The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Business Wire

TriQuint Announces Third Quarter 2012 Results

Wednesday, October 24, 2012

TriQuint Announces Third Quarter 2012 Results16:05 EDT Wednesday, October 24, 2012 HILLSBORO, Ore. (Business Wire) -- TriQuint Semiconductor, Inc. (NASDAQ:TQNT), a leading RF solutions supplier and technology innovator, announces its financial results for the quarter ended September 29, 2012, including the following highlights: Revenue for the quarter was $200.8 million GAAP net loss for the quarter was $11.2 million, or $(0.07) per share Non-GAAP net income for the quarter was $2.5 million, or $0.02 per share Grew MMPA design wins - 2nd generation device delivers 15% more browsing time Released the world's first dual-channel 40/100G driver for high speed optical networks Won new DARPA contract to achieve 3x GaN Power Handling Received Raytheon 3-Star supplier award Captured design win in Small Cell base station application Commenting on the results for the quarter ended September 29, 2012, Ralph Quinsey, President and Chief Executive Officer, stated “TriQuint's third quarter results improved sequentially with 13% revenue growth driven by increased demand from our major smartphone customers and order strength for infrastructure and defense products. We are expecting ten to twelve percent revenue growth in the fourth quarter with continued strength in each of our major markets but with pressure on gross margins due to planned inventory reductions.” Summary Financial Results for the Three and Nine Months Ended September 29, 2012: Revenues for the third quarter of 2012 were $200.8 million, down 7% from the third quarter of 2011 and up 13% sequentially. Mobile Devices market revenue grew 13%, Networks grew 11% and Defense was up 16%, in each case sequentially. Revenue for the nine months ended September 29, 2012 was $595.6 million, down 11% from the nine months ended October 1, 2011. GAAP Gross margin for the third quarter of 2012 was 30.7%, up sequentially from 25.2%. Gross margin for the nine months ended September 29, 2012 was 28.4%, down from 38.1% for the same period in 2011 due to lower factory utilization. Operating expenses for the third quarter of 2012 were $67.1 million, or 33% of revenue, down from $69.4 million in the previous quarter due to reduced litigation costs. Operating expenses for the nine months ended September 29, 2012 were $202.6 million compared to $201.3 million for the same period in 2011. Net loss for the third quarter of 2012 was $11.2 million or $(0.07) per share, compared with a net loss of $13.1 million, or $(0.08) per share, in the previous quarter. Net loss for the nine months ended September 29, 2012 was $22.4 million or $(0.14) per share compared to a net income of $43.8 million or $0.25 per diluted share for the nine months ended October 1, 2011. Cash and investments decreased by $17.8 million to $144.6 million in the quarter due primarily to higher sales volume later in the quarter resulting in a higher accounts receivable ending balance. Non-GAAP Gross margin for the third quarter was 32.5%, up sequentially from 27.9%. Improved product mix and utilization drove the change. Gross margin for the nine months ended September 29, 2012 was 30.4% down from 39.3% for the same period in 2011. Operating expenses for the quarter were $62.1 million, or 31% of revenue, down from $64.3 million in the prior quarter. Operating expenses for the nine months ended September 29, 2012 were $187.8 million or 32% of revenue. Net income for the third quarter of 2012 was $2.5 million, or $0.02 per diluted share, up sequentially from a net loss of $15.0 million or $(0.09) per share. Net loss for the nine months ended September 29, 2012 was $8.4 million or $(0.05) per share compared to a net income of $74.0 million or $0.43 per diluted share for the nine months ended October 1, 2011. 