MACOM(US:MTSI)2021-04-29 20:02Financial Performance - Revenue for the three months ended April 2, 2021, was $150.583 million, a 19.1% increase from $126.424 million for the same period in 2020[123]. - Gross profit for the three months ended April 2, 2021, was $84.113 million, compared to $63.370 million for the same period in 2020, reflecting a gross margin improvement[123]. - Net income for the three months ended April 2, 2021, was $14.807 million, a significant recovery from a net loss of $10.226 million in the same period of 2020[123]. - Revenue increased by $24.2 million, or 19.1%, to $150.6 million for the three months ended April 2, 2021, and by $53.6 million, or 21.8%, to $299.1 million for the six months ended April 2, 2021[128]. - Gross profit was $84.1 million for the three months ended April 2, 2021, compared to $63.4 million for the same period in 2020, resulting in a gross margin of 55.9%[133]. - Net income for the three months ended April 2, 2021, was 9.8%, compared to a net loss of (8.1)% for the same period in 2020[127]. Expenses - Research and development expenses for the three months ended April 2, 2021, were $34.619 million, slightly down from $35.830 million in the same period of 2020[123]. - Total operating expenses for the three months ended April 2, 2021, were $65.141 million, a decrease from $68.639 million in the same period of 2020[123]. - Research and development expenses decreased by $1.2 million, or 3.4%, to $34.6 million for the three months ended April 2, 2021, representing 23.0% of revenue[134]. - Selling, general and administrative expenses decreased by $1.5 million, or 4.6%, to $30.5 million for the three months ended April 2, 2021, representing 20.3% of revenue[135]. Market Outlook - The company expects revenue growth in the Telecom market driven by 5G deployments and upgrades in communication equipment[114]. - Revenue in the I&D market is anticipated to grow due to an expanding product portfolio servicing applications like satellite communications and radar[115]. - The Data Center market revenue is projected to increase with the adoption of cloud-based services and upgrades to higher-speed interconnects[116]. - The Telecom market revenue decreased by $9.4 million, or 18.2%, for the three months ended April 2, 2021, primarily due to a decrease in carrier-based optical semiconductor products[129]. Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were $105.5 million, down from $120.7 million at the end of the six months ended April 3, 2020[140]. - Cash flow from operating activities for the six months ended April 2, 2021 was $62.7 million, consisting of a net income of $5.8 million and adjustments totaling $70.6 million[141]. - Cash used in financing activities for the six months ended April 2, 2021, was $121.1 million, primarily due to $394.9 million from 2026 Convertible Notes and $496.0 million in Term Loan payments[145]. - As of April 2, 2021, the company held $105.5 million in cash and cash equivalents and $162.6 million in liquid short-term investments, with $23.4 million held by indefinitely reinvested foreign subsidiaries[147]. - The company has $160.0 million in borrowing capacity under its Revolving Facility, allowing up to $50.0 million to be borrowed without certain financial covenants[147]. - The company plans to utilize available cash, short-term investments, and borrowing capacity for general corporate purposes and potential acquisitions[148]. - As of April 2, 2021, the company had $170.1 million in outstanding borrowings under the Credit Agreement, with a 1% change in interest rates affecting annual interest expense by $1.7 million[154]. - The company believes its current liquidity will be sufficient to meet working capital requirements for at least the next twelve months[148]. Risk Factors - The impact of COVID-19 on operations has been managed without material effects on consolidated operating results for the periods presented[109]. - The company has limited exposure to foreign currency risk, as most international agreements are denominated in U.S. dollars[155]. - A 10% change in interest rates is not expected to materially impact the company's financial position or results of operations[153]. - The company did not have any off-balance sheet arrangements as of April 2, 2021[151]. - The company may need to raise additional capital through equity or debt securities, with no assurance of favorable terms[148]. - The effective income tax rate for the three months ended April 2, 2021 was 12.9%, compared to an effective tax rate of (18.3)% for the same period in 2020[138]. - The company reported a loss on extinguishment of debt of $3.8 million for the three months ended April 2, 2021[125].