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 email@example.com or Grant Brown, +1-503-615-9413 Director, Investor Relations firstname.lastname@example.org or Media Contact: Brandi Frye, +1-503-615-9488 Sr. Director, Corporate Communications email@example.com
TriQuint Announces First Quarter 2014 Results
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