Investor Presentation - April 25, 2019 - Investor Relations
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Investor Presentation April 25, 2019
Cautionary Note Regarding Forward-Looking Statements This presentation contains statements that are not historical in nature, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The matters discussed in these statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statements. Forward- looking statements include, but are not limited to, statements regarding: our financial outlook; the predictability and stability of our revenues and cash flows; our anticipated growth rates (including our estimated compound annual growth rates (CAGRs) from 2019 to 2023 for the total company and for our Internet of Things (IoT), Automotive, and Legacy businesses); the portion of our free cash flow that we will return to stockholders through dividends or stock repurchases in the future; our future dividend yield; our target model objectives for gross margin, operating expenses, operating margin, free cash flow, and LTM net leverage; expectations about whether, when, and how consistently we will achieve the target model, as well as our ability to grow revenue faster than the market; expected growth in the IoT and automotive markets; IoT and automotive megatrends, growth drivers, and growth in per- vehicle semiconductor content opportunities; and all other statements regarding our future strategic and operational plans, future financial expectations and objectives, and future predictions for the markets in which we compete. Except as otherwise noted, the forward-looking statements in this presentation are made as of the date of this presentation, April 25, 2019, and are based on our current expectations, beliefs and intentions regarding future events or our financial performance and the information available to management as of the date hereof. Readers are cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. We assume no responsibility to update any such forward- looking statements. Our actual results could differ materially from those expected or projected in the forward-looking statements made in this presentation for any number of reasons, including, but not limited to, the materialization of one or more of the risks and uncertainties described in the Risk Factors, Management’s Discussion and Analysis of Financial Condition and Results of Operation, and Quantitative and Qualitative Disclosure about Market Risk sections of the Annual Report on Form 10-K we filed with the SEC on February 27, 2019. Our target model describes long-term financial objectives Cypress hopes to achieve over several years and is inherently speculative and uncertain. Cypress’s long-term objectives are subject to business, economic, competitive, industry, regulatory, market, and financial uncertainties, many of which are beyond Cypress’s control. We cannot assure you that the estimates and assumptions made in preparing the long-term objectives will prove accurate; and our target model might not be achieved or sustained. Use of Non-GAAP Financial Measures and Where to Find Reconciliations to GAAP This presentation includes financial measures that were not prepared in accordance with GAAP. Reconciliations of our non-GAAP measures to the most comparable GAAP measures can be found in the Appendix to this presentation or in our earnings press release dated April 25, 2019, which are posted on our investor relations website at investors.cypress.com. There are limitations in using non-GAAP financial measures, including those discussed in the Appendix.
Cypress 3.0: Profile At-a-Glance
Overview Q1 2019 Revenue Cypress 3.0 Focus
Products Semiconductors By End Market1 ▪ Growth – Focused on the high-
Founded 1982 growth Internet of Things (IoT) and
Listed NASDAQ (CY)
Auto markets
IoT
Auto 28%
Headquarters San Jose, California
37% ▪ Margins – Differentiated Wi-Fi,
2018 Revenue $2,483.8 million Bluetooth, MCU, Fail-Safe Storage,
Legacy and Software
Products 35%
▪ Cashflow – Strong cashflow for
By Segment capital returns to shareholders;
strong dividend yield
Auto IoT
Memory
Products
Wi-Fi/Bluetooth MCU & ▪ Execution – Extending Cypress
Connect USB/USB-C
Connectivity
product adoption through cross-
58% 42% selling and content gains
MCU
Compute Human Interface
Fail-Safe Storage
1 End-market product categories are described in detail on slide 13
Focused Investments in Two Major Growth Opportunities
Enabling Connecting
the Car of Everything
the Future Everywhere
▪ 85% share in ADAS ▪ Wi-Fi/Bluetooth Combos
▪ Industry-Leading Cluster Solutions ▪ IoT Compute Portfolio
▪ Next Generation Body Electronics ▪ IoT HMI (Touch, See, Talk)
▪ Auto HMI ▪ IoT Platform: SoCs, SW, Services
▪ High-Performance Storage Solutions ▪ Ecosystem and Broad
Market Friendly
85% of R&D is Directed Towards Auto and IoT
Note: Market share in ADAS segment based-on Cypress estimates.
