Mindspeed Reports Preliminary Fiscal Second Quarter 2013 Results

  Mindspeed Reports Preliminary Fiscal Second Quarter 2013 Results

Business Wire

NEWPORT BEACH, Calif. -- April 30, 2013

Mindspeed Technologies, Inc. (NASDAQ: MSPD), a leading supplier of
semiconductor solutions for communications infrastructure applications, today
reported preliminary results for its fiscal second quarter of 2013. The
preliminary results are subject to change based on the conclusion of goodwill
and asset impairment testing being undertaken by Mindspeed. For the quarter
ended March 29, 2013, Mindspeed recorded net revenue of $35.4 million, a loss
per share of $0.02 on a non-GAAP basis, and a loss per share of $1.00 on a
GAAP basis (assuming a preliminary estimate of $33.5 million in goodwill and
asset impairment charges, as discussed below).

Revenue from high-performance analog (HPA) products was $15.7 million, or 44
percent of fiscal second quarter 2013 net revenue, and was approximately flat
in the same period year-over-year. Revenue from communications processors was
$17.1 million, or 49 percent of net revenue, and was approximately flat in the
same period year-over-year. Wireless infrastructure revenue contributed $2.6
million in the quarter, or approximately 7 percent of total revenue, and was
up 16 percent over the same period year-over-year.

Non-GAAP operating loss for the fiscal second quarter of 2013 was
approximately $541,000, compared to a non-GAAP operating loss of $4.9 million
for the same period in the prior fiscal year. GAAP operating loss for the
fiscal second quarter of 2013 was $39.4 million (assuming preliminarily
estimated goodwill and asset impairment charges), compared to a GAAP operating
loss of $13.8 million for the same period in the prior fiscal year. Non-GAAP
net loss for the fiscal second quarter of 2013 was $978,000, or $0.02 per
share, compared to a non-GAAP net loss of $5.2 million, or $0.14 per share,
for the same period in the prior fiscal year. GAAP net loss in the fiscal
second quarter of 2013 was $40.1 million (assuming preliminarily estimated
goodwill and asset impairment charges), or $1.00 per share, compared to a GAAP
net loss of $14.2 million, or $0.39 per share, for the same period in the
prior fiscal year.

In the fiscal second quarter of 2013, Mindspeed performed a review of its
goodwill, long-lived assets and indefinite-lived assets to determine if any of
these assets were impaired. As a result of this review, Mindspeed currently
estimates that it will record an impairment charge of $33.5 million in the
fiscal second quarter of 2013 related to its wireless infrastructure reporting
unit. Mindspeed expects the impairment testing to be complete prior to filing
its Form 10-Q for the fiscal second quarter of 2013. Final goodwill and asset
impairment charges as reflected in the Form 10-Q could differ materially from
Mindspeed’s preliminary estimates. Any change in goodwill and asset impairment
charges would be expected to result in a corresponding change in Mindspeed’s
GAAP net loss compared to the preliminary results reported today. Revenue,
non-GAAP metrics and our cash and cash equivalents balance will not change as
a result of any change in the company’s current estimates of goodwill and
asset impairment charges.

“While we were disappointed with our financial performance in the fiscal
second quarter, the weakness was primarily within the 3G wireless market. In
turn, we have had to reconsider our views of how and when that market will
develop. Our other product lines for high performance analog and
communications processors performed consistently with our expectations, and
4G/LTE met our goal of doubling in the quarter,” commented Raouf Y. Halim,
chief executive officer at Mindspeed. “We believe our diverse product families
for HPA, communications processors and wireless infrastructure are well
positioned in their respective markets, and we remain committed to maximizing
value to our customers, partners, employees and shareholders.”

Non-GAAP results exclude preliminary goodwill and asset impairment charges,
stock-based compensation and related payroll costs, restructuring charges,
acquisition-related costs, amortization of intangible assets and non-cash
interest expense on convertible senior notes, among other items.
Reconciliations of the non-GAAP measures to GAAP measures are included in the
accompanying financial data.

Outlook

Mindspeed forecasts total net product revenue in the fiscal third quarter of
2013 to be approximately flat versus the fiscal second quarter of 2013. The
company expects fiscal third quarter of 2013 non-GAAP gross margin to be
approximately 60 percent and anticipates non-GAAP operating expenses to be
approximately $21.5 million in the fiscal third quarter of 2013.

