FREMONT, Calif., May 9, 2017 /PRNewswire/ -- Exar Corporation (NYSE: EXAR) a leading supplier of analog mixed-signal application specific technology solutions serving the Industrial, Infrastructure, Automotive, and Audio/Video markets, today announced financial results for the Company's fiscal year 2017 fourth quarter and year-end, which ended on April 2, 2017. Unless otherwise indicated, all non-GAAP financial results exclude the financial results of the iML Display business, which the Company has divested, and are presented in the GAAP results as discontinued operations.
On March 29, 2017, Exar and MaxLinear, Inc. (NYSE: MXL) jointly announced that they had entered into a definitive agreement under which MaxLinear has agreed to acquire Exar for $13.00 per share in cash, via a tender offer. Subsequently, MaxLinear, Inc. filed a tender offer Schedule TO (amended on April 24, 2017 and May 5, 2017) and Exar filed a Schedule 14D-9 (amended on April 24, 2017 and May 3, 2017). Exar stockholders, banks and brokers who have questions, require assistance, or who desire to tender shares are referred to the Offer's Information Agent, Georgeson, toll-free at (866) 767-8986 prior to 12:00 p.m. midnight May 11, 2017.
Fiscal 2017 Fourth Quarter Highlights from Continuing Operations
-- Net sales of $27.8 million, up 2% sequentially and 10% year-over-year -- GAAP gross margin of 54.2% (Non-GAAP gross margin of 56.7%) -- GAAP operating loss of $0.1 million (Non-GAAP operating income of $4.2 million) -- GAAP EPS of $0.03 (Non-GAAP EPS of $0.09) -- Cash and equivalents, and short-term marketable securities of $236 million
Fiscal 2017 Full Year Highlights from Continuing Operations
-- Net sales of $109.8 million, up 8% year-over-year -- GAAP gross margin of 50.2% (Non-GAAP gross margin of 53.5%) -- GAAP operating income of $7.2 million (Non-GAAP operating income of $15.4 million) -- GAAP EPS of $0.18 (Non-GAAP EPS of $0.31)
About Exar
For more information, visit http://www.exar.com.
Discussion of Non-GAAP Financial Measures
The Company's non-GAAP measures exclude charges related to stock-based compensation, amortization of acquired intangible assets, impairment charges, gain upon closing sale-leaseback of our corporate headquarters, gain on sale of long-term investments, restructuring charges and exit costs which include costs for personnel whose positions have been eliminated as part of a restructuring or are in the process of being eliminated as part of the discontinuation of a product line, severance costs associated with the former CEO, the financial results of the iML Display business as well as the gain recognized from the sale of the iML business, accruals for and proceeds received from dispute resolutions and patent litigation, merger and acquisition and related integration costs, certain income tax benefits and credits, and related income tax effects on certain excluded items. The Company excludes these items primarily because they are significant special expense and gain estimates, which management separates for consideration when evaluating and managing business operations. The Company's management uses non-GAAP net income and non-GAAP earnings per share to evaluate its current operating results and financial results and to compare them against historical financial results. Management believes these non-GAAP measures are useful to investors because they are frequently used by securities analysts, investors and other interested parties in evaluating the Company and provide further clarity on its profitability.
Unless otherwise indicated, all non-GAAP financial results exclude the financial results of the iML Display business, which the Company has divested, and are presented in the GAAP results as discontinued operations.
In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company's business against that of its competitors who employ and disclose similar non-GAAP measures. However, the manner in which we calculate these non-GAAP financial measures may be different from non-GAAP methods of accounting and reporting used by the Company's competitors to the extent their non-GAAP measures include or exclude other items. The material limitation associated with the use of the non-GAAP financial measures is that the non-GAAP measures may not reflect the full economic impact of Exar's activities. Accordingly, investors are cautioned not to place undue reliance on non-GAAP information. The presentation of this additional information should not be considered a substitute for net income or net income per diluted share or other measures prepared in accordance with GAAP.
Investors should refer to the reconciliation of Non-GAAP Results to GAAP Results, which is contained in this press release.
