Exhibit (c)(7)
| Project Motion Preliminary Discussion Materials Strictly Private and Confidential December 20, 2012 THE PRELIMINARY ANALYSES CONTAINED HEREIN DO NOT CONSTITUTE AN OPINION OF RBC CAPITAL MARKETS AND HAVE NOT BEEN APPROVED BY ITS FAIRNESS OPINION REVIEW COMMITTEE |
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| Financial Metrics of Proposed Offer Terms (figures in millions, except per share prices) Note: LTM is as of 9/30/2012 per company filings. (1) Based on the treasury stock method, accounting for basic shares outstanding, stock options and restricted stock units. (2) Cash as of 9/30/2012 per 10Q for period ending 9/30/2012 filed on 11/14/2012 and includes cash & cash equivalents. (3) Debt as of 9/30/2012 per 10Q for period ending 9/30/2012 filed on 11/14/2012 and includes debt, minority interest and preferred stock. (4) Enterprise Value (EV) = Equity Value + Total Debt + Preferred Stock + Minority Interest – Cash & Cash Equivalents. (5) Motion EBITDA is operating income adjusted for depreciation, amortization, stock-based compensation and other one-time costs. (6) Revenue & EBITDA projections based on management estimates as of 12/17/2012. Proposed Offer Metrics Unaffected Company Trading Metrics Offer Price per Share $4.00 Price per Share as of 11/20/2012 $1.74 1 Month Average $1.82 1 Month Average $1.82 6 Month Average $1.81 6 Month Average $1.81 TSM Shares Outstanding (1) 24.922 TSM Shares Outstanding (1) 24.922 Equity Value $99.7 Equity Value $43.4 Less: Cash (2) (61.7) Less: Cash (2) (61.7) Plus: Debt (3) 18.1 Plus: Debt (3) 18.1 Enterprise Value (4) $56.1 Enterprise Value (4) ($0.2) Management Management Projections (6) Projections (6) LTM 2012E 2013E LTM 2012E 2013E Revenue $71.1 $65.0 $72.1 $71.1 $65.0 $72.1 EBITDA (5) $7.9 $6.1 $5.1 $7.9 $6.1 $5.1 EV / Revenue 0.8x 0.9x 0.8x NM NM NM EV / EBITDA (5) 7.1x 9.2x 11.0x NM NM NM Actual Actual |
| Implied Trading Range – Current Range (12/17/2012) – Based on Selected Companies with Similar Financial Characteristics ($ in millions, except per share data) Current Price (12/17/12): $3.18 Multiples EBITDA Multiples Unaffected Price (11/20/12): $1.74 Revenue Multiples THE PRELIMINARY ANALYSES CONTAINED HEREIN DO NOT CONSTITUTE AN OPINION OF RBC CAPITAL MARKETS AND HAVE NOT BEEN APPROVED BY ITS FAIRNESS OPINION REVIEW COMMITTEE Source: CapIQ and FactSet. Motion forecasts per management estimates as of 12/17/2012. (1) Application of comparables’ 2012 and 2013 EV / Revenue and EBITDA multiples to Motion’s 2012 and 2013 estimates. Low and High multiples ranges represent +/-15% of Median statistic; not actual low and high multiples from observation of comparables data. (2) Prices updated as of 12/17/2012. Similar financial characteristics include: LTM GM% 20-45%; CY12-13 revenue growth 0-15%; LTM EBITDA% 0-15%. (3) Enterprise Value (EV) = Equity Value + Total Debt + Preferred Stock + Minority Interest – Cash & Cash Equivalents. (4) Assumes diluted shares outstanding of 24.922mm, cash and equivalents of $61.7mm, and total debt + minority interest of $18.1mm. (5) Motion EBITDA is operating income adjusted for depreciation, amortization, stock-based compensation and other one-time costs. Illustrative Reference Range (+/- 15% of Median) Company Metric Multiples Range (1) (2) Enterprise Value (3) ($USD) Equity Value (4) ($USD) Price per Share ($USD) Low Median High Low High Low High Low Median High $65.0 0.5x 0.6x 0.7x $34.2 $46.2 $77.7 $89.8 $3.12 $3.36 $3.60 $72.1 0.5x 0.6x 0.7x $35.2 $47.7 $78.8 $91.2 $3.16 $3.41 $3.66 $6.1 6.1x 7.2x 8.3x $37.4 $50.6 $80.9 $94.1 $3.25 $3.51 $3.78 $5.1 3.6x 4.2x 4.9x $18.3 $24.7 $61.8 $68.3 $2.48 $2.61 $2.74 |
