Exar Corporation Announces Fiscal 2017 Fourth Quarter and Year-End Financial Results
FREMONT, Calif., May 9, 2017 /PRNewswire/ -- Exar Corporation (NYSE: EXAR) a leading supplier of analog mixed-signal application specific technology solutions serving the Industrial, Infrastructure, Automotive, and Audio/Video markets, today announced financial results for the Company's fiscal year 2017 fourth quarter and year-end, which ended on April 2, 2017. Unless otherwise indicated, all non-GAAP financial results exclude the financial results of the iML Display business, which the Company has divested, and are presented in the GAAP results as discontinued operations.
On March 29, 2017, Exar and MaxLinear, Inc. (NYSE: MXL) jointly announced that they had entered into a definitive agreement under which MaxLinear has agreed to acquire Exar for $13.00 per share in cash, via a tender offer. Subsequently, MaxLinear, Inc. filed a tender offer Schedule TO (amended on April 24, 2017 and May 5, 2017) and Exar filed a Schedule 14D-9 (amended on April 24, 2017 and May 3, 2017). Exar stockholders, banks and brokers who have questions, require assistance, or who desire to tender shares are referred to the Offer's Information Agent, Georgeson, toll-free at (866) 767-8986 prior to 12:00 p.m. midnight May 11, 2017.
Fiscal 2017 Fourth Quarter Highlights from Continuing Operations
- Net sales of $27.8 million, up 2% sequentially and 10% year-over-year
- GAAP gross margin of 54.2% (Non-GAAP gross margin of 56.7%)
- GAAP operating loss of $0.1 million (Non-GAAP operating income of $4.2 million)
- GAAP EPS of $0.03 (Non-GAAP EPS of $0.09)
- Cash and equivalents, and short-term marketable securities of $236 million
Fiscal 2017 Full Year Highlights from Continuing Operations
- Net sales of $109.8 million, up 8% year-over-year
- GAAP gross margin of 50.2% (Non-GAAP gross margin of 53.5%)
- GAAP operating income of $7.2 million (Non-GAAP operating income of $15.4 million)
- GAAP EPS of $0.18 (Non-GAAP EPS of $0.31)
About Exar
For more information, visit http://www.exar.com.
Discussion of Non-GAAP Financial Measures
The Company's non-GAAP measures exclude charges related to stock-based compensation, amortization of acquired intangible assets, impairment charges, gain upon closing sale-leaseback of our corporate headquarters, gain on sale of long-term investments, restructuring charges and exit costs which include costs for personnel whose positions have been eliminated as part of a restructuring or are in the process of being eliminated as part of the discontinuation of a product line, severance costs associated with the former CEO, the financial results of the iML Display business as well as the gain recognized from the sale of the iML business, accruals for and proceeds received from dispute resolutions and patent litigation, merger and acquisition and related integration costs, certain income tax benefits and credits, and related income tax effects on certain excluded items. The Company excludes these items primarily because they are significant special expense and gain estimates, which management separates for consideration when evaluating and managing business operations. The Company's management uses non-GAAP net income and non-GAAP earnings per share to evaluate its current operating results and financial results and to compare them against historical financial results. Management believes these non-GAAP measures are useful to investors because they are frequently used by securities analysts, investors and other interested parties in evaluating the Company and provide further clarity on its profitability.
Unless otherwise indicated, all non-GAAP financial results exclude the financial results of the iML Display business, which the Company has divested, and are presented in the GAAP results as discontinued operations.
In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company's business against that of its competitors who employ and disclose similar non-GAAP measures. However, the manner in which we calculate these non-GAAP financial measures may be different from non-GAAP methods of accounting and reporting used by the Company's competitors to the extent their non-GAAP measures include or exclude other items. The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures may not reflect the full economic impact of Exar's activities. Accordingly, investors are cautioned not to place undue reliance on non-GAAP information. The presentation of this additional information should not be considered a substitute for net income or net income per diluted share or other measures prepared in accordance with GAAP.
