Cree Reports Financial Results for the Second Quarter of Fiscal Year 2017
Revenue from continuing operations was
Revenue from discontinued operations was
"We delivered very good results in fiscal Q2, as revenue and non-GAAP
earnings were significantly above our targeted range due to the
settlement of our patent infringement and false advertising lawsuit with
Business Outlook:
For its third quarter of fiscal 2017 ending
For continuing operations, revenue is targeted in a range of
For discontinued operations, revenue is targeted at
Quarterly Conference Call:
Cree will host a conference call at
The conference call will be available to the public through a live audio web broadcast via the internet. For webcast details, visit Cree's website at investor.cree.com/events.cfm.
Supplemental financial information, including the non-GAAP reconciliation attached to this press release, is available on Cree's website at investor.cree.com/results.cfm.
About
Cree is a market-leading innovator of lighting-class LEDs, lighting products and semiconductor products for power and radio frequency (RF) applications. Cree believes in better light experiences and is delivering new innovative LED technology that transforms the way people experience light through high-quality interior and exterior LED lighting solutions.
Cree's product families include LED lighting systems and bulbs, blue and green LED chips, high-brightness LEDs, lighting-class power LEDs, power-switching devices and RF devices. Cree's products are driving improvements in applications such as general illumination, electronic signs and signals, power supplies and inverters.
For additional product and Company information, please refer to www.cree.com.
Sale of Wolfspeed to Infineon Update
As previously announced, Cree reached an agreement to sell the Wolfspeed business to Infineon Technologies AG. The parties are continuing to work together to obtain the customarily required regulatory approvals in various jurisdictions, including foreign and domestic antitrust approvals, as well as CFIUS approval. The Company targets closing the transaction within its third quarter of fiscal 2017.
Non-GAAP Financial Measures:
This press release highlights the Company's financial results on both a GAAP and a non-GAAP basis. The GAAP results include certain costs, charges and expenses which are excluded from non-GAAP results. By publishing the non-GAAP measures, management intends to provide investors with additional information to further analyze the Company's performance, core results and underlying trends. Cree's management evaluates results and makes operating decisions using both GAAP and non-GAAP measures included in this press release. Non-GAAP results are not prepared in accordance with GAAP and non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures attached to this press release.
Forward Looking Statements:
The schedules attached to this release are an integral part of the
release. This press release contains forward-looking statements
involving risks and uncertainties, both known and unknown, that may
cause actual results to differ materially from those indicated in the
forward-looking statements. Actual results, including with respect to
our targets and prospects, could differ materially due to a number of
factors, including the risk that we may not obtain sufficient orders to
achieve our targeted revenues; price competition in key markets; the
risk that we or our channel partners are not able to develop and expand
customer bases and accurately anticipate demand from end customers,
which can result in increased inventory and reduced orders as we
experience wide fluctuations in supply and demand; the risk that our
commercial Lighting results will continue to suffer if new issues arise
regarding the new ERP system we implemented in the third quarter of
fiscal 2016 for this business; the risk that we may experience
production difficulties that preclude us from shipping sufficient
quantities to meet customer orders or that result in higher production
costs and lower margins; our ability to lower costs; the risk that our
results will suffer if we are unable to balance fluctuations in customer
demand and capacity; product mix; risks associated with the ramp-up of
production of our new products, and our entry into new business channels
different from those in which we have historically operated; the risk
that customers do not maintain their favorable perception of our brand
and products, resulting in lower demand for our products; the risk that
our products fail to perform or fail to meet customer requirements or
expectations, resulting in significant additional costs, including costs
associated with warranty returns or the potential recall of our
products; the risk that retail customers may alter promotional pricing,
increase promotion of a competitor's products over our products or
