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RF Micro Devices® Delivers 29% Sequential Growth In December Quarterly Revenue

RF Micro Devices® Delivers 29% Sequential Growth In December Quarterly Revenue

Company Expects To Outperform Underlying Markets In March Quarter

PR Newswire

GREENSBORO, N.C., Jan. 22, 2013

GREENSBORO, N.C., Jan.22, 2013 /PRNewswire/ --

Quarterly Highlights:

  oDecember 2012 Quarterly Revenue Increases Approximately 29% Sequentially
    To $271.2 Million
  oGAAP Gross Margin Expands To 32.0% And Non-GAAP Gross Margin Expands To
    35.5%
  oGAAP Diluted EPS Is ($0.01), And Non-GAAP Diluted EPS Is $0.08
  oRFMD Anticipates Revenue Of Approximately $250 Million To $255 Million And
    Non-GAAP EPS Of Approximately $0.04 To $0.05 In The March 2013 Quarter

RF Micro Devices, Inc. (Nasdaq GS: RFMD), a global leader in the design and
manufacture of high-performance radio frequency solutions, today reported
financial results for the Company's fiscal 2013 third quarter, ended December
29, 2012.

RFMD's third quarter revenue increased approximately 29% sequentially to
$271.2 million, versus $209.7 million in the prior quarter. The sequential
revenue growth reflected broad-based growth in RFMD's Cellular Products Group
(CPG) and growth in high-performance WiFi in RFMD's Multi-Market Products
Group (MPG).

On a GAAP basis, gross margin totaled 32.0%, quarterly operating income was
$5.7 million, and quarterly net loss was ($1.4) million, or ($0.01) per
diluted share. On a non-GAAP basis, gross margin expanded to 35.5%, quarterly
operating income totaled $26.8 million, and quarterly net income was $21.3
million, or $0.08 per diluted share. RFMD generated cash flow from operations
of $43.3 million during the quarter.

Strategic Highlights

  oRFMD delivered robust sequential revenue growth across a broad set of
    products and customers
  oRFMD acquired leading RF CMOS technology provider Amalfi Semiconductor to
    complement its product portfolio for entry-level handsets and smartphones
  oCPG grew revenue approximately 40% sequentially, with increasing content
    in the world's leading smartphones and reference designs
  oMPG grew WiFi revenue approximately 28% sequentially in support of
    multiple applications, including smartphones, tablets, enterprise
    equipment, and consumer products
  oMPG commenced shipments of high-performance 802.11ac WiFi front ends in
    support of a leading smartphone manufacturer

GAAP RESULTS
(in millions,
except
percentages     Q3 Fiscal   Q2 Fiscal   Change        Q3 Fiscal   Change
and per
share data)     2013        2013        vs. Q2        2012        vs. Q3
                                        2013                      2012
Revenue         $ 271.2     $ 209.7     29.3   %      $ 225.4     20.3   %
Gross Margin    32.0     %  31.7     %  0.3      ppt  28.2     %  3.8      ppt
Operating       $ 5.7       $ (10.2)    $ 15.9        $ (2.2)     $ 7.9
Income (Loss)
Net (Loss)      $ (1.4)     $ (16.5)    $ 15.1        $ (9.4)     $ 8.0
Income
Diluted EPS     $ (0.01)    $ (0.06)    $ 0.05        $ (0.03)    $ 0.02
NON-GAAP RESULTS
(excluding share-based compensation, amortization of intangibles, acquired
inventory step-up and revaluation, acquisition-related costs, intellectual
property rights (IPR) litigation costs, inventory revaluation resulting from
transfer of molecular beam epitaxy (MBE) operations, start-up costs, loss on
retirement of convertible subordinated notes, restructuring charges, (gain)
loss on PP&E, loss (income) from equity investment, non-cash interest expense
on convertible subordinated notes and tax adjustments)
(in millions,
except
percentages     Q3 Fiscal   Q2 Fiscal   Change        Q3 Fiscal   Change
and per
share data)     2013        2013        vs. Q2        2012        vs. Q3
                                        2013                      2012
Gross Margin    35.5     %  35.2     %  0.3      ppt  30.2     %  5.3      ppt
Operating       $ 26.8      $ 9.2       $ 17.6        $ 8.8       $ 18.0
Income
Net Income      $ 21.3      $ 7.8       $ 13.5        $ 5.1       $ 16.2
Diluted EPS     $ 0.08      $ 0.03      $ 0.05        $ 0.02      $ 0.06

Business Commentary and Financial Outlook

RFMD expects to outperform normal seasonality in the March 2013 quarter,
reflecting continued content gains and category expansion, combined with the
benefit of significant customer product ramps.