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 believes fourth quarter 2012 revenues will be between $220 million and $225 million. Non-GAAP gross margin is expected to be about 30% with improvement in inventory turns impacting fourth quarter gross margin. Fourth quarter non-GAAP net income per share is expected to be between one cent and three cents per diluted share. The Company is 96% booked to the midpoint of revenue guidance. Additional Information regarding September 29, 2012 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 financial statement portion of this press release. GAAP RESULTS                                 Three Months EndedNine Months EndedQ3 2012   Q2 2012   Change vs. Q2 2012   Q3 2011   Change vs. Q3 2011Q3 2012   Q3 2011   Change vs. Q3 2011 Revenue $ 200.8     $ 178.0     13 %   $ 216.0     (7 )% $ 595.6     $ 669.1     (11 )% Gross Profit $ 61.6     $ 44.9     37 % $ 75.4     (18 )% $ 169.1     $ 254.9     (34 )% Gross Margin % 30.7 %   25.2 %   5.5 % 34.9 %   (4.2 )% 28.4 %   38.1 %   (9.7 )% Op (Loss) Income $ (5.5 )   $ (24.4 )   (77 )% $ 12.0     (146 )% $ (33.5 )   $ 53.6     (163 )% Net (Loss) Income $ (11.2 )   $ (13.1 )   (15 )% $ 14.8     (176 )% $ (22.4 )   $ 43.8     (151 )% Diluted per share $ (0.07 )   $ (0.08 )   $ 0.01     $ 0.09     $ (0.16 ) $ (0.14 )   $ 0.25     $ (0.39 )                                   NON-GAAP RESULTS A                               Three Months EndedNine Months EndedQ3 2012   Q2 2012   Change vs. Q2 2012   Q3 2011   Change vs. Q3 2011   Q3 2012   Q3 2011   Change vs. Q3 2011 Revenue $ 200.8     $ 178.0     13 % $ 216.0     (7 )% $ 595.6     $ 669.1     (11 )% Gross Profit $ 65.3     $ 49.7     31 % $ 78.3     (17 )% $ 180.8     $ 262.8     (31 )% Gross Margin % 32.5 %   27.9 %   4.6 % 36.3 %   (3.8 )% 30.4 %   39.3 %   (8.9 )% Op (Loss) Income $ 3.3     $ (14.7 )   (122 )% $ 19.6     (83 )% $ (7.0 )   $ 75.3     (109 )% Net (Loss) Income $ 2.5     $ (15.0 )   (117 )% $ 19.0     (87 )% $ (8.4 )   $ 74.0     (111 )% Diluted per share $ 0.02     $ (0.09 )   $ 0.11     $ 0.11     $ (0.09 ) $ (0.05 )   $ 0.43     $ (0.48 ) A Excludes stock based compensation charges, non-cash tax expense, certain entries associated with acquisitions, restructuring and other specifically identified non-routine transactions. Conference Call: TriQuint will host a conference call this afternoon at 2:00 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 34727786. 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 October 31, 2012. 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, certain entries associated with acquisitions, restructuring charges 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 recorded in connection with acquisition accounting and charged to the income statement. The non-cash tax expense excludes certain deferred tax charges and benefits that do not 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 TriQuint's anticipated fourth quarter revenues, non-GAAP gross margin and net income; our bookings to revenue; improvements in inventory turns; revenue growth; increased demand from our major smartphone customers; order strength for infrastructure and defense products; and continued strength in our major markets. 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 ISO9001-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: Connecting the Digital World to the Global Network®*Other names and brands may be claimed as the property of others TQNT-F CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)         September 29, 2012December 31, 2011Assets Current assets: Cash and cash equivalents $ 114,398 $ 116,305 Investments in marketable securities 30,191 46,006 Accounts receivable, net 122,779 129,103 Inventories 154,133 151,577 Prepaid expenses 9,101 7,051 Deferred tax assets, net 9,534 11,857 Other current assets 49,120   35,756 Total current assets 489,256 497,655 Property, plant and equipment, net 444,699 469,943 Goodwill 3,376 3,376 