Additional Information and Where to Find It
Neither this communication nor the information incorporated herein by reference is an offer to purchase or a solicitation of an offer to sell any shares or any other securities of Exar. On April 13, 2017, MaxLinear and its subsidiary commenced the tender offer and filed a Tender Offer Statement on Schedule TO with the SEC, and Exar filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC. EXAR STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE, RELATED LETTER OF TRANSMITTAL, AND CERTAIN OTHER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT, INCLUDING ALL AMENDMENTS TO THOSE MATERIALS. SUCH DOCUMENTS CONTAIN IMPORTANT INFORMATION, WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE TENDER OFFER. The Tender Offer Statement and the Solicitation/Recommendation Statement are available without charge at the SEC's website at www.sec.gov. Free copies of these materials and certain other offering documents were sent to Exar's stockholders by the information agent for the Tender Offer. These documents may also be obtained for free by contacting MaxLinear Investor Relations at http://investors.maxlinear.com/, at IR@MaxLinear.com or by telephone at (760) 517-1112 or by contacting Exar Investor Relations at investorrelations@exar.com or by telephone at (510) 668-7201. The contents of the websites referenced above are not deemed to be incorporated by reference into the Offer documents.
For more information, visit http://www.exar.com
For Press Inquiries Contact: press@exar.com
For Investor Relations Contact: Keith Tainsky, CFO Laura Guerrant-Oiye, Investor Relations Phone: (510) 668-7201 Phone: (510) 668-7201 Email: investorrelations@exar.com Email: laura.guerrant@exar.com
-Tables follow-
EXAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) THREE MONTHS ENDED TWELVE MONTHS ENDED ------------------ ------------------- APRIL 2, JANUARY 1, MARCH 27, APRIL 2, MARCH 27, 2017 2017 2016 2017 2016 ---- ---- ---- ---- ---- Net sales $19,796 $18,845 $18,060 $78,677 $65,799 Net sales, related party 8,018 8,377 7,283 31,096 35,791 Total net sales 27,814 27,222 25,343 109,773 101,590 ------ ------ ------ ------- ------- Cost of sales: Cost of sales (1) 9,394 10,054 9,694 40,867 39,615 Cost of sales, related party 2,739 3,118 3,082 11,207 15,929 Restructuring charges and exit costs - - - 225 739 Proceeds from legal settlement - - - - (1,500) Amortization of purchased intangible assets 594 594 594 2,376 2,427 Total cost of sales 12,727 13,766 13,370 54,675 57,210 ------ ------ ------ ------ ------ Gross profit 15,087 13,456 11,973 55,098 44,380 ------ ------ ------ ------ ------ Operating expenses: 54.2% 49.4% 47.2% 50.2% 43.7% Research and development(2) 5,476 4,964 5,173 20,316 22,180 Selling, general and administrative (3) 8,249 9,109 7,187 31,674 28,877 Restructuring charges and exit costs - - 106 923 4,952 Merger and acquisition costs 1,457 - - 2,727 544 Impairment of design tools - - - 1,519 - Gain on disposal of property - - - (9,300) - Total operating expenses 15,182 14,073 12,466 47,859 56,553 Income (loss) from operations (95) (617) (493) 7,239 (12,173) Other income and expense, net: Interest income and other, net 751 212 73 1,050 14 Interest expense and other, net 54 (80) (42) (93) (202) Disposal of long-term investment 779 779 --- --- Total other income (expense), net 1,584 132 31 1,736 (188) Income (loss) before income taxes 1,489 (485) (462) 8,975 (12,361) Provision for (benefit from) income taxes (264) (204) (201) (123) (5,611) ---- ---- ---- ---- ------ Net income (loss) from continuing operations 1,753 (281) (261) 9,098 (6,750) ----- ---- ---- ----- ------ Net income (loss) from discontinued operations - 45,660 (1,921) 47,982 (9,276) Net income (loss) $1,753 $45,379 $(2,182) $57,080 $(16,026) ====== ======= ======= ======= ======== Income (loss) per share - basic From continuing operations $0.03 $(0.01) $(0.01) $0.18 $(0.14) From discontinued operations - 0.91 (0.03) 0.96 (0.19) Income (loss) per share - basic $0.03 $0.90 $(0.04) $1.14 $(0.33) ===== ===== ====== ===== ====== Income (loss) per share - diluted From continuing operations $0.03 $(0.01) $(0.01) $0.18 $(0.14) From discontinued operations - 0.89 (0.03) 0.94 (0.19) Income (loss) per share - diluted $0.03 $0.88 $(0.04) $1.12 $(0.33) ===== ===== ====== ===== ====== Shares used in the computation of net income (loss) per share: Basic 51,059 50,409 48,523 49,917 48,240 ====== ====== ====== ====== ====== Diluted 52,227 51,365 48,523 50,763 48,240 ====== ====== ====== ====== ====== (1)Stock-based compensation included in cost of sales $77 $473 $98 $966 $355 (2)Stock-based compensation included in R&D 793 926 156 2,489 664 (3)Stock-based compensation included in SG&A 1,625 2,234 720 6,171 3,765
EXAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) APRIL 2, JANUARY 1, MARCH 27, 2017 2017 2016 ---- ---- ---- ASSETS Current assets: Cash and cash equivalents $93,805 $102,023 $55,070 Short term marketable securities 142,320 125,621 - Accounts receivable, net 14,458 12,842 16,130 Accounts receivable, related party, net 5,086 4,977 3,247 Inventories 26,625 24,221 20,807 Other current assets 5,728 3,081 1,922 Assets held for sale - - 93,911 --- --- ------ Total current assets 288,022 272,765 191,087 Property, plant and equipment, net 3,480 3,926 20,299 Goodwill 31,613 31,613 31,613 Intangible assets, net 8,896 9,602 11,735 Other non-current assets 5,051 5,605 639 ----- ----- --- Total assets $337,062 $323,511 $255,373 ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $12,528 $9,558 $11,258 Accrued compensation and related benefits 2,717 2,276 2,984 Deferred income and allowances on sales to distributors 3,068 3,221 3,053 Deferred income and allowances on sales to distributors, related party 3,690 2,988 4,683 Other current liabilities 9,548 10,200 10,669 Liabilities held for sale - - 3,470 --- --- ----- Total current liabilities 31,551 28,243 36,117 Long-term lease financing obligations - - 1,285 Other non-current obligations 3,076 3,536 3,422 ----- ----- ----- Total liabilities 34,627 31,779 40,824 Stockholders' equity 302,435 291,732 214,549 ------- ------- ------- Total liabilities and stockholders' equity $337,062 $323,511 $255,373 ======== ======== ========
EXAR CORPORATION AND SUBSIDIARIES SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS (In thousands, except per share amounts) (Unaudited) THREE MONTHS ENDED APRIL 2, 2017 ------------- Gross Margin Oper. Expenses Income (Loss) from Net Income (Loss) Oper. Income from Net Income (Loss) Net Income (Loss) Operations from Cont. Disc. Operations from Disc. Operations Operations --- GAAP amount $15,087 $15,182 $(95) $1,753 $ - $ - $1,753 Adjustments to GAAP amounts: Amortization of purchased intangible assets 594 (108) 702 702 - - 702 Restructuring charges and other non-GAAP exit costs, net 21 21 21 21 Stock-based compensation 77 (2,418) 2,495 2,495 - - 2,495 Merger and acquisition costs (1,514) 1,514 1,514 1,514 Gain on disposal of property - 398 (398) (398) - - (398) Disposal of long term investments (779) (779) Income tax effects - - - (284) - - (284) --- --- --- ---- --- --- ---- Non-GAAP amount $15,779 $11,540 $4,239 $5,024 $ - $ - $5,024 ======= ======= ====== ====== ==================== =========================== ====== % of revenue 56.7% 41.5% 15.2% 18.1% Non-GAAP net income per share $0.09 Shares used in the computation of Non-GAAP net income per share 53,220 THREE MONTHS ENDED JANUARY 1, 2017 --------------- Gross Margin Oper. Expenses Income (Loss) from Net Income (Loss) Oper. Income from Net Income (Loss) Net Income (Loss) Operations from Cont. Disc. Operations from Disc. Operations Operations --- GAAP amount $13,456 $14,073 $(617) $(281) $136 $45,660 $45,379 Adjustments to GAAP amounts: Amortization of purchased intangible assets 594 (108) 702 702 - - 702 Stock-based compensation 473 (3,160) 3,633 3,633 209 209 3,842 Transition service and retention charges for disposal group - (163) 163 163 621 621 784 Gain on disposal of property - 398 (398) (398) - - (398) Gain on divestititure of Integrated Memory Logic - - - - - (45,384) (45,384) Income tax effects - - - (385) - - (385) --- --- --- ---- --- --- ---- Non-GAAP