 48 | | | | 70 | | | | | 138 | | | | 228 | |
| Profit in acquired inventory (d) | | | 24 | | | | 514 | | | | - | | | | | 986 | | | | - | |
| Amortization of acquired intangible assets (e) | | | 246 | | | | 246 | | | | - | | | | | 643 | | | | - | |
| Gross margin | | $ | 21,011 | | | $ | 17,265 | | | $ | 25,016 | | | | $ | 78,509 | | | $ | 101,797 | |
| | | | | | | | | | | |
Reconciliation of Non-GAAP Research and Development Expenses to
GAAP Research and Development Expenses | | | | | | | | | | | |
| Non-GAAP research and development expenses | | $ | 16,128 | | | $ | 16,960 | | | $ | 15,042 | | | | $ | 63,949 | | | $ | 57,324 | |
| Items excluded from non-GAAP research and development expenses: | | | | | | | | | | | |
| Stock-based compensation and related payroll costs | | | 942 | | | | 899 | | | | 594 | | | | | 3,727 | | | | 1,783 | |
| Non-recurring legal and settlement costs | | | 574 | | | | - | | | | - | | | | | 574 | | | | - | |
| Employee separation costs (f) | | | 23 | | | | 246 | | | | 13 | | | | | 270 | | | | 67 | |
| Research and development expenses | | $ | 17,667 | | | $ | 18,105 | | | $ | 15,649 | | | | $ | 68,520 | | | $ | 59,174 | |
| | | | | | | | | | | |
Reconciliation of Non-GAAP Selling, General and Administrative Expenses
to GAAP Selling, General and Administrative Expenses | | | | | | | | | | | |
| Non-GAAP selling, general and administrative expenses | | $ | 8,285 | | | $ | 8,376 | | | $ | 9,451 | | | | $ | 33,852 | | | $ | 37,926 | |
| Items excluded from non-GAAP selling, general and administrative expenses: | | | | | | | | | | | |
| Stock-based compensation and related payroll costs | | | 1,898 | | | | 2,320 | | | | 1,248 | | | | | 7,930 | | | | 4,046 | |
| Amortization of acquired intangible assets (e) | | | 104 | | | | 106 | | | | - | | | | | 275 | | | | - | |
| Non-recurring legal and settlement costs | | | 141 | | | | - | | | | - | | | | | 141 | | | | - | |
| Employee separation costs (f) | | | 169 | | | | 276 | | | | 95 | | | | | 426 | | | | 146 | |
| Integration costs (g) | | | 226 | | | | 532 | | | | - | | | | | 2,219 | | | | - | |
| Selling, general and administrative expenses | | $ | 10,823 | | | $ | 11,610 | | | $ | 10,794 | | | | $ | 44,843 | | | $ | 42,118 | |
| | | | | | | | | | | |
| Reconciliation of Non-GAAP Operating Expenses to GAAP Operating Expenses | | | | | | | | | | | |
| Non-GAAP operating expenses | | $ | 24,413 | | | $ | 25,336 | | | $ | 24,493 | | | | $ | 97,801 | | | $ | 95,250 | |
| Items excluded from non-GAAP operating expenses: | | | | | | | | | | | |
| Stock-based compensation and related payroll costs | | | 2,840 | | | | 3,219 | | | | 1,842 | | | | | 11,657 | | | | 5,829 | |
| Acquisition-related costs (b) | | | 29 | | | | 680 | | | | - | | | | | 3,777 | | | | - | |
| Restructuring charges | | | 704 | | | | 78 | | | | 1,050 | | | | | 2,054 | | | | 1,032 | |
| Amortization of acquired intangible assets (e) | | | 104 | | | | 106 | | | | - | | | | | 275 | | | | - | |
| Non-recurring legal and settlement costs | | | 715 | | | | - | | | | - | | | | | 715 | | | | - | |
| Employee separation costs (f) | | | 192 | | | | 522 | | | | 108 | | | | | 696 | | | | 213 | |
| Integration costs (g) | | | 226 | | | | 532 | | | | - | | | | | 2,219 | | | | - | |
| Operating expenses | | $ | 29,223 | | | $ | 30,473 | | | $ | 27,493 | | | | $ | 119,194 | | | $ | 102,324 | |
| | | | | | | | | | | |
| Reconciliation of Non-GAAP Operating (Loss)/Income to GAAP Operating Loss | | | | | | | | | | | |
