MACOM(US:MTSI)2021-07-29 20:02Financial Performance - Revenue for the three months ended July 2, 2021, was $152.622 million, a 11.2% increase from $137.267 million for the same period in 2020[119] - Gross profit for the three months ended July 2, 2021, was $87.269 million, compared to $70.876 million for the same period in 2020, reflecting a gross margin improvement[119] - Net income for the three months ended July 2, 2021, was $15.005 million, a significant recovery from a net loss of $24.982 million in the same period of 2020[119] - Operating expenses for the three months ended July 2, 2021, totaled $63.595 million, slightly down from $64.376 million in the same period of 2020[119] - Revenue increased by $15.4 million, or 11.2%, to $152.6 million for the three months ended July 2, 2021, and increased by $68.9 million, or 18.0%, to $451.7 million for the nine months ended July 2, 2021[124] - Gross profit was $87.3 million for the three months ended July 2, 2021, compared to $70.9 million for the same period in 2020, and $251.6 million for the nine months ended July 2, 2021, compared to $192.5 million for the same period in 2020[129] - Gross margin improved to 57.2% for the three months ended July 2, 2021, compared to 51.6% for the same period in 2020, and 55.7% for the nine months ended July 2, 2021, compared to 50.3% for the same period in 2020[129] - Net income was 9.8% for the three months ended July 2, 2021, compared to a net loss of (18.2)% for the same period in 2020, and net income was 4.6% for the nine months ended July 2, 2021, compared to a net loss of (16.6)% for the same period in 2020[123] Expenses and Costs - Research and development expenses for the three months ended July 2, 2021, were $33.610 million, compared to $34.948 million in the same period of 2020[119] - Research and development expenses decreased by $1.3 million, or 3.8%, to $33.6 million for the three months ended July 2, 2021, and decreased by $0.8 million, or 0.7%, to $105.2 million for the nine months ended July 2, 2021[130] - Selling, general and administrative expenses were $30.0 million for the three months ended July 2, 2021, unchanged from the same period in 2020, and decreased by $2.6 million, or 2.7%, to $91.8 million for the nine months ended July 2, 2021[131] - Interest expense decreased to $5.5 million, or 3.6% of revenue, for the three months ended July 2, 2021, compared to $5.8 million, or 4.3% of revenue, for the same period in 2020[134] Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were $144.1 million as of July 2, 2021, compared to $131.9 million as of July 3, 2020[138] - Cash flow from operating activities for the nine months ended July 2, 2021, was $107.6 million, consisting of a net income of $20.8 million and adjustments totaling $104.4 million, offset by cash used in operating assets and liabilities of $17.6 million[139] - Cash flow from investing activities for the nine months ended July 2, 2021, included proceeds of $191.3 million from the sale and maturity of short-term investments, offset by purchases of $152.3 million of short-term investments and capital expenditures of $12.9 million[141] - Cash used in financing activities for the nine months ended July 2, 2021, was $119.7 million, primarily related to $545.3 million of payments on Term Loans, partially offset by proceeds from the 2026 Convertible Notes of $444.2 million[143] - As of July 2, 2021, the company held $144.1 million in cash and cash equivalents and $164.8 million in liquid short-term investments, with $160.0 million in borrowing capacity under its Revolving Facility[145] - The company plans to use available cash and short-term investments for general corporate purposes, including working capital and potential acquisitions of complementary technologies and businesses[146] - Cash flow from operating activities for the nine months ended July 3, 2020, was $97.0 million, consisting of a net loss of $63.6 million and adjustments totaling $123.1 million[140] Market Outlook - The company expects revenue growth in the Telecom market driven by 5G deployments and upgrades in communications equipment[110] - Revenue in the I&D market is anticipated to grow due to an expanding product portfolio servicing applications like satellite communications and radar[111] - The Data Center market revenue is expected to increase with the adoption of cloud-based services and upgrades to higher-speed interconnects[112] Risk Management - The impact of COVID-19 on operations has been managed without material effects on consolidated operating results for the periods presented[105] - The company experienced a decrease in Telecom market revenue by $8.8 million, or 15.5%, for the three months ended July 2, 2021, primarily due to a decrease in carrier-based optical semiconductor products[125] - The company has limited exposure to foreign currency exchange rates, as most international customer agreements are denominated in U.S. dollars[153] - The company believes that a 10% change in interest rates or foreign currency exchange rates would not have a material impact on its financial position or results of operations[151][153] - The company did not have any off-balance sheet arrangements as of July 2, 2021[149]