QORVO, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except percentages)
(Unaudited)
| Three Months Ended | |||||||||||||||||
| January 2, 2016 | October 3, 2015 | December 27, 2014 | |||||||||||||||
| GAAP gross profit/margin | $ | 230,988 | 37.2 | % | $ | 284,848 | 40.2 | % | $ | 190,702 | 48.0 | % | |||||
| Adjustment for intangible amortization | 56,683 | 9.1 | % | 56,092 | 7.9 | % | 4,280 | 1.1 | % | ||||||||
| Adjustment for share-based compensation | 8,101 | 1.3 | % | 10,245 | 1.4 | % | 509 | 0.1 | % | ||||||||
| Restructuring and disposal adjustments | — | — | % | — | — | % | (195 | ) | (0.1 | )% | |||||||
| Other expenses | 913 | 0.1 | % | 421 | 0.1 | % | — | — | % | ||||||||
| Non-cash deferred royalty revenue and equal and offsetting non-cash prepaid royalty amortization ($970) | — | 0.2 | % | — | 0.1 | % | — | 0.2 | % | ||||||||
| Non-GAAP gross profit/margin | $ | 296,685 | 47.9 | % | $ | 351,606 | 49.7 | % | $ | 195,296 | 49.3 | % | |||||
| Three Months Ended | ||
| Non-GAAP Operating Income | January 2, 2016 | |
| (as a percentage of sales) | ||
| GAAP operating loss | (2.1 | )% |
| Share-based compensation expense | 4.9 | % |
| Amortization of intangible assets | 20.7 | % |
| IPR litigation costs | 0.1 | % |
| Acquisition and integration related costs | 0.8 | % |
| Start-up costs | 0.6 | % |
| Other expenses (including loss (gain) on assets and other non-cash expenses) | 0.3 | % |
| Non-GAAP operating income | 25.3 | % |
| Free Cash Flow (1) | Three Months Ended | ||
| January 2, 2016 | |||
| (In millions) | |||
| Net cash provided by operating activities | $ | 218.0 | |
| Purchases of property and equipment | (61.5 | ) | |
| Free cash flow | $ | 156.5 | |
(1) Free Cash Flow is calculated as net cash provided by operating activities minus property and equipment expenditures.
QORVO, INC. AND SUBSIDIARIES
ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
| Three Months Ended | |||||||||||
| January 2, 2016 | October 3, 2015 | December 27, 2014 | |||||||||
| GAAP research and development expense | $ | 105,992 | $ | 118,293 | $ | 48,865 | |||||
| Less: | |||||||||||
| Share-based compensation expense | 10,750 | 11,526 | 1,695 | ||||||||
| Other non-cash expenses | 240 | 239 | — | ||||||||
| Non-GAAP research and development expense | $ | 95,002 | $ | 106,528 | $ | 47,170 | |||||
| Three Months Ended | |||||||||||
| January 2, 2016 | October 3, 2015 | December 27, 2014 | |||||||||
| GAAP marketing and selling expense | $ | 101,890 | $ | 105,925 | $ | 17,939 | |||||
| Less: | |||||||||||
| Share-based compensation expense | 4,336 | 5,273 | 959 | ||||||||
| Amortization of intangible assets | 71,859 | 71,936 | 1,187 | ||||||||
| Other non-cash expenses | 34 | 34 | — | ||||||||
| Non-GAAP marketing and selling expense | $ | 25,661 | $ | 28,682 | $ | 15,793 | |||||
| Three Months Ended | |||||||||||
| January 2, 2016 | October 3, 2015 | December 27, 2014 | |||||||||
| GAAP general and administrative expense | $ | 24,404 | $ | 29,069 | $ | 12,026 | |||||
| Less: | |||||||||||
| Share-based compensation expense | 4,447 | 7,241 | 956 | ||||||||
| Other non-cash expenses | 513 | 64 | — | ||||||||
| IPR litigation costs | 337 | 192 | 189 | ||||||||
| Non-GAAP general and administrative expense | $ | 19,107 | $ | 21,572 | $ | 10,881 | |||||