| Non-GAAP operating (loss)/income | | $ | (3,041 | ) | | $ | (3,878 | ) | | $ | 593 | | | | $ | (14,140 | ) | | $ | 6,775 | |
| Items excluded from non-GAAP operating (loss)/income: | | | | | | | | | | | |
| Asset impairments (c) | | | - | | | | 3,385 | | | | - | | | | | 3,385 | | | | - | |
| Stock-based compensation and related payroll costs | | | 2,931 | | | | 3,267 | | | | 1,912 | | | | | 11,795 | | | | 6,057 | |
| Acquisition-related costs (b) | | | 29 | | | | 680 | | | | - | | | | | 3,777 | | | | - | |
| Restructuring charges | | | 704 | | | | 78 | | | | 1,050 | | | | | 2,054 | | | | 1,032 | |
| Profit in acquired inventory (d) | | | 24 | | | | 514 | | | | - | | | | | 986 | | | | - | |
| Amortization of acquired intangible assets (e) | | | 350 | | | | 352 | | | | - | | | | | 918 | | | | - | |
| Non-recurring legal and settlement costs | | | 715 | | | | | | | | | 715 | | | |
| Employee separation costs (f) | | | 192 | | | | 522 | | | | 108 | | | | | 696 | | | | 213 | |
| Integration costs (g) | | | 226 | | | | 532 | | | | - | | | | | 2,219 | | | | - | |
| Operating loss | | $ | (8,212 | ) | | $ | (13,208 | ) | | $ | (2,477 | ) | | | $ | (40,685 | ) | | $ | (527 | ) |
| |
| MINDSPEED TECHNOLOGIES, INC. |
| Reconciliation of Non-GAAP Measures to GAAP Measures |
| (unaudited, in thousands, except per share amounts) |
| | | | | | | | | | | |
| | Three Months Ended | | | Year Ended |
| | September 28, | | June 29, | | September 30, | | | September 28, | | September 30, |
| | | 2012 | | | | 2012 | | | | 2011 | | | | | 2012 | | | | 2011 | |
| | | | | | | | | | | |
| Reconciliation of Non-GAAP Other (Expense)/Income, Net to GAAP Other Income, Net | | | | | | | | | | | |
| Non-GAAP other (expense)/income, net | | $ | (663 | ) | | $ | (654 | ) | | $ | 123 | | | | $ | (1,458 | ) | | $ | 419 | |
| Items excluded from non-GAAP other (expense)/income, net: | | | | | | | | | | | |
| Revaluation of contingent consideration | | | 885 | | | | 7,277 | | | | | | | 8,162 | | | |
| Non-cash interest expense on convertible senior notes (h) | | | (200 | ) | | | (104 | ) | | | (102 | ) | | | | (511 | ) | | | (406 | ) |
| Other income, net | | $ | 22 | | | $ | 6,519 | | | $ | 21 | | | | $ | 6,193 | | | $ | 13 | |
| | | | | | | | | | | |
| Reconciliation of Non-GAAP Net (Loss)/Income to GAAP Net Loss | | | | | | | | | | | |
| Non-GAAP net (loss)/income | | $ | (3,676 | ) | | $ | (4,697 | ) | | $ | 1,013 | | | | $ | (15,957 | ) | | $ | 6,953 | |
| Items excluded from non-GAAP net (loss)/income: | | | | | | | | | | | |
| Asset impairments (c) | | | - | | | | 3,385 | | | | - | | | | | 3,385 | | | | - | |
| Stock-based compensation and related payroll costs | | | 2,931 | | | | 3,267 | | | | 1,912 | | | | | 11,795 | | | | 6,057 | |
| Acquisition-related costs (b) | | | 29 | | | | 680 | | | | - | | | | | 3,777 | | | | - | |
| Restructuring charges | | | 704 | | | | 78 | | | | 1,050 | | | | | 2,054 | | | | 1,032 | |
| Profit in acquired inventory (d) | | | 24 | | | | 514 | | | | - | | | | | 986 | | | | - | |
| Amortization of acquired intangible assets (e) | | | 350 | | | | 352 | | | | - | | | | | 918 | | | | - | |
| Non-recurring legal and settlement costs | | | 715 | | | | | | | | | 715 | | | |
| Employee separation costs (f) | | | 192 | | | | 522 | | | | 108 | | | | | 696 | | | | 213 | |
| Integration costs (g) | | | 226 | | | | 532 | | | | - | | | | | 2,219 | | | | - | |
