United States securities and exchange commission logo
March 10, 2023
Neill P. Reynolds
Executive Vice President and Chief Financial Officer
Wolfspeed, Inc.
4600 Silicon Drive
Durham, North Carolina 27703
Re: Wolfspeed, Inc.
Form 10-K for the
Fiscal Year Ended June 26, 2022
Filed August 22,
2022
Form 8-K Filed
January 25, 2023
File No. 001-40863
Dear Neill P. Reynolds:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended June 26, 2022
Results of Operations - Revenue, page 32
1. We note from your
disclosure on page 4, and elsewhere, that you mainly offer your
customers three product
groups (i.e., (i) Silicon Carbide and Gallium Nitride
Materials, (ii) Power
Devices, and (iii) Radio Frequency Devices) which are targeted at
different end markets
and customer groups. Please revise this section in future filings to
discuss the revenues
earned from each product group and to provide a more insightful and
quantified discussion
of how each product group contributed to and impacted your
revenues and results of
operations in each reported period. Refer to Item 303(b)(2) of
Regulation S-K.
Neill P. Reynolds
FirstName
Wolfspeed,LastNameNeill P. Reynolds
Inc.
Comapany
March NameWolfspeed, Inc.
10, 2023
March2 10, 2023 Page 2
Page
FirstName LastName
2. In this regard, tell us how you considered the guidance in ASC
606-10-50-5 relating to the
disaggregation of revenue in concluding not to provide disclosure of
revenue by group of
product in this filing.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies
Segment Information, page 54
3. We note your disclosure that you have one operating and reportable
segment. We also
note that you offer your customers three product groups (i.e., (i)
Silicon Carbide
and Gallium Nitride Materials, (ii) Power Devices, and (iii) Radio
Frequency Devices)
which, with some overlap, are targeted at different end markets and
customer groups.
Further, we note from your website that there is a Senior Vice
President who is the general
manager for each of these business units. Please address the
following:
Tell us how you considered these business units in your
conclusion that you have one
operating and reportable segment. Please refer to ASC 280-10-50
and tell us whether
each business unit meets the definition of an operating segment.
Specifically describe any discrete financial information
available at the business unit
level.
To the extent you are relying on the aggregation criteria
outlined in ASC 280-10-50-
11, please explain how the units or operating segments met each
criterion.
Tell us the title and describe the role of each of the
individuals who report to your
CODM. In particular, provide us with a clear and detailed
description of the role of
the individuals identified on your website as (i) SVP & GM,
Materials, (ii) SVP
&GM, Power and (iii) SVP & GM, RF.
Tell us how you considered these three business units in
determining the appropriate
level at which you should conduct impairment testing for
goodwill.
4. Tell us how you considered the guidance in ASC 280-10-50-40 in
concluding that
information about revenue by group of products was not required.
Form 8-K Filed January 25, 2023
Exhibit 99.1, page 7
5. We note you adjust certain non-GAAP financial measures for Factory
start-up and
underutilization costs and Project, transformation and
transaction costs." It appears to
us that factory start-up and underutilization costs and internal
transformation program
costs included in project, transformation and transaction costs are
normal recurring
operating costs necessary to operate your business. Please explain to
us how you
determined these adjustments are appropriate based on the guidance in
Question 100.01 of
Neill P. Reynolds
Wolfspeed, Inc.
March 10, 2023
Page 3
the Division of Corporation Finance s Compliance & Disclosure
Interpretations on Non-
GAAP Financial Measures or tell us how you plan to revise your
non-GAAP financial
measures in future filings.
6. You disclose that you exclude stock-based compensation expenses from
your non-GAAP
measures because they are non-cash expenses that you do not believe
"are reflective of
ongoing operating results." Given that you routinely utilize stock
options, restricted stock,
performance stock awards and employee stock purchases to compensate
employees,
stock-based compensation expenses appear to be reflective of ongoing
operating results.
Please revise your future filings to eliminate this confusing
disclosure. Consider revising
your disclosure to state instead that you exclude the amounts because
they are non-cash
expenses.
7. Similarly, your disclosure that you exclude amortization or impairment
of acquisition-
related intangibles from non-GAAP measures because they arise from
your prior
acquisitions "and have no direct correlation to the ongoing operating
results" of your
business is confusing, as the acquired intangible assets that are not
yet fully amortized
would be used to generate revenues in future periods. Please revise
your description of
this adjustment in future filings to eliminate this confusing
language, or advise us.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Jeff Gordon at 202-551-3866 or Martin James at
202-551-3671 with
any questions.
FirstName LastNameNeill P. Reynolds Sincerely,
Comapany NameWolfspeed, Inc.
Division of
Corporation Finance
March 10, 2023 Page 3 Office of
Manufacturing
FirstName LastName