Fiscal Second Quarter 2013 Conference Call

Mindspeed will conduct a conference call announcing its fiscal second quarter
of 2013 results today at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. To
listen to the conference call via telephone, call 877-303-3204 (domestic) or
253-237-1154 (international); password: Mindspeed. To listen via the Internet,
please visit the Investors section of Mindspeed's web site at
http://www.mindspeed.com. A replay of the conference call will be available
via telephone for a period of five days, beginning one hour after the
conference call concludes by calling 855-859-2056 (domestic) or 404-537-3406
(international). Conference ID # 30341105 is required to access the replay.
The replay will also be available in the Investors section of Mindspeed's web
site at http://www.mindspeed.com for a period of thirty days after the call.

About Mindspeed Technologies

Mindspeed Technologies (NASDAQ: MSPD) is a leading provider of network
infrastructure semiconductor solutions to the communications industry. The
company's low-power system-on-chip (SoC) products are helping to drive video,
voice and data applications in worldwide fiber-optic networks and enable
advanced processing for 3G and long-term evolution (LTE) mobile networks. The
company's high-performance analog products are used in a variety of optical,
enterprise, industrial and video transport systems. Mindspeed's products are
sold to original equipment manufacturers (OEMs) around the globe.

To learn more, please visitwww.mindspeed.com. Company news and updates are
also posted at www.twitter.com/mindspeed.

Non-GAAP Measures

We provide non-GAAP measures as a supplement to financial results based on
GAAP. A detailed reconciliation of the non-GAAP results to the most directly
comparable GAAP measures is set forth below under the heading “Reconciliation
of Non-GAAP Measures to GAAP Measures.” Investors are encouraged to review the
accompanying press release reconciliations. We believe the presentation of
non-GAAP measures provides investors with additional insight into underlying
operating results and prospects for the future by excluding our preliminary
estimates of goodwill and asset impairments, as well as stock-based
compensation and related payroll costs, profit in acquired inventory,
amortization of acquired intangible assets, non-recurring legal and settlement
costs, employee separation costs, acquisition-related costs, integration
costs, revaluation of contingent consideration, purchase price adjustments,
restructuring charges and/or non-cash interest expense on our convertible
senior notes. We have historically reported similar financial measures and
believe that the inclusion of comparative numbers provides consistency in our
financial reporting.

We also discuss certain non-GAAP measures excluding patent sales as a
supplement to financial results based on GAAP. The sale of patents in the
fiscal first quarter of 2013 impacted our net revenue, gross margin, operating
income and net income.

We use non-GAAP gross margin, research and development expenses, selling,
general and administrative expenses, operating expenses, operating income,
other expense, net, net income and net income per share internally to evaluate
our operating performance and to determine certain components of management
compensation. In addition, we use these non-GAAP measures for internal budgets
and forecasts. We believe that these non-GAAP measures can be useful to
investors in allowing for greater transparency with respect to supplemental
information used by management in its financial and operational decision
making.

We exclude stock-based compensation and related payroll costs and non-cash
interest expense on our convertible senior notes from non-GAAP measures
because we believe that excluding these costs can enhance the understanding of
our performance. We exclude profit in acquired inventory to facilitate
comparability of gross profit between periods and to better reflect continuing
operations of the acquired company. We exclude employee separation costs,
non-recurring legal and settlement costs, restructuring charges,
acquisition-related costs, and integration costs because they include
significant discrete items that may not be indicative of our ongoing
operations or economic performance. Similarly, we have excluded our
preliminary estimates of goodwill and asset impairment charges related to our
wireless infrastructure reporting unit because they involve non-cash items
that relate to historic imputed valuations of the reporting unit’s business
and assets and are not indicative of its operating or economic performance.

We do not provide forward-looking GAAP measures or a reconciliation of the
forward-looking non-GAAP measures to GAAP measures because of our inability to
project restructuring charges, employee separation costs and stock-based
compensation and related payroll costs.