| Revaluation of contingent consideration | | | (885 | ) | | | (7,277 | ) | | | - | | | | | (8,162 | ) | | | - | |
| Non-cash interest expense on convertible senior notes (h) | | | 200 | | | | 104 | | | | 102 | | | | | 511 | | | | 406 | |
| Net loss | | $ | (8,162 | ) | | $ | (6,854 | ) | | $ | (2,159 | ) | | | $ | (34,851 | ) | | $ | (755 | ) |
| | | | | | | | | | | |
| Reconciliation of Non-GAAP Net (Loss)/Income Per Share to GAAP Net Loss Per Share | | | | | | | | | | | |
| Basic: | | | | | | | | | | | |
| Non-GAAP net (loss)/income per share | | $ | (0.09 | ) | | $ | (0.12 | ) | | $ | 0.03 | | | | $ | (0.43 | ) | | $ | 0.22 | |
| Adjustments | | | (0.12 | ) | | | (0.06 | ) | | | (0.10 | ) | | | | (0.52 | ) | | | (0.24 | ) |
| Net loss per share | | $ | (0.21 | ) | | $ | (0.18 | ) | | $ | (0.07 | ) | | | $ | (0.95 | ) | | $ | (0.02 | ) |
| | | | | | | | | | | |
| Diluted: (c) | | | | | | | | | | | |
| Non-GAAP net (loss)/income per share | | $ | (0.09 | ) | | $ | (0.12 | ) | | $ | 0.03 | | | | $ | (0.43 | ) | | $ | 0.21 | |
| Adjustments | | | (0.12 | ) | | | (0.06 | ) | | | (0.10 | ) | | | | (0.52 | ) | | | (0.23 | ) |
| Net loss per share | | $ | (0.21 | ) | | $ | (0.18 | ) | | $ | (0.07 | ) | | | $ | (0.95 | ) | | $ | (0.02 | ) |
| | | | | | | | | | | |
| Reconciliation of Shares used in Non-GAAP diluted shares to GAAP diluted shares | | | | | | | | | | | |
| Non-GAAP diluted shares | | | 39,169 | | | | 38,784 | | | | 33,404 | | | | | 36,787 | | | | 33,245 | |
| The effect of dilutive potential common shares due to reporting Non-GAAP net income | | | - | | | | - | | | | (729 | ) | | | | - | | | | (966 | ) |
| Diluted shares | | | 39,169 | | | | 38,784 | | | | 32,675 | | | | | 36,787 | | | | 32,279 | |
| |
| (d) Profit in acquired inventory results from purchase-accounting adjustments which increase the value of inventory acquired to its fair value. As the acquired inventory is sold, the associated profit in acquired inventory increases cost of goods sold and reduces gross profit. |
| |
| (e) Amortization of acquired intangible assets reflects amortization expense on intangible assets recorded in conjunction with the Picochip acquisition. |
| |
| (f) Employee separation costs consist of severance benefits payable to certain former employees of the Company as a result of organizational changes. |
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| (g) Integration costs represent costs incurred related to the transition of Picochip to a wholly owned subsidiary of Mindspeed. |
| |
| (h) 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 6.50% and 6.75% convertible senior notes. |
| |
| MINDSPEED TECHNOLOGIES, INC. |
| CONSOLIDATED CONDENSED BALANCE SHEETS |
| (unaudited, in thousands) |
| | | | |
| | September 28, | | September 30, |
| | 2012 | | 2011 |
| | | | |
| ASSETS | | | | |
| Current Assets | | | | |
| Cash and cash equivalents | | $ | 49,098 | | $ | 45,227 |
| Receivables, net | | | 14,527 | | | 13,393 |
| Inventories | | | 10,482 | | | 14,216 |
| Prepaid expenses and other current assets | | | 10,497 | | | 3,067 |
| Total current assets | | | 84,604 | | | 75,903 |
| | | | |
| Property, plant and equipment, net | | | 16,031 | | | 15,369 |
| Intangible assets, net | | | 35,351 | | | 17,357 |
| Goodwill | | | 57,110 | | | - |
| Other assets | | | 4,000 | | | 1,982 |
| Total assets | | $ | 197,096 | | $ | 110,611 |
| | | | |
| | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| Current Liabilities | | | | |
| Accounts payable | | $ | 9,262 | | $ | 5,532 |
