MaxLinear, Inc. Announces Second Quarter 2019 Financial Results

CARLSBAD, Calif.--()--MaxLinear, Inc. (NYSE: MXL), a leading provider of RF, analog and mixed-signal integrated circuits for the connected home, and industrial and multi-market applications, today announced financial results for the second quarter ended June 30, 2019.

Second Quarter Financial Highlights

GAAP basis:

  • Net revenue was $82.5 million, down 3% sequentially, and down 19% year-on-year.
  • GAAP gross margin was 53.4%, compared to 53.3% in the prior quarter, and 55.5% in the year-ago quarter.
  • GAAP operating expenses were $47.0 million in the second quarter 2019, or 57% of net revenue, compared to $52.9 million in the prior quarter, or 63% of net revenue, and $56.6 million in the year-ago quarter, or 56% of net revenue.
  • GAAP loss from operations was 4% of revenue, compared to loss from operations of 9% in the prior quarter, and loss from operations of 0% in the year-ago quarter.
  • Net cash flow provided by operating activities was $12.4 million, compared to cash flow provided by operating activities of $16.0 million in the prior quarter and cash flow provided by operating activities of $35.8 million in the year-ago quarter.
  • GAAP income tax benefit was $3.4 million, compared to an income tax benefit of $6.5 million in the prior quarter, and income tax provision of $11.2 million in the year-ago quarter.
  • GAAP net loss was $2.2 million, compared to net loss of $4.9 million in the prior quarter, and net loss of $14.4 million in the year-ago quarter.
  • GAAP diluted loss per share was $0.03, compared to diluted loss per share of $0.07 in the prior quarter, and diluted loss per share of $0.21 in the year-ago quarter.

Non-GAAP basis:

  • Non-GAAP gross margin was 63.9%. This compares to 63.5% in the prior quarter, and 64.6% in the year-ago quarter.
  • Non-GAAP operating expenses were $32.8 million, or 40% of revenue, compared to $35.7 million or 42% of revenue in the prior quarter, and $37.1 million or 37% of revenue in the year-ago quarter.
  • Non-GAAP income from operations was 24% of revenue, compared to 21% in the prior quarter, and 28% in the year-ago quarter.
  • Non-GAAP effective tax rate was 7% of non-GAAP pre-tax income, compared to 7% in the prior quarter, and 7% in the year-ago quarter.
  • Non-GAAP net income was $16.0 million, compared to $13.5 million in the prior quarter, and $23.7 million in the year-ago quarter.
  • Non-GAAP diluted earnings per share was $0.22, compared to diluted earnings per share of $0.19 in the prior quarter, and diluted earnings per share of $0.34 in the year-ago quarter.

Recent Business Highlights

  • Announced that Cambridge Industries Group has selected the MxL3710 MoCA 2.5 SoC for their next-generation 10G PON ONT devices.
  • Announced that Raspberry Pi has selected MxL7704 Universal PMIC to power its latest single-board computer, the Raspberry Pi 4.
  • Announced that ZTE Strawcom Telecommunications Co., Ltd has selected MaxLinear's G.hn Wave-2 chipset to develop a new family of fiber-to-the-home (FTTH) fiber extenders.

Management Commentary

“In the second quarter, revenue results were in line with our revised guidance, gross margin improved nicely in the quarter and operating expenses continued to trend lower due to disciplined execution. We remain focused on succeeding in the new emerging 5G wireless and fiber-optic datacenter high-speed interconnect infrastructure markets as we grow the company beyond the connected home market, which remains weak due to delayed investment from the service providers and uncertainty around tariffs and customer supply chains,” commented Kishore Seendripu, Ph.D., Chairman and CEO.

“We continued to execute on our new 14nm CMOS 4x4 Quad RF transceiver system-on-chip solution for the 5G wireless infrastructure market. These efforts addressing the 5G market continue to be exciting due to the additional content that we are growing on a per-system basis and increasing confidence in realizing revenues in the coming year. Also, our 400 gigabit PAM4 DSP SoC with integrated laser drivers and companion quad-TIA system solution is progressing extremely well with continued traction in the hyperscale data center market,” continued Dr. Seendripu.