RFMD currently believes the demand environment in its end markets supports the
following expectations and projections for the March 2013 quarter:

  oRFMD expects quarterly revenue to decrease approximately 6-8% sequentially
    to approximately $250 million to $255 million
  oRFMD expects a non-GAAP tax rate of approximately 22%
  oRFMD expects non-GAAP EPS of approximately $0.04 to $0.05

RFMD's actual quarterly results may differ from these expectations and
projections, and such differences may be material.

Comments From Management

Bob Bruggeworth, president and CEO of RFMD, said, "RFMD's robust sequential
revenue growth in the December quarter reflected continued content gains,
category expansion, and growth in our addressable markets. Looking forward,
RFMD secured major design wins during the quarter, and we are executing on
multiple opportunities to increase our content generation-over-generation in
the world's leading smartphones and significantly outpace the growth rate of
the underlying markets." 

Dean Priddy, CFO and vice president of administration of RFMD, said, "RFMD's
December quarterly revenue increased by 29% quarter-over-quarter to $271.2
million and supported a near tripling in non-GAAP operating income
quarter-over-quarter to $26.8 million. On the balance sheet, RFMD generated
$43.3 million in cash flow from operations during the December quarter, versus
$1.9 million in the prior quarter, nearly offsetting the purchase in November
of Amalfi Semiconductor.

"In the March quarter, we expect our ability to capture an increasing amount
of semiconductor content within smart devices and reference designs will
enable RFMD to outperform normal seasonality in the March quarter."

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with
United States (U.S.) generally accepted accounting principles (GAAP), RFMD's
earnings release contains some or all of the following non-GAAP financial
measures: (i) non-GAAP gross profit and gross margin, (ii) non-GAAP operating
income (loss) and operating margin, (iii) non-GAAP net income (loss), (iv)
non-GAAP net income (loss) per diluted share, (v) non-GAAP operating expenses
(research and development, marketing and selling and general and
administrative), (vi) free cash flow, (vii), EBITDA, (viii) return on invested
capital (ROIC), and (ix) net debt or positive net cash. Each of these
non-GAAP financial measures is either adjusted from GAAP results to exclude
certain expenses or derived from multiple GAAP measures, which are outlined in
the "Reconciliation of GAAP to Non-GAAP Financial Measures" tables on pages 8
and 9 and the "Additional Selected Non-GAAP Financial Measures And
Reconciliations" tables on page 10.

In managing RFMD's business on a consolidated basis, management develops an
annual operating plan, which is approved by our Board of Directors, using
non-GAAP financial measures. In developing and monitoring performance against
this plan, management considers the actual or potential impacts on these
non-GAAP financial measures from actions taken to reduce unit costs with the
goal of increasing gross margin and operating margin. In addition, management
relies upon these non-GAAP financial measures to assess whether research and
development efforts are at an appropriate level, and when making decisions
about product spending, administrative budgets, and marketing programs. In
addition, we believe that non-GAAP financial measures provide useful
supplemental information to investors and enable investors to analyze the
results of operations in the same way as management. We have chosen to
provide this supplemental information to enable investors to perform
additional comparisons of operating results, to assess our liquidity and
capital position and to analyze financial performance excluding the effect of
expenses unrelated to operations, certain non-cash expenses and share-based
compensation expense, which may obscure trends in RFMD's underlying
performance.