Intangible assets, net 22,777 22,732 Deferred tax assets – noncurrent, net 59,655 48,957 Other noncurrent assets, net 33,938   12,605 Total assets $ 1,053,701   $ 1,055,268   Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 58,316 $ 67,812 Accrued payroll 31,191 28,519 Other accrued liabilities 12,811   9,901 Total current liabilities 102,318 106,232 Long-term liabilities: Long-term income tax liability 3,238 735 Cross-licensing liability 13,070 — Other long-term liabilities 12,429   11,013 Total liabilities 131,055 117,980 Stockholders' equity: Common stock 164 166 Additional paid-in capital 686,185 678,412 Accumulated other comprehensive income 140 140 Retained earnings 236,157   258,570 Total stockholders' equity 922,646   937,288 Total liabilities and stockholders' equity $ 1,053,701   $ 1,055,268 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts)               Three Months EndedNine Months EndedSeptember 29, 2012June 30, 2012October 1, 2011September 29, 2012October 1, 2011   Revenues $ 200,821 $ 178,002 $ 215,988 $ 595,553 $ 669,096 Cost of goods sold 139,208   133,064   140,632   426,413   414,204   Gross profit 61,613 44,938 75,356 169,140 254,892   Operating expenses: Research, development and engineering 40,871 38,084 36,479 116,029 110,910 Selling, general and administrative 26,264 27,588 22,799 79,074 73,415 Litigation expense —   3,682   4,058   7,546   16,968   Total operating expenses 67,135 69,354 63,336 202,649 201,293           Operating (loss) income (5,522 ) (24,416 ) 12,020 (33,509 ) 53,599   Other (expense) income: Interest income 58 89 40 196 249 Interest expense (666 ) (313 ) (367 ) (1,329 ) (1,107 ) Foreign currency gain (loss) 10 (154 ) (309 ) (108 ) (278 ) Gain/recovery of investment — 4 360 6,957 867 Other, net 13   189   7   276   101   Other (expense) income, net (585 ) (185 ) (269 ) 5,992 (168 )           (Loss) income before income tax (6,107 ) (24,601 ) 11,751 (27,517 ) 53,431   Income tax expense (benefit) 5,139   (11,551 ) (3,087 ) (5,104 ) 9,589   Net (loss) income $ (11,246 ) $ (13,050 ) $ 14,838   $ (22,413 ) $ 43,842     Per Share Data: Basic per share net (loss) income $ (0.07 ) $ (0.08 ) $ 0.09 $ (0.14 ) $ 0.27 Diluted per share net (loss) income $ (0.07 ) $ (0.08 ) $ 0.09 $ (0.14 ) $ 0.25   Weighted-average shares outstanding: Basic 163,838 165,355 164,812 165,143 163,773 Diluted 163,838 165,355 171,027 165,143 173,082 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (% of revenue)               Three Months EndedNine Months EndedSeptember 29, 2012June 30, 2012October 1, 2011September 29, 2012October 1, 2011   Revenues 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Cost of goods sold 69.3 % 74.8 % 65.1 % 71.6 % 61.9 % Gross profit 30.7 % 25.2 % 34.9 % 28.4 % 38.1 %   Operating expenses: Research, development and engineering 20.3 % 21.4 % 16.9 % 19.4 % 16.6 % Selling, general and administrative 13.1 % 15.4 % 10.6 % 13.3 % 11.0 % Litigation expense — % 2.1 % 1.8 % 1.3 % 2.5 % Total operating expenses 33.4 % 38.9 % 29.3 % 34.0 % 30.1 %           Operating (loss) income (2.7 )% (13.7 )% 5.6 % (5.6 )% 8.0 %   Other (expense) income: Interest income 0.0 % 0.0 % 0.0 % 0.0 % 0.1 % Interest expense (0.3 )% (0.2 )% (0.2 )% (0.2 )% (0.2 )% Foreign currency gain (loss) 0.0 % (0.1 )% (0.1 )% (0.0 )% (0.0 )% Gain/recovery of investment — % 0.0 % 0.2 % 1.2 % 0.1 % Other, net 0.0 % 0.2 % 0.0 % 0.0 % 0.0 % Other (expense) income, net (0.3 )% (0.1 )% (0.1 )% 1.0 % (0.0 )%           (Loss) income before income tax (3.0 )% (13.8 )% 5.5 % (4.6 )% 8.0 %   Income tax expense (benefit) 2.6 % (6.5 )% (1.4 )% (0.8 )% 1.4 % Net (loss) income (5.6 )% (7.3 )% 6.9 % (3.8 )% 6.6 % SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS (Unaudited) (Dollars in thousands, except per share amounts)         Three Months Ended   Nine Months Ended   September 29, 2012   June 30, 2012     October 1, 2011   September 29, 2012     October 1, 2011   (% of