Third Quarter 2019 Business Outlook

The company expects revenue in the third quarter 2019 to be approximately $77 million to $83 million. Due to continued restrictions and lack of clarity from the U.S. Government on the ability to ship product to Huawei, related revenues are excluded from our guidance until further direction is given. The Company also estimates the following:

  • GAAP gross margin of approximately 52.0% to 52.5%;
  • Non-GAAP gross margin of approximately 63.0% to 63.5%;
  • GAAP operating expenses of approximately $46.5 million to $47.5 million; and
  • Non-GAAP operating expenses of approximately $31.0 million to $32.0 million.

Webcast and Conference Call

MaxLinear will host its second quarter financial results conference call today, July 25, 2019 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access this call, dial US toll free: 1-877-407-3109 / International: 1-201-493-6798. A live webcast of the conference call will be accessible from the investor relations section of the MaxLinear website at http://investors.maxlinear.com, and will be archived and available after the call at http://investors.maxlinear.com until August 8, 2019. A replay of the conference call will also be available until August 8, 2019 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13692485.

Cautionary Note Concerning Forward-Looking Statements

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. Forward-looking statements include, among others, statements concerning our future financial performance (including specifically our current guidance for third quarter 2019 revenue, gross margins, and operating expenses) and statements concerning expectations of potential developments in our target markets, including management’s views with respect to the prospects for and trends in our connected home and 5G wireless and fiber-optic high-speed interconnect infrastructure markets. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking statements are based on management’s current, preliminary expectations and are subject to various risks and uncertainties. Risks and uncertainties affecting our business and future operating results include, without limitation, intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; uncertainties concerning how end user markets for our products will develop, including in particular new markets we are entering such as the 5G wireless and fiber-optic data center high-speed interconnect infrastructure markets but also existing markets such as connected home; uncertainties concerning the outcome of global trade negotiations, export control limitations, and heightened geopolitical risks generally; potential uncertainties arising from continued consolidation among cable television and satellite operators in our target markets and continued consolidation among competitors within the semiconductor industry generally; our ability to develop and introduce new and enhanced products on a timely basis and achieve market acceptance of those products, particularly as we seek to expand outside of our historic markets; potential decreases in average selling prices for our products; risks relating to intellectual property protection and the prevalence of intellectual property litigation in our industry; the impact on our financial condition of the indebtedness arising from the Exar transaction; our reliance on a limited number of third party manufacturers; and our lack of long-term supply contracts and dependence on limited sources of supply.

In addition to these risks and uncertainties, investors should review the risks and uncertainties contained in our filings with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 5, 2019, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 filed with the SEC on May 1, 2019, and our Current Reports on Form 8-K, as well as the information to be set forth under the caption “Risk Factors” in MaxLinear’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which we expect to file shortly. All forward-looking statements are based on the estimates, projections and assumptions of management as of July 25, 2019, and MaxLinear is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Use of Non-GAAP Financial Measures

To supplement our unaudited consolidated financial statements presented on a basis consistent with GAAP, we disclose certain non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating expenses as a percentage of revenue, income from operations as percentage of revenue, effective tax rate, net income and diluted earnings per share. These supplemental measures exclude the effects of (i) stock-based compensation expense; (ii) accruals related to our performance based bonus plan for 2019, which we currently intend to settle in shares of our common stock; (iii) accruals related to our performance based bonus plan for 2018 which we settled in shares of common stock in 2019; (iv) amortization of purchased intangible assets; (v) depreciation of fixed assets step-up; (vi) professional fees and settlement costs related to our previously disclosed IP and commercial litigation matters; (vii) severance and other restructuring charges; and (viii) non-cash income tax benefits and expenses and effects of the 2017 Tax Cuts and Jobs Act, or Tax Act, as applicable. These non-GAAP measures are not in accordance with and do not serve as an alternative for GAAP. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our GAAP results of operations. These non-GAAP measures should only be viewed in conjunction with corresponding GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

We believe that non-GAAP financial measures can provide useful information to both management and investors by excluding certain non-cash and other one-time expenses that are not indicative of our core operating results. Among other uses, our management uses non-GAAP measures to compare our performance relative to forecasts and strategic plans and to benchmark our performance externally against competitors. In addition, management’s incentive compensation will be determined in part using these non-GAAP measures because we believe non-GAAP measures better reflect our core operating performance.