| Accrued compensation and benefits | | | 8,501 | | | 7,292 |
| Accrued income taxes | | | 707 | | | 690 |
| Deferred income on sales to distributors | | | 4,396 | | | 5,346 |
| Deferred revenue | | | 2,338 | | | 653 |
| Restructuring | | | 427 | | | 944 |
| Line of credit - short-term | | | 5,511 | | | - |
| Short-term debt | | | 15,384 | | | - |
| Contingent consideration | | | 1,876 | | | - |
| Other current liabilities | | | 9,527 | | | 5,100 |
| Total current liabilities | | | 57,929 | | | 25,557 |
| | | | |
| Line of credit - long-term | | | 8,000 | | | - |
| Long-term debt | | | 44,765 | | | 14,216 |
| Other liabilities | | | 6,767 | | | 1,426 |
| Total liabilities | | | 117,461 | | | 41,199 |
| | | | |
| Stockholders' Equity | | | 79,635 | | | 69,412 |
| Total liabilities and stockholders' equity | | $ | 197,096 | | $ | 110,611 |
| |
| MINDSPEED TECHNOLOGIES, INC. |
| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
| (unaudited, in thousands) |
| | | | |
| | Year Ended |
| | September 28, | | September 30, |
| | | 2012 | | | | 2011 | |
| | | | |
| Cash Flows From Operating Activities | | | | |
| Net loss | | $ | (34,851 | ) | | $ | (755 | ) |
Adjustments required to reconcile net loss to net cash (used in) / provided by operating activities: | | | | |
| Depreciation and amortization | | | 6,345 | | | | 5,423 | |
| Amortization of intangible assets | | | 3,419 | | | | 2,303 | |
| Asset impairments | | | 3,399 | | | | 132 | |
| Revaluation of contingent consideration | | | (8,162 | ) | | | - | |
| Restructuring charges | | | 2,054 | | | | 1,032 | |
| Stock-based compensation | | | 11,555 | | | | 5,919 | |
| Provision for bad debt | | | 48 | | | | 187 | |
| Inventory provisions | | | 1,266 | | | | 1,168 | |
| Amortization of debt discount and issuance costs | | | 625 | | | | 245 | |
| Other non-cash items, net | | | (207 | ) | | | 77 | |
| Changes in assets and liabilities, net of acquisitions: | | | | |
| Receivables | | | 217 | | | | 12,263 | |
| Inventories | | | 4,407 | | | | (5,179 | ) |
| Other assets, net | | | (4,159 | ) | | | 1,600 | |
| Accounts payable | | | 194 | | | | (3,533 | ) |
| Deferred income on sales to distributors | | | (950 | ) | | | 147 | |
| Accrued restructuring charges | | | (2,571 | ) | | | (809 | ) |
| Accrued compensation and benefits | | | (3,010 | ) | | | (2,082 | ) |
| Accrued expenses and other current liabilities | | | (1,888 | ) | | | (346 | ) |
| Other liabilities, net | | | 5,511 | | | | 377 | |
| | | | |
| Net cash (used in)/provided by operating activities | | | (16,758 | ) | | | 18,169 | |
| | | | |
| Cash Flows From Investing Activities | | | | |
| Purchases of property, plant and equipment | | | (4,637 | ) | | | (8,008 | ) |
| Payments under license agreements | | | (13,030 | ) | | | (10,440 | ) |
| Net cash paid for acquired companies | | | (20,096 | ) | | | (100 | ) |
| | | | |
| Net cash used in investing activities | | | (37,763 | ) | | | (18,548 | ) |
| | | | |
| Cash Flows From Financing Activities | | | | |
| Payments made on capital lease obligations | | | (497 | ) | | | (482 | ) |
| Borrowings under term loan | | | 15,000 | | | | - | |
| Borrowings under line of credit | | | 16,808 | | | | - | |
| Borrowings under convertible debt | | | 30,560 | | | | - | |
| Payments made on line of credit | | | (3,297 | ) | | | - | |
| Deferred financing costs | | | (1,034 | ) | | | - | |
| Repurchase of restricted stock for income tax withholding | | | (1,213 | ) | | | (415 | ) |
