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M/A-COM Technology Solutions Holdings, Inc. Reports First Quarter Fiscal Year 2013 Financial Results



M/A-COM Technology Solutions Holdings, Inc. Reports First Quarter Fiscal Year
2013 Financial Results

LOWELL, Mass., Jan. 29, 2013 (GLOBE NEWSWIRE) -- M/A-COM Technology Solutions
Holdings, Inc. (Nasdaq:MTSI) ("M/A-COM"), a leading supplier of high
performance analog semiconductor solutions, today reported its financial
results for the quarter ended December 28, 2012.

First Quarter Fiscal Year 2013 GAAP Results

  * Revenue was $75.0 million, compared to $74.6 million in the prior quarter;
  * Gross margin was 43.0 percent, compared to 42.3 percent in the prior
    quarter;
  * Operating margin was 15.7 percent, compared to 19.5 percent in the prior
    quarter;
  * Net income was $6.1 million, or $0.13 per diluted share, compared to a net
    income of $17.0 million, or $0.36 per diluted share in the prior quarter;
    and
  * Cash and cash equivalents totaled $92.6 million at December 28, 2012.

First Quarter Fiscal Year 2013 Non-GAAP Results

  * Gross margin was 44.0 percent, compared to 43.9 percent in the prior
    quarter;
  * Operating margin was 18.4 percent, compared to 20.5 percent in the prior
    quarter; and
  * Net income was $9.7 million, or $0.20 per diluted share, compared to net
    income of $10.4 million, or $0.22 per diluted share in the prior quarter.

Commenting on the results, John Croteau, President and Chief Executive Officer
of M/A-COM, stated, "I am pleased to report that we achieved sequential and
year-over-year revenue growth during our fiscal first quarter despite
macroeconomic headwinds across our end markets. Additionally, we delivered
gross margin and earnings per share results that were within our previously
announced guidance range."

Mr. Croteau noted, "During the quarter, our Automotive sales continued to
outperform, exceeding our original plans and prompting us to report it as a
separate and fourth end market. These sales are accretive to corporate
operating margins, and we expect them to remain stable and rewarding for years
to come. The strength in Automotive was offset by our Networks and Aerospace &
Defense markets, which were down sequentially primarily due to customers'
year-end inventory management, especially in Asia. That said, current backlog
for new Optoelectronics products will drive sequential growth in fiscal Q2,
with continued momentum moving into the second half of the year."

Business Outlook

M/A-COM currently expects second quarter of fiscal 2013 revenue to range
between $75 million and $80 million, non-GAAP gross margin between 44 and 45
percent, and non-GAAP earnings per diluted share between $0.20 and $0.24,
based on 48 million shares outstanding.

Conference Call

M/A-COM will host a conference call on Tuesday, January 29, 2013 at 5:00 p.m.
Eastern Time to discuss its first quarter financial results and business
outlook. Investors and analysts may join the conference call by dialing
1-877-837-3908 and providing the confirmation code 86205719. International
callers may join the teleconference by dialing 1-973-872-3000 and entering the
same confirmation code at the prompt. A telephone replay of the call will be
made available beginning two hours after the call and will remain available
for 3 business days. The replay number is 1-855-859-2056 with a pass code of
86205719. International callers should dial 1-404-537-3406 and enter the same
pass code at the prompt.

Additionally, this conference call will be broadcast live over the Internet
and can be accessed by all interested parties in the Investors section of
M/A-COM's website at http://www.macomtech.com. To listen to the live call,
please go to the Investors section of M/A-COM's website and click on the
conference call link at least fifteen minutes prior to the start of the
conference call. For those unable to participate during the live broadcast, a
replay will be available shortly after the call and will remain available for
approximately 30 days.

About M/A-COM Technology Solutions Holdings, Inc.

M/A-COM (www.macomtech.com) is a leading supplier of high performance analog
semiconductor solutions for use in radio frequency (RF), microwave, and
millimeter wave applications. Recognized for its broad portfolio of products,
M/A-COM serves diverse markets including CATV, wireless infrastructure,
optical communications, aerospace and defense, automotive, industrial,
medical, and mobile devices. M/A-COM builds on more than 60 years of
experience designing and manufacturing innovative product solutions for
customers worldwide.

Headquartered in Lowell, Massachusetts, M/A-COM is certified to the ISO9001
international quality standard and ISO14001 environmental management standard.
M/A-COM has design centers and sales offices throughout North America, Europe,
Asia and Australia.