revenues) (% of revenues) (% of revenues) (% of revenues) (% of revenues) GAAP GROSS PROFIT $ 61,613   30.7 % $ 44,938   25.2 % $ 75,356   34.9 % $ 169,140   28.4 % $ 254,892   38.1 % Adjustment for stock based compensation charges   2,549 1.3 % 1,823 1.0 % 1,906 0.9 % 6,477 1.1 % 4,710 0.7 % Adjustment for restructuring charges   — — % 1,763 1.0 % — — % 1,763 0.3 % — — % Adjustment for charges associated with acquisitions   1,185     0.5 % 1,126     0.7 % 1,079     0.5 % 3,405     0.6 % 3,224     0.5 % NON-GAAP GROSS PROFIT $ 65,347 32.5 % $ 49,650 27.9 % $ 78,341 36.3 % 180,785 30.4 % 262,826 39.3 %   GAAP OPERATING EXPENSES $ 67,135 33.4 % $ 69,354 38.9 % $ 63,336 29.3 % $ 202,649 34.0 % $ 201,293 30.1 % Adjustment for stock based compensation charges   (4,815 ) (2.4 )% (5,735 ) (3.2 )% (4,230 ) (1.9 )% (15,142 ) (2.5 )% (13,632 ) (2.0 )% Adjustment for charges associated with acquisitions   (257 )   (0.0 )% 714     0.4 % (381 )   (0.2 )% 256     0.0 % (124 )   (0.0 )% NON-GAAP OPERATING EXPENSES $ 62,063 31.0 % $ 64,333 36.1 % $ 58,725 27.2 % $ 187,763 31.5 % $ 187,537 28.1 %   GAAP OPERATING (LOSS) INCOME $ (5,522 ) (2.7 )% $ (24,416 ) (13.7 )% $ 12,020 5.6 % $ (33,509 ) (5.6 )% $ 53,599 8.0 % Adjustment for stock based compensation charges   7,364 3.7 % 7,558 4.2 % 6,136 2.8 % 21,619 3.6 % 18,342 2.7 % Adjustment for restructuring charges   — — % 1,763 1.0 % — — % 1,763 0.3 % — — % Adjustment for charges associated with acquisitions   1,442     0.6 % 412     0.3 % 1,460     0.7 % 3,149     0.5 % 3,348     0.5 % NON-GAAP OPERATING INCOME (LOSS) $ 3,284 1.6 % $ (14,683 ) (8.2 )% $ 19,616 9.1 % $ (6,978 ) (1.2 )% $ 75,289 11.2 %   GAAP NET (LOSS) INCOME $ (11,246 ) (5.6 )% $ (13,050 ) (7.4 )% $ 14,838 7.0 % $ (22,413 ) (3.8 )% $ 43,842 6.6 % Adjustment for stock based compensation charges   7,364 3.7 % 7,558 4.2 % 6,136 2.8 % 21,619 3.6 % 18,342 2.7 % Adjustment for restructuring charges   — 0.0 % 1,763 1.0 % — — % 1,763 0.3 % — — % Adjustment for gain/recovery of investment   — 0.0 % (4 ) (0.0 )% (360 ) (0.2 )% (6,957 ) (1.2 )% (867 ) (0.1 )% Adjustment for non-cash tax expense (benefit)   4,975 2.6 % (11,703 ) (6.5 )% (3,093 ) (1.5 )% (5,585 ) (0.9 )% 9,245 1.4 % Adjustment for charges associated with acquisitions   1,442     0.6 % 412     0.3 % 1,482     0.7 % 3,174     0.6 % 3,432     0.5 % NON-GAAP NET INCOME (LOSS) $ 2,535 1.3 % $ (15,024 ) (8.4 )% $ 19,003 8.8 % $ (8,399 ) (1.4 )% $ 73,994 11.1 %   GAAP DILUTED (LOSS) EARNINGS PER SHARE   $ (0.07 ) $ (0.08 ) $ 0.09 $ (0.14 ) $ 0.25 Adjustment for stock based compensation charges   0.04 0.05 0.04 0.13 0.11 Adjustment for restructuring charges   — 0.01 — 0.01 — Adjustment for gain/recovery of investment   0.00 (0.00 ) (0.00 ) (0.04 ) (0.01 ) Adjustment for non-cash tax expense (benefit)   0.04 (0.07 ) (0.03 ) (0.03 ) 0.06 Adjustment for charges associated with acquisitions   0.01   0.00   0.01   0.02   0.02   NON-GAAP DILUTED EARNINGS (LOSS) PER SHARE   $ 0.02 $ (0.09 ) $ 0.11 $ (0.05 ) $ 0.43 Our earnings release contains forward looking estimates of non-GAAP gross margin and earnings per share for the fourth quarter of 2012. 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 for the fourth quarter of 2012 based on the mid-point of guidance. Forward Looking GAAP Gross Margin   28.5 %   Adjustment for stock based compensation charges 1.0 % Adjustment for charges associated with acquisitions 0.5 % Forward Looking non-GAAP Gross Margin 30.0 %   Forward Looking GAAP Loss per Share $ (0.02 ) Adjustment for stock based compensation charges 0.05 Adjustment for non-cash tax expense (benefit) (0.02 ) Adjustment for charges associated with acquisitions 0.01   Forward Looking non-GAAP Earnings per Share $ 0.02 TriQuint Semiconductor, IncSteve Buhaly, VP of Finance & Administration, CFO, +1-503-615-9401E-mail: steve.buhaly@tqs.comorMedia Contact:Brandi Frye, Director, Marketing Comms, +1-503-615-9488E-mail: brandi.frye@tqs.com