We believe that these non-GAAP financial measures offer an additional view of
RFMD's operations that, when coupled with the GAAP results and the
reconciliations to corresponding GAAP financial measures, provide a more
complete understanding of RFMD's results of operations and the factors and
trends affecting RFMD's business. However, these non-GAAP financial measures
should be considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance with GAAP.

Our rationale for using these non-GAAP financial measures, as well as their
impact on the presentation of RFMD's operations, are outlined below:

Non-GAAP gross profit and gross margin. Non-GAAP gross profit and gross
margin exclude share-based compensation expense, amortization of intangible
assets and other non-cash expenses, including adjustments for restructuring
and integration charges and certain items associated with acquisitions (such
as inventory step-up and inventory revaluation). We believe that exclusion of
these costs in presenting non-GAAP gross profit and gross margin gives
management and investors a more effective means of evaluating RFMD's
historical performance and projected costs and the potential for realizing
cost efficiencies. We believe that the majority of RFMD's purchased
intangibles are not relevant to analyzing current operations because they
generally represent costs incurred by the acquired company to build value
prior to acquisition, and thus are effectively part of transaction costs
rather than ongoing costs of operating RFMD's business. In this regard, we
note that (i) once the intangibles are fully amortized, the intangibles will
not be replaced with cash costs and therefore, the exclusion of these costs
provides management and investors with better visibility into the actual costs
required to generate revenues over time, and (ii) although we set the
amortization expense based on useful life of the various assets at the time of
the transaction, we cannot influence the timing and amount of the future
amortization expense recognition once the lives are established. Similarly,
we believe that presentation of non-GAAP gross profit and gross margin and
other non-GAAP financial measures that exclude the impact of share-based
compensation expense assists management and investors in evaluating the
period-over-period performance of RFMD's ongoing operations because (i) the
expenses are non-cash in nature, and (ii) although the size of the grants is
within our control, the amount of expense varies depending on factors such as
short-term fluctuations in stock price volatility and prevailing interest
rates, which can be unrelated to the operational performance of RFMD during
the period in which the expense is incurred and generally is outside the
control of management. Moreover, we believe that the exclusion of share-based
compensation expense in presenting non-GAAP gross profit and gross margin and
other non-GAAP financial measures is useful to investors to understand the
impact of the expensing of share-based compensation to RFMD's gross profit and
gross margins and other financial measures in comparison to both prior periods
as well as to its competitors. We also believe that the adjustments to profit
and margin related to other non-cash expenses, including restructuring and
integration charges and certain items associated with acquisitions (such as
inventory step-up and inventory revaluation), do not constitute part of RFMD's
ongoing operations and therefore the exclusion of these costs provides
management and investors with better visibility into the actual costs required
to generate revenues over time and gives management and investors a more
effective means of evaluating our historical and projected performance. We
believe disclosure of non-GAAP gross profit and gross margin has economic
substance because the excluded expenses do not represent continuing cash
expenditures and, as described above, we have little control over the timing
and amount of the expenses in question.

Non-GAAP operating income (loss) and operating margin. Non-GAAP operating
income (loss) and operating margin exclude share-based compensation expense,
amortization of intangible assets, other non-cash expenses, restructuring and
integration charges, certain items associated with acquisitions (such as
inventory step-up and inventory revaluation), intellectual property rights
(IPR) litigation costs, (gain) loss on PP&E and start-up costs. We believe
that presentation of a measure of operating income (loss) and operating margin
that excludes amortization of intangible assets and share-based compensation
expense is useful to both management and investors for the same reasons as
described above with respect to our use of non-GAAP gross profit and gross
margin. We believe that other non-cash expenses, restructuring and
integration charges, certain items associated with acquisitions (such as
inventory step-up and inventory revaluation), IPR litigation costs, (gain)
loss on PP&E and start-up costs do not constitute part of RFMD's ongoing
operations and therefore, the exclusion of these costs provides management and
investors with better visibility into the actual costs required to generate
revenues over time and gives management and investors a more effective means
of evaluating our historical and projected performance. We believe disclosure
of non-GAAP operating income (loss) and operating margin has economic
substance because the excluded expenses are either unrelated to operations or
do not represent current cash expenditures.