The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:

Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants. Our equity incentive plans are important components of our employee incentive compensation arrangements and are reflected as expenses in our GAAP results. Stock-based compensation expense has been and will continue to be a significant recurring expense for MaxLinear.

Bonuses under our executive and non-executive bonus programs have been excluded from our non-GAAP net income for all periods reported. Bonus payments for the 2018 performance periods were settled through the issuance of shares of common stock under our equity incentive plans in February 2019. We currently expect that bonus awards under our fiscal 2019 program will be settled in common stock in the first quarter of fiscal 2020. While we include the dilutive impact of equity awards in weighted average shares outstanding, the expense associated with stock-based awards reflects a non-cash charge that we exclude from non-GAAP net income.

Expenses incurred in relation to acquisitions include amortization of purchased intangible assets and depreciation of step-up of property and equipment to fair value.

Restructuring charges incurred are related to our restructuring plans which eliminate redundancies and primarily include severance and restructuring costs related to exiting certain facilities.

Expenses incurred in relation to our intellectual property and commercial litigation include professional fees incurred.

Income tax benefits and expense adjustments are those that do not affect cash income taxes payable. Effects of the Tax Act were excluded from Non-GAAP effective tax rate, as applicable.

Reconciliations of non-GAAP measures for the historic periods disclosed in this press release appear below. Because of the inherent uncertainty associated with our ability to project future charges, particularly related to stock-based compensation and its related tax effects as well as potential impairments, we have not provided a reconciliation for non-GAAP guidance provided for the third quarter 2019.

About MaxLinear, Inc.

MaxLinear, Inc. (NYSE:MXL) is a leading provider of radio frequency (RF), analog and mixed-signal integrated circuits for the connected home, wired and wireless infrastructure, and industrial and multi-market applications. MaxLinear is headquartered in Carlsbad, California. For more information, please visit www.maxlinear.com.

MXL is MaxLinear’s registered trademark. Other trademarks appearing herein are the property of their respective owners.

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

Three Months Ended

 

June 30, 2019

March 31, 2019

June 30, 2018

Net revenue

$

82,507

 

$

84,635

 

$

101,533

 

Cost of net revenue

 

38,427

 

 

39,558

 

 

45,203

 

Gross profit

 

44,080

 

 

45,077

 

 

56,330

 

Operating expenses:

 

 

 

Research and development

 

24,304

 

 

27,399

 

 

30,211

 

Selling, general and administrative

 

22,327

 

 

23,591

 

 

24,501

 

Restructuring charges

 

416

 

 

1,917

 

 

1,865

 

Total operating expenses

 

47,047

 

 

52,907

 

 

56,577

 

Loss from operations

 

(2,967

)

 

(7,830

)

 

(247

)

Interest income

 

192

 

 

147

 

 

19

 

Interest expense

 

(2,853

)

 

(2,975

)

 

(3,694

)

Other income (expense), net

 

(14

)

 

(655

)

 

725

 

Total interest and other expense, net

 

(2,675

)

 

(3,483

)

 

(2,950

)

Loss before income taxes

 

(5,642

)

 

(11,313

)

 

(3,197

)

Income tax provision (benefit)

 

(3,413

)

 

(6,462

)

 

11,225

 

Net loss

$

(2,229

)

$

(4,851

)

$

(14,422

)

Net loss per share:

 

 

 

Basic

$

(0.03

)

$

(0.07

)

$

(0.21

)

Diluted

$

(0.03

)

$

(0.07

)

$

(0.21

)

Shares used to compute net loss per share:

 

 

 

Basic

 

70,917

 

 

69,968

 

 

68,335

 

Diluted

 

70,917

 

 

69,968

 

 

68,335

 

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

Six Months Ended

 

June 30, 2019

June 30, 2018

Net revenue

$

167,142

 

$

212,360

 

Cost of net revenue

 

77,985

 

 

93,362

 

Gross profit

 

89,157

 

 

118,998

 

Operating expenses:

 

 

Research and development

 

51,703

 

 

61,332

 

Selling, general and administrative

 

45,918

 

 