The M/A-COM Technology Solutions Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=12438

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements based on M/A-COM
management's beliefs and assumptions and on information currently available to
our management. Forward-looking statements include, among others, information
concerning our business outlook and future results of operations, our future
expectations for our Automotive business and Optoelectronics products, and any
statements regarding future trends, business strategies, competitive position,
industry conditions and market opportunities. Forward-looking statements
include all statements that are not historical facts and generally may be
identified by terms such as "anticipates," "believes," "could," "estimates,"
"expects," "intends," "may," "plans," "potential," "predicts," "projects,"
"seeks," "should," "will," "would" or similar expressions and the negatives of
those terms.

Forward-looking statements contained in this press release reflect M/A-COM's
current views about future events and are subject to risks, uncertainties,
assumptions and changes in circumstances that may cause those events or our
actual activities or results to differ materially from those expressed in any
forward-looking statement. Although

M/A-COM believes that the expectations reflected in the forward-looking
statements are reasonable, it cannot and does not guarantee future events,
results, actions, levels of activity, performance or achievements. Readers are
cautioned not to place undue reliance on these forward-looking statements. A
number of important factors could cause actual results to differ materially
from those indicated by the forward-looking statements, including, among
others, the potential for continued weakness in our Networks market, lower
than expected demand in our Automotive market or any or all of our primary
markets or from any of our large OEM customers based on macro-economic
weakness or otherwise, the potential for a shift in the mix of products sold
in any period toward lower-margin products or a shift in the geographical mix
of our revenues, the relative success of our cost-savings initiatives, the
potential for inventory obsolescence and related write-offs, the potential for
defense spending cuts, program cancellations or sequestration, lower than
expected utilization and absorption in our manufacturing facilities, lack of
success or slower than expected success in our new product development
efforts, loss of business due to competitive factors, obsolescence, customer
program shifts or otherwise, lower than anticipated or slower than expected
customer acceptance of our new product introductions, the potential for
increased pricing pressure based on competitive factors, technology shifts or
otherwise, the impact of any acquisition, divestiture or restructuring
activity, the impact of supply shortages or other disruptions in our internal
or outsourced supply chain, the impact of any current or future litigation
instituted by or against us, and the impact of any claims of intellectual
property infringement or misappropriation, which could require us to pay
substantial damages for infringement, expend significant resources in
prosecuting or defending such matters or developing non-infringing technology,
incur material liability for royalty or license payments, or prevent us from
selling certain of our products, as well as those factors described in "Risk
Factors" in M/A-COM's filings with the Securities and Exchange Commission
(SEC), including its Annual Report on Form 10-K for the fiscal year ended
September 28, 2012 as filed with the SEC on November 28, 2012. M/A-COM
undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

In addition to GAAP reporting, M/A-COM provides investors with non-GAAP
financial reporting, including gross margin, operating margin, net income and
other data calculated on a non-GAAP basis. This non-GAAP information excludes
amortization of acquisition-related intangibles, share-based and other
non-cash compensation expense, restructuring charges, Optomai litigation
costs, changes in the carrying values of liabilities measured at fair value,
other non-cash expenses and certain income tax items. In addition, certain
cash flow activities are reported on a non-GAAP basis. Management does not
believe that the excluded items are reflective of M/A-COM's underlying
performance. The exclusion of these and other similar items from M/A-COM's
non-GAAP presentation should not be interpreted as implying that these items
are non-recurring, infrequent or unusual. M/A-COM believes this non-GAAP
financial information provides additional insight into M/A-COM's on-going
performance and has therefore chosen to provide this information to investors
for a more consistent basis of comparison and to help them evaluate the
results of M/A-COM's on-going operations and enable more meaningful period to
period comparisons. These non-GAAP measures are provided in addition to, and
not as a substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP
financial data is included in the supplemental financial data attached to this
press release.

