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TriQuint Announces First Quarter 2014 Results

  TriQuint Announces First Quarter 2014 Results  Business Wire  HILLSBORO, Ore. -- April 23, 2014  TriQuint Semiconductor, Inc. (NASDAQ: TQNT), a leading RF solutions supplier and technology innovator, announces its financial results for the quarter ended March29, 2014, including the following highlights:    *Revenue was $177.6 million with a strong book-to-bill ratio of 1.22   *GAAP gross margin was 33% and net loss was $(0.12) per share   *Non-GAAP gross margin was 35% and net loss was $(0.06) per share   *Received orders for 4th S-Band radar system   *Strong book-to-bill of 1.74 for discrete premium filters   *New MMPAs with envelope tracking captured design wins in Korea & China   *Introduced 130 Watt Spatium^TM Solid State Power Amplifier for Ka-Band     Satellite Communications   *Base station product revenue more than doubled from Q1 2013 ^1   *Received Supplier Excellence Award for Outstanding Performance from Hughes     Network Systems, LLC  Commenting on the results, Ralph Quinsey, President and Chief Executive Officer, stated, “Better product mix and successful factory cost management led to a substantially better gross margin compared to Q1 of 2013 and earnings well above analyst expectations. Demand for Q2 remains healthy as we transition into our seasonally stronger quarters and I am confident we continue to be on track to deliver significantly improved financial results in 2014. Merger preparation and integration planning with RFMD has successfully ramped up in anticipation of a second half 2014 close.”  ^1 Excludes commercial foundry revenue  Summary Financial Results for the Three Months Ended March29, 2014:  Revenue for the first quarter of 2014 was $177.6 million, down 4% from the first quarter of 2013 and 34% sequentially. First quarter revenue declined 4% from the first quarter of 2013, driven primarily by the defense market.  Cash and investments increased by $84.5 million to $163.5 million driven by a reduction in accounts receivable and cash proceeds from employee stock option exercises.  GAAP  Gross margin for the first quarter of 2014 was 33.2%, up sharply from 21.0% in the first quarter of 2013 due to product mix and better factory cost management. Operating expenses for the first quarter of 2014 were $79.0 million, up slightly sequentially.  Net loss for the first quarter of 2014 was $19.1 million or $(0.12) per diluted share, compared with a net loss of $27.9 million or $(0.17) per share in Q1 of 2013.  Non-GAAP  Gross margin for the first quarter was 35.3%, up sharply from 22.8% in the first quarter of 2013. Operating expenses for the quarter were $70.9 million, down slightly sequentially.  Net loss for the first quarter of 2014 was $9.4 million, or $(0.06) per diluted share, compared with a net loss of $27.2 million or $(0.17) per share in Q1 of 2013.  Please see the discussion of non-GAAP financial measures below and the attached supplemental schedule for a reconciliation of GAAP to non-GAAP financial measures.  Outlook:  The company is fully booked to our second quarter 2014 revenue expectation of $215 million to $225 million. Non-GAAP gross margin is expected to be between 37% and 38%. Second quarter non-GAAP net income is expected to be between $0.06 and $0.08 on an estimated 180 million diluted shares. Both revenue and earnings guidance are well above current analyst estimates and indicate robust sequential improvement.  Additional Information Regarding March29, 2014 Results:  GAAP and non-GAAP financial measures are presented in the tables below (in millions, except for percentage and per share information). Non-GAAP financial measures are reconciled to the corresponding GAAP financial measures in the table later in this press release.   GAAP RESULTS                                                                              Three Months Ended                                         Change                   Change                                             vs. Q4                       vs. Q1                 Q1 2014     Q4 2013     2013         Q1 2013     2013 Revenue         $ 177.6    $ 267.7    (34     )%     $ 184.2    (4     )% Gross           $ 59.1     $ 70.0     (16     )%     $ 38.8     52     % Profit Gross           33.2    %   26.1    %   7.1     %      21.0    %   12.2   % Margin % Operating       $ (20.0 )   $ (8.5  )   (135    )%     $ (34.5 )   42     % Loss Net Loss        $ (19.1 )   $ (8.7  )   (120    )%     $ (27.9 )   32     % Loss per        $ (0.12 )   $ (0.05 )   $ (0.07 )      $ (0.17 )   $ 0.05  share                                                             NON-GAAP RESULTS ^ A                                                                                 Three Months Ended                                             Change                       Change                                             vs. Q4                       vs. Q1                 Q1 2014     Q4 2013     2013         Q1 2013     2013 Revenue         $ 177.6    $ 267.7    (34     )%     $ 184.2    (4     )% Gross           $ 62.6     $ 99.6     (37     )%     $ 42.0     49     % Profit Gross           35.3    %   37.2    %   (1.9    )%     22.8    %   12.5   % Margin % Op (Loss)       $ (8.3  )   $ 28.4     (129    )%     $ (26.0 )   68     % Income Net (Loss)          $ (9.4  )   $ 26.4     (136    )%     $ (27.2 )   65     % Income (Loss) Inc per         $ (0.06 )   $ 0.16     $ (0.22 )      $ (0.17 )   $ 0.11  share                 Excludes stock based compensation charges, non-cash tax benefit, A               certain entries associated with mergers and acquisitions and other                 specifically identified non-routine transactions.                                