Core Viewpoint - Allegro Microsystems rejected a $6.9 billion cash acquisition offer from ON Semiconductor, citing the proposal as "inadequate" [1][2]. Group 1: Allegro Microsystems - Allegro's board received the acquisition proposal in February and deemed the offer of $35.10 per share insufficient, following a previous offer of $34.50 per share [2]. - Allegro's latest closing stock price was $26.78 per share, with a total market capitalization of approximately $4.9 billion [2]. - In 2024, Allegro reported sales revenue exceeding $1 billion, reflecting an 8% year-over-year growth, with the latest quarterly revenue at $178 million [2]. Group 2: ON Semiconductor - ON Semiconductor's revenue primarily comes from automotive CMOS image sensors (CIS) and power semiconductors, holding a leading position in the automotive image sensor market with a 50% market share [3]. - In the advanced driver-assistance systems (ADAS) segment, ON Semiconductor commands a significant 68% market share [3]. - The CEO of ON Semiconductor stated that the merger would combine two highly complementary companies [3].

Core Viewpoint - Allegro received an unsolicited acquisition proposal from onsemi for $35.10 per share in cash, which the Allegro Board deemed inadequate after review [1]. Company Summary - Allegro Microsystems, Inc. has over three decades of expertise in magnetic sensing and power integrated circuits, focusing on automotive, clean energy, and industrial automation sectors [3]. - The company emphasizes enhancing efficiency, performance, and sustainability through its solutions, reinforcing its status as a pioneer in "automotive-grade" technology [3].

Core Viewpoint - Allegro Microsystems Inc. is attracting acquisition interest from ON Semiconductor, with potential other suitors also considering the company [1][2][3] Group 1: Acquisition Interest - ON Semiconductor has been working with advisors to explore the possibility of acquiring Allegro Microsystems [1] - Allegro may have other potential buyers, and it has not indicated whether it is open to a sale [2] - Semiconductor companies looking to enhance their automotive capabilities might consider acquiring Allegro [3] Group 2: Company Performance - Allegro's stock has declined approximately 31% this year, with a market capitalization of about $4.1 billion [4] - ON Semiconductor's stock has dropped 42%, with a market cap of $19.8 billion [4] - Allegro recently announced a leadership change, appointing Mike Doogue as CEO, replacing Vineet Nargolwala [4] Group 3: Financial Highlights - Allegro reported revenue of $177.9 million for Q3 2025, exceeding expectations of $176.34 million [6] - The company adjusted its Q4 2025 revenue guidance to a range of $180 million to $190 million, with non-GAAP EPS guidance of $0.03 to $0.07 [6] - Allegro's interest expenses for Q4 2025 are expected to decrease from $7.8 million in Q3 to approximately $6 million [6]

Core Viewpoint - Allegro MicroSystems has appointed Mike Doogue as the new President and CEO, succeeding Vineet Nargolwala, marking a significant leadership transition aimed at enhancing the company's growth in the automotive and industrial markets [1][3]. Company Leadership - Mike Doogue has been with Allegro for 27 years, progressing through various leadership roles, including Executive Vice President and Chief Technology Officer, and holds 75 U.S. patents related to semiconductors [2][3]. - The leadership transition is part of a long-term succession planning process by the Board, reflecting confidence in Doogue's ability to drive the company forward [3]. Strategic Focus - Under Doogue's leadership, Allegro aims to extend its technology leadership and capitalize on growth opportunities in the automotive and industrial sectors [3]. - The company emphasizes its commitment to "innovation with purpose," focusing on enhancing customer value and financial performance [3]. Company Background - Allegro MicroSystems specializes in power and sensing semiconductor solutions, leveraging over 30 years of expertise in magnetic sensing and power integrated circuits to drive advancements in automotive, clean energy, and industrial automation [4].

