Business Wire | Feb 3, 2021 04:05PM EST

MaxLinear, Inc. Announces Fourth Quarter 2020 Financial Results

Feb. 03, 2021

CARLSBAD, Calif.--(BUSINESS WIRE)--Feb. 03, 2021--MaxLinear, Inc. (NYSE: MXL), a leading provider of RF, analog, digital and mixed-signal integrated circuits, today announced financial results for the fourth quarter ended December 31, 2020.

Fourth Quarter Financial Highlights

GAAP basis:

* Net revenue was $194.7 million, up 24% sequentially, and up 178% year-on-year. * GAAP gross margin was 42.7%, compared to 42.3% in the prior quarter, and 52.3% in the year-ago quarter. * GAAP operating expenses were $106.7 million in the fourth quarter 2020, or 55% of net revenue, compared to $100.8 million in the prior quarter, or 64% of net revenue, and $44.6 million in the year-ago quarter, or 64% of net revenue. * GAAP loss from operations was 12% of revenue, compared to loss from operations of 22% in the prior quarter, and loss from operations of 11% in the year-ago quarter. * Net cash flow provided by operating activities was $74.3 million, compared to net cash flow used in operating activities of $16.6 million in the prior quarter, and net cash flow provided by operating activities of $28.1 million in the year-ago quarter. * GAAP diluted loss per share was $0.33, compared to diluted loss per share of $0.50 in the prior quarter, and diluted loss per share of $0.11 in the year-ago quarter.

Non-GAAP basis:

* Non-GAAP gross margin was 57.8%. This compares to 58.0% in the prior quarter, and 64.6% in the year-ago quarter. * Non-GAAP operating expenses were $75.8 million, or 39% of revenue, compared to $61.1 million or 39% of revenue in the prior quarter, and $30.0 million or 43% of revenue in the year-ago quarter. * Non-GAAP income from operations was 19% of revenue, compared to 19% in the prior quarter, and 22% in the year-ago quarter. * Non-GAAP diluted earnings per share was $0.39, compared to diluted earnings per share of $0.32 in the prior quarter, and diluted earnings per share of $0.16 in the year-ago quarter.

Recent Business Highlights

* Announced three new high-current DC/DC Power modules that simplify FPGA, DSP, and SoC power management designs in infrastructure applications. * Announced that MaxLinear's wireless transceiver chipsets are used in Microelectronics Technology Inc. (MTI) Remote Radio Unites (RRUs) targeting specific greenfield Open Ran deployments for 4G and 5G applications. * Announced that MaxLinear's new WAV664 Wi-Fi SoC was selected by Wi-Fi Alliance as an official Wi-Fi 6E test bed device.

Management Commentary

"In the fourth quarter, we posted record revenue, up 24% sequentially, due to stronger-than-expected demand for broadband access and connectivity products. The fourth quarter represented the first full of quarter of ownership of the Intel and NanoSemi assets, with which we are making tremendous progress on the respective integration efforts. Despite intensifying supply chain challenges, our cash flow from operations approximated $74.3 million with non-GAAP gross margin of 57.8% in the quarter. We are making tremendous progress with integration efforts of our recent acquisitions. With this backdrop, along with contributions from our expected revenues from our PAM4 DSP product for the 400G optical data center market and 5G wireless backhaul, we are very confident in the Company's outlook entering 2021," commented Kishore Seendripu, Ph.D., Chairman and CEO.

First Quarter 2021 Business Outlook

The company expects revenue in the first quarter 2021 to be approximately $200 million to $210 million. The Company also estimates the following:

* GAAP gross margin of approximately 51.5% to 53.5%; * Non-GAAP gross margin of approximately 57.5% to 59.5%; * GAAP operating expenses of approximately $103 million to $107 million; * Non-GAAP operating expenses of approximately $72 million to $76 million; * GAAP interest and other expense of approximately $4.3 million to $4.5 million; and * Non-GAAP interest and other expense of approximately $4.0 million to $4.2 million.

Webcast and Conference Call

MaxLinear will host its fourth quarter financial results conference call today, February 3, 2021 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access this call, dial US toll free: 1-877-407-3109 / International: 1-201-493-6798. A live webcast of the conference call will be accessible from the investor relations section of the MaxLinear website at https://investors.maxlinear.com, and will be archived and available after the call at https://investors.maxlinear.com until February 17, 2021. A replay of the conference call will also be available until February 17, 2021 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13715073.