Cypress IoT Solutions
Connectivity Low-Power Security
500M+ Wi-Fi Networks Extended Battery Life Ensuring System and
4B+ Bluetooth Networks Data Integrity
Global USB-C Adoption
Megatrends
Connect Compute
Wi-Fi® / Combos Low-Power Ultra-Low-Power
Bluetooth® Performance MCUs Flexibility / Security
#1 in IoT Connectivity Consistent 32-bit share gains
USB/ Flexibility Human Low-Power
USB-C Interface Performance
Integration
#1 in IoT USB Solutions
Note: Market rankings based-on Cypress estimates.
Cypress The IoT Connectivity Leader
Standards compliance is just the beginning
1997
1997 1998 1999
1999 2000 2001 2002
2002 2003 2004 2005 2006 2007 ...... 2012 ...... 2019 ...... ???
GEN 1 GEN 2 GEN 3 GEN 4 GEN 5 GEN 6
GEN 7
802.11 802.11b 802.11g/a 802.11n 802.11ac 802.11ax
Cypress connectivity has 10,000+ Man-Years and >$2B of investment making it the clear IoT connectivity leader
▪ Wi-Fi / BT Combo Leadership
▪ Best-in-Class – Range, ▪ 50% of Cypress Wireless Revenue
Rate & Robustness from Wi-Fi/BT Combos
(Transmit Power,
Receiver Sensitivity) ▪ Complex Coexistence
Cypress Cypress ▪ Coexistence Algorithms & Engines
Performance Advantage Developed over 10+ years
▪ World Class
Integration & Power
▪ Installed Base – Billions of
Smartphones, Hundreds of Millions of
(Wi-Fi, BT, PA, LNA,
AP’s & Gateways
PMU, Switch, Baluns)
▪ Mature Software Stacks (Sticky)
IoT Connectivity Market
LoRa
Proprietary
LP-WAN
802.15.4 Wi-Fi
Cypress Connect
Bluetooth Cypress Compute
2019 IoT Connected MCU TAM
2019 IoT Wi-Fi / BT TAM
$1.9B
$2.0B
Combined TAM of $3.9B
Note: Cypress Estimates. IoT market includes Consumer and Industrial only.
Cypress Automotive Solutions
Electrification Connectivity Autonomy
Electrified Totally Connected,
Levels 1 - 5
Transportation Digitized
Megatrends
Connect Compute
Scalability
MCUs
Wi-Fi® / Combos Security #1 in Auto Cluster MCUs
Bluetooth® Performance
#1 in Auto Combos
Distributed
Touch
Intuitive #1 in Auto Touch
USB-C Flexibility
Integration Instant-on
Storage
#1 in Auto USB-C Reliability #1 in Auto NOR
Note: Market rankings based-on Cypress estimates.
Cypress Auto Solutions Driving Content Growth
Wi-Fi / Bluetooth
USB-C
MCUs
Touch
Fail-Safe Storage
2018 2023
2018 Oppty: 2023 Oppty:
~$93 ~$184
Content Opportunity per Vehicle Will Double Over the Next 5 Years
Two Growth Drivers - IoT and Auto
■ IoT
Momentum to Grow 7-9% − Differentiated Platform-Approach
− Strong Channels to Serve the IoT;
10,000+ Customers and
$2,484M Worldwide Distributor Network
$2,209M IoT
$2,328M
(Street)
$1,942M CAGR +12-14%
34%
■ Automotive
− Market Leader in Multiple Product
Categories that Enable the Car of
the Future
− Supplier to the Top 25 Automotive
33% OEMs
Auto
CAGR +8-12% − Strong Content Growth Story
− Growth into Body Electronics
33% ■ Legacy
CAGR 2-4%* Legacy − Steady Cash Flow
* Closed NAND Divestiture on 4/1/19.
