MaxLinear(US:MXL)2022-02-02 21:17Financial Performance - In the year ended December 31, 2021, net revenue was $892.4 million, driven by sales of RF receivers, connectivity solutions, and high-speed optical interconnect solutions [238]. - Net revenue increased by $413.8 million to $892.4 million for the year ended December 31, 2021, compared to $478.6 million for the year ended December 31, 2020, representing an 86% increase [281]. - Gross profit for the year ended December 31, 2021 was $495.8 million, up $283.0 million or 133% from $212.8 million in 2020, with a gross profit percentage of 56% [283]. - Gross profit margin improved to 56% in 2021 from 44% in 2020, while cost of net revenue decreased from 56% to 44% [279]. - Cost of net revenue increased by $130.8 million to $396.6 million for the year ended December 31, 2021, representing a 49% increase compared to 2020 [283]. Revenue Sources - Products shipped to Asia accounted for 83% of net revenue in 2021, with significant contributions from Hong Kong (40%) and mainland China (12%) [239]. - The top two customers accounted for 26% of net revenue in 2021, while the ten largest customers collectively accounted for 69% [240]. - Broadband revenue contributed $248.1 million to the increase, primarily due to a full-year contribution from the acquisition of Wi-Fi and Broadband assets on July 31, 2020 [281]. - Connectivity revenue rose by $78.5 million, driven by a full-year contribution from the Wi-Fi and Broadband assets acquisition and increased MoCA and G.hn product shipments [281]. - Infrastructure revenue increased by $43.3 million, attributed to higher shipments of high-performance analog and wireless backhaul products, driven by the ramp-up of 5G [281]. - Industrial and multi-market revenue grew by $43.9 million, linked to increased shipments of high-performance analog products from the Wi-Fi and Broadband assets acquisition [281]. Acquisitions and Investments - The company completed the acquisition of the Home Gateway Platform Division of Intel for $150 million on July 31, 2020 [247]. - The acquisition of NanoSemi, Inc. included $10 million in cash and 804,163 shares, with potential additional payments of up to $70 million based on performance [248]. - A recent acquisition on December 8, 2021, involved an initial payment of $5 million, with an additional $3 million contingent on meeting targets by March 31, 2023 [256]. - The company reported net cash used in investing activities of $91.8 million for 2021, which included $40.0 million for acquisitions and $39.2 million for property and equipment purchases [310]. Expenses and Cost Management - Research and development expenses accounted for 31% of total operating expenses in 2021, down from 38% in 2020 [279]. - Research and development expenses rose by $98.4 million to $278.4 million in 2021, a 55% increase from $180.0 million in 2020, accounting for 31% of net revenue [284]. - Selling, general and administrative expenses decreased to 17% of total operating expenses in 2021 from 27% in 2020 [279]. - Selling, general and administrative expenses increased by $19.9 million to $149.9 million in 2021, a 15% increase from $130.0 million in 2020, representing 17% of net revenue [286]. - Restructuring charges decreased by $1.6 million to $2.2 million in 2021, a 42% reduction compared to $3.8 million in 2020 [287]. Cash Flow and Financial Position - As of December 31, 2021, the company had cash and cash equivalents of $130.6 million and net accounts receivable of $119.7 million, with working capital of $196.7 million [297]. - The company's working capital increased to $196.7 million as of December 31, 2021, compared to $128.1 million in 2020 [305]. - Cash and cash equivalents decreased to $130.6 million as of December 31, 2021, down from $148.9 million in 2020 [305]. - The company expects its cash and cash equivalents to be sufficient to fund projected operating requirements for at least the next twelve months [314]. - Net cash provided by operating activities for the year ended December 31, 2021 was $168.2 million, a significant increase from $73.6 million in 2020 [307][308]. - Net cash used in financing activities was $91.9 million for 2021, primarily due to $409.8 million in debt repayments and $23.5 million in common stock repurchases [312]. Market Conditions and Future Outlook - The company experienced a global semiconductor chip shortage impacting its ability to meet increased demand, which may continue into 2023 [245]. - The COVID-19 pandemic has caused significant volatility in sales and revenues, with ongoing uncertainty in customer demand [246]. - The company expects revenue to fluctuate in the future due to evolving customer demand and macroeconomic conditions, with potential volatility from the COVID-19 pandemic and global semiconductor chip shortage [282]. - The company anticipates an increase in research and development expenses in future years to expand its product portfolio and enhance existing products [285]. - The company may face decreased sales and revenues in the near future due to heightened volatility and uncertainty in customer demand stemming from the COVID-19 pandemic and global semiconductor chip shortages [300]. Financial Obligations - As of December 31, 2021, the company had total cash requirements of $532.6 million, including long-term debt obligations of $310.0 million and operating lease obligations of $36.2 million [303]. - The company has a revolving credit facility of up to $100.0 million, which was undrawn as of December 31, 2021 [304]. - The company is subject to variable interest rates on its credit agreements, with potential impacts from rising interest rates being immaterial [321].