Cautionary Note Concerning Forward-Looking Statements

This press release contains 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. Forward-looking statements include, among others, statements concerning our future financial performance (including specifically our current guidance for first quarter 2021 revenue, gross margins, and operating expenses) and statements concerning expectations of potential developments in our target markets, including management's views with respect to the prospects for and trends in our broadband, connectivity and 5G wireless and fiber-optic high-speed interconnect infrastructure markets. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking statements are based on management's current, preliminary expectations and are subject to various risks and uncertainties. In particular, our future operating results are substantially dependent on our assumptions about market trends and conditions and our expectations with respect to the impact of our acquisitions of the Home Gateway Platform Division of Intel Corporation, which we refer to as the Wi-Fi and Broadband assets business and NanoSemi, Inc. With respect to our acquisitions of the Wi-Fi and Broadband assets business and NanoSemi, we face particular risks associated with our ability to successfully complete the integration of the acquired businesses and maintain relationships with employees, customers, and vendors. The Wi-Fi and Broadband assets business and NanoSemi have operations that differ from those of MaxLinear, and we may be unable to realize anticipated strategic, financial, and operating synergies. In addition, we have incurred incremental acquisition-related indebtedness, which enhances specific risks relating to our ability to service interest and principal payments on our combined indebtedness and limitations on our operating flexibility based on financial and operating covenants in the applicable term loan agreements, including (without limitation) debt covenant restrictions that may limit our ability to obtain additional financing, issue guarantees, create liens, make certain restricted payments or repay certain obligations or to pursue future acquisitions. Additional risks and uncertainties affecting our business and future operating results include, without limitation, the on-going impact of the COVID-19 pandemic, including whether and the extent to which we will continue to benefit from work-from-home and similar initiatives as the situation progresses and the adverse impact of the pandemic on our operations around the world; risks associated with our ability to realize improved profitability from our Wi-Fi and Broadband assets business; intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; potential uncertainties arising from continued consolidation among cable television and satellite operators in our target markets and continued consolidation among competitors within the semiconductor industry generally; our ability to develop and introduce new and enhanced products on a timely basis and achieve market acceptance of those products, particularly as we seek to expand outside of our historic markets; potential decreases in average selling prices for our products; risks relating to intellectual property protection and the prevalence of intellectual property litigation in our industry; our reliance on a limited number of third party manufacturers; our lack of long-term supply contracts and dependence on limited sources of supply, which may be adversely affected by the pandemic; uncertainties concerning how end user markets for our products will develop, including in particular markets we have entered more recently such as broadband and Wi-Fi and 5G wireless and fiber-optic data center high-speed interconnect infrastructure markets but also existing markets which we previously referred to as connected home; and uncertainties concerning the outcome of global trade negotiations, export control limitations, and heightened geopolitical risks generally.

Due to additional work and procedures arising from the significance of our recent acquisitions, the annual audit of our consolidated financial statements by our independent registered public accounting firm is not yet complete, and final adjustments may arise between now and the time our financial results for the year ended December 31, 2020 are filed with our Annual Report on Form 10-K. For additional information, you should carefully review our audited consolidated financial statements for the year ended December 31, 2020 once they become available in the Form 10-K.

In addition to these risks and uncertainties, investors should review the risks and uncertainties contained in our filings with the Securities and Exchange Commission (SEC), including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, and our Current Reports on Form 8-K, as well as the information to be set forth under the caption "Risk Factors" in MaxLinear's Annual Report on Form 10-K for the year ended December 31, 2020, which we expect to file soon. All forward-looking statements are based on the estimates, projections and assumptions of management as of February 3, 2021, and MaxLinear is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Use of Non-GAAP Financial Measures