| Comparable Company Analysis – Similar Financial Metrics ICs ($ in millions, except per share data) Source: Capital IQ and Wall Street research. LTM as of 9/30/12 or latest available. Public semiconductor companies with similar financial characteristics: LTM GM% 20-45%; CY12-13 revenue growth 0-15%; LTM EBITDA% 0-15%. Not Meaningful (NM) when relevant or projected figures are less than zero, EBITDA multiples are greater than 30.0x and PE multiples are greater than 75.0x. (1) Projections based on management estimates as of 12/17/2012. Motion debt includes non-controlling interest of $0.7mm. Motion EBITDA is operating income adjusted for depreciation, amortization, stock-based compensation and other one-time costs. Valuation Metrics Operating Statistics Revenue Rev Growth EBITDA Gross Margin EBITDA Margin Net Margin LTM CY12E CY13E CY14E CY12-13 CY13-14 LTM CY12E CY13E CY14E LTM LTM LTM STMicroelectronics NV [STM] $8,439 $8,568 $8,995 $9,653 5% 7% $444 $452 $995 $1,364 33% 5% (9%) RF Micro Devices Inc. [RFMD] $826 $846 $972 $1,134 15% 17% $71 $73 $125 $115 30% 9% (7%) International Rectifier Corporation [IRF] $1,000 $993 $997 $1,091 0% 9% $73 $29 $105 $194 30% 7% (11%) TriQuint Semiconductor, Inc. [TQNT] $823 $818 $895 $993 10% 11% $99 $89 $122 $157 29% 12% (2%) MagnaChip Semiconductor Corporation [MX] $782 $821 $883 $941 8% 6% $120 $145 $160 $182 31% 15% 12% Himax Technologies, Inc. [HIMX] $716 $737 $849 NA 15% NA $80 $80 $89 NA 23% 11% 6% IXYS Corp. [IXYS] $317 $305 $328 NA 7% NA $43 $45 $56 NA 31% 13% 6% Supertex Inc. [SUPX] $62 $64 $71 $70 10% (1%) $5 $5 $9 NA 45% 7% 4% Pericom Semiconductor Corp. [PSEM] $139 $141 $149 NA 6% NA $14 NA NA NA 36% 10% (1%) BCD Semiconductor Manufacturing Limited [BCDS] $137 $142 $158 $158 11% (1%) $17 $19 $24 $26 27% 12% 7% Median 9% 7% 31% 11% 2% Mean 9% 7% 32% 10% 0% Motion (1) - 11/20/12 $71 $65 $72 $89 11% 24% $8 $6 $5 $7 37% 11% 7% Motion (1) - at $4.00 / share $71 $65 $72 $89 11% 24% $8 $6 $5 $7 37% 11% 7% Company TEV / Revenue TEV / EBITDA P / E LTM CY12E CY13E LTM CY12E CY13E LTM CY12E CY13E STMicroelectronics NV [STM] $6.97 109% $4,702 $1,558 $2,054 $4,206 0.4x 0.5x 0.5x 9.5x 9.3x 4.2x NM NM 42.6x RF Micro Devices Inc. [RFMD] $4.60 82% $1,286 $80 $207 $1,158 1.3x 1.4x 1.2x 16.4x 15.8x 9.3x NM 57.5x 17.9x International Rectifier Corporation [IRF] $17.34 73% $1,199 $0 $378 $821 0.7x 0.8x 0.8x 11.2x 27.9x 7.8x NM NM NM TriQuint Semiconductor, Inc. [TQNT] $4.72 68% $785 $0 $145 $640 0.7x 0.8x 0.7x 6.5x 7.2x 5.3x NM NM 30.8x MagnaChip Semiconductor Corporation [MX] $13.14 92% $473 $202 $166 $508 0.7x 0.6x 0.6x 4.2x 3.5x 3.2x 5.6x 6.3x 5.8x Himax Technologies, Inc. [HIMX] $2.32 95% $394 $73 $102 $365 0.6x 0.5x 0.4x 4.6x 4.6x 4.1x 9.9x 7.2x 6.3x IXYS Corp. [IXYS] $8.85 63% $276 $29 $116 $189 0.5x 0.6x 0.6x 4.4x 4.2x 3.4x 16.1x 15.4x 9.7x Supertex Inc. [SUPX] $17.79 86% $206 $0 $160 $47 0.7x 0.7x 0.7x 10.2x 9.7x 5.2x NM 37.3x 27.7x Pericom Semiconductor Corp. [PSEM] $8.35 92% $196 $3 $126 $73 0.5x 0.5x 0.5x 5.1x NA NA NM 32.1x 23.0x BCD Semiconductor Manufacturing Limited [BCDS $3.75 61% $69 $24 $72 $21 0.2x 0.2x 0.1x 1.3x 1.1x 0.9x 7.3x 7.0x 6.5x Median 84% 0.6x 0.6x 0.6x 5.8x 7.2x 4.2x 8.6x 15.4x 17.9x Mean 82% 0.6x 0.7x 0.6x 7.3x 9.3x 4.8x 9.7x 23.3x 18.9x Motion (1) - 11/20/12 $1.74 33% $43 $18 $62 ($0) NM NM NM NM NM NM 9.1x 17.0x 45.0x Motion (1) - at $4.00 / share $4.00 77% $100 $18 $62 $56 0.8x 0.9x 0.8x 7.1x 9.2x 11.0x 20.8x 39.1x NM Company Price 12/17/12 % of 52- Wk High Market Cap Debt Cash Total Enterprise Value Valuation Metrics Operating Statistics |