51,618

 

Restructuring charges

 

2,333

 

 

1,865

 

Total operating expenses

 

99,954

 

 

114,815

 

Income (loss) from operations

 

(10,797

)

 

4,183

 

Interest income

 

339

 

 

37

 

Interest expense

 

(5,828

)

 

(7,588

)

Other income (expense), net

 

(669

)

 

154

 

Total interest and other expense, net

 

(6,158

)

 

(7,397

)

Loss before income taxes

 

(16,955

)

 

(3,214

)

Income tax provision (benefit)

 

(9,875

)

 

9,361

 

Net loss

$

(7,080

)

$

(12,575

)

Net loss per share:

 

 

Basic

$

(0.10

)

$

(0.18

)

Diluted

$

(0.10

)

$

(0.18

)

Shares used to compute net loss per share:

 

 

Basic

 

70,445

 

 

68,008

 

Diluted

 

70,445

 

 

68,008

 

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

Three Months Ended

 

June 30, 2019

March 31, 2019

June 30, 2018

Operating Activities

 

 

 

Net loss

$

(2,229

)

$

(4,851

)

$

(14,422

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Amortization and depreciation

 

16,646

 

 

16,863

 

 

20,051

 

Amortization of debt issuance costs and accretion of discount on debt and leases

 

391

 

 

402

 

 

287

 

Stock-based compensation

 

8,207

 

 

7,747

 

 

7,309

 

Deferred income taxes

 

(4,600

)

 

(6,476

)

 

(1,289

)

Loss on disposal of property and equipment

 

11

 

 

35

 

 

Impairment of leasehold improvements

 

 

1,442

 

 

700

 

Impairment of long-lived assets

 

 

2,182

 

 

Gain on extinguishment of lease liabilities

 

 

(2,880

)

 

(Gain) loss on foreign currency

 

(54

)

 

567

 

 

(828

)

Excess tax benefits on stock-based awards

 

(2,074

)

 

(1,737

)

 

(318

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

3,022

 

 

(142

)

 

6,979

 

Inventory

 

(122

)

 

(1,015

)

 

1,420

 

Prepaid expenses and other assets

 

(648

)

 

604

 

 

2,213

 

Leased right-of-use assets

 

981

 

 

645

 

 

Accounts payable, accrued expenses and other current liabilities

 

2,961

 

 

1,921

 

 

11,540

 

Accrued compensation

 

(209

)

 

893

 

 

1,401

 

Accrued price protection liability

 

(7,649

)

 

2,489

 

 

(132

)

Lease liabilities

 

(2,179

)

 

(2,125

)

 

Other long-term liabilities

 

(11

)

 

(519

)

 

913

 

Net cash provided by operating activities

 

12,444

 

 

16,045

 

 

35,824

 

Investing Activities

 

 

 

Purchases of property and equipment

 

(524

)

 

(2,155

)

 

(2,423

)

Net cash used in investing activities

 

(524

)

 

(2,155

)

 

(2,423

)

Financing Activities

 

 

 

Repayment of debt

 

(15,000

)

 

(15,000

)

 

(18,000

)

Net proceeds from issuance of common stock

 

3,305

 

 

2,628

 

 

3,036

 

Minimum tax withholding paid on behalf of employees for restricted stock units

 

(5,408

)

 

(4,419

)

 

(1,448

)

Net cash used in financing activities

 

(17,103

)

 

(16,791

)

 

(16,412

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

354

 

 

577

 

 

793

 

Increase (decrease) in cash, cash equivalents and restricted cash

 

(4,829

)

 

(2,324

)

 

17,782

 

Cash, cash equivalents and restricted cash at beginning of period

 

71,867

 

 

74,191

 

 

57,333

 

Cash, cash equivalents and restricted cash at end of period

$

67,038

 

$

71,867

 

$

75,115

 

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

Six Months Ended

 

June 30, 2019

 

June 30, 2018

Operating Activities

 

 

 

Net loss

$

(7,080

)

 

$

(12,575

)

Adjustments to reconcile net loss to cash provided by operating activities:

 

 

 

Amortization and depreciation

33,509

 

 

40,135

 

Amortization of debt issuance costs and accretion of discount on debt and leases

793

 

