TriQuint Announces Third Quarter 2013 Results
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TriQuint Announces Third Quarter 2013 Results

HILLSBORO, Ore. — (BUSINESS WIRE) — October 23, 2013 — TriQuint Semiconductor, Inc. (NASDAQ: TQNT), a leading RF solutions supplier and technology innovator, announces its financial results for the quarter ended September 28, 2013, including the following highlights:

Commenting on the results, Ralph Quinsey, President and Chief Executive Officer, stated, “I am pleased with the strong growth and substantially improved earnings we achieved this quarter. Strong mobile demand drove improved factory utilization while expenses were managed closely. RF content growth is being fueled by next-generation smartphones operating in a more crowded spectrum with expanding frequency requirements. TriQuint is uniquely positioned to supply high-performance solutions for the most challenging and complex RF front end requirements."

Summary Financial Results for the Three Months Ended September 28, 2013:

Revenue for the third quarter of 2013 was $250.8 million, up 25% from the third quarter of 2012 and up 32% sequentially. Revenue grew 53% and 11% in the mobile devices and defense end markets respectively, but declined 11% in the networks end market sequentially. The decline in networks was largely driven by a reduction in non-strategic foundry business.

Cash and investments decreased by $62.4 million to $26.9 million in the quarter. Growth in accounts receivable and repayment of debt drove the decline.

GAAP

Gross margin for the third quarter of 2013 was 36.8%, up sequentially from 29.8% due primarily to higher revenue and factory utilization. Operating expenses for the third quarter of 2013 were $73.4 million, consistent with the previous quarter.

Net income for the third quarter of 2013 was $13.6 million or $0.08 per diluted share, compared with a net loss of $14.9 million, or $(0.09) per share, in the previous quarter.

Non-GAAP

Gross margin for the third quarter was 38.0%, up sequentially from 31.3% due to higher revenue and improved factory utilization. Operating expenses for the quarter were $68.6 million, down 1% sequentially.

Net income for the third quarter of 2013 of $26.3 million, or $0.16 per diluted share, improved sequentially from a net loss of $10.9 million or $(0.07) per share.

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 2013 revenue will be between $260 million and $270 million. Fourth quarter revenue is currently 88% booked to the midpoint of this guidance. Non-GAAP gross margin is expected to be between 35% and 36%. Fourth quarter non-GAAP net income is expected to be between $0.12 and $0.14 per diluted share.

Additional Information regarding September 28, 2013 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   Nine Months Ended
   

Change

       

Change

vs. Q2

Change vs. Q3

vs. Q3

Q3 2013

 

Q2 2013

 

2013

 

Q3 2012

 

2012

Q3 2013

 

Q3 2012

 

2012

Revenue $ 250.8     $ 190.1     32 % $ 200.8    

25

% $ 625.1     $ 595.6     5 %
Gross Profit $ 92.2     $ 56.7     63 %

$

61.6     50 % $ 187.7     $ 169.1     11 %
Gross Margin % 36.8 %   29.8 %   7.0 % 30.7 %   6.1 % 30.0 %   28.4 %   1.6 %
Op Income (loss) $ 18.8     $ (16.4 )   215 % $ (5.5 )   442 % $ (32.1 )   $ (33.5 )   4 %
Net Income (loss) $ 13.6     $ (14.9 )   191 % $ (11.2 )   221 % $ (29.3 )   $ (22.4 )   (31 )%
Inc(loss) per share $ 0.08     $ (0.09 )   $ 0.17   $ (0.07 )   $ 0.15   $ (0.18 )   $ (0.14 )   $ (0.04 )
                                     
NON-GAAP RESULTS A            
                           
Three Months Ended Nine Months Ended

Change

Change

vs. Q2

Change vs. Q3

vs. Q3

Q3 2013

 

Q2 2013

 

2013

 

Q3 2012

 

2012

Q3 2013

 

Q3 2012

 