Non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share.
Non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share
exclude the effects of share-based compensation expense, amortization of
intangible assets, other non-cash expenses, restructuring and integration
charges, certain items associated with acquisitions (such as inventory
step-up, inventory revaluation and transaction costs), IPR litigation costs,
(gain) loss on PP&E, start-up costs, loss on retirement of convertible
subordinated notes, non-cash interest expense on convertible subordinated
notes, loss (income) from equity investment and also reflect an adjustment of
income taxes for cash basis. We believe that presentation of measures of net
income (loss) and net income (loss) per diluted share that exclude these items
is useful to both management and investors for the reasons described above
with respect to non-GAAP gross profit and gross margin and non-GAAP operating
income (loss) and operating margin. We believe disclosure of non-GAAP net
income (loss) and non-GAAP net income (loss) per diluted share has economic
substance because the excluded expenses are either unrelated to operations or
do not represent current cash expenditures.

Non-GAAP research and development, marketing and selling and general and
administrative expenses. Non-GAAP research and development, marketing and
selling and general and administrative expenses exclude share-based
compensation expense, amortization of intangible assets, other non-cash
expenses, IPR litigation costs and restructuring and integration charges. We
believe that presentation of measures of these operating expenses that exclude
amortization of intangible assets and share-based compensation expense is
useful to both management and investors for the same reasons as described
above with respect to our use of non-GAAP gross profit and gross margin. We
believe that other non-cash expenses, IPR litigation costs, and restructuring
and integration charges do not constitute part of RFMD's ongoing operations
and therefore, the exclusion of these costs provides management and investors
with better visibility into the actual costs required to generate revenues
over time and gives management and investors a more effective means of
evaluating our historical and projected performance. We believe disclosure of
these non-GAAP operating expenses has economic substance because the excluded
expenses are either unrelated to operations or do not represent current cash
expenditures.

Free cash flow. RFMD defines free cash flow as net cash provided by operating
activities during the period minus property and equipment expenditures made
during the period. We use free cash flow as a supplemental financial measure
in our evaluation of liquidity and financial strength. Management believes
that this measure is useful as an indicator of our ability to service our
debt, meet other payment obligations and make strategic investments. Free cash
flow should be considered in addition to, rather than as a substitute for, net
income as a measure of our performance and net cash provided by operating
activities as a measure of our liquidity. Additionally, our definition of free
cash flow is limited, in that it does not represent residual cash flows
available for discretionary expenditures due to the fact that the measure does
not deduct the payments required for debt service and other contractual
obligations. Therefore, we believe it is important to view free cash flow as a
measure that provides supplemental information to our entire statement of cash
flows.

EBITDA. RFMD defines EBITDA as earnings before interest expense and interest
income, income tax expense (benefit), depreciation and intangible
amortization. Management believes that this measure is useful to evaluate our
ongoing operations and as a general indicator of our operating cash flow (in
conjunction with a cash flow statement which also includes among other items,
changes in working capital and the effect of non-cash charges). The amounts
shown for EBITDA as presented herein differ from the amounts calculated under
the definition of EBITDA used in our equipment term loan agreement. The
definition of EBITDA as used in the loan agreement is further adjusted for
certain cash and non-cash charges, including stock compensation expense, and
is used to determine compliance with financial covenants.

Non-GAAP ROIC. Return on invested capital (ROIC) is a non-GAAP financial
measure that management believes provides useful supplemental information for
management and the investor by measuring the effectiveness of our operations'
use of invested capital to generate profits. We use ROIC to track how much
value we are creating for our shareholders. Non-GAAP ROIC is calculated by
dividing annualized non-GAAP operating income, net of cash taxes, by average
invested capital. Average invested capital is calculated by subtracting the
average of the beginning balance and the ending balance of current liabilities
(excluding the current portion of long-term debt and other short-term
financings) from the average of the beginning balance and the ending balance
of net accounts receivable, inventories, other current assets, net property
and equipment and a cash amount equal to seven days of quarterly revenue.