2016 2017 2018 2019 2023
IoT: MCUs (PSoC); Wireless Connectivity (Wi-Fi / BT); Automotive: MCUs (PSoC, Traveo), Wireless Connectivity (Wi-Fi/ BT), Legacy: Non-auto Storage (NOR, RAM), Legacy USB, Agiga,
Wired Connectivity (USB, USB-C); Software (Cirrent, SDK) Wired Connectivity (USB-C), Storage (NOR Flash), Touch IP Licensing, Clocks, Legacy Analog, NAND (through Q1 2019)
Note: 2016-2018 is actual Cypress revenues for three categories shown above. 2019 is Wall Street Analyst consensus as of 3/8/19. 2023 is Cypress estimates.CY 3.0 Focus on Execution
Revenue Gross Margin Operating Income
(Non-GAAP) (Non-GAAP) (Non-GAAP)
15% CAGR 6x Increase $567
46.8%
$2,484 22.8%
$2,328 42.2%
$M 38.9% $M $392
$1,942 35.3%
16.8%
$1,627
$227
11.7%
$94
5.8%
2015 2016 2017 2018 2015 2016 2017 2018 2015 2016 2017 2018
▪ 2018 Record Revenue ▪ Executed on Cost ▪ Focused R&D Investment
▪ Driven by IoT, Automotive Reduction and in Targeted Markets
and Industrial End Markets Manufacturing Efficiencies ▪ Operating Income
▪ Ramping USB-C, Wireless ▪ New Products Drive Gross Increased 9.6 Times Faster
Connectivity, Storage Shift Margin Expansion Than Revenue From 2015 to
to High-Density ▪ 1,080 bps Improvement 2018.
Under CY 3.0 from Q2’16 to
Q4’18.Committed to Shareholder Returns
Strong Free Cash Flow Growth Returning Capital to Shareholders
$M $500 $M $400
Free Cash Flow Dividend Buyback
$400 47% of FCF Returned to
Shareholders in 2018
$300
$170M Left on Share Buyback
$300 Authorization as of 4/25/19
$184
$200 $409 $200
$352 $35
$65
$100
$160
$100
$141 $145 $157
$0 $128
-$38
-$100 $0
2015 2016 2017 2018 2015 2016 2017 2018
Target: Return 50% of Free Cash Flow to Shareholders
Industry-Leading Dividend Yield of 2.9%1
1 Dividend yield is annualized and based on Cypress closing stock price on 3/29/19.Expanded Our Target Model on March 13, 2019
2017 2018 Q1 2019 New Target Model
Grow Faster
Revenue $2,328M $2,484M $539M than the Market
Non-GAAP Gross Margin 42.2% 46.8% 47.4% > 50%
Non-GAAP Operating
25.4% 23.9% 26.3% 25%
Expense
Non-GAAP Operating
16.8% 22.8% 21.1% > 25%
Margin
Non-GAAP EPS $0.89 $1.36 $0.27
$352M $409M $51M
Free Cash Flow > 20%
15.1% 16.5% 9.4%
LTM Net Leverage 2.0x 1.0x 1.0x < 2.0x
1 LTM Net Leverage is calculated as Net debt / last 12 months' Adjusted EBITDAFocus on Execution and Growth
Cypress 3.0 = Connect and Compute for IoT and Auto
Focused on Markets Growing Faster than the Overall Semi Market
New Product Cycles Drive Growth at Favorable Margins
Operating Margin and Cash Flow Expansion
Auto and IoT Focus Improves Quality of Earnings
Track Record of Strong Execution and Alignment with Shareholders
Expanded Target Model Provides Operating Leverage
Delivering Shareholder Value Through Capital ReturnsThank You
Non-GAAP Financial Measures
To supplement its condensed consolidated unaudited financial results non-GAAP financial measures used by other companies. The Other adjustments: Other items are excluded from non-GAAP
presented in accordance with GAAP, Cypress uses the presentation of non-GAAP financial information is not meant to be financial measures because management does not consider them to
non-GAAP financial measures listed below, which are adjusted from considered in isolation or as a substitute for the most directly be related to the core operating activities and ongoing operating
the most directly comparable GAAP financial measures to exclude comparable GAAP financial measures. The non-GAAP financial performance of Cypress. Excluding these items, which can vary
certain items, as described in more detail below. measures supplement and should be viewed in conjunction with significantly from quarter to quarter, allows management to better
• Non-GAAP gross profit; GAAP financial measures. compare Cypress’ period-over-period performance. However,
limitations of non-GAAP measures that exclude these items include