Investors should refer to the reconciliation of Non-GAAP Results to GAAP Results, which is contained in this press release.
Additional Information and Where to Find It
Neither this communication nor the information incorporated herein by reference is an offer to purchase or a solicitation of an offer to sell any shares or any other securities of Exar. On April 13, 2017, MaxLinear and its subsidiary commenced the tender offer and filed a Tender Offer Statement on Schedule TO with the SEC, and Exar filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC. EXAR STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE, RELATED LETTER OF TRANSMITTAL, AND CERTAIN OTHER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT, INCLUDING ALL AMENDMENTS TO THOSE MATERIALS. SUCH DOCUMENTS CONTAIN IMPORTANT INFORMATION, WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE TENDER OFFER. The Tender Offer Statement and the Solicitation/Recommendation Statement are available without charge at the SEC's website at www.sec.gov. Free copies of these materials and certain other offering documents were sent to Exar's stockholders by the information agent for the Tender Offer. These documents may also be obtained for free by contacting MaxLinear Investor Relations at http://investors.maxlinear.com/, at [email protected] or by telephone at (760) 517-1112 or by contacting Exar Investor Relations at [email protected] or by telephone at (510) 668-7201. The contents of the websites referenced above are not deemed to be incorporated by reference into the Offer documents.
For more information, visit http://www.exar.com
For Press Inquiries Contact: [email protected]
| For Investor Relations Contact: |
||
| Keith Tainsky, CFO |
Laura Guerrant-Oiye, Investor Relations |
|
| Phone: (510) 668-7201 |
Phone: (510) 668-7201 |
|
| Email: [email protected] |
Email: [email protected] |
|
-Tables follow-
| EXAR CORPORATION AND SUBSIDIARIES |
|||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||
| (In thousands, except per share amounts) |
|||||||||||
| (Unaudited) |
|||||||||||
| THREE MONTHS ENDED |
TWELVE MONTHS ENDED |
||||||||||
| APRIL 2, |
JANUARY 1, |
MARCH 27, |
APRIL 2, |
MARCH 27, |
|||||||
| 2017 |
2017 |
2016 |
2017 |
2016 |
|||||||
| Net sales |
$ 19,796 |
$ 18,845 |
$ 18,060 |
$ 78,677 |
$ 65,799 |
||||||
| Net sales, related party |
8,018 |
8,377 |
7,283 |
31,096 |
35,791 |
||||||
| Total net sales |
27,814 |
27,222 |
25,343 |
109,773 |
101,590 |
||||||
| Cost of sales: |
|||||||||||
| Cost of sales (1) |
9,394 |
10,054 |
9,694 |
40,867 |
39,615 |
||||||
| Cost of sales, related party |
2,739 |
3,118 |
3,082 |
11,207 |
15,929 |
||||||
| Restructuring charges and exit costs |
- |
- |
- |
225 |
739 |
||||||
| Proceeds from legal settlement |
- |
- |
- |
- |
(1,500) |
||||||
| Amortization of purchased intangible assets |
594 |
594 |
594 |
2,376 |
2,427 |
||||||
| Total cost of sales |
12,727 |
13,766 |