 

574

 

Stock-based compensation

15,954

 

 

15,782

 

Deferred income taxes

(11,076

)

 

(3,621

)

Loss on disposal of property and equipment

46

 

 

 

Impairment of leasehold improvements

1,442

 

 

700

 

Impairment of long-lived assets

2,182

 

 

 

Gain on extinguishment of lease liabilities

(2,880

)

 

 

(Gain) loss on foreign currency

513

 

 

(357

)

Excess tax benefits on stock-based awards

(3,811

)

 

(1,115

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

2,880

 

 

(17,554

)

Inventory

(1,137

)

 

9,096

 

Prepaid expenses and other assets

(44

)

 

3,216

 

Leased right-of-use assets

1,626

 

 

 

Accounts payable, accrued expenses and other current liabilities

4,882

 

 

11,119

 

Accrued compensation

684

 

 

3,903

 

Deferred revenue and deferred profit

 

 

(138

)

Accrued price protection liability

(5,160

)

 

(1,491

)

Lease liabilities

(4,304

)

 

 

Other long-term liabilities

(530

)

 

121

 

Net cash provided by operating activities

28,489

 

 

47,795

 

Investing Activities

 

 

 

Purchases of property and equipment

(2,679

)

 

(4,804

)

Net cash used in investing activities

(2,679

)

 

(4,804

)

Financing Activities

 

 

 

Repayment of debt

(30,000

)

 

(43,000

)

Net proceeds from issuance of common stock

5,933

 

 

4,016

 

Minimum tax withholding paid on behalf of employees for restricted stock units

(9,827

)

 

(3,839

)

Net cash used in financing activities

(33,894

)

 

(42,823

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

931

 

 

535

 

Increase (decrease) in cash, cash equivalents and restricted cash

(7,153

)

 

703

 

Cash, cash equivalents and restricted cash at beginning of period

74,191

 

 

74,412

 

Cash, cash equivalents and restricted cash at end of period

$

67,038

 

 

$

75,115

 

MAXLINEAR, INC.

UNAUDITED GAAP CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

June 30, 2019

March 31, 2019

June 30, 2018 (1)

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

66,629

$

71,102

$

74,059

Short-term restricted cash

 

344

 

347

 

345

Accounts receivable, net

 

56,618

 

59,639

 

83,648

Inventory

 

42,875

 

42,753

 

44,338

Prepaid expenses and other current assets

 

6,184

 

5,479

 

7,305

Total current assets

 

172,650

 

179,320

 

209,695

Long-term restricted cash

 

65

 

418

 

711

Property and equipment, net

 

15,738

 

16,987

 

20,886

Leased right-of-use assets

 

20,624

 

21,543

Intangible assets, net

 

216,342

 

230,634

 

281,017

Goodwill

 

238,330

 

238,330

 

238,330

Deferred tax assets

 

62,667

 

58,067

 

42,995

Other long-term assets

 

2,744

 

3,583

 

4,732

Total assets

$

729,160

$

748,882

$

798,366

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities

$

66,918

$

73,483

$

80,160

Long-term lease liabilities

 

16,515

 

18,132

 

4,538

Long-term debt

 

226,335

 

241,044

 

305,183

Other long-term liabilities

 

8,016

 

8,019

 

8,564

Stockholders’ equity

 

411,376

 

408,204

 

399,921

Total liabilities and stockholders’ equity

$

729,160

$

748,882

$

798,366

 

_____________

(1) Long-term lease liabilities have been reclassified from other long-term liabilities to conform to current period presentation.

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS

(in thousands, except per share data)

 

 

Three Months Ended

 

June 30, 2019

March 31, 2019

June 30, 2018

GAAP gross profit

$

44,080

 

$

45,077

 

$

56,330

 

Stock-based compensation

 

147

 

 

130

 

 

120

 

Performance based equity

 

 

73

 

 

47

 

Amortization of purchased intangible assets

 

8,478

 

 

8,424

 

 

8,968

 

Depreciation of fixed asset step-up

 

 

 

96

 

Non-GAAP gross profit

 

52,705

 

 

53,704

 

 

65,561

 

 

 

 

 

GAAP R&D expenses

 

24,304

 