• Non-GAAP gross margin; NON-GAAP EXCLUSIONS: Each non-GAAP financial measure that these adjustments are often subjective and such non-GAAP
• Non-GAAP cost of revenues; (other than free cash flow) excludes one or more of the following measures may not be comparable to similarly titled non-GAAP
items: financial measures used by other companies. Other adjustments
• Non-GAAP interest and other expense, net;
primarily include:
• Non-GAAP research and development expenses; Acquisition-related charges: Acquisition-related charges are not
factored into management's evaluation of Cypress' long-term • Changes in value of deferred compensation plan assets and
• Non-GAAP selling, general and administrative expenses; performance after the completion of acquisitions. However, a limitation liabilities;
• Non-GAAP operating expenses; of non-GAAP measures that exclude acquisition-related charges is • Investment-related gains or losses, including equity method
that these charges may represent payments that reduce the cash investments;
• Non-GAAP operating expenses as a percentage of revenue;
available to the Company for other purposes. Acquisition-related
• Adjusted EBITDA; expenses primarily include: • Restructuring and related costs;
• Adjusted EBITDA margin; • Amortization of purchased intangibles, including purchased • Loss on extinguishment of debt;
• Non-GAAP income tax provision (benefit); technology, patents, customer relationships, trademarks, backlog • Amortization of debt issuance costs, discounts and imputed
and non-compete agreements; interest related to the equity component of convertible debt,
• Non-GAAP pre-tax profit;
• Amortization of step-up in value of inventory recorded as part of • Asset impairments;
• Non-GAAP operating income (loss); purchase price accounting; and • Tax effects of non-GAAP adjustments;
• Non-GAAP operating margin; • One-time charges associated with the completion of an • Income tax adjustment related to the use of the net operating
• Non-GAAP net income (loss); acquisition including items such as contract termination costs, loss, non-cash impact of not asserting indefinite reinvestment on
severance and other acquisition-related restructuring costs; costs
• Non-GAAP diluted earnings (loss) per share; and earnings of our foreign subsidiaries, deferred tax expense not
incurred in connection with integration activities; and legal and affecting taxes payable (i.e. release of valuation allowance), and
• Free cash flow; accounting costs. non-cash expense (benefit) related to uncertain tax positions;
• Free cash flow margin. Stock-based compensation expense: Stock-based compensation • Certain other expenses and benefits; and
Management believes that these non-GAAP financial measures expense relates primarily to employee stock options, restricted stock
units, performance stock units and the employee stock purchase plan. • Diluted weighted average shares non-GAAP adjustment - for
reflect an additional and useful way of viewing aspects of the
Stock-based compensation expense is a non-cash expense that is purposes of calculating non-GAAP diluted earnings per share, the
Company's operations which, when viewed in conjunction with
affected by changes in market factors including the price of Cypress’ GAAP diluted weighted average shares outstanding is adjusted to
Cypress' GAAP results, provide a more comprehensive understanding
common shares, which are not within the control of management. In include the impact of non-GAAP adjustments on the number of
of the various factors and trends affecting the Company's business
addition, the valuation of stock-based compensation is subjective, and diluted shares underlying stock-based compensation awards and
and operations.
the expense recognized by Cypress may be significantly different than the impact of the capped call transactions related to the
The Company presents non-GAAP financial measures because the expense recognized by other companies for similar equity awards, convertible notes.