To supplement our unaudited consolidated financial statements presented on a basis consistent with GAAP, we disclose certain non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating expenses as a percentage of revenue, income from operations as percentage of revenue, and diluted earnings per share. These supplemental measures exclude the effects of (i) stock-based compensation expense; (ii) accruals related to our performance based bonus plan for 2020, which we currently intend to settle in shares of our common stock; (iii) accruals related to our performance based bonus plan for 2019, which we settled in shares of common stock in 2020; (iv) amortization of inventory fair value adjustments; (v) amortization of purchased intangible assets; (vi) depreciation of fixed asset fair value adjustments; (vii) acquisition and integration costs related to our acquisitions; (viii) professional fees and settlement costs related to IP and commercial litigation matters; (ix) severance and other restructuring charges; (x) impairment losses on intangible assets; (xi) other non-recurring interest and other income (expenses), net attributable to acquisitions and (xii) non-cash income tax benefits and expenses. These non-GAAP measures are not in accordance with and do not serve as an alternative for GAAP. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our GAAP results of operations. These non-GAAP measures should only be viewed in conjunction with corresponding GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

We believe that non-GAAP financial measures can provide useful information to both management and investors by excluding certain non-cash and other one-time expenses that are not indicative of our core operating results. Among other uses, our management uses non-GAAP measures to compare our performance relative to forecasts and strategic plans and to benchmark our performance externally against competitors. In addition, management's incentive compensation will be determined in part using these non-GAAP measures because we believe non-GAAP measures better reflect our core operating performance.

The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:

Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants. Our equity incentive plans are important components of our employee incentive compensation arrangements and are reflected as expenses in our GAAP results. Stock-based compensation expense has been and will continue to be a significant recurring expense for MaxLinear. While we include the dilutive impact of equity awards in weighted average shares outstanding, the expense associated with stock-based awards reflects a non-cash charge that we exclude from non-GAAP net income.

Bonuses under our executive and non-executive bonus programs have been excluded from our non-GAAP net income for all periods reported. Bonus payments for the 2019 performance periods were settled through the issuance of shares of common stock under our equity incentive plans in March 2020. We currently expect that bonus awards under our fiscal 2020 program will be settled in common stock in the first quarter of fiscal 2021.

Expenses incurred in relation to acquisitions include amortization of inventory fair value adjustments, amortization of purchased intangible assets, depreciation of fixed asset fair value adjustments, acquisition and integration costs primarily consisting of professional and consulting fees, amortization of discount on deferred purchase price payments to interest expense, and non-recurring gain on reversal of liability for an assumed indemnification obligation in 2019.

Impairment losses relate to certain intangible assets.

Restructuring charges incurred are related to our restructuring plans which eliminate redundancies and primarily include severance and restructuring costs related to impairment of leased right-of-use assets or from exiting certain facilities.

Expenses incurred in relation to our intellectual property and commercial litigation include professional fees incurred.

Income tax benefits and expense adjustments are those that do not affect cash income taxes payable.

Reconciliations of non-GAAP measures for the historic periods disclosed in this press release appear below. Because of the inherent uncertainty associated with our ability to project future charges, particularly related to stock-based compensation and its related tax effects as well as potential impairments, we have not provided a reconciliation for non-GAAP guidance provided for the first quarter 2021.

About MaxLinear, Inc.

MaxLinear, Inc. (NYSE:MXL) is a leading provider of radio frequency (RF), analog, digital and mixed-signal integrated circuits for access and connectivity, wired and wireless infrastructure, and industrial and multi-market applications. MaxLinear is headquartered in Carlsbad, California. For more information, please visit www.maxlinear.com.

MXL is MaxLinear's registered trademark. Other trademarks appearing herein are the property of their respective owners.

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Three Months Ended

December 31, September 30, December 31, 2020 2020 2019

Net revenue $ 194,716 $ 156,633 $ 70,018

Cost of net revenue 111,629 90,427 33,394

Gross profit 83,087 66,206 36,624

Operating expenses:

Research and development 70,504 55,816 23,467

Selling, general and 36,238 41,685 20,924 administrative

Restructuring charges - 3,280 159

Total operating expenses 106,742 100,781 44,550

Loss from operations (23,655 ) (34,575 ) (7,926 )

Interest income 126 27 222

Interest expense (4,724 ) (3,569 ) (2,587 )

Other income (expense), net (550 ) (719 ) (498 )

Total interest and other income (5,148 ) (4,261 ) (2,863 )(expense), net

Loss before income taxes (28,803 ) (38,836 ) (10,789 )

