In deriving non-GAAP operating expenses from GAAP operating expenses, we exclude stock-based compensation charges and amortization of intangible assets. In deriving non-GAAP income (loss) from operations from GAAP income (loss) from operations, we exclude stock-based compensation charges and amortization of intangible assets. In deriving non-GAAP net income (loss) from GAAP net income (loss), we further exclude loss on extinguishment of debt and gain on the embedded derivative. Stock-based compensation charges, amortization of intangible assets, loss on extinguishment of debt, and gain on the embedded derivative represent charges that recur in amounts unrelated to the Company’s operations.
The non-GAAP financial measures we provide have certain limitations because they do not reflect all of the costs associated with the operation of our business as determined in accordance with GAAP. Non-GAAP operating expenses, non-GAAP income (loss) from operations and non-GAAP net income (loss) are in addition to, and are not a substitute for or superior to, operating expenses, income (loss) from operations and net income (loss), which are prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. A detailed reconciliation of the non-GAAP measures to the most directly comparable GAAP measure is set forth below. Investors are encouraged to review these reconciliations to appropriately incorporate the non-GAAP measures and the limitations of these measures into their analyses. For complete information on stock-based compensation, amortization of intangible assets, loss on extinguishment of debt, and the change in the fair value of our embedded derivatives, please see our Form 10-Q for the quarterly period ended March 31, 2014 and Form 10-K for the year ended September 30, 2013.
VITESSE SEMICONDUCTOR CORPORATION | ||||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||||||
March 31, 2014 | September 30, 2013 | |||||||
(in thousands, except par value) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 48,201 | $ | 68,863 | ||||
Accounts receivable |
9,921 | 9,807 | ||||||
Inventory, net | 11,347 | 10,692 | ||||||
Prepaid expenses and other current assets | 2,067 | 1,897 | ||||||
Total current assets | 71,536 | 91,259 | ||||||
Property, plant and equipment, net | 3,308 | 3,107 | ||||||
Other intangible assets, net | 1,502 | 1,170 | ||||||
Other assets | 3,652 | 3,425 | ||||||
$ | 79,998 | $ | 98,961 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 7,748 | $ | 7,436 | ||||
Accrued expenses and other current liabilities | 12,588 | 12,245 | ||||||
Current portion of debt, net | 32,031 | — | ||||||
Deferred revenue | 3,529 | 2,215 | ||||||
Total current liabilities | 55,896 | 21,896 | ||||||
Other long-term liabilities | 497 | 407 | ||||||
Long-term debt, net | 16,243 | 16,366 | ||||||
Convertible subordinated debt, net | — | 44,384 | ||||||
Total liabilities | 72,636 | 83,053 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.01 par value: 10,000 shares authorized; no shares issued or outstanding | — | — | ||||||
Common stock, $0.01 par value: 250,000 shares authorized; 58,716 and 57,545 shares outstanding at March 31, 2014 and September 30, 2013, respectively | 587 | 575 | ||||||
Additional paid-in-capital | 1,894,305 | 1,891,661 | ||||||
Accumulated deficit | (1,887,530 | ) | (1,876,328 | ) | ||||
Total stockholders’ equity | 7,362 | 15,908 | ||||||
$ | 79,998 | $ | 98,961 | |||||
VITESSE SEMICONDUCTOR CORPORATION | |||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
Three months ended March 31, | Six Months Ended March 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||
Net revenues: | |||||||||||||||
Product revenues | $ | 24,869 | $ | 24,689 | $ | 49,732 | $ | 48,594 | |||||||
Intellectual property revenues | 723 | 64 | 2,943 | 1,886 | |||||||||||
Net revenues | 25,592 | 24,753 | 52,675 | 50,480 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of product revenues |