 

27,399

 

 

30,211

 

Stock-based compensation

 

(4,222

)

 

(4,213

)

 

(4,454

)

Performance based equity

 

 

(925

)

 

(1,297

)

Depreciation of fixed asset step-up

 

 

(6

)

 

(324

)

Non-GAAP R&D expenses

 

20,082

 

 

22,255

 

 

24,136

 

 

 

 

 

GAAP SG&A expenses

 

22,327

 

 

23,591

 

 

24,501

 

Stock-based compensation

 

(3,823

)

 

(3,404

)

 

(2,735

)

Performance based equity

 

 

(939

)

 

(730

)

Amortization of purchased intangible assets

 

(5,792

)

 

(5,798

)

 

(7,994

)

Depreciation of fixed asset step-up

 

 

 

(12

)

IP litigation costs, net

 

(13

)

 

 

(19

)

Non-GAAP SG&A expenses

 

12,699

 

 

13,450

 

 

13,011

 

 

 

 

 

GAAP restructuring expenses

 

416

 

 

1,917

 

 

1,865

 

Restructuring charges

 

(416

)

 

(1,917

)

 

(1,865

)

Non-GAAP restructuring expenses

 

 

 

 

 

 

 

GAAP loss from operations

 

(2,967

)

 

(7,830

)

 

(247

)

Total non-GAAP adjustments

 

22,891

 

 

25,829

 

 

28,661

 

Non-GAAP income from operations

 

19,924

 

 

17,999

 

 

28,414

 

 

 

 

 

GAAP and non-GAAP interest and other income (expense), net

 

(2,675

)

 

(3,483

)

 

(2,950

)

 

 

 

 

GAAP loss before income taxes

 

(5,642

)

 

(11,313

)

 

(3,197

)

Total non-GAAP adjustments

 

22,891

 

 

25,829

 

 

28,661

 

Non-GAAP income before income taxes

 

17,249

 

 

14,516

 

 

25,464

 

 

 

 

 

GAAP income tax provision (benefit)

 

(3,413

)

 

(6,462

)

 

11,225

 

Adjustment for non-cash tax benefits/expenses and effects of the Tax Act

 

4,621

 

 

7,478

 

 

(9,443

)

Non-GAAP income tax provision

 

1,208

 

 

1,016

 

 

1,782

 

 

 

 

 

GAAP net loss

 

(2,229

)

 

(4,851

)

 

(14,422

)

Total non-GAAP adjustments before income taxes

 

22,891

 

 

25,829

 

 

28,661

 

Less: total tax adjustments

 

4,621

 

 

7,478

 

 

(9,443

)

Non-GAAP net income

$

16,041

 

$

13,500

 

$

23,682

 

 

 

 

 

Shares used in computing non-GAAP basic net income per share

 

70,917

 

 

69,968

 

 

68,335

 

Shares used in computing non-GAAP diluted net income per share

 

72,389

 

 

71,900

 

 

70,473

 

Non-GAAP basic net income per share

$

0.23

 

$

0.19

 

$

0.35

 

Non-GAAP diluted net income per share

$

0.22

 

$

0.19

 

$

0.34

 

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS

(in thousands, except per share data)

 

 

Six Months Ended

 

June 30, 2019

June 30, 2018

GAAP gross profit

$

89,157

 

$

118,998

 

Stock-based compensation

 

277

 

 

226

 

Performance based equity

 

73

 

 

125

 

Amortization of purchased intangible assets

 

16,902

 

 

17,937

 

Depreciation of fixed asset step-up

 

 

208

 

Non-GAAP gross profit

 

106,409

 

 

137,494

 

 

 

 

GAAP R&D expenses

 

51,703

 

 

61,332

 

Stock-based compensation

 

(8,435

)

 

(8,828

)

Performance based equity

 

(925

)

 

(2,437

)

Depreciation of fixed asset step-up

 

(6

)

 

(653

)

Non-GAAP R&D expenses

 

42,337

 

 

49,414

 

 

 

 

GAAP SG&A expenses

 

45,918

 

 

51,617

 

Stock-based compensation

 

(7,227

)

 

(6,728

)

Performance based equity

 

(939

)

 

(1,779

)

