Wolfspeed(US:WOLF)2025-05-09 20:16Revenue and Financial Performance - Revenue for the nine months ended March 30, 2025, decreased by $45.9 million to $560.6 million, primarily due to weaker demand in industrial and energy markets, partially offset by growth in automotive products [133]. - Revenue for the three months ended March 30, 2025, was $185.4 million, down 8% from $200.7 million in the same period in 2024 [142]. - Power Products revenue decreased by 5% to $107.5 million, while Materials Products revenue fell by 21% to $77.9 million for the three months ended March 30, 2025 [142]. - For the nine months ended March 30, 2025, net cash used in operating activities increased to $469.2 million, a 9% increase from $431.8 million in the same period last year [171]. Profitability and Margins - Gross margin decreased to -17.1% from 12.4%, impacted by underutilization costs related to the Mohawk Valley Fab and restructuring costs from the Durham Fab [133]. - Gross profit for the three months ended March 30, 2025, was a loss of $22.5 million, compared to a profit of $22.5 million in the same period in 2024, resulting in a gross margin of (12.1)% [143]. - Diluted loss per share was $6.88, up from $3.18 year-over-year [133]. Expenses and Investments - Operating loss increased to $747.6 million compared to $299.4 million in the previous year [133]. - Research and development expenses decreased by 20% to $42.2 million for the three months ended March 30, 2025, representing 23% of revenue [144]. - Sales, general and administrative expenses decreased by 26% to $41.1 million for the three months ended March 30, 2025, representing 22% of revenue [145]. - Factory start-up costs increased by 63% to $23.5 million for the three months ended March 30, 2025, due to construction costs for a new manufacturing facility [147]. - Cash used in investing activities decreased significantly by 84%, from $1,571.4 million to $254.5 million, primarily due to reduced capital expenditures [171]. Debt and Cash Position - Cash, cash equivalents, and short-term investments totaled $1,329.6 million as of March 30, 2025, down from $2,174.6 million at June 30, 2024 [133]. - Long-term debt increased to $6,511.8 million as of March 30, 2025, compared to $6,161.1 million at June 30, 2024 [133]. - As of March 30, 2025, the company had approximately $1,329.6 million in unrestricted cash and cash equivalents, compared to scheduled debt repayments of $575 million and debt service costs of $322 million over the next 12 months [160]. Capital Investment and Future Plans - The company incurred approximately $0.8 billion in net capital investment for the nine months ended March 30, 2025, with an additional $0.2 billion expected in Q4 of fiscal 2025 [137]. - Major expansion projects at the Mohawk Valley Fab and Siler City, NC facility are nearing substantial completion, with gross capital investment expected to decrease significantly to approximately $0.2 billion in fiscal 2026 [138]. - The company anticipates gross capital investment to decrease significantly to approximately $0.2 billion in fiscal 2026 [168]. - The company expects to need additional funding for capacity expansions and may consider reducing capital expenditures to preserve working capital [156]. Design Wins and Market Position - Design-wins for the third quarter of fiscal 2025 were the second highest in company history, indicating a ramp-up in previously reported design-ins [139]. - The company is focused on transitioning from 150mm to 200mm silicon carbide devices as part of its 2025 Restructuring Plan [136]. Non-Operating and Other Expenses - Non-operating expense, net, was $90.9 million for the three months ended March 30, 2025, an increase of 114% compared to $42.4 million in the same period in 2024 [151]. - Loss on disposal or impairment of long-lived assets was $31.1 million for the three months ended March 30, 2025, a significant increase from $0.6 million in the same period in 2024 [148]. Funding and Tax Refunds - In Q3 fiscal 2025, the company received an initial federal cash tax refund of $186.5 million related to AMIC claims under Section 48D of the Internal Revenue Code [158]. - The company expects to submit for approximately $600 million in cash tax refunds related to AMIC over the next 12 months [160]. - The company raised approximately $200.0 million through the sale of 27.8 million additional shares of common stock as part of an at-the-market program [157]. Supplier Agreements and Market Value - The company has take-or-pay supplier agreements requiring a minimum of $209.9 million in purchases over the next five years [169]. - As of March 30, 2025, the market value of MACOM common stock held by the company was approximately $70.1 million, with a potential decrease of $7.0 million if market values hypothetically drop by 10% [180].