Net debt or positive net cash. Net debt or positive net cash is defined as
unrestricted cash, cash equivalents and short-term investments minus the
principal amount of RFMD's convertible subordinated notes. Management believes
that net debt or positive net cash provides useful information regarding the
level of RFMD's indebtedness by reflecting cash and investments that could be
used to repay debt.

Limitations of non-GAAP financial measures. The primary material limitations
associated with the use of non-GAAP gross profit and gross margin, non-GAAP
operating expenses, non-GAAP operating income (loss) and operating margin,
non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, free
cash flow, EBITDA, non-GAAP ROIC and net debt or positive net cash, as
compared to the most directly comparable GAAP financial measures of gross
profit and gross margin, operating expenses, operating income (loss), net
income (loss), net income (loss) per diluted share and net cash provided by
operating activities are (i) they may not be comparable to similarly titled
measures used by other companies in RFMD's industry, and (ii) they exclude
financial information that some may consider important in evaluating our
performance. We compensate for these limitations by providing full disclosure
of the differences between these non-GAAP financial measures and the
corresponding GAAP financial measures, including a reconciliation of the
non-GAAP financial measures to the corresponding GAAP financial measures, to
enable investors to perform their own analysis of our gross profit and gross
margin, operating expenses, operating income (loss), net income (loss), net
income (loss) per diluted share and net cash provided by operating activities.

RF Micro Devices will conduct a conference call at 5:00 p.m. EST today to
discuss today's press release. The conference call will be broadcast live
over the Internet and can be accessed by any interested party at
http://www.rfmd.com (under Investors"). A telephone playback of the
conference call will be available approximately one hour after the call's
completion by dialing 303-590-3030 and entering pass code 4587278#.

About RFMD

RF Micro Devices, Inc. (Nasdaq: RFMD) is a global leader in the design and
manufacture of high-performance radio frequency solutions. RFMD's products
enable worldwide mobility, provide enhanced connectivity and support advanced
functionality in the mobile device, wireless infrastructure, wireless local
area network (WLAN or WiFi), cable television (CATV)/broadband, Smart
Energy/advanced metering infrastructure (AMI), and aerospace and defense
markets. RFMD is recognized for its diverse portfolio of semiconductor
technologies and RF systems expertise and is a preferred supplier to the
world's leading mobile device, customer premises and communications equipment
providers.

Headquartered in Greensboro, N.C., RFMD is an ISO 9001-, ISO 14001-, and
ISO/TS 16949-certified manufacturer with worldwide engineering, design, sales
and service facilities. RFMD is traded on the NASDAQ Global Select Market
under the symbol RFMD. For more information, please visit RFMD's web site at
www.rfmd.com.

This press release includes "forward-looking statements" within the meaning of
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, but are not limited to,
statements about our plans, objectives, representations and contentions and
are not historical facts and typically are identified by use of terms such as
"may," "will," "should," "could," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "potential," "continue" and similar words, although
some forward-looking statements are expressed differently. You should be aware
that the forward-looking statements included herein represent management's
current judgment and expectations, but our actual results, events and
performance could differ materially from those expressed or implied by
forward-looking statements. We do not intend to update any of these
forward-looking statements or publicly announce the results of any revisions
to these forward-looking statements, other than as is required under the
federal securities laws. RF Micro Devices' business is subject to numerous
risks and uncertainties, including variability in operating results, risks
associated with the impact of global macroeconomic and credit conditions on
our business and the business of our suppliers and customers, our reliance on
a few large customers for a substantial portion of our revenue, the rate of
growth and development of wireless markets, our ability to bring new products
to market, our reliance on inclusion in third party reference designs for a
portion of our revenue, our ability to manage channel partner and customer
relationships, risks associated with the operation of our wafer fabrication,
molecular beam epitaxy, assembly and test and tape and reel facilities, our
ability to complete acquisitions and integrate acquired companies, including
the risk that we may not realize expected synergies from our business
combinations, our ability to attract and retain skilled personnel and develop
leaders, variability in production yields, raw material costs and
availability, our ability to reduce costs and improve margins in response to
declining average selling prices, our ability to adjust production capacity in
a timely fashion in response to changes in demand for our products, dependence
on gallium arsenide (GaAs) for the majority of our products, dependence on
third parties, and substantial reliance on international sales and operations.
These and other risks and uncertainties, which are described in more detail in
RF Micro Devices' most recent Annual Report on Form 10-K and other reports and
statements filed with the Securities and Exchange Commission, could cause
actual results and developments to be materially different from those
expressed or implied by any of these forward-looking statements.