Conference Call:  TriQuint will host a conference call this afternoon at 1:30 p.m. PDT to discuss the results for the quarter and our future expectations for the company. To access the conference call, please dial (888) 813-6582 domestically, or (706) 643-7082 internationally, approximately ten minutes prior to the beginning of the call, using passcode 8679181. The call can also be heard via webcast accessed through the “Investors” section of TriQuint's web site at: http://invest.triquint.com. A replay of the conference call will be available until May 7, 2014.  Non-GAAP Financial Measures:  This press release provides financial measures for non-GAAP net income (loss), diluted earnings (loss) per share, gross profit, gross margin, operating expenses and operating income (loss) that exclude equity compensation expense, non-cash tax expense (benefit), certain entries associated with mergers and acquisitions and other specifically identified non-routine items, and are therefore not calculated in accordance with accounting principles generally accepted in the United States (“GAAP”). The charges associated with acquisitions reflect the amortization of intangible and tangible assets, transaction costs and changes to the earnout liability estimates recorded in connection with acquisition accounting and charged to the income statement. The non-cash tax expense (benefit) excludes certain deferred tax charges and benefits that do not currently result in a tax payment or tax refund. Management believes that these non-GAAP financial measures provide meaningful supplemental information that enhances management's and investors' ability to evaluate TriQuint's operating results.  These non-GAAP financial measures are not intended to be used in isolation and should not be considered a substitute for any other performance measure determined in accordance with GAAP. Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool, including that other companies may calculate similar non-GAAP financial measures differently than we do, limiting their usefulness as a comparative tool. The company compensates for these limitations by providing specific information regarding the GAAP amount excluded from the non-GAAP financial measures. The company further compensates for the limitations of our use of non-GAAP financial measures by presenting comparable GAAP measures more prominently. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with our GAAP net income and net income per share.  Forward-Looking Statements:  This press release contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding seasonally stronger demand in our second quarter, improved financial results in 2014; and statements under "Outlook" regarding anticipated second quarter revenues, non-GAAP gross margin and non-GAAP diluted earnings per share for the second quarter and our bookings to anticipated revenue. These forward-looking statements are statements of management's opinion and are subject to various assumptions, risks, uncertainties and changes in circumstances. Actual results may vary materially from those expressed or implied in the statements herein or from historical results, due to changes in economic, business, competitive, technological and/or regulatory factors. More detailed information about risk factors that may affect actual results are set forth in TriQuint's reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission. These reports can be accessed at the SEC web site, www.sec.gov. Except as required by law, TriQuint undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.  A reader of this release should understand that it is not possible to predict or identify all risk factors and should not consider the risk factors described in TriQuint's filings with the Securities and Exchange Commission to be a complete statement of all potential risks and uncertainties.  Facts About TriQuint  Founded in 1985, TriQuint Semiconductor (NASDAQ: TQNT) is a leading RF solutions supplier and technology innovator for the world's top communications, defense and aerospace companies. People and organizations around the world need real-time, all-the-time connections; TriQuint products help reduce the cost and increase the performance of connected mobile devices and the networks that deliver critical voice, data and video communications. With the industry's broadest technology portfolio, recognized R&D leadership, and expertise in high-volume manufacturing, TriQuint creates standard and custom products using gallium arsenide (GaAs), gallium nitride (GaN), surface acoustic wave (SAW) and bulk acoustic wave (BAW) technologies. The company has ISO 9001-certified manufacturing facilities in the U.S., production in Costa Rica, and design centers in North America and Germany. For more information, visit www.triquint.com.  TriQuint: Reach Further, Reach Faster™  TQNT-F   TriQuint Semiconductor, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)                                                                                                 March 29, 2014     December 31, 2013 Assets Current assets:    Cash and cash equivalents              $   163,522        $    79,026    Accounts receivable, net               124,038            177,114    Inventories                            162,969            159,488    Prepaid expenses                       12,442             13,617    Deferred tax assets, net               15,015             12,787    Other current assets                   29,624             39,960       Total current assets                507,610            481,992 Property, plant and equipment, net        419,829            420,363 Goodwill                                  13,519             13,519 Intangible assets, net                    21,826             23,510 Deferred tax assets – noncurrent,         70,412             61,554 net Other noncurrent assets, net              33,915             32,319       Total assets                        $   1,067,111      $    