reduce their inventory levels, all of which could negatively affect
product demand; the risk that the sale of our Wolfspeed business to
Infineon may be delayed or may not occur; the ability to obtain
regulatory approval or the possibility that such regulatory approval may
result in the imposition of conditions that could cause the parties to
abandon the Wolfspeed transaction; the risk that one or more of the
conditions to closing of the Wolfspeed transaction may not be satisfied;
the possibility that anticipated benefits of the proposed Wolfspeed
transaction will not be realized, including the amount of cash to be
realized by Cree from the transaction or our resulting ability to pursue
select strategic transactions and stock repurchases; potential business
uncertainty, including changes to existing business relationships during
the pendency before closing that could affect our financial performance;
the risk that our investments may experience periods of significant
stock price volatility causing us to recognize fair value losses on our
investment; the risk that we have an increasingly complex supply chain
and its ability to scale to enable maintaining a sufficient supply of
raw materials, subsystems and finished products with the required
specifications and quality; ongoing uncertainty in global economic
conditions, infrastructure development or customer demand that could
negatively affect product demand, collectability of receivables and
other related matters as consumers and businesses may defer purchases or
payments, or default on payments; the risk we may be required to record
a significant charge to earnings if our goodwill or amortizable assets
become impaired; our ability to complete development and
commercialization of products under development, such as our pipeline of
improved LED chips, LED components and LED lighting products; risks
resulting from the concentration of our business among few customers,
including the risk that customers may reduce or cancel orders or fail to
honor purchase commitments; risks related to our multi-year warranty
periods for LED lighting products; risks associated with acquisitions,
divestitures or investments generally; the rapid development of new
technology and competing products that may impair demand or render our
products obsolete; the potential lack of customer acceptance for our
products; risks associated with ongoing litigation; and other factors
discussed in our filings with the
Cree® is a registered trademark and Wolfspeed™ is
a trademark of
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| Three Months Ended | Six Months Ended | ||||||||||||||||||||
|
2016 |
2015 |
2016 |
2015 |
||||||||||||||||||
| Revenue, net | $ | 346,962 | $ | 393,758 | $ | 668,291 | $ | 775,307 | |||||||||||||
| Cost of revenue, net | 236,071 | 282,624 | 471,059 | 556,981 | |||||||||||||||||
| Gross profit | 110,891 | 111,134 | 197,232 | 218,326 | |||||||||||||||||
| Gross margin percentage | 32.0 | % | 28.2 | % | 29.5 | % | 28.2 | % | |||||||||||||
| Operating expenses: | |||||||||||||||||||||
| Research and development | 28,070 | 31,563 | 56,601 | 64,294 | |||||||||||||||||
| Sales, general and administrative | 67,671 | 67,877 | 129,042 | 138,049 | |||||||||||||||||
| Amortization or impairment of acquisition-related intangibles | 5,937 | 6,468 | 12,203 | 12,937 | |||||||||||||||||
| Loss on disposal or impairment of long-lived assets | 530 | 2,015 | 846 | 11,580 | |||||||||||||||||
| Total operating expenses | 102,208 | 107,923 | 198,692 | 226,860 | |||||||||||||||||
| Operating income (loss) | 8,683 | 3,211 | (1,460 | ) | (8,534 | ) | |||||||||||||||
| Operating income percentage | 2.5 | % | 0.8 | % | (0.2 | )% | (1.1 | )% | |||||||||||||
| Non-operating (expense) income, net | (4,754 | ) | 8,016 | (4,912 | ) | (14,787 | ) | ||||||||||||||
| Income (loss) from continuing operations before income taxes | 3,929 | 11,227 | (6,372 | ) | (23,321 | ) | |||||||||||||||
| Income tax expense (benefit) | 5,036 | 1,815 | (2,407 | ) | (6,997 | ) | |||||||||||||||
| (Loss) income from continuing operations | (1,107 | ) | 9,412 | (3,965 | ) | (16,324 | ) | ||||||||||||||
| Income from discontinued operations, net of tax | 7,326 | 4,030 | 10,750 | 5.277 | |||||||||||||||||
| Net income (loss) | $ | 6,219 | $ | 13,442 | $ | 6,785 | $ | (11,047 | ) | ||||||||||||
| Earnings (loss) per share-diluted | |||||||||||||||||||||
| Continuing operations | $ | (0.01 | ) | $ | 0.09 | $ | (0.04 | ) | $ | (0.16 | ) | ||||||||||
| Discontinued operations | 0.07 | 0.04 | 0.11 | 0.05 | |||||||||||||||||
| Earnings (loss) per share-diluted | $ | 0.06 | $ | 0.13 | $ | 0.07 | $ | (0.11 | ) | ||||||||||||
| Shares used in diluted per share calculation | 98,467 | 102,521 | 99,513 | 102,932 | |||||||||||||||||
These unaudited condensed consolidated statements of income (loss) reflect the Wolfspeed business as discontinued operations.