The non-GAAP financial measures we provide have certain limitations because
they do not reflect all of the costs associated with the operation of our
business as determined in accordance with GAAP. The non-GAAP measures are in
addition to, and not a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP and may be different from
non-GAAP measures used by other companies. We endeavor to compensate for the
limitations of these non-GAAP measures by providing GAAP financial statements,
descriptions of the reconciling items and a reconciliation of the non-GAAP
measures to the most directly comparable GAAP measures so that investors can
appropriately incorporate the non-GAAP measures and their limitations into
their analyses. For complete information on goodwill and asset impairments,
stock-based compensation and related payroll costs, profit in acquired
inventory, amortization of acquired intangible assets, non-recurring legal and
settlement costs, employee separation costs, restructuring charges,
acquisition-related costs, integration costs, revaluation of contingent
consideration and non-cash interest expense on our convertible senior notes,
please see our financial statements and “Management’s Discussion and Analysis
of Results of Operations and Financial Condition” that will be included in the
periodic report we expect to file with the SEC with respect to the financial
periods discussed herein.

Safe Harbor Statement

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. Such statements include
statements regarding our expectations, goals or intentions, including, but not
limited to: our market positions in HPA, communications processors and
wireless infrastructure; our current expectations for fiscal third quarter
2013 net product revenue, non-GAAP gross margin and non-GAAP operating
expenses; and our preliminary estimates of impairment charges related to our
wireless infrastructure reporting unit. These forward-looking statements are
based on management's current expectations, estimates, forecasts and
projections and are subject to risks and uncertainties that could cause actual
results and events to differ materially from those stated in the
forward-looking statements. In particular, we are continuing to conduct
testing relating to goodwill and asset impairment charges in our wireless
infrastructure reporting unit. The charges included in the financial
statements we have provided in this press release are preliminary and subject
to change. The final impairment charges reported in our Form 10-Q for the
fiscal second quarter of 2013 could differ materially from the preliminary
estimates that we announced today. Any increase in the amount of impairment
charges would result in a corresponding increase in our net losses for the
fiscal second quarter of 2013. In addition, our business is subject to
numerous risks and uncertainties that could adversely affect investors in our
securities, including fluctuations in our operating results and the potential
for future operating losses; loss of or diminished demand from one or more key
distributors; our ability to successfully develop and introduce new products;
pricing pressures; whether we continue to sustain losses and consume cash in
our operations; and the potential for intellectual property or other
litigation. Additional risks and uncertainties that could cause our actual
results to differ from those set forth in any forward-looking statements are
discussed in more detail under the caption “Risk Factors” in our Annual Report
on Form 10-K for the fiscal year ended September 28, 2012, our most recent
Quarterly Report on Form 10-Q and our future filings with the SEC.

MINDSPEED TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
                                                                      
                      Three Months Ended                       Six Months Ended
                      March 29,     December   March 30,       March 29,     March 30,
                                    28,
                       2013       2012        2012          2013        2012    
                                                                             
Net revenue:
Products              $ 35,385      $ 38,394   $ 34,858        $ 73,779      $ 68,700
Intellectual           -           6,000     501           6,000       591     
property
Total net revenue       35,385        44,394     35,359          79,779        69,291
Cost of goods sold     16,615      15,094    14,839        31,709      29,058  
(a), (b)
Gross margin           18,770      29,300    20,520        48,070      40,233  
                                                                             
Operating expenses:
Research and            16,106        15,597     17,740          31,703        32,748
development (a)
Selling, general
and administrative      10,183        9,598      13,088          19,781        22,410
(a)
Goodwill impairment     30,533        -          -               30,533        -
charge (b)
Impairment of
indefinite-lived        500           -          -               500           -
intangible assets
(b)
Acquisition-related     178           12         2,259           190           3,067
costs
Restructuring          676         1,572     1,272         2,248       1,272   
charges
Total operating        58,176      26,779    34,359        84,955      59,497  
expenses
                                                                             
Operating               (39,406 )     2,521      (13,839 )       (36,885 )     (19,264 )
(loss)/income
                                                                             
Other expense, net     561         1,373     262           1,934       348     
                                                                             
(Loss)/income           (39,967 )     1,148      (14,101 )       (38,819 )     (19,612 )
before income taxes
                                                                             
Provision for          154         71        134           225         222     
income taxes
                                                                             
Net (loss)/income     $ (40,121 )   $ 1,077    $ (14,235 )     $ (39,044 )   $ (19,834 )
                                                                             
Net (loss)/income
per share:
Basic                 $ (1.00   )   $ 0.03     $ (0.39   )     $ (0.98   )   $ (0.57   )
Diluted               $ (1.00   )   $ 0.03     $ (0.39   )     $ (0.98   )   $ (0.57   )
                                                                             
Weighted-average
number of shares
used in per share
computation:
Basic                   40,115        39,497     36,293          39,809        34,597
Diluted                 40,115        40,058     36,293          39,809        34,597
                                                                             