13,370 |
54,675 |
57,210 |
||||||
| Gross profit |
15,087 |
13,456 |
11,973 |
55,098 |
44,380 |
||||||
| Operating expenses: |
54.2% |
49.4% |
47.2% |
50.2% |
43.7% |
||||||
| Research and development(2) |
5,476 |
4,964 |
5,173 |
20,316 |
22,180 |
||||||
| Selling, general and administrative (3) |
8,249 |
9,109 |
7,187 |
31,674 |
28,877 |
||||||
| Restructuring charges and exit costs |
- |
- |
106 |
923 |
4,952 |
||||||
| Merger and acquisition costs |
1,457 |
- |
- |
2,727 |
544 |
||||||
| Impairment of design tools |
- |
- |
- |
1,519 |
- |
||||||
| Gain on disposal of property |
- |
- |
- |
(9,300) |
- |
||||||
| Total operating expenses |
15,182 |
14,073 |
12,466 |
47,859 |
56,553 |
||||||
| Income (loss) from operations |
(95) |
(617) |
(493) |
7,239 |
(12,173) |
||||||
| Other income and expense, net: |
|||||||||||
| Interest income and other, net |
751 |
212 |
73 |
1,050 |
14 |
||||||
| Interest expense and other, net |
54 |
(80) |
(42) |
(93) |
(202) |
||||||
| Disposal of long-term investment |
779 |
779 |
|||||||||
| Total other income (expense), net |
1,584 |
132 |
31 |
1,736 |
(188) |
||||||
| Income (loss) before income taxes |
1,489 |
(485) |
(462) |
8,975 |
(12,361) |
||||||
| Provision for (benefit from) income taxes |
(264) |
(204) |
(201) |
(123) |
(5,611) |
||||||
| Net income (loss) from continuing operations |
1,753 |
(281) |
(261) |
9,098 |
(6,750) |
||||||
| Net income (loss) from discontinued operations |
- |
45,660 |
(1,921) |
47,982 |
(9,276) |
||||||
| Net income (loss) |
$ 1,753 |
$ 45,379 |
$ (2,182) |
$ 57,080 |
$ (16,026) |
||||||
| Income (loss) per share — basic |
|||||||||||
| From continuing operations |
$ 0.03 |
$ (0.01) |
$ (0.01) |
$ 0.18 |
$ (0.14) |
||||||
| From discontinued operations |
- |
0.91 |
(0.03) |
0.96 |
(0.19) |
||||||
| Income (loss) per share — basic |
$ 0.03 |
$ 0.90 |
$ (0.04) |
$ 1.14 |
$ (0.33) |
||||||
| Income (loss) per share — diluted |
|||||||||||
| From continuing operations |
$ 0.03 |
$ (0.01) |
$ (0.01) |
$ 0.18 |
$ (0.14) |
||||||
| From discontinued operations |
- |
0.89 |
(0.03) |
0.94 |
(0.19) |
||||||
| Income (loss) per share — diluted |
$ 0.03 |
$ 0.88 |
$ (0.04) |
$ 1.12 |
$ (0.33) |
||||||
| Shares used in the computation of net income (loss) per share: |
|||||||||||
| Basic |
51,059 |
50,409 |
48,523 |
49,917 |
48,240 |
||||||
| Diluted |
52,227 |
51,365 |
48,523 |
50,763 |
48,240 |
||||||
| (1)Stock-based compensation included in cost of sales |
$ 77 |
$ 473 |
$ 98 |
$ 966 |
$ 355 |
||||||
| (2)Stock-based compensation included in R&D |
793 |
926 |
156 |
2,489 |
664 |
||||||
| (3)Stock-based compensation included in SG&A |
1,625 |
2,234 |
720 |
6,171 |
3,765 |
||||||
| EXAR CORPORATION AND SUBSIDIARIES |
||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
| (In thousands) |
||||||
| (Unaudited) |
||||||
| APRIL 2, |
JANUARY 1, |
MARCH 27, |
||||
| 2017 |
2017 |
2016 |
||||