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2016 |
2016 |
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| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash, cash equivalents, and short-term investments | $ | 591,114 | $ | 605,305 | |||||||
| Accounts receivable, net | 121,759 | 138,772 | |||||||||
| Income tax receivable | 3,245 | 6,304 | |||||||||
| Inventories | 281,677 | 281,671 | |||||||||
| Prepaid expenses | 22,017 | 25,728 | |||||||||
| Other current assets | 45,024 | 44,501 | |||||||||
| Current assets held for sale | 434,859 | 54,426 | |||||||||
| Total current assets | 1,499,695 | 1,156,707 | |||||||||
| Property and equipment, net | 360,171 | 387,167 | |||||||||
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518,059 | 518,059 | |||||||||
| Intangible assets, net | 246,246 | 259,400 | |||||||||
| Other long-term investments | 34,315 | 40,179 | |||||||||
| Deferred income taxes | 41,019 | 38,564 | |||||||||
| Long-term assets held for sale | — | 356,735 | |||||||||
| Other assets | 8,165 | 9,249 | |||||||||
| Total assets | $ | 2,707,670 | $ | 2,766,060 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable, trade | $ | 109,306 | $ | 122,808 | |||||||
| Accrued salaries and wages | 41,955 | 40,128 | |||||||||
| Other current liabilities | 21,281 | 14,962 | |||||||||
| Current liabilities held for sale | 42,107 | 45,101 | |||||||||
| Total current liabilities | 214,649 | 222,999 | |||||||||
| Long-term liabilities: | |||||||||||
| Long-term debt | 170,000 | 160,000 | |||||||||
| Deferred income taxes | 945 | 943 | |||||||||
| Long-term liabilities held for sale | — | 1,850 | |||||||||
| Other long-term liabilities | 22,057 | 12,444 | |||||||||
| Total long-term liabilities | 193,002 | 175,237 | |||||||||
| Shareholders' equity: | |||||||||||
| Common stock | 121 | 125 | |||||||||
| Additional paid-in-capital | 2,388,855 | 2,359,584 | |||||||||
| Accumulated other comprehensive income, net of taxes | 3,299 | 8,728 | |||||||||
| Accumulated deficit | (92,256 | ) | (613 | ) | |||||||
| Total shareholders' equity | 2,300,019 | 2,367,824 | |||||||||
| Total liabilities and shareholders' equity | $ | 2,707,670 | $ | 2,766,060 | |||||||
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These unaudited condensed consolidated balance sheets reflect the
Wolfspeed business as discontinued operations. The assets and
liabilities of the Wolfspeed business are therefore classified as held
for sale and are reflected as current in nature as of
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UNAUDITED FINANCIAL RESULTS BY OPERATING
SEGMENT
(in thousands, except percentages)
The following table reflects the results of the Company's reportable
segments as reviewed by the Company's Chief Executive Officer, its Chief
Operating Decision Maker or CODM, for the three months ended
| Three Months Ended | ||||||||||||||||||||
|
2016 |
2015 |
Change | ||||||||||||||||||
| Lighting Products revenue | $ | 208,924 | $ | 254,970 | $ | (46,046 | ) | (18 | )% | |||||||||||
| Percent of revenue | 60 | % | 65 | % | ||||||||||||||||
| LED Products revenue | 138,038 | 138,788 | (750 | ) | (1 | )% | ||||||||||||||
| Percent of revenue | 40 | % | 35 | % | ||||||||||||||||
| Total revenue | $ | 346,962 | $ | 393,758 | $ | (46,796 | ) | (12 | )% | |||||||||||
| Six Months Ended | ||||||||||||||||||||
|
2016 |
2015 |
Change | ||||||||||||||||||
| Lighting Products revenue | $ | 392,760 | $ | 503,001 | $ | (110,241 | ) | (22 | )% | |||||||||||