RF MICRO DEVICES® and RFMD® are trademarks of RFMD, LLC. All other trade
names, trademarks and registered trademarks are the property of their
respective owners.

[Tables To Follow]



RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                        Three Months Ended          Nine Months Ended
                        December29,  December31,  December29,  December31,
                        2012          2011          2012          2011
Revenue                 $  271,213    $  225,425    $  683,544    $  683,427
Costs and expenses:
Cost of goods sold      184,403       161,864       465,945       451,305
Research and            46,509        37,455        130,053       110,999
development
Marketing and selling   16,906        16,047        50,022        46,901
General and             15,746        12,238        47,734        38,396
administrative
Other operating expense 1,969         5             7,127         136
Total costs and         265,533       227,609       700,881       647,737
expenses
Income (loss) from      5,680         (2,184)       (17,337)      35,690
operations
Other expense           (1,173)       (2,084)       (7,625)       (8,013)
Income (loss) before    $  4,507      $  (4,268)    $  (24,962)   $  27,677
income taxes
Income tax expense      (5,950)       (5,125)       (12,076)      (13,829)
Net (loss) income       $  (1,443)    $  (9,393)    $  (37,038)   $  13,848
Net (loss) income per   $  (0.01)     $  (0.03)     $  (0.13)     $  0.05
share, diluted
Weighted average
outstanding diluted     279,523       277,192       277,562       283,079
shares



RF MICRO DEVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except percentages and per share data)
(Unaudited)
                                Three Months Ended
                                December29,  September 29, 2012  December31,
                                2012                              2011
GAAP operating income (loss)    $  5,680      $    (10,150)       $  (2,184)
Share-based compensation        8,832         9,546               6,409
expense
Amortization of intangible      6,456         4,752               4,598
assets
Acquired inventory step-up and  2,558         —                   —
revaluation
Acquisition-related costs and   2,019         —                   —
restructuring expenses
IPR litigation costs            1,173         2,775               —
Inventory revaluation resulting —             2,436               —
from transfer of MBE operations
Other expenses (income)
(restructuring, (gain) loss on  56            (114)               5
PP&E, start-up costs and other
expenses)
Non-GAAP operating income      26,774        9,245               8,828
GAAP net (loss) income          (1,443)       (16,456)            (9,393)
Share-based compensation        8,832         9,546               6,409
expense
Amortization of intangible      6,456         4,752               4,598
assets
Acquired inventory step-up and  2,558         —                   —
revaluation
Acquisition-related costs and   2,019         —                   —
restructuring expenses
IPR litigation costs            1,173         2,775               —
Inventory revaluation resulting —             2,436               —
from transfer of MBE operations
Other expenses (income)
(restructuring, (gain) loss on  56            (114)               5
PP&E, start-up costs and other
expenses)
Loss on retirement of           —             2,034               20
convertible subordinated notes
Non-cash interest expense on    1,230         1,457               2,388
convertible subordinated notes
Loss (income) from equity       8             (10)                (497)
investment
Tax adjustments                 391           1,406               1,555
Non-GAAP net income             $  21,280     $    7,826          $  5,085
GAAP weighted average           279,523       278,105             277,192
outstanding diluted shares
 Diluted share-based      3,763         3,218               6,726
awards
Non-GAAP weighted average       283,286       281,323             283,918
outstanding diluted shares
Non-GAAP net income per share,  $  0.08       $    0.03           $  0.02
diluted