Amortization of purchased intangible assets

 

(11,590

)

 

(15,988

)

Depreciation of fixed asset step-up

 

 

(22

)

IP litigation costs, net

 

(13

)

 

(61

)

Non-GAAP SG&A expenses

 

26,149

 

 

27,039

 

 

 

 

GAAP restructuring expenses

 

2,333

 

 

1,865

 

Restructuring charges

 

(2,333

)

 

(1,865

)

Non-GAAP restructuring expenses

 

 

 

 

 

GAAP income (loss) from operations

 

(10,797

)

 

4,183

 

Total non-GAAP adjustments

 

48,720

 

 

56,857

 

Non-GAAP income from operations

 

37,923

 

 

61,041

 

 

 

 

GAAP and non-GAAP interest and other income (expense), net

 

(6,158

)

 

(7,397

)

 

 

 

GAAP loss before income taxes

 

(16,955

)

 

(3,214

)

Total non-GAAP adjustments

 

48,720

 

 

56,857

 

Non-GAAP income before income taxes

 

31,765

 

 

53,643

 

 

 

 

GAAP income tax provision (benefit)

 

(9,875

)

 

9,361

 

Adjustment for non-cash tax benefits/expenses and effects of the Tax Act

 

12,099

 

 

(5,606

)

Non-GAAP income tax provision

 

2,224

 

 

3,755

 

 

 

 

GAAP net loss

 

(7,080

)

 

(12,575

)

Total non-GAAP adjustments before income taxes

 

48,720

 

 

56,857

 

Less: total tax adjustments

 

12,099

 

 

(5,606

)

Non-GAAP net income

$

29,541

 

$

49,888

 

 

 

 

Shares used in computing non-GAAP basic net income per share

 

70,445

 

 

68,008

 

Shares used in computing non-GAAP diluted net income per share

 

72,147

 

 

70,460

 

Non-GAAP basic net income per share

$

0.42

 

$

0.73

 

Non-GAAP diluted net income per share

$

0.41

 

$

0.71

 

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

 

Three Months Ended

 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

GAAP gross profit

53.4

%

 

53.3

%

 

55.5

%

Stock-based compensation

0.2

%

 

0.2

%

 

0.1

%

Performance based equity

%

 

0.1

%

 

%

Amortization of purchased intangible assets

10.3

%

 

10.0

%

 

8.8

%

Depreciation of fixed asset step-up

%

 

%

 

0.1

%

Non-GAAP gross profit

63.9

%

 

63.5

%

 

64.6

%

 

 

 

 

 

 

GAAP R&D expenses

29.5

%

 

32.4

%

 

29.8

%

Stock-based compensation

(5.1

)%

 

(5.0

)%

 

(4.4

)%

Performance based equity

%

 

(1.1

)%

 

(1.3

)%

Depreciation of fixed asset step-up

%

 

%

 

(0.4

)%

Non-GAAP R&D expenses

24.3

%

 

26.3

%

 

23.8

%

 

 

 

 

 

 

GAAP SG&A expenses

27.1

%

 

27.9

%

 

24.1

%

Stock-based compensation

(4.6

)%

 

(4.0

)%

 

(2.7

)%

Performance based equity

%

 

(1.1

)%

 

(0.7

)%

Amortization of purchased intangible assets

(7.0

)%

 

(6.9

)%

 

(7.9

)%

Depreciation of fixed asset step-up

%

 

%

 

%

IP litigation costs, net

%

 

%

 

%

Non-GAAP SG&A expenses

15.4

%

 

15.9

%

 

12.8

%

 

 

 

 

 

 

GAAP restructuring expenses

0.5

%

 

2.3

%

 

1.8

%

Restructuring charges

(0.5

)%

 

(2.3

)%

 

(1.8

)%

Non-GAAP restructuring expenses

%

 

%

 

%

 

 

 

 

 

 

GAAP loss from operations

(3.6

)%

 

(9.3

)%

 

(0.2

)%

Total non-GAAP adjustments

27.7

%

 

30.5

%

 

28.2

%

Non-GAAP income from operations

24.1

%

 

21.3

%

 

28.0

%

 

 

 

 

 

 