Core Insights - Allegro MicroSystems, Inc. is a global leader in power and sensing semiconductor solutions, focusing on motion control and energy-efficient systems [1][3] - The company will present at Morgan Stanley's Technology, Media & Telecom Conference on March 4, 2025, with CFO Derek D'Antilio participating in a fireside chat [1] - A live and archived webcast of the fireside chat will be available on the company's Investor Relations page [2] Company Overview - Allegro MicroSystems has over three decades of expertise in magnetic sensing and power integrated circuits (ICs), driving advancements in automotive, clean energy, and industrial automation [3] - The company emphasizes quality and innovation, reinforcing its status as a pioneer in "automotive grade" technology [3] - Allegro aims to enhance efficiency, performance, and sustainability across various industries [3]

Core Viewpoint - Allegro MicroSystems, Inc. will present at Morgan Stanley's Technology, Media & Telecom Conference on March 4, 2025, highlighting its leadership in power and sensing semiconductor solutions for motion control and energy-efficient systems [1]. Company Overview - Allegro MicroSystems has over three decades of expertise in magnetic sensing and power integrated circuits (ICs), focusing on automotive, clean energy, and industrial automation sectors [3]. - The company emphasizes enhancing efficiency, performance, and sustainability through its solutions, reinforcing its status as a pioneer in "automotive grade" technology [3]. - Allegro's commitment to quality is aimed at driving transformation across various industries and supporting customer success [3].

Core Viewpoint - Allegro MicroSystems has appointed Dr. Krishna Palepu, a Harvard Business School professor, as an independent director on its Board, effective January 31, 2025, bringing valuable expertise in strategy, governance, and emerging markets to the company [1][2][3] Company Overview - Allegro MicroSystems is a leader in power and sensing semiconductor solutions, focusing on motion control and energy-efficient systems, with over three decades of expertise in magnetic sensing and power integrated circuits [4] - The company aims to enhance efficiency, performance, and sustainability across automotive, clean energy, and industrial automation sectors, reinforcing its status as a pioneer in "automotive grade" technology [4] Board Appointment Details - Dr. Palepu's background includes extensive experience in advising technology and semiconductor companies, with a focus on globalization and corporate board effectiveness [2] - His academic credentials include a master's degree in Electronics, an MBA-equivalent degree, and a Ph.D. in Management, positioning him well to contribute to Allegro's strategic direction [3]