(a) Includes stock-based compensation expense and related payroll costs.
                                                                             
(b) As of March 29, 2013, we performed an interim evaluation of goodwill, definite-lived
intangible assets and indefinite-lived intangible assets as we believed there was an
impairment triggering circumstance which warranted an evaluation. This circumstance was
the slower than expected deployments of 3G small cell base stations. As a result, we
recorded a preliminarily estimated charge for the impairment of goodwill, definite-lived
intangible assets and indefinite-lived intangibles of $33.5 million related to our
wireless infrastructure reporting unit. The impairment charge for the definite-lived
intangible assets was included in cost of goods sold.


MINDSPEED TECHNOLOGIES, INC.
Reconciliation of Non-GAAP Measures to GAAP Measures
(unaudited, in thousands, except per share amounts)
                                                                      
                      Three Months Ended                       Six Months Ended
                      March 29,     December   March 30,       March 29,     March 30,
                                    28,
                       2013       2012        2012          2013        2012    
                                                                             
Reconciliation of
Non-GAAP Gross
Margin to GAAP
Gross Margin
Non-GAAP gross        $ 21,489      $ 29,604   $ 21,162        $ 51,093      $ 40,832
margin
Items excluded from
non-GAAP gross
margin:
Asset impairments       2,420         -          -               2,420         -
(b)
Stock-based
compensation and        52            57         42              109           (1      )
related payroll
costs
Profit in acquired      -             -          448             -             448
inventory (c)
Amortization of
acquired intangible    247         247       152           494         152     
assets (d)
Gross margin          $ 18,770     $ 29,300   $ 20,520       $ 48,070     $ 40,233  
                                                                             
Reconciliation of
Non-GAAP Research
and Development
Expenses to GAAP
Research and
Development
Expenses
Non-GAAP research
and development       $ 14,911      $ 14,500   $ 16,524        $ 29,411      $ 30,862
expenses
Items excluded from
non-GAAP research
and development
expenses:
Asset impairment        -             135        -               135           -
(f)
Stock-based
compensation and        1,008         950        1,216           1,958         1,886
related payroll
costs
Employee separation    187         12        -             199         -       
costs (e)
Research and
development           $ 16,106     $ 15,597   $ 17,740       $ 31,703     $ 32,748  
expenses
                                                                             
Reconciliation of
Non-GAAP Selling,
General and
Administrative
Expenses to GAAP
Selling, General
and Administrative
Expenses
Non-GAAP selling,
general and           $ 7,119       $ 7,656    $ 9,552         $ 14,775      $ 17,191
administrative
expenses
Items excluded from
non-GAAP selling,
general and
administrative
expenses:
Stock-based
compensation and        2,220         1,677      2,145           3,897         3,712
related payroll
costs
Amortization of
acquired intangible     104           104        65              208           65
assets (d)
Non-recurring legal
and settlement          774           117        -               891           -
costs
Employee separation     (14     )     44         -               30            (19     )
costs (e)
Integration costs      (20     )    -         1,326         (20     )    1,461   
(g)
Selling, general
and administrative    $ 10,183     $ 9,598    $ 13,088       $ 19,781     $ 22,410  
expenses
                                                                             
                                                                             
Reconciliation of
Non-GAAP Operating
Expenses to GAAP
Operating Expenses
Non-GAAP operating    $ 22,030      $ 22,156   $ 26,076        $ 44,186      $ 48,053
expenses
Items excluded from
non-GAAP operating
expenses:
Asset impairment        -             135        -               135           -
(f)
Goodwill impairment     30,533        -          -               30,533        -
charge (b)
Impairment of
indefinite-lived        500           -          -               500           -
intangible assets
(b)
Stock-based
compensation and        3,228         2,627      3,361           5,855         5,598
related payroll
costs
Acquisition-related     178           12         2,259           190           3,067
costs (h)
Restructuring           676           1,572      1,272           2,248         1,272
charges
Amortization of
acquired intangible     104           104        65              208           65
assets (d)
Non-recurring legal
and settlement          774           117        -               891           -
costs
Employee separation     173           56         -               229           (19     )
costs (e)
Integration costs      (20     )    -         1,326         (20     )    1,461   
(g)
Operating expenses    $ 58,176     $ 26,779   $ 34,359       $ 84,955     $ 59,497  
                                                                             