2012

Revenue $ 250.8     $ 190.1     32 % $ 200.8     25 % $ 625.1     $ 595.6     5 %
Gross Profit $ 95.2     $ 59.5     60 % $ 65.3     46 % $ 196.7     $ 180.8     9 %
Gross Margin % 38.0 %   31.3 %   6.7 % 32.5 %   5.5 % 31.5 %   30.4 %   1.1 %
Op Income (loss) $ 26.7     $ (10.1 )   364 % $ 3.3     709 % $ (9.4 )   $ (7.0 )   (34 )%
Net Income (loss) $ 26.3     $ (10.9 )   341 % $ 2.5     952 % $ (11.9 )   $ (8.4 )   (42 )%
Inc(loss) per share $ 0.16     $ (0.07 )   $ 0.23   $ 0.02     $ 0.14   $ (0.07 )   $ (0.05 )   $ (0.02 )

A

      Excludes stock based compensation charges, non-cash tax (benefit) expense, certain entries associated with 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 77085822. 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 November 6, 2013.

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 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 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 strong growth in mobile demand and RF content growth; and statements under "Outlook" regarding TriQuint's anticipated fourth quarter revenues, non-GAAP gross margin and diluted earnings per share for the fourth 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 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: Reach Further, Reach Faster™

TQNT-F

TriQuint Semiconductor, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
 
   

 

      September 28, 2013     December 31, 2012
Assets
Current assets:
Cash and cash equivalents $ 26,327 $ 116,653
Investments in marketable securities 553 22,305
Accounts receivable, net 173,991 132,729
Inventories 175,583 138,246
Prepaid expenses 10,635 8,938
Deferred tax assets, net 12,111 12,530
Other current assets 51,446   48,382  
Total current assets 450,646 479,783
Property, plant and equipment, net 454,237 448,741
Goodwill 13,790 4,391
Intangible assets, net 25,001 23,163
Deferred tax assets – noncurrent, net 63,109 57,185
Other noncurrent assets, net 32,062   40,415  
Total assets $ 1,038,845   $ 1,053,678  
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 77,588 $ 65,388
Accrued payroll 38,182 33,254
Other accrued liabilities 13,721   15,132  
Total current liabilities 129,491 113,774
Long-term liabilities:
Long-term income tax liability 4,070 2,809
Cross-licensing liability 12,027 12,818
Other long-term liabilities 16,699   15,878  
Total liabilities 162,287 145,279
Stockholders' equity:
Common stock 158 161
Additional paid-in capital 673,635 676,203
Accumulated other comprehensive loss (363 ) (366 )
Retained earnings 203,128   232,401  
Total stockholders' equity 876,558   908,399  
Total liabilities and stockholders' equity $ 1,038,845   $ 1,053,678  
 

TriQuint Semiconductor, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
(In thousands, except per share amounts)
                         
Three Months Ended Nine Months Ended
September June 29, September 29, September September 29,
28, 2013 2013 2012 28, 2013 2012
 
Revenues $ 250,836 $ 190,103 $ 200,821 $ 625,148 595,553
Cost of goods sold 158,619   133,384   139,208   437,440   426,413  
Gross profit 92,217 56,719 61,613 187,708 169,140
 
Operating expenses:
Research, development and engineering 47,023 47,107 40,871 140,201 116,029
Selling, general and administrative 26,420   25,989   26,264   79,650   86,620  
Total operating expenses 73,443 73,096 67,135 219,851 202,649
         
Operating income (loss) 18,774 (16,377 ) (5,522 ) (32,143 ) (33,509 )
 
Other (expense) income:
Interest income 7 38 58 83 196
Interest expense (1,153 ) (1,137 ) (666 ) (3,429 ) (1,329 )
Gain/recovery of investment — 421 — 421 6,957
Other, net 70   (85 ) 23   (324 ) 168  
Other (expense) income, net (1,076 ) (763 ) (585 ) (3,249 ) 5,992
         
Income (loss) before income tax 17,698 (17,140 ) (6,107 ) (35,392 ) (27,517 )
 
Income tax expense (benefit) 4,137   (2,255 ) 5,139   (6,119 ) (5,104 )
Net income (loss) $ 13,561   $ (14,885 ) $ (11,246 ) $ (29,273 ) $ (22,413 )
 