GAAP and non-GAAP interest and other income (expense), net

(3.2

)%

 

(4.1

)%

 

(2.9

)%

 

 

 

 

 

 

GAAP loss before income taxes

(6.8

)%

 

(13.4

)%

 

(3.1

)%

Total non-GAAP adjustments before income taxes

27.7

%

 

30.5

%

 

28.2

%

Non-GAAP income before income taxes

20.9

%

 

17.2

%

 

25.1

%

 

 

 

 

 

 

GAAP income tax provision (benefit)

(4.1

)%

 

(7.6

)%

 

11.1

%

Adjustment for non-cash tax benefits/expenses and the effects of the Tax Act

5.6

%

 

8.8

%

 

(9.3

)%

Non-GAAP income tax provision

1.5

%

 

1.2

%

 

1.8

%

 

 

 

 

 

 

GAAP net loss

(2.7

)%

 

(5.7

)%

 

(14.2

)%

Total non-GAAP adjustments before income taxes

27.7

%

 

30.5

%

 

28.2

%

Less: total tax adjustments

5.6

%

 

8.8

%

 

(9.3

)%

Non-GAAP net income

19.4

%

 

16.0

%

 

23.3

%

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

 

Six Months Ended

 

June 30, 2019

 

June 30, 2018

GAAP gross profit

53.3

%

 

56.0

%

Stock-based compensation

0.2

%

 

0.1

%

Performance based equity

%

 

0.1

%

Amortization of purchased intangible assets

10.1

%

 

8.4

%

Depreciation of fixed asset step-up

%

 

0.1

%

Non-GAAP gross profit

63.7

%

 

64.7

%

 

 

 

 

GAAP R&D expenses

30.9

%

 

28.9

%

Stock-based compensation

(5.0

)%

 

(4.2

)%

Performance based equity

(0.6

)%

 

(1.1

)%

Depreciation of fixed asset step-up

%

 

(0.3

)%

Non-GAAP R&D expenses

25.3

%

 

23.3

%

 

 

 

 

GAAP SG&A expenses

27.5

%

 

24.3

%

Stock-based compensation

(4.3

)%

 

(3.2

)%

Performance based equity

(0.6

)%

 

(0.8

)%

Amortization of purchased intangible assets

(6.9

)%

 

(7.5

)%

Depreciation of fixed asset step-up

%

 

%

IP litigation costs, net

%

 

%

Non-GAAP SG&A expenses

15.6

%

 

12.7

%

 

 

 

 

GAAP restructuring expenses

1.4

%

 

0.9

%

Restructuring charges

(1.4

)%

 

(0.9

)%

Non-GAAP restructuring expenses

%

 

%

 

 

 

 

GAAP income (loss) from operations

(6.5

)%

 

2.0

%

Total non-GAAP adjustments

29.1

%

 

26.8

%

Non-GAAP income from operations

22.7

%

 

28.7

%

 

 

 

 

GAAP and non-GAAP interest and other income (expense), net

(3.7

)%

 

(3.5

)%

 

 

 

 

GAAP loss before income taxes

(10.1

)%

 

(1.5

)%

Total non-GAAP adjustments before income taxes

29.1

%

 

26.8

%

Non-GAAP income before income taxes

19.0

%

 

25.3

%

 

 

 

 

GAAP income tax provision (benefit)

(5.9

)%

 

4.4

%

Adjustment for non-cash tax benefits/expenses and the effects of the Tax Act

7.2

%

 

(2.6

)%

Non-GAAP income tax provision

1.3

%

 

1.8

%

 

 

 

 

GAAP net loss

(4.2

)%

 

(5.9

)%

Total non-GAAP adjustments before income taxes

29.1

%

 

26.8

%

Less: total tax adjustments

7.2

%

 

(2.6

)%

Non-GAAP net income

17.7

%

 

23.5

%

 

Contacts

MaxLinear, Inc. Investor Relations Contact:
Steven Litchfield
Tel: 949-333-0080
slitchfield@maxlinear.com

Release Summary

MaxLinear, Inc. announces Q2 2019 financial results.

Contacts

MaxLinear, Inc. Investor Relations Contact:
Steven Litchfield
Tel: 949-333-0080
slitchfield@maxlinear.com