10,979 | 11,369 | 21,655 | 22,344 | |||||||||||
Engineering, research and development | 10,896 | 9,777 | 21,575 | 20,281 | |||||||||||
Selling, general and administrative | 8,005 | 7,390 | 15,859 | 15,360 | |||||||||||
Amortization of intangible assets | 91 | 89 | 179 | 186 | |||||||||||
Costs and expenses | 29,971 | 28,625 | 59,268 | 58,171 | |||||||||||
Loss from operations | (4,379 | ) | (3,872 | ) | (6,593 | ) | (7,691 | ) | |||||||
Other expense (income): | |||||||||||||||
Interest expense, net | 1,492 | 1,966 | 3,196 | 3,936 | |||||||||||
Gain on compound embedded derivative | — | — | — | (803 | ) | ||||||||||
Loss on extinguishment of debt | — | — | 1,594 | — | |||||||||||
Other expense (income), net | 32 | 5 | 93 | (26 | ) | ||||||||||
Other expense, net | 1,524 | 1,971 | 4,883 | 3,107 | |||||||||||
Loss before income tax benefit | (5,903 | ) | (5,843 | ) | (11,476 | ) | (10,798 | ) | |||||||
Income tax benefit | (72 | ) | (996 | ) | (274 | ) | (919 | ) | |||||||
Net loss | $ | (5,831 | ) | $ | (4,847 | ) | $ | (11,202 | ) | $ | (9,879 | ) | |||
Net loss per common share - basic and diluted | $ | (0.10 | ) | $ | (0.13 | ) | $ | (0.19 | ) | $ | (0.30 | ) | |||
Weighted average common shares outstanding - basic and diluted | 58,327 | 37,215 | 57,965 | 32,587 | |||||||||||
VITESSE SEMICONDUCTOR CORPORATION | ||||||||||||||||
UNAUDITED RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS | ||||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
|
2014 | 2013 | 2014 | 2013 | ||||||||||||
(in thousands, except per share data) | ||||||||||||||||
UNAUDITED RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS | ||||||||||||||||
GAAP net loss | $ | (5,831 | ) | $ | (4,847 | ) | $ | (11,202 | ) | $ | (9,879 | ) | ||||
Adjustments: | ||||||||||||||||
Stock-based compensation charges | 1,615 | 1,006 | 2,880 |
|
2,149 |
|||||||||||
Amortization of intangible assets | 91 | 89 | 179 |
|
186 |
|||||||||||
Gain on compound embedded derivative | — | — | — |
|
(803 |
) | ||||||||||
Loss on extinguishment of debt | — | — | 1,594 |
|
— |
|||||||||||
Total GAAP to non-GAAP adjustments | 1,706 | 1,095 | 4,653 |
|
1,532 |
|||||||||||
Non-GAAP net loss | $ | (4,125 | ) | $ | (3,752 | ) | $ | (6,549 | ) | $ | (8,347 | ) | ||||
Net loss per common share - basic and diluted: | ||||||||||||||||
GAAP net loss per common share | $ | (0.10 | ) | $ | (0.13 | ) | $ | (0.19 | ) | $ | (0.30 | ) | ||||
Adjustments | 0.03 | 0.03 | 0.08 |
|
0.05 |
|||||||||||
Non-GAAP net loss per common share | $ | (0.07 | ) | $ | (0.10 | ) | $ | (0.11 | ) | $ | (0.25 | ) | ||||
UNAUDITED RECONCILIATION OF GAAP LOSS FROM OPERATIONS TO NON-GAAP LOSS FROM OPERATIONS | ||||||||||||||||
GAAP loss from operations | $ | (4,379 | ) | $ | (3,872 | ) | $ | (6,593 | ) |
$ |
(7,691 |
) | ||||
Adjustments: | ||||||||||||||||
Stock-based compensation charges | 1,615 | 1,006 | 2,880 |
|
2,149 |
|||||||||||
Amortization of intangible assets | 91 | 89 | 179 |
|
186 |
|||||||||||
Total GAAP to non-GAAP adjustments | 1,706 | 1,095 | 3,059 |
|
2,335 |
|||||||||||
Non-GAAP loss from operations | $ | (2,673 | ) | $ | (2,777 | ) | $ | (3,534 | ) | $ | (5,356 | ) | ||||
UNAUDITED RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | ||||||||||||||||
GAAP operating expenses: | ||||||||||||||||
Engineering, research and development | $ | 10,896 | $ | 9,777 | $ | 21,575 |
$ |
20,281 |
||||||||
Selling, general and administrative | 8,005 | 7,390 | 15,859 |
|
15,360 |
|||||||||||
Amortization of intangible assets | 91 | 89 | 179 |
|
186 |
|||||||||||
Total GAAP operating expenses | 18,992 | 17,256 | 37,613 |
|
35,827 |
|||||||||||
Adjustments: | ||||||||||||||||
Stock-based compensation charges | 1,390 | 862 | 2,471 |
|
1,851 |
|||||||||||
Amortization of intangible assets | 91 | 89 | 179 |
|
186 |
|||||||||||
Total GAAP to non-GAAP adjustments | 1,481 | 951 | 2,650 |
|
2,037 |
|||||||||||
Non-GAAP operating expenses | $ | 17,511 | $ | 16,305 | $ | 34,963 | $ | 33,790 |