management uses these measures to analyze and assess the which makes it difficult to assess Cypress’ results compared to its
Company's financial results and to manage the business. competitors. Accordingly, management excludes this item from its
There are limitations in using non-GAAP financial measures including internal operating forecasts and models. However, a limitation of non-
those discussed below. Moreover, the Company’s GAAP measures that exclude stock-based compensation expense is
non-GAAP measures may be calculated differently than the that they do not reflect the full costs of compensating employees.Non-GAAP Financial Measures
NON-GAAP REVENUE: Cypress presented non-GAAP revenue FREE CASH FLOW: Free cash flow is calculated as net cash
for six quarters following our March 2015 merger with Spansion. provided by (used in) operating activities, less acquisition of property,
This metric adjusted GAAP revenue to include revenue from an plant and equipment, net (i.e., acquisition of property, plant and
intellectual property license between Spansion and Samsung equipment less proceeds received from disposition of property, plant
(entered into prior to our merger with Spansion) that was not and equipment). We consider free cash flow to be a liquidity measure
included in GAAP revenue as a result of the effect of our purchase that provides useful information to management and investors about
accounting for the Spansion merger. the amount of cash generated by business operations, after
deducting our net payments for acquisitions and dispositions of
property and equipment, which cash can then be used for strategic
opportunities or other business purposes including, among others,
ADJUSTED EBITDA: Adjusted EBITDA is calculated by adjusting investing in the Company's business, repurchasing stock, making
net income (loss) attributable to Cypress to exclude (without strategic acquisitions, repayment of debt, and strengthening the
duplication): interest expense, income tax (provision), depreciation, balance sheet. A limitation of free cash flow is that it does not
amortization, equity in net loss of equity method investees, and the represent the total increase or decrease in the cash balance for the
non-GAAP adjustments described above (acquisition related period. Management compensates for this limitation by also relying
charges, stock-based compensation expense, and other on the net increase in cash and cash equivalents and restricted cash
adjustments). Commencing in the second quarter of 2018, Cypress as presented in the Company’s condensed consolidated statements
reconciles adjusted EBITDA to GAAP net income rather than of cash flows prepared in accordance with GAAP which incorporates
operating income; prior period reconciliation tables have been all cash movements during the period.
revised to conform to the current presentation. Adjusted EBITDA
may be useful to management, investors and other users of our
financial information because the exclusion of certain gains, losses,
and expenses facilitates comparisons of Cypress' operating
performance on a period to period basis. Adjusted EBITDA should
not be considered as a measure of discretionary cash available to
invest in the growth of the business. In addition, adjusted EBITDA
should not be considered as a substitute for, or superior to net
income attributable to Cypress, operating income, or diluted earnings
per share, or other financial measures prepared in accordance with
GAAP.Reconciliation of GAAP Measures to Non-GAAP Measures
FY 2015 FY 2016 FY 2017 FY 2018 Q2 2016 Q1 2018 Q4 2018 Q1 2019
GAAP Revenue $ 1,607,853 $ 1,923,108 $ 2,327,771 $ 2,483,840 $ 450,127 $ 582,241 $ 604,474 $ 539,004