Financial Performance - Total net sales for the three-month period ended December 27, 2024, were $177.872 million, a decrease of 30.2% compared to $254.984 million for the same period in 2023[18]. - Gross profit for the three-month period ended December 27, 2024, was $81.215 million, down from $133.828 million in the same period last year, reflecting a gross margin decline[18]. - The net loss attributable to Allegro MicroSystems, Inc. for the three-month period ended December 27, 2024, was $6.860 million, compared to a net income of $33.345 million for the same period in 2023[18]. - The company reported a comprehensive loss of $14.361 million for the three-month period ended December 27, 2024, compared to a comprehensive income of $36.965 million for the same period in 2023[20]. - Net loss for the nine-month period ended December 27, 2024, was $58,025 thousand, compared to a net income of $159,962 thousand for the same period in 2023[28]. - For the three-month period ended December 27, 2024, total net sales were $177,872, a decrease of 30.3% compared to $254,984 for the same period in 2023[43]. - Automotive segment sales for the three-month period ended December 27, 2024, were $130,066, down 33.3% from $194,764 in the prior year[43]. - The company reported net sales of $532,182 for the nine-month period ended December 27, 2024, a decline of 34.1% from $808,786 for the same period in 2023[43]. Operating Expenses - Operating expenses for the three-month period ended December 27, 2024, totaled $81.256 million, compared to $97.142 million for the same period in 2023, indicating a reduction of 16.4%[18]. - Research and development expenses for the nine-month period ended December 27, 2024, were $132.031 million, slightly up from $130.799 million for the same period in 2023[18]. - Depreciation and amortization for the nine-month period was $48,578 thousand, slightly lower than $49,548 thousand in the prior year[28]. - Total depreciation expense for the three-month period ended December 27, 2024, was $9,409, compared to $15,124 for the same period in 2023[50]. - Intangible assets amortization expense was $6,363 for the three-month period ended December 27, 2024, compared to $5,071 for the same period in 2023[54]. Cash Flow and Assets - Cash and cash equivalents decreased to $138.452 million as of December 27, 2024, from $212.143 million as of March 29, 2024[16]. - Total assets decreased to $1.441 billion as of December 27, 2024, from $1.531 billion as of March 29, 2024[16]. - Cash provided by operating activities for the nine-month period ended December 27, 2024, was $41,560 thousand, a decrease from $168,951 thousand in the prior year[28]. - Total cash and cash equivalents and restricted cash at the end of the period was $148,962 thousand, down from $223,735 thousand at the end of the previous year[28]. - Trade accounts receivable, net, decreased to $83,805 as of December 27, 2024, from $118,508 as of March 29, 2024[48]. - Total inventories increased to $193,140 as of December 27, 2024, compared to $162,302 as of March 29, 2024[49]. Debt and Financing - Long-term debt increased to $374.729 million as of December 27, 2024, compared to $249.611 million as of March 29, 2024[16]. - The total debt as of December 27, 2024, was $376,103, an increase from $253,540 as of March 29, 2024[56]. - The Company entered into a new $400,000 tranche of term loans maturing in 2030, primarily used for stock repurchase and refinancing existing debt[58]. - The 2023 Revolving Credit Facility was increased to $256,000 as of August 6, 2024[57]. - The company was in compliance with its debt covenants as of December 27, 2024[59]. Stock and Equity - The company had 184,011,189 weighted average shares outstanding for the three-month period ended December 27, 2024[18]. - The basic net loss per share attributable to Allegro MicroSystems, Inc. stockholders for the three-month period ended December 27, 2024, was $(0.04)[67]. - The company repurchased common stock amounting to $853,921 thousand during the nine-month period[28]. - The company repurchased 28,750,000 shares of common stock for $628,256 during the First Closing of the Share Repurchase Agreement[78]. - The company completed the Second Closing of the Share Repurchase Agreement, repurchasing 10,017,315 shares for $225,549[79]. - The company granted 1,486,141 Restricted Stock Units (RSUs) during the nine-month period ended December 27, 2024[69]. - The company had 2,573,920 Performance Stock Units (PSUs) outstanding as of December 27, 2024[70]. Other Financial Metrics - The company incurred a loss on change in fair value of forward repurchase contracts amounting to $34,752 thousand[28]. - The company recorded a foreign currency translation adjustment loss of $5,243 thousand[28]. - The company recognized a net loss of $2,804 related to the PSL equity interests transaction[84]. - The company recorded inventory provisions of $2,739 for the three-month period ended December 27, 2024, compared to $429 for the same period in 2023[49]. - The estimated useful lives of machinery and equipment were increased from seven years to ten years, resulting in a decrease in depreciation expense by $4,460 for the three-month period ended December 27, 2024[52]. - The fair value of the company's debt was $376,406 as of December 27, 2024[47]. - The effective tax rate for the nine-month period ended December 27, 2024, was 13.7%, compared to 9.9% for the same period in 2023[72]. - One distributor accounted for 11.4% of total net sales for the three-month period ended December 27, 2024[36]. - The company is evaluating the impact of new accounting standards that will require additional disclosures starting in 2026 and 2027[38][39][40]. - The Company expanded its global manufacturing capacities, including operations in the Philippines and the acquisition of Crocus Technology International Corp.[52].

Company Performance - Allegro MicroSystems reported quarterly earnings of $0.07 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, but down from $0.32 per share a year ago, representing an earnings surprise of 16.67% [1] - The company posted revenues of $177.87 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.53%, but down from $254.98 million year-over-year [2] - Over the last four quarters, Allegro MicroSystems has consistently surpassed consensus EPS and revenue estimates [2] Market Outlook - Allegro MicroSystems shares have increased approximately 4.5% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $175.2 million, and for the current fiscal year, it is $0.22 on revenues of $704.7 million [7] Industry Context - The Electronics - Semiconductors industry, to which Allegro MicroSystems belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Allegro MicroSystems' stock performance [5][6]

JANUARY 30, 2025 3QFY25 Investor Presentation Forward-looking statements This presentation and the accompanying oral remarks contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward- looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other th ...