1,033,257                                                               Liabilities and Stockholders' Equity Current liabilities:    Accounts payable                       $   53,665         $    52,472    Accrued payroll                        37,024             39,743    Other accrued liabilities              16,044             15,893       Total current liabilities           106,733            108,108 Long-term liabilities:    Long-term income tax liability         2,152              2,062    Cross-licensing liability              11,985             11,752    Other long-term liabilities            16,819             16,782       Total liabilities                   137,689            138,704 Stockholders' equity:    Common stock                           169                162    Additional paid-in capital             753,834            699,903    Accumulated other comprehensive        95                 95    income    Retained earnings                      175,324            194,393       Total stockholders' equity          929,422            894,553       Total liabilities and               $   1,067,111      $    1,033,257       stockholders' equity                                                                      TriQuint Semiconductor, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts)                                                                                             Three Months Ended                                   March 29,       December 31,     March 30,                                   2014            2013             2013                                                                               Revenues                          $ 177,606       $  267,731       $ 184,209 Cost of goods sold                118,556        197,755         145,437      Gross profit                    59,050          69,976           38,772                                                                               Operating expenses:   Research, development and       49,870          49,765           46,071   engineering   Selling, general and            29,163         28,760          27,241       administrative          Total operating          79,033          78,525           73,312          expenses                                                                            Operating loss                  (19,983   )     (8,549     )     (34,540   )                                                                               Other (expense) income:   Interest income                 27              23               38   Interest expense                (855      )     (1,046     )     (1,139    )   Other, net                      45             (102       )     (309      )          Other (expense)          (783      )     (1,125     )     (1,410    )          income, net                                                                          Loss before income tax            (20,766   )     (9,674     )     (35,950   )                                                                                 Income tax benefit              (1,697    )     (939       )     (8,001    ) Net loss                          $ (19,069 )     $  (8,735  )     $ (27,949 )                                                                               Per Share Data:   Basic per share net loss        $ (0.12   )     $  (0.05   )     $ (0.17   )   Diluted per share net           $ (0.12   )     $  (0.05   )     $ (0.17   )   loss                                                                               Weighted-average shares outstanding:   Basic                           164,386         160,190          160,758   Diluted                         164,386         160,190          160,758                                                                                 TriQuint Semiconductor, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (% of revenue)                                                                                                   Three Months Ended                                       March 29,     December 31,     March 30,                                       2014          2013             2013                                                                              Revenues                              100.0  %      100.0   %        100.0  % Cost of goods sold                    66.8   %      73.9    %        79.0   %   Gross profit                        33.2   %      26.1    %        21.0   %                                                                              Operating expenses:   Research, development and           28.1   %      18.6    %        25.0   %   engineering   Selling, general and                16.4   %      10.7    %        14.8   %   administrative      Total operating expenses         44.5   %      29.3    %        39.8   %                                                                           Operating loss                      (11.3  )%     (3.2    )%       (18.8  )%                                                                              Other (expense) income:   Interest income                     0.0    %      0.0     %        0.0    %   Interest expense                    (0.4   )%     (0.4    )%       (0.6   )%   Other, net                          0.0    %      (0.0    )%       (0.2   )%      Other (expense) income,          (0.4   )%     (0.4    )%       (0.8   )%      net                                                                         Loss before income tax                (11.7  )%     (3.6    )%       (19.6  )%                                                                                Income tax benefit                  (1.0   )%     (0.3    )%       (4.4   )% Net loss                              (10.7  )%     (3.3    )%       (15.2  )%                                                                                TriQuint