Per Share Data:
Basic per share net income (loss) $ 0.09 $ (0.09 ) $ (0.07 ) $ (0.18 ) $ —
Diluted per share net income (loss) 0.08 $ (0.09 ) $ (0.07 ) (0.18 ) $ —
 
Weighted-average shares outstanding:
Basic 157,105 159,347 163,838 159,057 165,143
Diluted 163,917 159,347 163,838 159,057 165,143
 

TriQuint Semiconductor, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(% of revenue)
                         
Three Months Ended Nine Months Ended
September June 29, September September September
28, 2013 2013 29, 2012 28, 2013 29, 2012
 
Revenues 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Cost of goods sold 63.2 % 70.2 % 69.3 % 70.0 % 71.6 %
Gross profit 36.8 % 29.8 % 30.7 % 30.0 % 28.4 %
 
Operating expenses:
Research, development and engineering 18.7 % 24.8 % 20.3 % 22.4 % 19.4 %
Selling, general and administrative 10.5 % 13.6 % 13.1 % 12.7 % 14.6 %
Total operating expenses 29.3 % 38.4 % 33.4 % 35.1 % 34.0 %
         
Operating income (loss) 7.5 % (8.6 )% (2.7 )% (5.1 )% (5.6 )%
 
Other (expense) income:
Interest income 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Interest expense (0.5 )% (0.6 )% (0.3 )% (0.6 )% (0.2 )%
Gain/recovery of investment — % 0.2 % — % 0.1 % 1.2 %
Other, net 0.0 % (0.0 )% 0.0 % (0.1 )% 0.0 %
Other (expense) income, net (0.4 )% (0.4 )% (0.3 )% (0.6 )% 1.0 %
         
Income (loss) before income tax 7.1 % (9.0 )% (3.0 )% (5.7 )% (4.6 )%
 
Income tax expense (benefit) 1.5 % (1.2 )% 2.6 % (1.0 )% (0.8 )%
Net income (loss) 5.4 % (7.8 )% (5.6 )% (4.7 )% (3.8 )%
 

TriQuint Semiconductor, Inc.

SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(Unaudited)
(Dollars in thousands, except per share amounts)
 
          Three Months Ended     Nine Months Ended
September 28, 2013     June 29, 2013     September 29, 2012 September 28, 2013     September 29, 2012
(% of revenues) (% of revenues) (% of revenues) (% of revenues) (% of revenues)
GAAP GROSS PROFIT $ 92,217   36.8 % $ 56,719 29.8 % $ 61,613 30.7 % $ 187,708 30.0 % $ 169,140 28.4 %
Adjustment for stock based compensation charges 1,720 0.7 % 1,570 0.8 % 2,549 1.3 % 5,327 0.9 % 6,477 1.1 %
Adjustment for restructuring charges — — % — — %

 

— — % — — % 1,763 0.3 %
Adjustment for charges associated with acquisitions 1,272     0.5 % 1,202   0.7 % 1,185   0.5 % 3,682   0.6 % 3,405   0.6 %
NON-GAAP GROSS PROFIT $ 95,209 38.0 % $ 59,491 31.3 % $ 65,347 32.5 % 196,717 31.5 % 180,785 30.4 %
 
GAAP OPERATING EXPENSES $ 73,443 29.3 % $ 73,096 38.4 % $ 67,135 33.4 % $ 219,851 35.1 % $ 202,649 34.0 %
Adjustment for stock based compensation charges (5,193 ) (2.1 )% (5,623 ) (3.0 )% (4,815 ) (2.4 )% (15,802 ) (2.5 )% (15,142 ) (2.5 )%
Adjustment for charges associated with acquisitions 308     0.1 % 2,108   1.2 % (257 ) — % 2,103   0.4 % 256   0.0 %
NON-GAAP OPERATING EXPENSES $ 68,558 27.3 % $ 69,581 36.6 % $ 62,063 31.0 % $ 206,152 33.0 % $ 187,763 31.5 %
 