Income tax benefit (4,131 ) (2,191 ) (2,685 )

Net loss $ (24,672 ) $ (36,645 ) $ (8,104 )

Net loss per share:

Basic $ (0.33 ) $ (0.50 ) $ (0.11 )

Diluted $ (0.33 ) $ (0.50 ) $ (0.11 )

Shares used to compute net loss per share:

Basic 74,335 73,402 71,746

Diluted 74,335 73,402 71,746

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Year Ended

December 31, 2020

December 31, 2019

Net revenue

$

478,596

$

317,180

Cost of net revenue

265,798

149,495

Gross profit

212,798

167,685

Operating expenses:

Research and development

179,993

98,344

Selling, general and administrative

130,025

88,762

Impairment losses

86

-

Restructuring charges

3,833

2,636

Total operating expenses

313,937

189,742

Loss from operations

(101,139

)

(22,057

)

Interest income

409

775

Interest expense

(12,952

)

(11,133

)

Other income (expense), net

(1,170

)

(69

)

Total interest and other income (expense), net

(13,713

)

(10,427

)

Loss before income taxes

(114,852

)

(32,484

)

Income tax benefit

(16,259

)

(12,586

)

Net loss

$

(98,593

)

$

(19,898

)

Net loss per share:

Basic

$

(1.35

)

$

(0.28

)

Diluted

$

(1.35

)

$

(0.28

)

Shares used to compute net loss per share:

Basic

73,133

71,005

Diluted

73,133

71,005

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Year Ended

December 31, December 31, 2020 2019

Net revenue $ 478,596 $ 317,180

Cost of net revenue 265,798 149,495

Gross profit 212,798 167,685

Operating expenses:

Research and development 179,993 98,344

Selling, general and administrative 130,025 88,762

Impairment losses 86 -

Restructuring charges 3,833 2,636

Total operating expenses 313,937 189,742

Loss from operations (101,139 ) (22,057 )

Interest income 409 775

Interest expense (12,952 ) (11,133 )

Other income (expense), net (1,170 ) (69 )

Total interest and other income (expense), (13,713 ) (10,427 ) net

Loss before income taxes (114,852 ) (32,484 )

Income tax benefit (16,259 ) (12,586 )

Net loss $ (98,593 ) $ (19,898 )

Net loss per share:

Basic $ (1.35 ) $ (0.28 )

Diluted $ (1.35 ) $ (0.28 )

Shares used to compute net loss per share:

Basic 73,133 71,005

Diluted 73,133 71,005



MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

December 31, 2020

September 30, 2020

December 31, 2019

Operating Activities

Net loss

$

(24,672

)

$

(36,645

)

$

(8,104

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Amortization and depreciation

22,694

20,554

16,473

Amortization of inventory fair value adjustments

18,500

14,445

-

Amortization of debt issuance costs and accretion of discount on debt and leases

815

579

404

Stock-based compensation

14,540

14,145

7,747

Deferred income taxes

(13,235

)

3,834

(3,238

)

Impairment of leasehold improvements

-

156

-

Impairment of leased right-of-use assets

-

1,464

7,058

Gain on extinguishment of lease liabilities

-

-

(7,557

)

Loss on foreign currency and other

914

601

430

Excess tax benefits on stock based awards

(147

)

(152

)

(192

)

Changes in operating assets and liabilities, net of effects of acquisitions:

Accounts receivable

37,736

(63,569

)

5,930

Inventory

(11,657

)

(17,349

)

6,224

Prepaid expenses and other assets

(4,597

)

(35,131

)

2,889

Leased right-of-use assets

36

79

109

Accounts payable, accrued expenses and other current liabilities

(10,099

)

61,958

2,692

Accrued compensation

9,485

15,364

607

Accrued price protection liability

29,280

12,108

(1,097

)

Lease liabilities

(2,111

)

(1,566

)

(1,655

)

Other long-term liabilities

6,787

(7,459

)

(613

)

Net cash provided by (used in) operating activities

74,269

(16,584

)

28,107

Investing Activities

Purchases of property and equipment

(2,355

)

(5,196

)

(2,989

)

Purchases of intangible assets

(2,411

)