Reconciliation of
Non-GAAP Operating
(Loss)/Income to
GAAP Operating
(Loss)/Income
Non-GAAP operating    $ (541    )   $ 7,448    $ (4,914  )     $ 6,907       $ (7,221  )
(loss)/income
Items excluded from
non-GAAP operating
(loss)/income:
Asset impairments       2,420         135        -               2,555         -
(b), (f)
Goodwill impairment     30,533        -          -               30,533        -
charge (b)
Impairment of
indefinite-lived        500           -          -               500           -
intangible assets
(b)
Stock-based
compensation and        3,280         2,684      3,403           5,964         5,597
related payroll
costs
Acquisition-related     178           12         2,259           190           3,067
costs (h)
Restructuring           676           1,572      1,272           2,248         1,272
charges
Profit in acquired      -             -          448             -             448
inventory (c)
Amortization of
acquired intangible     351           351        217             702           217
assets (d)
Non-recurring legal
and settlement          774           117        -               891           -
costs
Employee separation     173           56         -               229           (19     )
costs (e)
Integration costs      (20     )    -         1,326         (20     )    1,461   
(g)
Operating             $ (39,406 )   $ 2,521    $ (13,839 )     $ (36,885 )   $ (19,264 )
(loss)/income


MINDSPEED TECHNOLOGIES, INC.
Reconciliation of Non-GAAP Measures to GAAP Measures
(unaudited, in thousands, except per share amounts)
                                                                         
                      Three Months Ended                          Six Months Ended
                      March 29,     December      March 30,       March 29,     March 30,
                                    28,
                       2013        2012        2012          2013        2012    
                                                                                
Reconciliation of
Non-GAAP Other
Expense, Net to
GAAP Other Expense,
Net
Non-GAAP other        $ 283         $ 1,197       $ 158           $ 1,480       $ 141
expense, net
Items excluded from
non-GAAP other
expense, net:
Purchase price          92            -             -               92            -
adjustments (k)
Revaluation of
contingent              -             (10     )     -               (10     )     -
consideration
Non-cash interest
expense on             186         186         104           372         207     
convertible senior
notes (i)
Other expense, net    $ 561        $ 1,373      $ 262          $ 1,934      $ 348     
                                                                                
Reconciliation of
Non-GAAP Net
(Loss)/Income to
GAAP Net
(Loss)/Income
Non-GAAP net          $ (978    )   $ 6,180       $ (5,206  )     $ 5,202       $ (7,584  )
(loss)/income
Items excluded from
non-GAAP net
(loss)/income:
Asset impairments       2,420         135           -               2,555         -
(b), (f)
Goodwill impairment     30,533        -             -               30,533        -
charge (b)
Impairment of
indefinite-lived        500           -             -               500           -
intangible assets
(b)
Stock-based
compensation and        3,280         2,684         3,403           5,964         5,597
related payroll
costs
Acquisition-related     178           12            2,259           190           3,067
costs (h)
Restructuring           676           1,572         1,272           2,248         1,272
charges
Profit in acquired      -             -             448             -             448
inventory (c)
Amortization of
acquired intangible     351           351           217             702           217
assets (d)
Non-recurring legal
and settlement          774           117           -               891           -
costs
Employee separation     173           56            -               229           (19     )
costs (e)
Integration costs       (20     )     -             1,326           (20     )     1,461
(g)
Purchase price          92            -             -               92            -
adjustments (k)
Revaluation of
contingent              -             (10     )     -               (10     )     -
consideration
Non-cash interest
expense on             186         186         104           372         207     
convertible senior
notes (i)
Net (loss)/income     $ (40,121 )   $ 1,077      $ (14,235 )     $ (39,044 )   $ (19,834 )
                                                                                
Reconciliation of
Non-GAAP Net
(Loss)/Income Per
Share to GAAP Net
(Loss)/Income Per
Share
Net (loss)/income
per share, basic:
Non-GAAP net          $ (0.02   )   $ 0.16        $ (0.14   )     $ 0.13        $ (0.22   )
(loss)/income
Adjustments            (0.98   )    (0.13   )    (0.25   )      (1.11   )    (0.35   )
Net (loss)/income     $ (1.00   )   $ 0.03       $ (0.39   )     $ (0.98   )   $ (0.57   )
                                                                                