GAAP OPERATING INCOME (LOSS) $ 18,774 7.5 % $ (16,377 ) (8.6 )% $ (5,522 ) (2.7 )% $ (32,143 ) (5.1 )% $ (33,509 ) (5.6 )%
Adjustment for stock based compensation charges 6,913 2.8 % 7,193 3.8 % 7,364 3.7 % 21,129 3.4 % 21,619 3.6 %
Adjustment for restructuring charges — — % — — % — — % — — % 1,763 0.3 %
Adjustment for charges associated with acquisitions 964     0.3 % (906 ) (0.5 )% 1,442   0.6 % 1,579   0.2 % 3,149   0.5 %
NON-GAAP OPERATING INCOME (LOSS) $ 26,651 10.6 % $ (10,090 ) (5.3 )% $ 3,284 1.6 % $ (9,435 ) (1.5 )% $ (6,978 ) (1.2 )%
 
GAAP NET INCOME (LOSS) $ 13,561 5.4 % $ (14,885 ) (7.8 )% $ (11,246 ) (5.6 )% $ (29,273 ) (4.7 )% $ (22,413 ) (3.8 )%
Adjustment for stock based compensation charges 6,913 2.8 % 7,193 3.8 % 7,364 3.7 % 21,129 3.4 % 21,619 3.6 %
Adjustment for restructuring charges — — % — — % — — % — — % 1,763 0.3 %
Adjustment for gain/recovery of investment — — % (421 ) (0.2 )% — — % (421 ) (0.1 )% (6,957 ) (1.2 )%
Adjustment for non-cash tax expense (benefit) 4,482 1.8 % (2,413 ) (1.4 )% 4,975 2.6 % (6,243 ) (1.0 )% (5,585 ) (0.9 )%
Adjustment for charges associated with acquisitions 1,351     0.5 % (421 ) (0.2 )% 1,442   0.6 % 2,941   0.5 % 3,174   0.6 %
NON-GAAP NET INCOME (LOSS) $ 26,307 10.5 % $ (10,947 ) (5.8 )% $ 2,535 1.3 % $ (11,867 ) (1.9 )% $ (8,399 ) (1.4 )%
 
GAAP DILUTED EARNINGS (LOSS) PER SHARE 0.08 $ (0.09 ) $ (0.07 ) $ (0.18 ) (0.14 )
Adjustment for stock based compensation charges 0.04 0.04 0.04 0.13 0.13
Adjustment for accelerated depreciation of certain machinery and equipment — — — — 0.01
Adjustment for gain/recovery of investment 0.00 — 0.00 (0.00 ) (0.04 )
Adjustment for non-cash tax expense (benefit) 0.03 (0.02 ) 0.04 (0.04 ) (0.03 )
Adjustment for charges associated with acquisitions 0.01   0.00   0.01   0.02   0.02  
NON-GAAP DILUTED EARNINGS (LOSS) PER SHARE $ 0.16 $ (0.07 ) $ 0.02 $ (0.07 ) $ (0.05 )
 

Our earnings release contains forward looking estimates of non-GAAP gross margin and earnings per share for the fourth quarter of 2013. 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 fourth quarter of 2013 based on the mid-point of guidance.

Forward Looking Q4 GAAP Gross Margin       25.7 %
  Adjustment for stock based compensation charges 0.8 %
Adjustment for assets held for sale 8.5 %
Adjustment for charges associated with acquisitions 0.5 %
Forward Looking Q4 non-GAAP Gross Margin 35.5 %
 
Forward Looking Q4 GAAP Net Loss per Share $ (0.02 )
Adjustment for stock based compensation charges 0.04
Adjustment for assets held for sale 0.13
Adjustment for non-cash tax benefit (0.03 )
Adjustment for charges associated with acquisitions 0.01  
Forward Looking Q4 non-GAAP Net Earnings per Share $ 0.13


Contact:

TriQuint Semiconductor, Inc.
Steve Buhaly, +1-503-615-9401
VP of Finance & Administration, CFO
Email Contact
or
Grant Brown, +1-503-615-9413
Director, Investor Relations
Email Contact
or
Media Contact:
Brandi Frye, +1-503-615-9488
Sr. Director, Corporate Communications
Email Contact