(375

)

-

Cash used in acquisitions, net of cash acquired

-

(160,000

)

-

Net cash used in investing activities

(4,766

)

(165,571

)

(2,989

)

Financing Activities

Proceeds from the issuance of debt

-

175,000

-

Payment of debt issuance cost

-

(2,696

)

-

Repayment of debt

(17,188

)

-

-

Net proceeds from issuance of common stock

2,798

628

2,382

Minimum tax withholding paid on behalf of employees for restricted stock units

(643

)

(1,393

)

(820

)

Net cash provided by (used in) financing activities

(15,033

)

171,539

1,562

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(1,178

)

(71

)

(87

)

Increase (decrease) in cash, cash equivalents and restricted cash

53,292

(10,687

)

26,593

Cash, cash equivalents and restricted cash at beginning of period

96,742

107,429

66,524

Cash, cash equivalents and restricted cash at end of period

$

150,034

$

96,742

$

93,117

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

December 31, September 30, December 31, 2020 2020 2019

Operating Activities

Net loss $ (24,672 ) $ (36,645 ) $ (8,104 )

Adjustments to reconcile net lossto net cash provided by (used in) operating activities:

Amortization and depreciation 22,694 20,554 16,473

Amortization of inventory fair 18,500 14,445 - value adjustments

Amortization of debt issuancecosts and accretion of discount on 815 579 404 debt and leases

Stock-based compensation 14,540 14,145 7,747

Deferred income taxes (13,235 ) 3,834 (3,238 )

Impairment of leasehold - 156 - improvements

Impairment of leased right-of-use - 1,464 7,058 assets

Gain on extinguishment of lease - - (7,557 ) liabilities

Loss on foreign currency and other 914 601 430

Excess tax benefits on stock based (147 ) (152 ) (192 ) awards

Changes in operating assets andliabilities, net of effects of acquisitions:

Accounts receivable 37,736 (63,569 ) 5,930

Inventory (11,657 ) (17,349 ) 6,224

Prepaid expenses and other assets (4,597 ) (35,131 ) 2,889

Leased right-of-use assets 36 79 109

Accounts payable, accrued expenses (10,099 ) 61,958 2,692 and other current liabilities

Accrued compensation 9,485 15,364 607

Accrued price protection liability 29,280 12,108 (1,097 )

Lease liabilities (2,111 ) (1,566 ) (1,655 )

Other long-term liabilities 6,787 (7,459 ) (613 )

Net cash provided by (used in) 74,269 (16,584 ) 28,107 operating activities

Investing Activities

Purchases of property and (2,355 ) (5,196 ) (2,989 ) equipment

Purchases of intangible assets (2,411 ) (375 ) -

Cash used in acquisitions, net of - (160,000 ) - cash acquired

Net cash used in investing (4,766 ) (165,571 ) (2,989 ) activities

Financing Activities

Proceeds from the issuance of debt - 175,000 -

Payment of debt issuance cost - (2,696 ) -

Repayment of debt (17,188 ) - -

Net proceeds from issuance of 2,798 628 2,382 common stock

Minimum tax withholding paid onbehalf of employees for restricted (643 ) (1,393 ) (820 ) stock units

Net cash provided by (used in) (15,033 ) 171,539 1,562 financing activities

Effect of exchange rate changes oncash, cash equivalents and (1,178 ) (71 ) (87 ) restricted cash

Increase (decrease) in cash, cash 53,292 (10,687 ) 26,593 equivalents and restricted cash

Cash, cash equivalents andrestricted cash at beginning of 96,742 107,429 66,524 period

Cash, cash equivalents and $ 150,034 $ 96,742 $ 93,117 restricted cash at end of period

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year ended

December 31, 2020

December 31, 2019

Operating Activities

Net loss

$

(98,593

)

$

(19,898

)

Adjustments to reconcile net loss to cash provided by operating activities:

Amortization and depreciation

76,513

66,401

Impairment losses

86

-

Amortization of inventory fair value adjustments

32,945

-

Amortization of debt issuance costs and accretion of discount on debt and leases

2,201

1,577

Stock-based compensation

47,597

32,060

Deferred income taxes

(18,488

)

(15,693

)