Semiconductor, Inc. SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS (Unaudited) (Dollars in thousands, except per share amounts)                    Three Months Ended                       March 29, 2014             December 31, 2013        March 30, 2013                       (% of revenues)              (% of revenues)            (% of revenues) GAAP GROSS            $ 59,050      33.2  %      $ 69,976     26.1 %      $ 38,772      21.0  % PROFIT   Adjustment   for stock   based               1,785           1.0   %      3,222          1.2  %      2,036           1.1   %   compensation   charges   Adjustment   for   restructuring       715             0.4   %      25,283         9.4  %      —               —     %   and   impairment   charges   Adjustment   for charges   associated          1,083        0.7   %      1,103       0.5  %      1,208        0.7   %   with   acquisitions NON-GAAP GROSS        $ 62,633        35.3  %      $ 99,584       37.2 %      $ 42,016        22.8  % PROFIT                                                                                                      GAAP OPERATING        $ 79,033        44.5  %      $ 78,525       29.3 %      $ 73,312        39.8  % EXPENSES   Adjustment   for stock   based               (4,805    )     (2.7  )%     (5,202   )     (1.9 )%     (4,987    )     (2.7  )%   compensation   charges   Adjustment   for   restructuring       (1,080    )     (0.6  )%     (1,837   )     (0.7 )%     —               —     %   and   impairment   charges   Adjustment   for charges   associated          (2,200    )   (1.2  )%     (337     )   (0.1 )%     (314      )   (0.2  )%   with   acquisitions NON-GAAP OPERATING             $ 70,948        40.0  %      $ 71,149       26.6 %      $ 68,011        36.9  % EXPENSES                                                                                                      GAAP OPERATING        $ (19,983 )     (11.3 )%     $ (8,549 )     (3.2 )%     $ (34,540 )     (18.8 )% LOSS   Adjustment   for stock   based               6,590           3.7   %      8,424          3.1  %      7,023           3.8   %   compensation   charges   Adjustment   for   restructuring       1,795           1.0   %      27,120         10.1 %      —               —     %   and   impairment   charges   Adjustment   for charges   associated          3,283        1.9   %      1,440       0.6  %      1,522        0.9   %   with   acquisitions NON-GAAP OPERATING             $ (8,315  )     (4.7  )%     $ 28,435       10.6 %      $ (25,995 )     (14.1 )% (LOSS) INCOME                                                                                                      GAAP NET LOSS         $ (19,069 )     (10.7 )%     $ (8,735 )     (3.3 )%     $ (27,949 )     (15.2 )%   Adjustment   for stock   based               6,590           3.7   %      8,424          3.2  %      7,023           3.8   %   compensation   charges   Adjustment   for   restructuring       1,795           1.0   %      27,120         10.1 %      —               —     %   and   impairment   charges   Adjustment   for non-cash        (2,190    )     (1.2  )%     (2,178   )     (0.8 )%     (8,311    )     (4.5  )%   tax benefit   Adjustment   for charges   associated          3,510        1.9   %      1,721       0.6  %      2,012        1.1   %   with   acquisitions NON-GAAP NET          $ (9,364  )     (5.3  )%     $ 26,352       9.8  %      $ (27,225 )     (14.8 )% (LOSS) INCOME                                                                                                      GAAP DILUTED          (0.12     )                  $ (0.05  )                 $ (0.17   ) LOSS PER SHARE   Adjustment   for stock   based               0.04                         0.05                       0.04   compensation   charges   Adjustment   for   restructuring       0.01                         0.16                       0.00   and   impairment   charges   Adjustment   for non-cash        (0.01     )                  (0.01    )                 (0.05     )   tax benefit   Adjustment   for charges   associated          0.02                        0.01                      0.01         with   acquisitions NON-GAAP DILUTED (LOSS)        $ (0.06   )                  $ 0.16                     $ (0.17   ) EARNINGS PER SHARE                                                                                                       Our earnings release contains forward looking estimates of non-GAAP gross margin and loss per share for the second quarter of 2014. We provide these non-GAAP measures on a prospective basis for the same reasons that we provide them to investors on a historical basis. The following table provides a reconciliation of GAAP gross margin and loss per share to non-GAAP gross margin and earnings per share anticipated for the second quarter of 2014 based on the mid-point of guidance.                                                           Forward Looking Q2 GAAP Gross Margin                        36.0   %  Adjustment for stock based compensation charges           1.0    %   Adjustment for charges associated with acquisitions       0.5    % Forward Looking Q2 non-GAAP Gross Margin                    37.5   %                                                                     Forward Looking Q2 GAAP Net Earnings per Share              $ 0.01   Adjustment for stock based compensation charges           0.05   Adjustment for non-cash tax benefit                       (0.01  )   Adjustment for charges associated with acquisitions       0.02    Forward Looking Q2 non-GAAP Net Earnings per Share          $ 0.07  Contact:  TriQuint Semiconductor, Inc. Steve Buhaly, +1-503-615-9401 VP of Finance & Administration, CFO steve.buhaly@triquint.com or Grant Brown, +1-503-615-9413 Director, Investor Relations grant.brown@triquint.com or Media Contact: Brandi Frye, +1-503-615-9488 Sr. Director, Corporate Communications brandi.frye@triquint.com