| Percent of revenue | 59 | % | 65 | % | ||||||||||||||||
| LED Products revenue | 275,531 | 272,306 | 3,225 | 1 | % | |||||||||||||||
| Percent of revenue | 41 | % | 35 | % | ||||||||||||||||
| Total revenue | $ | 668,291 | $ | 775,307 | $ | (107,016 | ) | (14 | )% | |||||||||||
| Three Months Ended | ||||||||||||||||||||
|
2016 |
2015 |
Change | ||||||||||||||||||
| Lighting Products gross profit | $ | 74,770 | $ | 72,642 | $ | 2,128 | 3 | % | ||||||||||||
| Lighting Products gross margin | 35.8 | % | 28.5 | % | ||||||||||||||||
| LED Products gross profit | 40,314 | 42,931 | (2,617 | ) | (6 | )% | ||||||||||||||
| LED Products gross margin | 29.2 | % | 30.9 | % | ||||||||||||||||
| Unallocated costs | (4,193 | ) | (4,439 | ) | 246 | (6 | )% | |||||||||||||
| Consolidated gross profit | $ | 110,891 | $ | 111,134 | $ | (243 | ) | — | % | |||||||||||
| Consolidated gross margin | 32.0 | % | 28.2 | % | ||||||||||||||||
| Six Months Ended | ||||||||||||||||||||
|
2016 |
2015 |
Change | ||||||||||||||||||
| Lighting Products gross profit | $ | 124,060 | $ | 141,723 | $ | (17,663 | ) | (12 | )% | |||||||||||
| Lighting Products gross margin | 31.6 | % | 28.2 | % | ||||||||||||||||
| LED Products gross profit | 82,084 | 84,800 | (2,716 | ) | (3 | )% | ||||||||||||||
| LED Products gross margin | 29.8 | % | 31.1 | % | ||||||||||||||||
| Unallocated costs | (8,912 | ) | (8,197 | ) | (715 | ) | 9 | % | ||||||||||||
|
Consolidated gross profit |
$ | 197,232 | $ | 218,326 | $ | (21,094 | ) | (10 | )% | |||||||||||
| Consolidated gross margin | 29.5 | % | 28.2 | % | ||||||||||||||||
Reportable Segments Description
The Company's Lighting Products segment primarily consists of LED lighting systems and bulbs. The Company's LED Products segment includes LED chips and LED components.
Financial Results by Reportable Segment
The Company's CODM reviews gross profit as the lowest and only level of segment profit. As such, all items below gross profit in the consolidated statements of income (loss) must be included to reconcile the consolidated gross profit presented in the preceding table to the Company's consolidated income before taxes.
The Company allocates direct costs and indirect costs to each segment's cost of revenue. The allocation methodology is based on a reasonable measure of utilization considering the specific facts and circumstances of the cost being allocated.
Certain costs are not allocated when evaluating segment performance. These unallocated costs consist primarily of manufacturing employees' stock-based compensation, expenses for profit sharing and quarterly or annual incentive plans and matching contributions under the Company's 401(k) Plan.
Non-GAAP Measures of Financial Performance
To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, Cree uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross margin, non-GAAP operating income, non-GAAP non-operating income, net, non-GAAP net income, non-GAAP earnings per diluted share and free cash flow.
Reconciliation to the nearest GAAP measure of all historical non-GAAP measures included in this press release can be found in the tables included with this press release. In this press release, Cree also presents its target for non-GAAP expenses, which are expenses less expenses in the various categories described below. Both our GAAP targets and non-GAAP targets do not include any estimated changes in the fair value of our Lextar investment.