| Appendix |
| Implied Trading Range – Hypothetical Range 1 Year from Now (Illustrative) ($ in millions, except per share data) Current Price (12/17/12): $3.18 Unaffected Price (11/20/12): $1.74 Revenue Multiples THE PRELIMINARY ANALYSES CONTAINED HEREIN DO NOT CONSTITUTE AN OPINION OF RBC CAPITAL MARKETS AND HAVE NOT BEEN APPROVED BY ITS FAIRNESS OPINION REVIEW COMMITTEE. THIS ANALYSIS IS A HYPOTHETICAL ANALYSIS PERFORMED FOR ILLUSTRATIVE PURPOSES ONLY BASED ON THE REQUEST OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF MOTION. IT ASSUMES, AMONG OTHER THINGS, THAT (1) EQUITY PRICE LEVELS WILL REMAIN AT CURRENT LEVELS GENERALLY, (2) EQUITY MARKETS’ PRICING OF FORWARD LOOKING ESTIMATES OF REVENUE, EBITDA AND/OR EARNINGS REMAINS CONSTANT, IN PARTICULAR, AND (3) APPLICABLE GROWTH METRICS REMAIN CONSTANT. Multiples Source: CapIQ and FactSet. Motion forecasts per management estimates as of 12/17/2012. (1) Application of comparables’ 2012 and 2013 EV / Revenue and EBITDA multiples to Motion’s 2013 and 2014 estimates. Low and High multiples ranges represent +/-15% of Median statistic; not actual low and high multiples from observation of comparables data. (2) Prices updated as of 12/17/2012. Similar financial characteristics include: LTM GM% 20-45%; CY12-13 revenue growth 0-15%; LTM EBITDA% 0-15%. (3) Enterprise Value (EV) = Equity Value + Total Debt + Preferred Stock + Minority Interest – Cash & Cash Equivalents. (4) Assumes diluted shares outstanding of 24.922mm, cash and equivalents of $61.7mm, and total debt + minority interest of $18.1mm. (5) Motion EBITDA is operating income adjusted for depreciation, amortization, stock-based compensation and other one-time costs. EBITDA Multiples Illustrative Reference Range (+/- 15% of Median) Company Metric Multiples Range (1) (2) Enterprise Value (3) ($USD) Equity Value (4) ($USD) Price per Share ($USD) Low Median High Low High Low High Low Median High $72.1 0.5x 0.6x 0.7x $37.9 $51.3 $81.5 $94.8 $3.27 $3.54 $3.81 $89.4 0.5x 0.6x 0.7x $43.7 $59.1 $87.3 $102.7 $3.50 $3.81 $4.12 $5.1 6.1x 7.2x 8.3x $31.2 $42.2 $74.8 $85.8 $3.00 $3.22 $3.44 $6.5 3.6x 4.2x 4.9x $23.3 $31.6 $66.9 $75.1 $2.68 $2.85 $3.02 |
| Implied Trading Range – Hypothetical Range 1 Year from Now – Higher Growth Comps (Illustrative) ($ in millions, except per share data) Current Price (12/17/12): $3.18 Unaffected Price (11/20/12): $1.74 Source: CapIQ and FactSet. Motion forecasts per management estimates as of 12/17/2012. (1) Application of comparables’ 2012 and 2013 EV / Revenue and EBITDA multiples to Motion’s 2013 and 2014 estimates. Low and High multiples ranges represent +/-15% of Median statistic; not actual low and high multiples from observation of comparables data. (2) Prices updated as of 12/17/2012. Similar financial characteristics include: LTM GM% 20-45%; CY12-13 revenue growth 10%+; CY13-14 revenue growth 10%+ (if available); LTM EBITDA% 0-15%. (3) Enterprise