Loss on disposal of property and equipment

-

46

Impairment of leasehold improvements

319

1,442

Impairment of leased right-of-use assets

1,508

9,240

Gain on extinguishment of lease liabilities

-

(10,437

)

Loss on foreign currency

1,289

760

Excess tax benefits on stock-based awards

(677

)

(4,064

)

Changes in operating assets and liabilities, net of effects of acquisitions:

Accounts receivable

(16,856

)

9,090

Inventory

(31,837

)

10,195

Prepaid expenses and other assets

(38,954

)

3,805

Leased right-of-use assets

441

3,044

Accounts payable, accrued expenses and other current liabilities

57,094

1,261

Accrued compensation

32,606

2,021

Accrued price protection liability

34,719

(3,966

)

Lease liabilities

(6,386

)

(8,142

)

Other long-term liabilities

(1,934

)

(394

)

Net cash provided by operating activities

73,593

78,348

Investing Activities

Purchases of property and equipment

(12,487

)

(6,887

)

Purchases of intangible assets

(2,799

)

(86

)

Cash used in acquisitions, net of cash acquired

(160,000

)

-

Net cash used in investing activities

(175,286

)

(6,973

)

Financing Activities

Proceeds from the issuance of debt

175,000

-

Payment of debt issuance cost

(2,696

)

-

Repayment of debt

(17,188

)

(50,000

)

Net proceeds from issuance of common stock

8,068

8,603

Minimum tax withholding paid on behalf of employees for restricted stock units

(3,535

)

(11,986

)

Net cash provided by (used in) financing activities

159,649

(53,383

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(1,039

)

934

Increase in cash, cash equivalents and restricted cash

56,917

18,926

Cash, cash equivalents and restricted cash at beginning of period

93,117

74,191

Cash, cash equivalents and restricted cash at end of period

$

150,034

$

93,117

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year ended

December 31, December 31, 2020 2019

Operating Activities

Net loss $ (98,593 ) $ (19,898 )

Adjustments to reconcile net loss to cash provided by operating activities:

Amortization and depreciation 76,513 66,401

Impairment losses 86 -

Amortization of inventory fair value adjustments 32,945 -

Amortization of debt issuance costs and accretion 2,201 1,577 of discount on debt and leases

Stock-based compensation 47,597 32,060

Deferred income taxes (18,488 ) (15,693 )

Loss on disposal of property and equipment - 46

Impairment of leasehold improvements 319 1,442

Impairment of leased right-of-use assets 1,508 9,240

Gain on extinguishment of lease liabilities - (10,437 )

Loss on foreign currency 1,289 760

Excess tax benefits on stock-based awards (677 ) (4,064 )

Changes in operating assets and liabilities, net of effects of acquisitions:

Accounts receivable (16,856 ) 9,090

Inventory (31,837 ) 10,195

Prepaid expenses and other assets (38,954 ) 3,805

Leased right-of-use assets 441 3,044

Accounts payable, accrued expenses and other 57,094 1,261 current liabilities

Accrued compensation 32,606 2,021

Accrued price protection liability 34,719 (3,966 )

Lease liabilities (6,386 ) (8,142 )

Other long-term liabilities (1,934 ) (394 )

Net cash provided by operating activities 73,593 78,348

Investing Activities

Purchases of property and equipment (12,487 ) (6,887 )

Purchases of intangible assets (2,799 ) (86 )

Cash used in acquisitions, net of cash acquired (160,000 ) -

Net cash used in investing activities (175,286 ) (6,973 )

Financing Activities

Proceeds from the issuance of debt 175,000 -

Payment of debt issuance cost (2,696 ) -

Repayment of debt (17,188 ) (50,000 )

Net proceeds from issuance of common stock 8,068 8,603

Minimum tax withholding paid on behalf of employees (3,535 ) (11,986 ) for restricted stock units

Net cash provided by (used in) financing activities 159,649 (53,383 )

Effect of exchange rate changes on cash, cash (1,039 ) 934 equivalents and restricted cash

Increase in cash, cash equivalents and restricted 56,917 18,926 cash

Cash, cash equivalents and restricted cash at 93,117 74,191 beginning of period

Cash, cash equivalents and restricted cash at end $ 150,034 $ 93,117 of period





MAXLINEAR, INC.