| ASSETS |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ 93,805 |
$ 102,023 |
$ 55,070 |
|||
| Short term marketable securities |
142,320 |
125,621 |
- |
|||
| Accounts receivable, net |
14,458 |
12,842 |
16,130 |
|||
| Accounts receivable, related party, net |
5,086 |
4,977 |
3,247 |
|||
| Inventories |
26,625 |
24,221 |
20,807 |
|||
| Other current assets |
5,728 |
3,081 |
1,922 |
|||
| Assets held for sale |
- |
- |
93,911 |
|||
| Total current assets |
288,022 |
272,765 |
191,087 |
|||
| Property, plant and equipment, net |
3,480 |
3,926 |
20,299 |
|||
| Goodwill |
31,613 |
31,613 |
31,613 |
|||
| Intangible assets, net |
8,896 |
9,602 |
11,735 |
|||
| Other non-current assets |
5,051 |
5,605 |
639 |
|||
| Total assets |
$ 337,062 |
$ 323,511 |
$ 255,373 |
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
| Current liabilities: |
||||||
| Accounts payable |
$ 12,528 |
$ 9,558 |
$ 11,258 |
|||
| Accrued compensation and related benefits |
2,717 |
2,276 |
2,984 |
|||
| Deferred income and allowances on sales to distributors |
3,068 |
3,221 |
3,053 |
|||
| Deferred income and allowances on sales to distributors, related party |
3,690 |
2,988 |
4,683 |
|||
| Other current liabilities |
9,548 |
10,200 |
10,669 |
|||
| Liabilities held for sale |
- |
- |
3,470 |
|||
| Total current liabilities |
31,551 |
28,243 |
36,117 |
|||
| Long-term lease financing obligations |
- |
- |
1,285 |
|||
| Other non-current obligations |
3,076 |
3,536 |
3,422 |
|||
| Total liabilities |
34,627 |
31,779 |
40,824 |
|||
| Stockholders' equity |
302,435 |
291,732 |
214,549 |
|||
| Total liabilities and stockholders' equity |
$ 337,062 |
$ 323,511 |
$ 255,373 |
|||
| EXAR CORPORATION AND SUBSIDIARIES |
|||||||||||||
| SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS |
|||||||||||||
| (In thousands, except per share amounts) |
|||||||||||||
| (Unaudited) |
|||||||||||||
| THREE MONTHS ENDED |
|||||||||||||
| Gross Margin |
Oper. Expenses |
Income (Loss) from |
Net Income (Loss) |
Oper. Income from |
Net Income (Loss) |
Net Income (Loss) |
|||||||
| GAAP amount |
$ 15,087 |
$ 15,182 |
$ (95) |
$ 1,753 |
$ - |
$ - |
$ 1,753 |
||||||
| Adjustments to GAAP amounts: |
|||||||||||||
| Amortization of purchased intangible assets |
594 |
(108) |
702 |
702 |
- |
- |
702 |
||||||
| Restructuring charges and other non-GAAP exit costs, net |
21 |
21 |
21 |
21 |
|||||||||
| Stock-based compensation |
77 |
(2,418) |
2,495 |
2,495 |
- |
- |
2,495 |
||||||
| Merger and acquisition costs |
(1,514) |
1,514 |
1,514 |
1,514 |
|||||||||
| Gain on disposal of property |
- |
398 |
(398) |
(398) |
- |
- |
(398) |
||||||
| Disposal of long term investments |
(779) |
(779) |
|||||||||||
| Income tax effects |
- |
- |
- |
(284) |
- |
- |
(284) |
||||||
| Non-GAAP amount |
$ 15,779 |
$ 11,540 |
$ 4,239 |
$ 5,024 |
$ - |
$ - |
$ 5,024 |
||||||
| % of revenue |
56.7% |
41.5% |
15.2% |
18.1% |
|||||||||
| Non-GAAP net income per share |