RF MICRO DEVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except percentages)
(Unaudited)
                          Three Months Ended
                          December29,      September29,     December31,
                          2012              2012              2011
GAAP gross margin         $ 86,810  32.0 %  $ 66,535  31.7 %  $ 63,561  28.2 %
Adjustment for intangible 5,147     1.9  %  3,682     1.8  %  3,515     1.6  %
amortization
Adjustment for            1,578     0.6  %  1,201     0.6  %  993       0.4  %
share-based compensation
Acquisition inventory     2,558     1.0  %  —         —       —         —
step-up and revaluation
Inventory revaluation
resulting from transfer   —         —       2,436     1.1  %  —         —
of MBE operations
Other expenses            107       —       —         —       —         —
Non-GAAP gross margin     $ 96,200  35.5 %  $ 73,854  35.2 %  $ 68,069  30.2 %

                                                            Three Months Ended
Non-GAAP Operating Income                                   December29, 2012
(as a percentage of sales)
GAAP operating income                                       2.1        %
Share-based compensation expense                            3.3
Amortization of intangible assets                           2.4
Acquired inventory step-up and revaluation                  1.0
Acquisition-related costs and restructuring expenses        0.7
IPR litigation costs                                        0.4
Other expenses (restructuring, (gain) loss on PP&E,         —
start-up costs and other expenses)
Non-GAAP operating income                                   9.9        %



RF MICRO DEVICES, INC. AND SUBSIDIARIES
ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(Unaudited)
                                     Three Months Ended
                                     December29,  September29,  December31,
                                     2012          2012           2011
GAAP research and development        $  46,509     $   41,968     $  37,455
expense
Less:
Share-based compensation expense     1,973         1,569          1,515
Amortization of intangible assets    —             —              13
Non-GAAP research and development    $  44,536     $   40,399     $  35,927
expense
                                     Three Months Ended
                                     December29,  September29,  December31,
                                     2012          2012           2011
GAAP marketing and selling expense   $  16,906     $   16,238     $  16,047
Less:
Share-based compensation expense     1,195         1,171          1,339
Amortization of intangible assets    1,309         1,070          1,070
Non-GAAP marketing and selling       $  14,402     $   13,997     $  13,638
expense
                                     Three Months Ended
                                     December29,  September29,  December31,
                                     2012          2012           2011
GAAP general and administrative      $  15,746     $   18,593     $  12,238
expense
Less:
Share-based compensation expense     4,086         5,605          2,562
IPR litigation costs                 1,173         2,775          —
Non-GAAP general and administrative  $  10,487     $   10,213     $  9,676
expense

Free Cash Flow ^ (1)                      Three Months Ended
                                          December 29, 2012
(In millions)
Net cash provided by operating activities $     43.3
Purchases of property and equipment       (13.7)
Free cash flow                            $     29.6

(1) Free Cash Flow is calculated as net cash provided by operating activities
minus property and equipment expenditures.



RF MICRO DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                                           December29, 2012  March31, 2012
ASSETS
Current assets:
Cash and cash equivalents                  $    113,665       $   135,524
Short-term investments                     75,976             164,863
Accounts receivable, net                   145,498            100,446
Inventories                                159,021            130,372
Other current assets                       40,397             38,162
Total current assets                       534,557            569,367
Property and equipment, net                170,932            197,921
Goodwill                                   103,663            95,628
Intangible assets, net                     101,269            65,141
Long-term investments                      4,186              4,325
Other non-current assets                   31,818             32,202
Total assets                               $    946,425       $   964,584
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities   $    188,923       $   110,580
Current portion of long term debt, net     —                  32,759
Other current liabilities                  6,717              4,846
Total current liabilities                  195,640            148,185
Long-term debt, net                        80,769             118,949
Other long-term liabilities                23,029             25,119
Total liabilities                          299,438            292,253
Shareholders' equity                       646,987            672,331
Total liabilities and shareholders' equity $    946,425       $   964,584



SOURCE RF Micro Devices, Inc.

Website: http://www.rfmd.com
Contact: At RFMD®: Doug DeLieto, VP, Investor Relations, +1-336-678-7088, Dean
Priddy, CFO, +1-336-678-7975; At The Financial Relations Board: Joe Calabrese,
Vice President, +1-212-827-3772
 
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