Non-GAAP measures presented in this press release are not in accordance with or an alternative to measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cree's results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate Cree's results of operations in conjunction with the corresponding GAAP measures.
Cree believes that these non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, enhance investors' and management's overall understanding of the Company's current financial performance and the Company's prospects for the future, including cash flows available to pursue opportunities to enhance shareholder value. In addition, because Cree has historically reported certain non-GAAP results to investors, the Company believes the inclusion of non-GAAP measures provides consistency in the Company's financial reporting.
For its internal budgeting process, and as discussed further below, Cree's management uses financial statements that do not include the items listed below and the income tax effects associated with the foregoing. Cree's management also uses non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the Company's financial results.
Cree excludes the following items from one or more of its non-GAAP measures when applicable:
Stock-based compensation expense. This expense consists of expenses for stock options, restricted stock, performance stock awards and employee stock purchases through its ESPP. Cree excludes stock-based compensation expenses from its non-GAAP measures because they are non-cash expenses that Cree does not believe are reflective of ongoing operating results.
Amortization or impairment of acquisition-related intangibles. Cree incurs amortization or impairment of acquisition-related intangibles in connection with acquisitions. Cree excludes these items because they arise from Cree's prior acquisitions and have no direct correlation to the ongoing operating results of Cree's business.
LED business restructuring charges or gains. In
Changes in the fair value of our Lextar investment. The Company's
common stock ownership investment in Lextar Electronics Corporation is
accounted for utilizing the fair value option. As such, changes in fair
value are recognized in income, including fluctuations due to the
exchange rate between the New
Transaction costs associated with the sale of the Wolfspeed business. The Company has incurred transaction costs in conjunction with the proposed sale of its Wolfspeed business to Infineon. Because these costs were incurred relative to a portion of the business which is reported as discontinued operations in fiscal 2017, Cree does not consider these charges to be reflective on ongoing operating results.
Income tax effects of the foregoing non-GAAP items. This amount is used to present each of the amounts described above on an after-tax basis consistent with the presentation of non-GAAP net income. Non-GAAP net income is presented using a non-GAAP tax rate. The Company's non-GAAP tax rate represents a recalculation of the GAAP tax rate reflecting the exclusion of the non-GAAP items.
Cree expects to incur many of these same expenses, including income taxes associated with these expenses, in future periods. In addition to the non-GAAP measures discussed above, Cree also uses free cash flow as a measure of operating performance and liquidity. Free cash flow represents operating cash flows less net purchases of property and equipment and patent and licensing rights. Cree considers free cash flow to be an operating performance and a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property and equipment, a portion of which can then be used to, among other things, invest in Cree's business, make strategic acquisitions, strengthen the balance sheet and repurchase stock. A limitation of the utility of free cash flow as a measure of operating performance and liquidity is that it does not represent the residual cash flow available to the company for discretionary expenditures, as it is excludes certain mandatory expenditures such as debt service.