Net income/(loss)
per share, diluted:
Non-GAAP net          $ (0.02   )   $ 0.14        $ (0.14   )     $ 0.13        $ (0.22   )
income/(loss)
Adjustments            (0.98   )    (0.11   )    (0.25   )      (1.11   )    (0.35   )
Net (loss)/income     $ (1.00   )   $ 0.03       $ (0.39   )     $ (0.98   )   $ (0.57   )
                                                                                
Reconciliation of
Shares used in
Non-GAAP diluted
shares to GAAP
diluted shares
Non-GAAP diluted        40,115        51,428        36,293          40,549        34,597
shares
The effect of
dilutive potential
common shares due      -           (11,370 )    -             (740    )    -       
to reporting
Non-GAAP net income
(j)
GAAP diluted shares    40,115      40,058      36,293        39,809      34,597  
                                                                                
                                                                                
                                                                                
(c) Profit in acquired inventory results from purchase-accounting adjustments which
increase the value of inventory acquired to its fair value. As the acquired inventory is
sold, the associated profit in acquired inventory increases cost of goods sold and reduces
gross profit.
                                                                                
(d) Amortization of acquired intangible assets reflects amortization expense on intangible
assets recorded in conjunction with the picoChip acquisition.
                                                                                
(e) Employee separation costs consist of severance benefits payable to certain former
employees of the Company as a result of organizational changes.
                                                                                
(f) Asset impairment includes the write-off of software tools no longer in use.
                                                                                
(g) Integration costs represent costs incurred related to the transition of picoChip to a
wholly owned subsidiary of Mindspeed.
                                                                                
(h) Acquisition-related costs are professional fees incurred related to the acquisition of
picoChip.
                                                                                
(i) Non-cash interest expense on convertible senior notes represents the amortization of
debt discounts recorded in accordance with FASB ASC 470-20, related to the Company's 6.50%
and 6.75% convertible senior notes.
                                                                                
(j) Diluted shares include shares that would be issued from the company's 6.5% and 6.75%
convertible notes, calculated using the "if converted" method.
                                                                                
(k) Purchase price adjustments consist of adjustments to amounts recognized in the picoChip
acquisition that occurred after the measurement period.


MINDSPEED TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited, in thousands)
                                                      
                                             March 29,   September 28,
                                             2013        2012
                                                         
ASSETS
Current Assets
Cash and cash equivalents                    $ 46,572    $   49,098
Receivables, net                               19,348        14,527
Inventories                                    11,006        10,482
Prepaid expenses and other current assets     4,309        10,497
Total current assets                           81,235        84,604
                                                         
Property, plant and equipment, net             17,194        16,031
Intangible assets, net                         32,986        35,351
Goodwill                                       26,529        57,110
Other assets                                  4,164        4,000
Total assets                                 $ 162,108   $   197,096
                                                         
                                                         
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable                             $ 10,150    $   9,262
Accrued compensation and benefits              5,510         6,401
Deferred income on sales to distributors       3,704         4,396
Deferred revenue                               1,459         2,338
Line of credit - short term                    5,521         5,511
Short term debt                                16,348        15,384
Contingent consideration                       1,866         1,876
Other current liabilities                     9,812        10,661
Total current liabilities                      54,370        55,829
                                                         
Line of credit – long term                     8,000         8,000
Long-term debt                                 44,174        44,765
Other liabilities                             7,107        6,767
Total liabilities                              113,651       115,361
                                                         
Stockholders' equity                          48,457       81,735
Total liabilities and stockholders' equity   $ 162,108   $   197,096


MINDSPEED TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
                                                                
                                                     Six Months Ended
                                                     March 29,     March 30,
                                                      2013        2012    
                                                                   
Cash Flows From Operating Activities
Net loss                                             $ (39,044 )   $ (19,834 )
Adjustments required to reconcile net loss to net
cash provided by/(used in) operating activities:
Depreciation and amortization of property, plant       3,108         3,108
and equipment
Amortization of license agreements                     1,391         1,240
Amortization of intangible assets                      702           217
Asset impairments                                      2,560         -
Restructuring charges                                  2,248         1,272
Goodwill impairment charge                             30,533        -
Impairment of indefinite-lived intangible assets       500           -
Stock-based compensation                               5,916         5,456
Inventory provisions                                   442           1,539
Amortization of debt discount on convertible debt      482           300
Other non-cash items, net                              (53     )     35
Changes in assets and liabilities, net of
acquisitions:
Receivables                                            (4,769  )     (7,632  )
Inventories                                            (966    )     3,779
Other assets, net                                      4,889         1,001
Accounts payable                                       (449    )     4,425
Deferred income on sales to distributors               (692    )     (471    )
Restructuring charges                                  (1,829  )     (1,349  )
Accrued compensation and benefits                      (899    )     (3,656  )
Accrued expenses and other current liabilities         (1,612  )     (1,024  )
Other liabilities, net                                198         (76     )
                                                                   