$ 0.09 |
||||||||||||
| Shares used in the computation of Non-GAAP net income per share |
53,220 |
||||||||||||
| THREE MONTHS ENDED |
|||||||||||||
| Gross Margin |
Oper. Expenses |
Income (Loss) from |
Net Income (Loss) |
Oper. Income from |
Net Income (Loss) |
Net Income (Loss) |
|||||||
| GAAP amount |
$ 13,456 |
$ 14,073 |
$ (617) |
$ (281) |
$ 136 |
$ 45,660 |
$ 45,379 |
||||||
| Adjustments to GAAP amounts: |
|||||||||||||
| Amortization of purchased intangible assets |
594 |
(108) |
702 |
702 |
- |
- |
702 |
||||||
| Stock-based compensation |
473 |
(3,160) |
3,633 |
3,633 |
209 |
209 |
3,842 |
||||||
| Transition service and retention charges for disposal group |
- |
(163) |
163 |
163 |
621 |
621 |
784 |
||||||
| Gain on disposal of property |
- |
398 |
(398) |
(398) |
- |
- |
(398) |
||||||
| Gain on divestititure of Integrated Memory Logic |
- |
- |
- |
- |
- |
(45,384) |
(45,384) |
||||||
| Income tax effects |
- |
- |
- |
(385) |
- |
- |
(385) |
||||||
| Non-GAAP amount |
$ 14,523 |
$ 11,040 |
$ 3,483 |
$ 3,434 |
$ 966 |
$ 1,106 |
$ 4,540 |
||||||
| % of revenue |
53.4% |
40.6% |
12.8% |
12.6% |
N/A |
||||||||
| Non-GAAP net income per share |
$ 0.07 |
$ 0.02 |
|||||||||||
| Shares used in the computation of Non-GAAP net income per share |
52,394 |
52,394 |
|||||||||||
| THREE MONTHS ENDED |
|||||||||||||
| Gross Margin |
Oper. Expenses |
Income (Loss) from |
Net Income (Loss) |
Oper. Income from |
Net Income (Loss) |
Net Income (Loss) |
|||||||
| GAAP amount |
$ 11,973 |
$ 12,466 |
$ (493) |
$ (261) |
$ (1,597) |
$ (1,921) |
$ (2,182) |
||||||
| Adjustments to GAAP amounts: |
|||||||||||||
| Amortization of purchased intangible assets |
594 |
(125) |
719 |
719 |
2,715 |
2,715 |
3,434 |
||||||
| Restructuring charges and other non-GAAP exit costs, net |
- |
(106) |
106 |
106 |
245 |
245 |
351 |
||||||
| Stock-based compensation |
97 |
(876) |
973 |
973 |
177 |
177 |
1,150 |
||||||
| Merger and acquisition costs |
- |
(213) |
213 |
213 |
- |
- |
213 |
||||||
| Accruals for legal settlement and associated costs |
- |
- |
- |
- |
822 |
822 |
822 |
||||||
| Impairment of intangible assets |
- |
- |
- |
- |
- |
- |
- |
||||||
| Income tax effects |
- |
- |
- |
(238) |
- |
269 |
31 |
||||||
| Non-GAAP amount |
$ 12,664 |
$ 11,146 |
$ 1,518 |
$ 1,512 |
$ 2,362 |
$ 2,307 |
$ 3,819 |
||||||
| % of revenue |
50.0% |
44.0% |
6.0% |
6.0% |
N/A |
||||||||
| Non-GAAP net income per share |
$ 0.03 |
$ 0.05 |
|||||||||||
| Shares used in the computation of Non-GAAP net income (loss) per share |
49,052 |
49,052 |
|||||||||||
| EXAR CORPORATION AND SUBSIDIARIES |
|||||||||||||
| SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS |
|||||||||||||
| (In thousands, except per share amounts) |
|||||||||||||
| (Unaudited) |
|||||||||||||
| TWELVE MONTHS ENDED |
|||||||||||||
| Gross Margin |
Oper. Expenses |
Income (Loss) from |
Net Income (Loss) |
Oper. Income from |
Net Income (Loss) |
