Warrant Liability Charges- are associated with market to market fair value adjustments which are largely based on the value of our common stock, which may vary from period to period. We believe these amounts are not correlated to future business operations and including such charges does not reflect our ongoing operations.
Non Cash Interest Expense - includes amounts associated with the amortization of certain fees associated with the establishment of our Credit Agreement that are being amortized over the life of the agreement. We believe these amounts are non-cash in nature and not correlated to future business operations and including such charges does not reflect our ongoing operations.
Litigation Costs - includes gains, losses and expenses related to the resolution of other-than-ordinary-course threatened and actually filed lawsuits and other-than-ordinary-course contractual disputes and legal matters. We exclude these gains and losses because they are not considered by management in making operating decisions. We believe such gains, losses and expenses do not necessarily reflect the performance of our ongoing operations for the period in which such charges are recognized and the amount of such gains or losses and expenses can vary significantly between companies and make comparisons less reliable.
Acquisition and Integration Related Costs - includes such items as professional fees incurred in connection with pre-acquisition and integration specific activities, post-acquisition employee retention amounts, contingent consideration adjustments, severance and other amounts accrued or paid to terminated employees of acquired businesses, costs including salaries incurred which are not expected to have a continuing contribution to operations or are expected to have a diminishing contribution during the integration period and the amortization of the fair market step-up value of acquired inventory and fixed assets. We believe the exclusion of these items is useful in providing management a basis to evaluate ongoing operating activities and strategic decision making.
Discontinued Operations excluding consulting income - includes the profit and loss amounts of discontinued operations, with the exception of consulting income associated with a consulting agreement we entered into at the time of our Automotive business divestiture. We believe excluding gains and losses associated with historically divested businesses from our net income provides management with a comparable basis to our current ongoing operating activities. We do not exclude the consulting agreement income classified as discontinued operations because management views this income as part of our ongoing operations and correlated with future operations.
Other - includes historical amounts primarily associated with the impairment of minority investment of $3.5 million during the second fiscal quarter of 2015 as well as income associated with transition service agreements entered in connection with divested businesses. We believe these amounts are not correlated to future business operations and including such charges does not reflect our ongoing operations.
Tax Effect of Non-GAAP Adjustments - adjustments to arrive at an estimate of our Adjusted Non-GAAP cash tax rate associated with our Adjusted Non-GAAP income over a period of time. These adjustments have resulted in an estimated Adjusted Non-GAAP cash tax rate of 15% and 18% for our fiscal years 2016 and 2015, respectively. We believe it is beneficial for our management to review Adjusted Non-GAAP cash tax rate on a consistent basis over periods of time. Certain items including many of the items noted above may have a significant impact on our US GAAP tax expense and associated tax rate during a specific period of time.
Adjusted EBITDA - is a calculation that adds interest income taxes and depreciation expense to our Adjusted Non-GAAP Net Income. Adjusted EBITDA is a measure that management reviews and utilizes for operational analysis purposes. We believe competitors and others in the financial industry utilize this Non-GAAP measure for analysis purposes.
Free Cash Flow - is a calculation that starts with cash flow from operating activities and reduces this amount by our capital expenditures in the applicable period. Free Cash Flow is a measure that management reviews and utilizes for cash flow analysis purposes. We believe competitors and others in the financial industry utilize this Non-GAAP measure for analysis purposes.
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
|Three Months Ended||Nine Months Ended|
|Cost of revenue||68,326||68,054||56,562||191,836||161,416|
|Research and development||26,064||26,203||20,965||77,589||60,186|
|Selling, general and administrative||35,866||34,617||26,592||105,169||80,067|
|Total operating expenses||63,782||72,676||48,115||196,623||141,224|
|Income (loss) from operations||10,180||(7,151||)||4,381||3,182||5,405|
|Other income (expense):|
|Warrant liability gain (expense)||15,339||(4,201||)||546||(3,741||)||(15,671||)|
|Interest expense, net||(4,363||)||(4,408||)||(4,505||)||(13,117||)||(13,951||)|
|Other income (expense), net||16||(81||)||(225||)||36||(1,227||)|
|Total other income (expense)||10,992||(8,690||)||(4,184||)||(16,822||)||(30,849||)|
|Income (loss) before income taxes||21,172||(15,841||)||197||(13,640||)||(25,444||)|
|Income tax benefit||(181||)||(3,796||)||(1,559||)||(6,178||)||(6,059||)|
|Income (loss) from continuing operations||21,353||(12,045||)||1,756||(7,462||)||(19,385||)|
|Income from discontinued operations||1,199||1,396||6,271||3,794||13,568|
|Net income (loss)||$||22,552||$||(10,649||)||$||8,027||$||(3,668||)||$||(5,817||)|
|Net income (loss) per share:|
|Income (loss) from continuing operations||$||0.40||$||(0.23||)||$||0.03||$||(0.14||)||$||(0.38||)|
|Income from discontinued operations||0.02||0.03||0.12||0.07||0.27|
|Income (loss) per share - basic||$||0.42||$||(0.20||)||$||0.15||$||(0.07||)||$||(0.12||)|
|Income (loss) from continuing operations||$||0.11||$||(0.23||)||$||0.02||$||(0.14||)||$||(0.38||)|
|Income from discontinued operations||0.02||0.03||0.11||0.07||0.27|
|Income (loss) per share - diluted||$||0.13||$||(0.20||)||$||0.14||$||(0.07||)||$||(0.12||)|
|Shares - Basic||53,516||53,228||53,098||53,253||50,433|
|Shares - Diluted||55,288||53,228||55,174||53,253||50,433|
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
|Cash and cash equivalents||$||66,842||$||122,312|
|Short term investments||23,726||39,557|
|Accounts receivable, net||91,962||83,950|
|Deferred income taxes (1)||—||31,431|
|Income tax receivable||16,123||15,854|
|Prepaids and other current assets||12,353||11,172|
|Total current assets||328,084||384,219|
|Property and equipment, net||100,452||83,759|
|Goodwill and intangible assets, net||388,700||337,012|
|Deferred income taxes||83,900||48,239|
|Other long-term assets||12,015||13,022|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Current portion of debt obligations||$||4,513||$||4,058|
|Accounts payable, accrued liabilities and other||73,624||67,418|
|Total current liabilities||78,137||71,476|
|Long-term debt obligations, less current portion||340,581||340,504|
|Common stock warrant liability||25,563||21,822|
|Deferred income taxes||14,293||—|
|Long-term liabilities and other||7,945||7,916|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||913,151||$||866,251|