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Macom Reports "˜solid Execution And Growth' In Q3

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Gross profit up 12.9 percent, revenues up 6.5 percent

US RF and microwave chip company Macom has announced its financial results for Q3 ended July 1, 2016, described as 'another quarter of solid execution and growth' by John Croteau, Macom's president and CEO.

GAAP results for the quarter showed revenue of $142.3 million, an increase of 6.5 percent, compared to $133.6 million in Q2 2016 and an increase of 30.5 percent compared to $109.1 million in Q3 2015.

Gross profit was $74.0 million, an increase of 12.9 percent, compared to $65.5 million in Q2 2016 and an increase of 40.9 percent compared to $52.5 million in Q3 2015.

Gross margin was 52.0 percent, compared to 49.1 percent in Q2 2016 and 48.1 percent in Q3 2015. Operating income was $10.2 million, compared to an operating loss of $7.2 million Q2 2016 and operating income of $4.4 million Q3 2015.

Net income from continuing operations was $21.4 million, resulting in $0.11 income per diluted share, compared to a net loss from continuing operations of $12.0 million, or $0.23 loss per share, in Q2 2016 and net income from continuing operations of $1.8 million, or $0.02 income per diluted share, in Q3 2015.

"I am pleased to announce another quarter of solid execution and growth, with Networks up 8.6 percent sequentially on continued share expansion in Optical and strong demand for new catalogue products servicing the broader Networks market," commented  Croteau. "Our diversification, coupled with our leading market position in Optical, allowed us to gain market share and grow even in the presence of isolated headwinds," he added.

"Revenue from the Aerospace and Defence market was essentially flat, while Multi-market was up 1.9 percent sequentially. Our catalogue business spanning all end markets increased on the back of our new MMIC-based products.

"Additionally, we continued to advance our GaN initiative and remain on track to ramp volume production programs beginning in the first half of 2017. Lastly, Aerospace and Defense is shaping up to deliver twice the growth rate of our target operating model next quarter and through fiscal 2017."

Non GAAP results

Adjusted gross margin was 57.3 percent, compared to 58.1 percent in Q2 2016 and 58.0 percent in the previous year Q3.

Adjusted operating income was $34.9 million, or 24.5 percent of revenue, compared to $32.4 million, or 24.3 percent of revenue, in Q2 2016 and $25.8 million, or 23.6 percent of revenue, in the previous year Q3.

Adjusted net income was $27.9 million, or $0.51 per diluted share, compared to adjusted net income of $25.7 million, or $0.46 per diluted share, in Q2 2016 and adjusted net income of $18.4 million, or $0.33 per diluted share, in Q3 2015. Adjusted EBITDA was $42.1 million, compared to $39.0 million for Q2 2016 and $29.0 million for the previous year Q3.

Business Outlook

For the fiscal fourth quarter ending September 30, 2016, Macom expects revenue to be in the range of $148 million to $152 million, adjusted gross margin between 57 percent and 59 percent, and adjusted earnings per share to be between $0.54 and $0.58 on an anticipated 56 million fully diluted shares outstanding.



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