Net Income (Loss) |
|||||||
| GAAP amount |
$ 55,098 |
$ 47,859 |
$ 7,239 |
$ 9,098 |
$ 2,663 |
$ 47,982 |
$ 57,080 |
||||||
| Adjustments to GAAP amounts: |
|||||||||||||
| Amortization of purchased intangible assets |
2,376 |
(449) |
2,825 |
2,825 |
1,806 |
1,806 |
4,631 |
||||||
| Restructuring charges and other non-GAAP exit costs, net |
264 |
(923) |
1,187 |
1,187 |
109 |
109 |
1,296 |
||||||
| Stock-based compensation |
965 |
(8,660) |
9,625 |
9,625 |
918 |
918 |
10,543 |
||||||
| Merger and acquisition costs |
- |
(2,784) |
2,784 |
2,784 |
- |
- |
2,784 |
||||||
| Transition service and retention charges for disposal group |
- |
(746) |
746 |
746 |
1,586 |
1,586 |
2,332 |
||||||
| Impairment of design tools |
- |
(1,519) |
1,519 |
1,519 |
- |
- |
1,519 |
||||||
| Gain on disposal of property |
- |
10,494 |
(10,494) |
(10,494) |
- |
- |
(10,494) |
||||||
| Disposal of long term investments |
- |
- |
- |
(779) |
- |
- |
(779) |
||||||
| Gain on divestititure of Integrated Memory Logic |
- |
- |
- |
- |
- |
(45,384) |
(45,384) |
||||||
| Income tax effects |
- |
- |
- |
(416) |
- |
272 |
(144) |
||||||
| Non-GAAP amount |
$ 58,703 |
$ 43,272 |
$ 15,431 |
$ 16,095 |
$ 7,082 |
$ 7,289 |
$ 23,384 |
||||||
| % of revenue |
53.5% |
39.4% |
14.1% |
14.7% |
N/A |
||||||||
| Non-GAAP net income per share |
$ 0.31 |
$ 0.14 |
|||||||||||
| Shares used in the computation of Non-GAAP net income per share |
51,621 |
51,621 |
|||||||||||
| TWELVE MONTHS ENDED |
|||||||||||||
| Gross Margin |
Oper. Expenses |
Income (Loss) |
Net Income (Loss) |
Oper. Income from |
Net Income (Loss) |
Net Income (Loss) |
|||||||
| GAAP amount |
$ 44,380 |
$ 56,553 |
$ (12,173) |
$ (6,750) |
$ (4,360) |
$ (9,276) |
$ (16,026) |
||||||
| Adjustments to GAAP amounts: |
|||||||||||||
| Provision for dispute |
- |
- |
- |
- |
|||||||||
| Amortization of purchased intangible assets |
2,427 |
(519) |
2,946 |
2,946 |
10,651 |
10,651 |
13,597 |
||||||
| Restructuring charges and other non-GAAP exit costs, net |
740 |
(4,975) |
5,715 |
5,715 |
997 |
997 |
6,712 |
||||||
| Stock-based compensation |
355 |
(4,428) |
4,783 |
4,783 |
798 |
798 |
5,581 |
||||||
| Accruals for legal settlement and associated costs |
(1,500) |
- |
(1,500) |
(1,500) |
2,521 |
2,521 |
1,021 |
||||||
| Impairment of intangible assets |
- |
- |
- |
- |
1,807 |
1,807 |
1,807 |
||||||
| Merger and acquisition costs |
- |
(800) |
800 |
800 |
124 |
124 |
924 |
||||||
| Income tax effects |
- |
- |
- |
(5,715) |
- |
4,663 |
(1,052) |
||||||
| Non-GAAP amount |
$ 46,402 |
$ 45,831 |
$ 571 |
$ 279 |
$ 12,538 |
$ 12,285 |
$ 12,564 |
||||||
| % of revenue |
45.7% |
45.1% |
0.6% |
0.3% |
N/A |
||||||||
| Non-GAAP net income (loss) per share |
$ 0.01 |
$ 0.25 |
|||||||||||
| Shares used in the computation of Non-GAAP net income (loss) per share |
49,314 |
49,314 |
|||||||||||
SOURCE Exar Corporation
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