amount $14,523 $11,040 $3,483 $3,434 $966 $1,106 $4,540 ======= ======= ====== ====== ==== ====== ====== % of revenue 53.4% 40.6% 12.8% 12.6% N/A Non-GAAP net income per share $0.07 $0.02 Shares used in the computation of Non-GAAP net income per share 52,394 52,394 THREE MONTHS ENDED MARCH 27, 2016 -------------- Gross Margin Oper. Expenses Income (Loss) from Net Income (Loss) Oper. Income from Net Income (Loss) Net Income (Loss) Operations from Cont. Disc. Operations from Disc. Operations Operations --- GAAP amount $11,973 $12,466 $(493) $(261) $(1,597) $(1,921) $(2,182) Adjustments to GAAP amounts: Amortization of purchased intangible assets 594 (125) 719 719 2,715 2,715 3,434 Restructuring charges and other non-GAAP exit costs, net - (106) 106 106 245 245 351 Stock-based compensation 97 (876) 973 973 177 177 1,150 Merger and acquisition costs - (213) 213 213 - - 213 Accruals for legal settlement and associated costs - - - - 822 822 822 Impairment of intangible assets - - - - - - - Income tax effects - - - (238) - 269 31 --- --- --- --- --- Non-GAAP amount $12,664 $11,146 $1,518 $1,512 $2,362 $2,307 $3,819 ======= ======= ====== ====== ====== ====== ====== % of revenue 50.0% 44.0% 6.0% 6.0% N/A Non-GAAP net income per share $0.03 $0.05 Shares used in the computation of Non-GAAP net income (loss) per share 49,052 49,052
EXAR CORPORATION AND SUBSIDIARIES SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS (In thousands, except per share amounts) (Unaudited) TWELVE MONTHS ENDED APRIL 2, 2017 ------------- Gross Margin Oper. Expenses Income (Loss) from Net Income (Loss) Oper. Income from Net Income (Loss) Net Income (Loss) Operations from Cont. Disc. Operations from Disc. Operations Operations --- GAAP amount $55,098 $47,859 $7,239 $9,098 $2,663 $47,982 $57,080 Adjustments to GAAP amounts: Amortization of purchased intangible assets 2,376 (449) 2,825 2,825 1,806 1,806 4,631 Restructuring charges and other non-GAAP exit costs, net 264 (923) 1,187 1,187 109 109 1,296 Stock-based compensation 965 (8,660) 9,625 9,625 918 918 10,543 Merger and acquisition costs - (2,784) 2,784 2,784 - - 2,784 Transition service and retention charges for disposal group - (746) 746 746 1,586 1,586 2,332 Impairment of design tools - (1,519) 1,519 1,519 - - 1,519 Gain on disposal of property - 10,494 (10,494) (10,494) - - (10,494) Disposal of long term investments - - - (779) - - (779) Gain on divestititure of Integrated Memory Logic - - - - - (45,384) (45,384) Income tax effects - - - (416) - 272 (144) Non-GAAP amount $58,703 $43,272 $15,431 $16,095 $7,082 $7,289 $23,384 ======= ======= ======= ======= ====== ====== ======= % of revenue 53.5% 39.4% 14.1% 14.7% N/A Non-GAAP net income per share $0.31 $0.14 Shares used in the computation of Non-GAAP net income per share 51,621 51,621 TWELVE MONTHS ENDED MARCH 27, 2016 -------------- Gross Margin Oper. Expenses Income (Loss) Net Income (Loss) Oper. Income from Net Income (Loss) Net Income (Loss) from Operations from Cont. Disc. Operations from Disc. Operations Operations --- GAAP amount $44,380 $56,553 $(12,173) $(6,750) $(4,360) $(9,276) $(16,026) Adjustments to GAAP amounts: Provision for dispute - - - - Amortization of purchased intangible assets 2,427 (519) 2,946 2,946 10,651 10,651 13,597 Restructuring charges and other non-GAAP exit costs, net 740 (4,975) 5,715 5,715 997 997 6,712 Stock-based compensation 355 (4,428) 4,783 4,783 798 798 5,581 Accruals for legal settlement and associated costs (1,500) - (1,500) (1,500) 2,521 2,521 1,021 Impairment of intangible assets - - - - 1,807 1,807 1,807 Merger and acquisition costs - (800) 800 800 124 124 924 Income tax effects - - - (5,715) - 4,663 (1,052) --- --- ------ --- ----- ------ Non-GAAP amount $46,402 $45,831 $571 $279 $12,538 $12,285 $12,564 ======= ======= ==== ==== ======= ======= ======= % of revenue 45.7% 45.1% 0.6% 0.3% N/A Non-GAAP net income (loss) per share $0.01 $0.25 Shares used in the computation of Non-GAAP net income (loss) per share 49,314 49,314
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SOURCE Exar Corporation