Revenue from intellectual property license 18,750 18,750 - - 6,250 - - -
Non-GAAP Revenue $ 1,626,603 $ 1,941,858 $ 2,327,771 $ 2,483,840 $ 456,377 $ 582,241 $ 604,474 $ 539,004
FY 2015 FY 2016 FY 2017 FY 2018 Q2 2016 Q1 2018 Q4 2018 Q1 2019
GAAP Gross Profit $ 301,745 $ 458,496 $ 781,934 $ 931,455 $ 126,473 $ 212,392 $ 225,210 $ 202,409
GAAP Gross Margin (GAAP Gross Profit / GAAP Revenue) 18.8% 23.8% 33.6% 37.5% 28.1% 36.5% 37.3% 37.6%
Revenue from intellectual property license 18,750 18,750 - - 6,250 - - -
Stock based compensation, including costs related to modification of equity awards 13,766 17,971 15,605 16,531 3,915 3,584 3,842 2,684
Changes in value of deferred compensation plan (38) 288 602 (169) 86 61 (468) 471
Merger, integration, related costs and adjustments related to assets held for sale 54,733 17,927 5,357 - 3,149 - - -
Inventory Step-up related to acquisition accounting 84,297 13,264 3,736 - - - -
Amortization of intangible assets 97,017 156,489 174,981 200,024 28,714 49,438 49,583 48,217
Restructuring charges 4,209 1,420 548 3,271 69 1,887 135 (49)
Loss/impairment on assets held for sale - 37,219 - 10,869 - - 10,869 2,017
Impairment of acquisition related intangibles - 33,944 - - - - -
Non-GAAP Gross Profit $ 574,479 $ 755,768 $ 982,763 $ 1,161,981 $ 168,656 $ 267,362 $ 289,171 $ 255,749
Non-GAAP Gross Margin (Non-GAAP Gross Profit / Non-GAAP Revenue) 35.3% 38.9% 42.2% 46.8% 37.0% 45.9% 47.8% 47.4%
FY 2015 FY 2016 FY 2017 FY 2018 Q1 2018 Q4 2018 Q1 2019
GAAP Operating Expenses (SG&A + R&D) $ 625,075 $ 1,067,234 $ 703,841 $ 767,027 $ 176,630 $ 222,470 $ 170,593
GAAP Operating Expenses as a % of GAAP Revenue 38.9% 55.5% 30.2% 30.9% 30.3% 36.8% 31.6%
Stock based compensation, including costs related to modification of equity awards 69,924 80,542 75,976 79,434 14,874 15,561 17,711
Changes in value of deferred compensation plan (493) 2,773 6,762 (2,007) 622 (5,103) 4,463
Merger, integration, related costs and adjustments related to assets held for sale 42,620 31,925 (1,153) - - - -
Goodwill impairment charge 488,504
Amortization of intangible assets 11,318 18,256 20,274 18,125 5,150 4,310 -
Settlement charges and other - - 2,500 (954) - (468) -
Restructuring charges and others 85,189 24,711 8,540 13,570 2,209 1,381 98
Amortization of Acquisition-Related intangible assets - - - - - - 4,310
Loss on assets held for sale - - - 65,722 - 65,722 1,515
Other income and expenses - - - - - 505
(Gain) on sale on cost method investment (66,472) (112,774) - (1,521) - - -
Non-GAAP Operating Expenses (SG&A + R&D) $ 482,989 $ 533,297 $ 590,942 $ 594,658 $ 153,775 $ 141,067 $ 141,991
GAAP Operating Expenses as a % of Non-GAAP Revenue 29.7% 27.5% 25.4% 23.9% 26.4% 23.3% 26.3%Reconciliation of GAAP Measures to Non-GAAP Measures
FY 2015 FY 2016 FY 2017 FY 2018 Q1 2018 Q4 2018 Q1 2019
GAAP operating income (loss) $ (323,330) $ (608,738) $ 78,093 $ 164,428 $ 35,762 $ 2,740 $ 31,816
GAAP operating margin (GAAP operating income / GAAP Revenue) (20.1%) (31.7)% 3.4% 6.6% 6.1% 0.5% 5.9%
Revenue from intellectual property license 18,750 18,750 - - - - -
Stock based compensation, including costs related to modification of equity awards 83,690 98,513 91,581 95,965 18,458 19,403 20,395
Changes in value of deferred compensation plan (531) 3,061 7,364 (2,176) 683 (5,571) 4,934
Merger, integration, related costs and adjustments related to assets held for sale 97,353 49,852 4,204 - - - -
Inventory step-up related to acquisition accounting 84,297 13,264 3,736 - - - -
Amortization of intangible assets 108,335 174,745 195,255 218,149 54,588 53,893 52,527
Settlement charges and other - - 2,500 (954) (468)
Restructuring charges and others 91,720 30,631 9,088 16,841 4,096 1,516 49