Value (EV) = Equity Value + Total Debt + Preferred Stock + Minority Interest – Cash & Cash Equivalents. (4) Assumes diluted shares outstanding of 24.922mm, cash and equivalents of $61.7mm, and total debt + minority interest of $18.1mm. (5) Motion EBITDA is operating income adjusted for depreciation, amortization, stock-based compensation and other one-time costs. Revenue Multiples EBITDA Multiples Multiples THE PRELIMINARY ANALYSES CONTAINED HEREIN DO NOT CONSTITUTE AN OPINION OF RBC CAPITAL MARKETS AND HAVE NOT BEEN APPROVED BY ITS FAIRNESS OPINION REVIEW COMMITTEE. THIS ANALYSIS IS A HYPOTHETICAL ANALYSIS PERFORMED FOR ILLUSTRATIVE PURPOSES ONLY BASED ON THE REQUEST OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF MOTION. IT ASSUMES, AMONG OTHER THINGS, THAT (1) EQUITY PRICE LEVELS WILL REMAIN AT CURRENT LEVELS GENERALLY, (2) EQUITY MARKETS’ PRICING OF FORWARD LOOKING ESTIMATES OF REVENUE, EBITDA AND/OR EARNINGS REMAINS CONSTANT, IN PARTICULAR, AND (3) APPLICABLE GROWTH METRICS REMAIN CONSTANT. Illustrative Reference Range (+/- 15% of Median) Company Metric Multiples Range (1) (2) Enterprise Value (3) ($USD) Equity Value (4) ($USD) Price per Share ($USD) Low Median High Low High Low High Low Median High Financial Metrics EV / Current CY Revenue $72.1 0.7x 0.8x 0.9x $48.0 $64.9 $91.6 $108.5 $3.67 $4.01 $4.35 EV / Current CY+1 Revenue $89.4 0.6x 0.7x 0.8x $54.4 $73.5 $97.9 $117.1 $3.93 $4.31 $4.70 EV / Current CY EBITDA (5) $5.1 5.9x 7.0x 8.0x $30.2 $40.9 $73.8 $84.5 $2.96 $3.18 $3.39 EV / Current CY+1 EBITDA (5) $6.5 4.2x 4.9x 5.7x $27.3 $37.0 $70.9 $80.6 $2.85 $3.04 $3.23 |
| Comparable Company Analysis – Similar Financial Metrics ICs (Higher Growth Comparables) ($ in millions, except per share data) Valuation Metrics Operating Statistics Source: Capital IQ and Wall Street research. LTM as of 9/30/12 or latest available. Public semiconductor companies with similar financial characteristics: LTM GM% 20-45%; CY12-13 revenue growth 10%+; CY13-14 revenue growth 10%+ (if available); LTM EBITDA% 0-15%. Not Meaningful (NM) when relevant or projected figures are less than zero, EBITDA multiples are greater than 30.0x and PE multiples are greater than 75.0x. (1) Projections based on management estimates as of 12/17/2012. Motion debt includes non-controlling interest of $0.7mm. Motion EBITDA is operating income adjusted for depreciation, amortization, stock-based compensation and other one-time costs. |
| Historical Revenue and EBITDA Trading Multiples 9 ($ in millions, except per share data) EV / Revenue Multiples EV / EBITDA Multiples Source: CapIQ and FactSet as of 12/19/2012. (1) Based on consensus research estimates as of the indicated date. |
| Preliminary Precedent Transactions 10 ($ in millions, except per share data) Source: SEC and other public filings. Notes: Not Available (NA) when figures are not publicly available; Not Meaningful (NM) when relevant or projected figures are less than zero and EBITDA multiples are greater than 30.0x. Total enterprise value (TEV) is defined as equity value (EMC) plus total debt, preferred stock, and minority interest less cash and cash equivalents (Net Cash). LTM EBITDA adjusted for stock-based compensation, restructuring expenses, and other available non-recurring items. Represents all public-to-public semiconductor device transactions since 1/1/2009 with equity values of $25mm to $250mm, and additional semiconductor device transactions under $1bn equity values with target gross margins below 40%. Source: Motion forecasts per management estimates as of 12/17/2012. (1) Application of precedents’ LTM EV / Revenue and EBITDA multiples to Motion’s 2012 and 2013 estimates. Low and High multiples ranges represent +/-15% of Median statistic; not actual low and high multiples from observation of comparables data. (2) Enterprise Value (EV) = Equity Value + Total Debt + Preferred Stock + Minority Interest – Cash & Cash Equivalents. (3) Assumes diluted shares outstanding of 24.922mm, cash and equivalents of $61.7mm, and total debt + minority interest of $18.1mm. (4) Motion EBITDA is operating income adjusted for depreciation, amortization, stock-based compensation and other one-time costs. |
| Motion Income Statement Projections – Internal Estimates Source: Motion forecasts per management estimates as of 12/17/2012. Excludes impact of amortization of intangibles. ($ in millions) ($ in millions) 2012 CY2009 CY2010 CY2011 Q1 Q2 Q3 Q4 CY2012 CY2013 CY2014 Revenue Sensors $28,372 $27,790 $57,877 $17,208 $12,004 $13,145 $13,258 $55,615 $61,746 $78,000 Systems - 10,862 10,276 2,809 2,411 2,044 2,100 9,363 10,341 11,400 Total Revenue $28,372 $38,652 $68,153 $20,017 $14,415 $15,189 $15,358 $64,979 $72,087 $89,400 COGS Sensors $15,436 $17,682 $39,640 $11,203 $7,542 $8,678 $8,651 $36,074 $39,205 $50,414 Systems - 5,645 4,673 1,397 1,090 1,200 1,330 5,016 5,740 5,700 Total COGS $15,436 $23,327 $44,314 $12,600 $8,631 $9,878 $9,981 $41,090 $44,945 $56,114 Gross Profit Sensors $12,936 $10,108 $18,237 $6,005 $4,463 $4,467 $4,607 $19,541 $22,541 $27,587 Systems - 5,217 5,602 1,412 1,321 844 770 4,347 4,601 5,700 Total Gross Profit $12,936 $15,325 $23,839 $7,417 $5,784 $5,311 $5,377 $23,888 $27,142 $33,287 Operating Expenses G&A $6,149 $8,547 $10,355 $2,675 $2,778 $2,691 $2,797 $10,941 $12,013 $11,693 S&M 2,328 5,092 6,892 1,432 1,228 1,277 1,355 5,292 6,016 8,527 R&D 5,230 8,698 8,554 1,703 1,770 1,440 1,805 6,718 9,400 11,450 Total Operating Expenses $13,707 $22,337 $25,801 $5,810 $5,776 $5,408 $5,957 $22,951 $27,429 $31,670 Stock-Based Compensation 1,414 1,481 1,595 323 428 353 400 1,504 1,637 1,865 Operating Income $643 ($5,531) ($366) $1,930 $436 $255 ($180) $2,441 $1,350 $3,482 Interest Income $819 $442 $438 $108 $125 $4 $5 $242 - - Other Non-Operating Income 215 815 1,718 (19) (168) 229 100 142 - - Pre-Tax Income $1,677 ($4,274) $1,790 $2,019 $394 $489 ($75) $2,826 $1,350 $3,482 Income Taxes $93 ($6) $77 $69 $29 $96 $50 $244 $240 $400 Noncontrolling Interest - 64 82 30 (16) 19 75 108 176 200 Net Income $1,584 ($4,332) $1,630 $1,920 $380 $374 ($200) $2,474 $934 $2,882 Other Non-Operating Income $215 $815 $1,718 (19) (168) 229 100 $142 - - Depreciation 1,899 2,313 3,114 912 892 839 974 3,616 3,914 3,231 EBITDA $2,757 ($2,467) $4,384 $2,793 $1,176 $1,305 $819 $6,092 $5,087 $6,513 Growth & Margins Revenue Growth% 41.3% 36.2% 76.3% (6.8%) (28.0%) 5.4% 1.1% (4.7%) 10.9% 24.0% Gross Margin % 45.6% 39.6% 35.0% 37.1% 40.1% 35.0% 35.0% 36.8% 37.7% 37.2% G&A Margin % 21.7% 22.1% 15.2% 13.4% 19.3% 17.7% 18.2% 16.8% 16.7% 13.1% Marketing Margin % 8.2% 13.2% 10.1% 7.2% 8.5% 8.4% 8.8% 8.1% 8.3% 9.5% R&D Margin % 18.4% 22.5% 12.6% 8.5% 12.3% 9.5% 11.8% 10.3% 13.0% 12.8% Operating Margin % 5.9% (11.1%) 2.6% 10.1% 2.7% 3.2% (0.5%) 4.3% 1.9% 3.9% |