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Non-GAAP Gross Margin |
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| Three Months Ended | Six Months Ended | ||||||||||||||||||||
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2016 |
2015 |
2016 |
2015 |
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| GAAP gross profit | $ | 110,891 | $ | 111,134 | $ | 197,232 | $ | 218,326 | |||||||||||||
| GAAP gross margin percentage | 32.0 | % | 28.2 | % | 29.5 | % | 28.2 | % | |||||||||||||
| Adjustment: | |||||||||||||||||||||
| Stock-based compensation expense | 2,564 | 2,714 | $ | 5,342 | $ | 5,334 | |||||||||||||||
| Non-GAAP gross profit | $ | 113,455 | $ | 113,848 | $ | 202,574 | $ | 223,660 | |||||||||||||
| Non-GAAP gross margin percentage | 32.7 | % | 28.9 | % | 30.3 | % | 28.8 | % | |||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
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Non-GAAP Operating Income |
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|
2016 |
2015 |
2016 |
2015 |
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| GAAP operating income (loss) | $ | 8,683 | $ | 3,211 | $ | (1,460 | ) | $ | (8,534 | ) | |||||||||||
| GAAP operating income (loss) percentage | 2.5 | % | 0.8 | % | (0.2 | )% | (1.1 | )% | |||||||||||||
| Adjustments: | |||||||||||||||||||||
| Stock-based compensation expense: | |||||||||||||||||||||
| Cost of revenue, net | 2,564 | 2,714 | 5,342 | 5,334 | |||||||||||||||||
| Research and development | 1,907 | 2,560 | 4,514 | 5,190 | |||||||||||||||||
| Sales, general and administrative | 6,184 | 7,275 | 13,820 | 14,987 | |||||||||||||||||
| Total stock-based compensation expense | 10,655 | 12,549 | 23,676 | 25,511 | |||||||||||||||||
| Amortization or impairment of acquisition-related intangibles | 5,937 | 6,468 | 12,202 | 12,937 | |||||||||||||||||
| LED business restructuring charges | 13 | 2,803 | 20 | 13,842 | |||||||||||||||||
| Total adjustments to GAAP operating income (loss) | 16,605 | 21,820 | 35,898 | 52,290 | |||||||||||||||||
| Non-GAAP operating income | $ | 25,288 | $ | 25,031 | $ | 34,438 | $ | 43,756 | |||||||||||||
| Non-GAAP operating income percentage | 7.3 | % | 6.4 | % | 5.2 | % | 5.6 | % | |||||||||||||
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Non-GAAP Income From Continuing Operations |
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| Three Months Ended | Six Months Ended | |||||||||||||||||
|
2016 |
2015 |
2016 |
2015 |
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| GAAP (loss) income from continuing operations |
( |
) | $ | 9,412 | $ | (3,965 | ) | $ | (16,324 | ) | ||||||||
| Adjustments | ||||||||||||||||||
| Stock-based compensation expense | 10,655 | 12,549 | 23,676 | 25,511 | ||||||||||||||
| Amortization or impairment of acquisition-related intangibles | 5,937 | 6,468 | 12,202 | 12,937 | ||||||||||||||
| LED business restructuring charges | 13 | 2,803 | 20 | 13,842 | ||||||||||||||
| Net changes associated with equity investments | 4,735 | (7,262 | ) | 5,849 | 15,682 | |||||||||||||
| Total adjustments to GAAP (loss) income from continuing operations before provision for income taxes | 21,340 | 14,558 | 41,747 | 67,972 | ||||||||||||||
| Income tax effect | (372 | ) | (2,398 | ) | (8,421 | ) | (13,728 | ) | ||||||||||
| Non-GAAP income from continuing operations | $ | 19,861 | $ | 21,572 | $ | 29,361 | $ | 37,920 | ||||||||||
| Earnings per share | ||||||||||||||||||
| Non-GAAP diluted earnings per share from continuing operations | $ | 0.20 | $ | 0.21 | $ | 0.30 | $ | 0.37 | ||||||||||
| Shares used in non-GAAP diluted earnings per share from continuing operations calculation | ||||||||||||||||||
| Non-GAAP shares used | 98,467 | 102,521 | 99,513 | 102,932 | ||||||||||||||
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Non-GAAP Net Income |
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| Three Months Ended | Six Months Ended | |||||||||||||||||
|
2016 |
2015 |
2016 |
2015 |