Loss on asset held for sale - 37,219 - 76,591 76,591 3,532
Gain on sale on cost method investment - - - (1,521) - - -
Goodwill impairment charge - 488,504 - - - - -
(Gain) related to investment in Deca Technologies - (112,774) - - - - -
(Gain) on divestiture of TrueTouch® Mobile business (66,472) - - - - - -
Impairment of acquisition related intangibles - 33,944 - - - - -
Other income and expenses - - - - - - 505
Non-GAAP operating income (loss) $ 93,812 $ 226,971 $ 391,821 $ 567,323 $ 113,587 $ 148,104 $ 113,758
Non-GAAP operating margin (Non-GAAP operating income / Non-GAAP Revenue) 5.77% 11.69% 16.83% 22.84% 19.51% 24.50% 21.11%
Depreciation 74,468 75,924 67,578 66,299 17,140 16,527 19,512
Adjusted EBITDA $ 168,280 $ 302,895 $ 459,399 $ 633,622 $ 130,727 $ 164,631 $ 133,270
FY 2015 FY 2016 FY 2017 FY 2018 Q1 2018 Q4 2018 Q1 2019
GAAP net cash provided by operation activities $ 8,801 $ 217,419 $ 403,487 $ 471,700 $ 31,678 $ 142,215 $ 61,248
GAAP net cash provided by operation activities as percentage of revenue 0.55% 11.31% 17.33% 18.99% 23.53% 11.36%
Acquisition of property, plant and equipment, net (47,206) (57,398) (51,944) (63,130) (17,023) (5,069) (10,534)
Free cash flow $ (38,405) $ 160,021 $ 351,543 $ 408,570 $ 14,655 $ 137,146 $ 50,714
Free cash flow as percentage of revenue (2.39)% 8.32% 15.10% 16.45% 2.52% 22.69% 9.41%Reconciliation of GAAP Measures to Non-GAAP Measures
FY 2017 FY 2018 Q1 2018 Q4 2018 Q1 2019
GAAP net income (loss) $ (80,915) $ 354,592 $ 9,078 $ 267,114 $ 19,714
Stock based compensation, including costs related to modification of equity awards 91,581 95,965 18,458 19,403 20,395
Changes in value of deferred compensation plan 1,277 728 417 (170) 600
Inventory step-up related to acquisition accounting 3,736 - - - -
Share in net loss and impairment of equity method investees 71,772 57,369 3,461 46,496 3,590
(Gain) on divestiture of TrueTouch® Mobile business - - - - -
Amortization of intangible assets 195,255 218,149 54,588 53,893 52,527
Imputed interest on convertible debt, equity component amortization on convertible
debt and others 20,538 17,966 6,229 4,246 4,297
Amortization of debt issuance cost - 1,981 - - -
Settlement charges and other 3,344 (2,065) 394 (309) -
Restructuring charges and others 9,088 16,841 4,096 1,516 49
Loss on extinguishment of Spansion convertible notes 4,250 3,258 1,533 - -
Merger, integration, related costs and adjustments related to assets held for sale 4,214 - - - -
Loss on assets held for sale - 76,591 - 76,591 3,532
Gain on sale on cost method investment - (1,521) - - -
Other income and expenses - - - - 808
Tax impact of above non-GAAP adjustments (141,476) (102,274) (18,645) (42,350) (18,018)
Uncertain tax provision 6,228 8,815 1,362 3,945 (297)
Valuation allowance release, utilization of NOLs including excess tax benefit, and others 135,365 (237,420) 19,325 (299,385) 14,907
Non-GAAP net income $ 324,257 $ 508,975 $ 100,296 $ 130,990 $ 102,104
FY 2017 FY 2018 Q1 2018 Q4 2018 Q1 2019
GAAP Weighted-average common shares outstanding, diluted 333,451 372,178 370,592 369,638 373,131
Impact of non-GAAP adjustments on number of diluted shares underlying stock- 14,838 5,565 4,618 5,227 4,153
based compensation awards
Adjustment to include the impact of the capped call transactions related to the 16,851 (2,395) (2,484) - (1,454)
convertible notes
Non-GAAP Weighted-average common shares outstanding, diluted 365,140 375,348 372,726 374,865 375,830
FY 2017 FY 2018 Q1 2018 Q4 2018 Q1 2019
Earnings (loss) per share - diluted (GAAP) $ (0.24) $ 0.95 $ 0.02 $ 0.72 $ 0.05
Per share impact of Non-GAAP adjustments $ 1.13 $ 0.41 $ 0.25 $ (0.37) $ 0.22
Earnings (loss) per share - diluted (Non-GAAP) $ 0.89 $ 1.36 $ 0.27 $ 0.35 $ 0.27You can also read