                                                                   
M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share data)
                                                                   
                                                                   
                                       Three Months Ended
                                       December 28, September 28, December 30,
                                       2012         2012          2011
Revenue                                $75,014      $74,563       $73,035
Cost of revenue                        42,749       43,029        41,620
Gross profit                           32,265       31,534        31,415
Operating expenses:                                                
Research and development               9,823        7,960         9,891
Selling, general and administrative    10,867       11,730        11,278
Accretion of contingent consideration  (172)        (2,945)       169
Restructuring charges                  —            276           1,586
Total operating expenses               20,518       17,021        22,924
Income from operations                 11,747       14,513        8,491
Other income (expense):                                            
Accretion of common stock warrant      (2,026)      5,966         1,458
liability
Accretion of Class B conversion        —            —             13,620
liability
Interest expense                       (226)        (150)         (181)
Other income - related party           84           94            —
Total other income expense             (2,168)      5,910         14,897
 Income before income taxes            9,579        20,423        23,388
 Income tax provision                  3,471        3,465         1,346
 Net income                            6,108        16,958        22,042
Accretion of redeemable preferred                                  
stock and
participating stock dividends          —            (49)          (21,291)
 Net income attributable to common     $6,108       $16,909       $751
stockholders
                                                                   
Net income per share:                                              
Basic                                  $0.13        $0.37         $0.43
Diluted                                $0.13        $0.36         $0.20
                                                                   
Shares used to compute net income per                              
share:
Basic                                  45,511       45,235        1,747
Diluted                                46,870       46,913        3,753

                                                                      
M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(unaudited and in thousands, except per share data)
                                                                      
                                                                      
                       Three Months Ended
                       December 28, 2012 September 28, 2012 December 30, 2011
                       Amount  % Revenue Amount   % Revenue Amount   % Revenue
Gross profit - GAAP    $32,265 43.0%     $31,534  42.3%     $31,415  43.0%
Amortization expense   474     0.6       841      1.1       382      0.5
Non-cash compensation  288     0.4       335      0.4       36       —
expense
Gross profit -         $33,027 44.0%     $32,710  43.9%     $31,833  43.6%
non-GAAP
                                                                      
Research and           $9,823  13.1%     $7,960   10.7%     $9,891   13.5%
Development - GAAP
Non-cash compensation  (321)   (0.4)     (367)    (0.5)     (106)    (0.1)
expense
Research and           $9,502  12.7%     $7,593   10.2%     $9,785   13.4%
Development - non-GAAP
                                                                      
Selling, General and   $10,867 14.5%     $11,730  15.7%     $11,278  15.4%
Administrative - GAAP
Amortization expense   (315)   (0.4)     (545)    (0.7)     (258)    (0.4)
Non-cash compensation  (654)   (0.9)     (871)    (1.2)     (391)    (0.5)
expense
Optomai litigation     (195)   (0.3)     (484)    (0.6)     —        —
costs
Selling, General and
Administrative -       $9,703  12.9%     $9,830   13.2%     $10,629  14.6%
non-GAAP
                                                                      
Total operating        $20,518 27.4%     $17,021  22.8%     $22,924  31.4%
expenses - GAAP
Amortization expense   (315)   (0.4)     (545)    (0.7)     (258)    (0.4
Non-cash compensation  (975)   (1.3)     (1,238)  (1.7)     (497)    (0.7)
expense
Optomai litigation     (195)   (0.3)     (484)    (0.6)     —        —
costs
Accretion of
contingent             172     0.2       2,945    3.9       (169)    (0.2)
consideration
Restructuring charges  —       —         (276)    (0.4)     (1,586)  (2.2)
Total operating        $19,205 25.6%     $17,423  23.4%     $20,414  28.0%
expenses - non-GAAP
                                                                      
Income from operations $11,747 15.7%     $14,513  19.5%     $8,491   11.6%
- GAAP
Amortization expense   789     1.1       1,386    1.9       640      0.9
Non-cash compensation  1,263   1.7       1,573    2.1       533      0.7
expense
Optomai litigation     195     0.3       484      0.6       —        —
costs
Accretion of
contingent             (172)   (0.2)     (2,945)  (3.9)     169      0.2
consideration
Restructuring charges  —       —         276      0.4       1,586    2.2
Income from operations $13,822 18.4%     $15,287  20.5%     $11,419  15.6%
- non-GAAP
                                                                      