| Proceeds from equity compensation programs | | | 2,074 | | | | 2,914 | |
| | | | |
| Net cash provided by financing activities | | | 58,401 | | | | 2,017 | |
| | | | |
| Effect of foreign currency exchange rates on cash | | | (9 | ) | | | (96 | ) |
| | | | |
| Net increase in cash and cash equivalents | | | 3,871 | | | | 1,542 | |
| Cash and cash equivalents at beginning of period | | | 45,227 | | | | 43,685 | |
| | | | |
| Cash and cash equivalents at end of period | | $ | 49,098 | | | $ | 45,227 | |
| |
| MINDSPEED TECHNOLOGIES, INC. |
| Selected Corporate Data |
| (unaudited, in thousands) |
| | | | | | | | | | | |
| | Three Months Ended | | | Year Ended |
| | September 28, | | June 29, | | September 30, | | | September 28, | | September 30, |
| | | 2012 | | | | 2012 | | | | 2011 | | | | | 2012 | | | | 2011 | |
| | | | | | | | | | | |
| Gross margin % | | | 57.9 | % | | | 48.7 | % | | | 61.3 | % | | | | 55.7 | % | | | 62.8 | % |
| | | | | | | | | | | |
| Cash (used in)/provided by: | | | | | | | | | | | |
| Operating activities | | $ | (1,079 | ) | | $ | (4,009 | ) | | $ | 7,763 | | | | $ | (16,758 | ) | | $ | 18,169 | |
| Investing activities | | | (4,975 | ) | | | (3,017 | ) | | | (5,780 | ) | | | | (37,763 | ) | | | (18,548 | ) |
| Financing activities | | | (51 | ) | | | 29,834 | | | | 115 | | | | | 58,401 | | | | 2,017 | |
| Effect of foreign currency on cash | | | 65 | | | | (24 | ) | | | (98 | ) | | | | (9 | ) | | | (96 | ) |
| Net increase/(decrease) in cash | | $ | (6,040 | ) | | $ | 22,784 | | | $ | 2,000 | | | | $ | 3,871 | | | $ | 1,542 | |
| | | | | | | | | | | |
| Depreciation and amortization | | $ | 1,552 | | | $ | 1,685 | | | $ | 1,454 | | | | $ | 6,345 | | | $ | 5,423 | |
| Amortization of intangible assets | | $ | 1,017 | | | | 946 | | | | 587 | | | | $ | 3,419 | | | $ | 2,303 | |
| Capital expenditures | | $ | 4,975 | | | | 3,017 | | | | 5,780 | | | | $ | 17,667 | | | $ | 18,448 | |
| Net cash paid for acquired companies | | $ | - | | | | - | | | | - | | | | $ | 20,096 | | | $ | 100 | |
| | | | | | | | | | | |
| Net revenue by region: | | | | | | | | | | | |
| Americas | | $ | 5,942 | | | $ | 6,240 | | | $ | 7,172 | | | | $ | 23,848 | | | $ | 33,850 | |
| Europe, Middle East and Africa | | | 2,325 | | | | 2,421 | | | | 2,420 | | | | | 9,433 | | | | 12,744 | |
| Asia-Pacific | | | 27,997 | | | | 26,790 | | | | 31,185 | | | | | 107,725 | | | | 115,495 | |
| Total net revenue | | $ | 36,264 | | | $ | 35,451 | | | $ | 40,777 | | | | $ | 141,006 | | | $ | 162,089 | |
| | | | | | | | | | | |
| Net revenue by product line: | | | | | | | | | | | |
| Communications convergence processing products | | $ | 14,261 | | | $ | 14,496 | | | $ | 20,541 | | | | $ | 58,892 | | | $ | 71,652 | |
| High-performance analog products | | | 17,821 | | | | 16,845 | | | | 14,699 | | | | | 64,667 | | | | 59,240 | |
| WAN communications products | | | 4,182 | | | | 4,110 | | | | 5,537 | | | | | 16,856 | | | | 28,697 | |
| Total net product revenue | | | 36,264 | | | | 35,451 | | | | 40,777 | | | | | 140,415 | | | | 159,589 | |
| Intellectual property | | | - | | | | - | | | | - | | | | | 591 | | | | 2,500 | |
| Total net revenue | | $ | 36,264 | | | $ | 35,451 | | | $ | 40,777 | | | | $ | 141,006 | | | $ | 162,089 | |
CONTACT:
Investor Relations Contact:
Mindspeed Technologies, Inc.
Kevin Trosian
VP, Business Development and Investor Relations
+1-949-579-3111
Investor.Relations@Mindspeed.com