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| GAAP net income (loss) | $ | 6,219 | $ | 13,442 | $ | 6,785 | $ | (11,047 | ) | |||||||||
| Adjustments | ||||||||||||||||||
| Stock-based compensation expense | 12,207 | 14,388 | 26,857 | 29,459 | ||||||||||||||
| Amortization or impairment of acquisition-related intangibles | 5,937 | 7,062 | 12,344 | 14,125 | ||||||||||||||
| LED business restructuring charges | 13 | 2,803 | 20 | 18,715 | ||||||||||||||
| Net changes associated with equity investments | 4,735 | (7,262 | ) | 5,849 | 15,682 | |||||||||||||
| Transaction costs related to the sale of the Wolfspeed business | 2,976 | 2,105 | 4,972 | 2,230 | ||||||||||||||
| Total adjustments to GAAP net income (loss) before provision for income taxes | 25,868 | 19,096 | 50,042 | 80,211 | ||||||||||||||
| Income tax effect | (2,152 | ) | (4,051 | ) | (11,658 | ) | (17,739 | ) | ||||||||||
| Non-GAAP net income | $ | 29,935 | $ | 28,487 | $ | 45,169 | $ | 51,425 | ||||||||||
| Earnings per share | ||||||||||||||||||
| Non-GAAP diluted earnings per share | $ | 0.30 | $ | 0.28 | $ | 0.45 | $ | 0.50 | ||||||||||
| Shares used in non-GAAP diluted earnings per share calculation | ||||||||||||||||||
| Non-GAAP shares used | 98,467 | 102,521 | 99,513 | 102,932 | ||||||||||||||
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GAAP Income From Discontinued Operations |
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| Three Months Ended | Six Months Ended | ||||||||||||||||||||
|
2016 |
2015 |
2016 |
2015 |
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| Revenue, net | $ | 54,363 | $ | 42,048 | $ | 104,265 | $ | 85,987 | |||||||||||||
| Cost of revenue, net | 24,688 | 18,723 | 51,002 | 39,271 | |||||||||||||||||
| Gross profit | 29,675 | 23,325 | 53,263 | 46,716 | |||||||||||||||||
| Total operating expenses | 18,854 | 17,812 | 37,509 | 39,325 | |||||||||||||||||
| Income from discontinued operations before income taxes | 10,821 | 5,513 | 15,754 | 7,391 | |||||||||||||||||
| Income tax expense | 3,495 | 1,483 | 5,004 | 2,114 | |||||||||||||||||
| Income from discontinued operations, net of tax | $ | 7,326 | $ | 4,030 | $ | 10,750 | $ | 5,277 | |||||||||||||
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Non-GAAP Income From Discontinued Operations |
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| Three Months Ended | Six Months Ended | ||||||||||||||||||||
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2016 |
2015 |
2016 |
2015 |
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| GAAP Income from discontinued operations, net of tax | $ | 7,326 | $ | 4,030 | $ | 10,750 | $ | 5,277 | |||||||||||||
| Adjustments | |||||||||||||||||||||
| Stock-based compensation expense | 1,552 | 1,839 | 3,181 | 3,948 | |||||||||||||||||
| Amortization or impairment of acquisition-related intangibles | — | 594 | 142 | 1,188 | |||||||||||||||||
| LED business restructuring charges | — | — | — | 4,873 | |||||||||||||||||
| Transaction costs related to the sale of the Wolfspeed business | 2,976 | 2,105 | 4,972 | 2,230 | |||||||||||||||||
| Total adjustments to GAAP income from discontinued operations before provision for income taxes | 4,528 | 4,538 | 8,295 | 12,239 | |||||||||||||||||
| Income tax effect | (1,780 | ) | (1,653 | ) | (3,237 | ) | (4,011 | ) | |||||||||||||
| Non-GAAP income from discontinued operations, net of tax | $ | 10,074 | $ | 6,915 | $ | 15,808 | $ | 13,505 | |||||||||||||
|
Free Cash Flow |
|||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
|
2016 |
2015 |
2016 |
2015 |
||||||||||||||||||||||
| Cash flows from operations | $ | 101,618 | $ | 76,962 | $ | 119,716 | $ | 123,796 | |||||||||||||||||
| Less: PP&E spending | (15,874 | ) | (31,921 | ) | (35,211 | ) | (81,804 | ) | |||||||||||||||||
| Less: Patents spending | (3,584 | ) | (3,314 | ) | (5,836 | ) | (7,628 | ) | |||||||||||||||||
| Total free cash flow | $ | 82,160 | $ | 41,727 | $ | 78,669 | $ | 34,364 | |||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170124006437/en/
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