Net income - GAAP      $6,108  8.1%      $16,958  22.7%     $22,042  30.2%
Amortization expense   553     0.7       1,054    1.4       437      0.6
Non-cash compensation  885     1.2       1,196    1.6       364      0.5
expense
Optomai litigation     137     0.2       368      0.5       —        —
costs
Accretion of
contingent             (120)   (0.2)     (2,239)  (3.0)     115      0.2
consideration
Restructuring charges  —       —         210      0.3       1,083    1.5
Accretion of common
stock warrant          2,026   2.7       (5,966)  (8.0)     (1,458)  (2.0)
liability
Accretion of Class B   —       —         —        —         (13,620) (18.6)
conversion liability
Non-cash interest      69      0.1       54       0.1       40       0.1
expense
Tax adjustments        —       —         (1,202)  (1.6)     (1,287)  (1.8)
Net income - non-GAAP  $9,658  12.9%     $10,433  14.0%     $7,716   10.6%
                                                                      
Net cash from          $9,042                                         
operations - GAAP
Contingent             5,328                                          
consideration payment
Net cash from          $14,370                                        
operations - non-GAAP

                                                                     
M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS 
(unaudited and in thousands, except per share data)
                                                                     
                                                                     
                      Three Months Ended
                      December 28, 2012 September 28, 2012 December 30, 2011
                             Income per         Income per          Income per
                      Amount diluted    Amount  diluted    Amount   diluted
                             share              share               share
Net income - GAAP:                                                   
Net income            $6,108 $0.13      $16,958 $0.36      $22,042  $5.87
Accretion of
redeemable preferred
stock and             —      —          (49)    —          (21,291) (5.67)
participating stock
dividends
                                                                     
Net income
attributable to       $6,108 $0.13      $16,909 $0.36      $751     $0.20
common stockholders
                                                                     
Net income - non-GAAP $9,658 $0.20      $10,433 $0.22      $7,716   $0.19
Diluted shares - GAAP 46,870            46,913             3,753     
Convertible preferred —                 —                  37,748    
stock
Incremental stock
options, warrants,    776               513                —         
restricted stock and
units
Diluted shares -      47,646            47,426             41,501    
non-GAAP

                                                                  
M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS 
(unaudited and in thousands)
                                                                  
                                                                  
                                                    December 28, September 28,
                                                    2012         2012
ASSETS                                                            
Current assets:                                                   
Cash and cash equivalents                           $92,574      $84,528
Accounts receivable, net                            52,142       54,184
Inventories                                         58,629       57,459
Deferred income taxes and other current assets      13,347       16,863
Total current assets                                216,692      213,034
Property and equipment, net                         29,548       30,209
Goodwill and intangible assets, net                 21,977       22,766
Other assets                                        1,989        2,064
TOTAL ASSETS                                        $270,206     $268,073
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY                              
Current liabilities:                                              
Accounts payable, accrued liabilities and other     $38,610      $41,155
Deferred revenue                                    8,067        7,992
Current portion of contingent consideration         405          6,580
Total current liabilities                           47,082       55,727
Common stock warrant liability                      9,587        7,561
Deferred income taxes and other long-term           5,326        5,327
liabilities
Total liabilities                                   61,995       68,615
Commitments and contingencies                                     
Stockholders' equity                                208,211      199,458
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $270,206     $268,073

                                                              
M/A-COM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(unaudited and in thousands)
                                                              
                                                              
                                                Three Months Ended
                                                December 28, December 30,
                                                2012         2011
CASH FLOWS FROM OPERATING ACTIVITIES:                         
Net income                                      $6,108       $22,042
Non-cash adjustments                            6,413        (13,565)
Payment of contingent consideration             (5,328)      —
Change in operating assets and liabilities      1,849        (221)
Net cash from operating activities              9,042        8,256
CASH FLOWS FROM INVESTING ACTIVITIES --                       
Purchases of property and equipment             (1,580)      (4,503)
CASH FLOWS FROM FINANCING ACTIVITIES:                         
Payment of contingent consideration             (675)        (15,000)
Financing activities                            1,259        (1,313)
Net cash from financing activities              584          (16,313)
NET CHANGE IN CASH AND CASH EQUIVALENTS         8,046        (12,560)
CASH AND CASH EQUIVALENTS — Beginning of period 84,528       45,668
CASH AND CASH EQUIVALENTS — End of period       $92,574      $33,108

CONTACT: Company Contact:
         M/A-COM Technology Solutions Holdings, Inc.
         Conrad Gagnon
         Chief Financial Officer
         P: 978-656-2550
         E: Conrad.Gagnon@macomtech.com
        
         Investor Relations Contact:
         Shelton Group
         Leanne K. Sievers
         EVP, Investor Relations
         P: 949-224-3874
         E: lsievers@sheltongroup.com

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