Net cash provided by/(used in) operating              2,656       (11,670 )
activities
                                                                   
Cash Flows From Investing Activities
Purchases of property, plant and equipment             (2,443  )     (2,334  )
Payments under license agreements                      (2,687  )     (7,341  )
Net cash paid for acquired companies                   -             (20,096 )
                                                                  
Net cash used in investing activities                 (5,130  )    (29,771 )
                                                                   
Cash Flows From Financing Activities
Payments made on capital lease obligations             (110    )     (281    )
Borrowings under term loan                             -             15,000
Borrowings under line of credit                        1,420         14,807
Payments made on line of credit                        (1,410  )     (1,317  )
Deferred financing costs                               -             (378    )
Repurchase of restricted stock for income tax          (858    )     (575    )
withholding
Proceeds from equity compensation programs             915           1,362
                                                                  
Net cash (used in)/provided by financing              (43     )    28,618  
activities
                                                                   
Effect of foreign currency exchange rates on cash      (9      )     (50     )
                                                                   
Net decrease in cash and cash equivalents              (2,526  )     (12,873 )
Cash and cash equivalents at beginning of period      49,098      45,227  
                                                                   
Cash and cash equivalents at end of period           $ 46,572     $ 32,354  


MINDSPEED TECHNOLOGIES, INC.
Selected Corporate Data
(unaudited, in thousands)
                                                                        
                      Three Months Ended                          Six Months Ended
                      March 29,    December       March 30,       March 29,    March 30,
                                   28,
                       2013       2012         2012          2013       2012    
                                                                               
                                                                               
Gross margin %          53.0   %     66.0   %       58.0    %       60.3   %     58.1    %
                                                                               
Cash (used
in)/provided by:
Operating             $ (2,162 )   $ 4,818    *   $ (11,324 )     $ 2,656      $ (11,670 )
activities
Investing               (1,830 )     (3,300 ) *     (27,090 )       (5,130 )     (29,771 )
activities
Financing               (539   )     496            28,063          (43    )     28,618
activities
Effect of foreign      (34    )    25           (56     )      (9     )    (50     )
currency on cash
Net
(decrease)/increase   $ (4,565 )   $ 2,039       $ (10,407 )     $ (2,526 )   $ (12,873 )
in cash
                                                                               
Depreciation          $ 1,555      $ 1,553        $ 1,595         $ 3,108      $ 3,108
Amortization of         1,083        1,010          814             2,093        1,457
intangible assets
Capital                 1,830        3,300          6,994           5,130        9,675
expenditures
Net cash paid for       -            -              20,096          -            20,096
acquired companies
                                                                               
Net revenue by
region:
Americas              $ 6,720      $ 11,510       $ 6,150         $ 18,230     $ 11,666
Europe                  3,356        3,454          2,829           6,810        4,687
Asia-Pacific           25,309     29,430       26,380        54,739     52,938  
Total net revenue     $ 35,385    $ 44,394      $ 35,359       $ 79,779    $ 69,291  
                                                                               
Net revenue by
product lines:
High-performance      $ 15,683     $ 19,190       $ 15,657        $ 34,873     $ 30,001
analog
Communications          17,135       14,630         16,988          31,765       36,214
processors
Wireless               2,567      4,574        2,213         7,141      2,485   
infrastructure
Total net product       35,385       38,394         34,858          73,779       68,700
revenue
Intellectual           -          6,000        501           6,000      591     
property
Total net revenue     $ 35,385    $ 44,394      $ 35,359       $ 79,779    $ 69,291  
                                                                               
                                                                               
* Cash provided by operating activities and cash used in investing activities have been
adjusted to exclude $2.2 million of property and equipment and licenses of intellectual
property from the corresponding amounts previously reported.

Contact:

Investor Relations Contact:
Mindspeed Technologies, Inc.
Kevin Trosian
VP, Corporate Development and Investor Relations
+1 949-579-3111
Investor.Relations@Mindspeed.com
 
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