UNAUDITED GAAP CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

December 31, 2020

September 30, 2020

December 31, 2019

Assets

Current assets:

Cash and cash equivalents

$

148,901

$

96,570

$

92,708

Short-term restricted cash

115

111

349

Accounts receivable, net

67,442

105,355

50,411

Inventory

97,839

104,471

31,510

Prepaid expenses and other current assets

47,421

43,546

6,792

Total current assets

361,718

350,053

181,770

Long-term restricted cash

1,018

61

60

Property and equipment, net

39,470

37,258

16,613

Leased right-of-use assets

21,886

11,876

10,978

Intangible assets, net

207,266

232,148

187,971

Goodwill

302,828

302,576

238,330

Deferred tax assets

86,065

72,537

67,284

Other long-term assets

2,191

1,270

2,785

Total assets

$

1,022,442

$

1,007,779

$

705,791

Liabilities and stockholders' equity

Current liabilities

$

233,661

$

211,374

$

66,562

Long-term lease liabilities

20,862

9,406

9,335

Long-term debt

363,592

372,457

206,909

Other long-term liabilities

13,210

17,734

8,065

Stockholders' equity

391,117

396,808

414,920

Total liabilities and stockholders' equity

$

1,022,442

$

1,007,779

$

705,791

MAXLINEAR, INC.

UNAUDITED GAAP CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

December 31, September 30, December 31, 2020 2020 2019

Assets

Current assets:

Cash and cash equivalents $ 148,901 $ 96,570 $ 92,708

Short-term restricted cash 115 111 349

Accounts receivable, net 67,442 105,355 50,411

Inventory 97,839 104,471 31,510

Prepaid expenses and other 47,421 43,546 6,792 current assets

Total current assets 361,718 350,053 181,770

Long-term restricted cash 1,018 61 60

Property and equipment, net 39,470 37,258 16,613

Leased right-of-use assets 21,886 11,876 10,978

Intangible assets, net 207,266 232,148 187,971

Goodwill 302,828 302,576 238,330

Deferred tax assets 86,065 72,537 67,284

Other long-term assets 2,191 1,270 2,785

Total assets $ 1,022,442 $ 1,007,779 $ 705,791



Liabilities and stockholders' equity

Current liabilities $ 233,661 $ 211,374 $ 66,562

Long-term lease liabilities 20,862 9,406 9,335

Long-term debt 363,592 372,457 206,909

Other long-term liabilities 13,210 17,734 8,065

Stockholders' equity 391,117 396,808 414,920

Total liabilities and $ 1,022,442 $ 1,007,779 $ 705,791 stockholders' equity

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS

(in thousands, except per share data)

Three Months Ended

December 31, 2020

September 30, 2020

December 31, 2019

GAAP gross profit

$

83,087

$

66,206

$

36,624

Stock-based compensation

160

143

149

Performance based equity

124

180

(21

)

Amortization of inventory fair value adjustments

18,500

14,445

-

Amortization of purchased intangible assets

10,667

9,901

8,513

Non-GAAP gross profit

112,538

90,875

45,265

GAAP R&D expenses

70,504

55,816

23,467

Stock-based compensation

(7,410

)

(6,056

)

(3,955

)

Performance based equity

(6,124

)

(6,190

)

(421

)

Non-GAAP R&D expenses

56,970

43,570

19,091

GAAP SG&A expenses

36,238

41,685

20,924

Stock-based compensation

(6,970

)

(7,349

)

(3,643

)

Performance based equity

(2,991

)

(2,991

)

(604

)

Amortization of purchased intangible assets

(6,200

)

(6,057

)

(5,723

)

Acquisition and integration costs

(1,200

)

(7,762

)

-

IP litigation costs, net

(32

)

(35

)

3

Non-GAAP SG&A expenses

18,845

17,491

10,957

GAAP restructuring expenses

-

3,280

159

Restructuring charges

-

(3,280

)

(159

)

Non-GAAP restructuring expenses

-

-

-

GAAP loss from operations

(23,655

)

(34,575

)

(7,926

)

Total non-GAAP adjustments

60,378

64,389

23,143

Non-GAAP income from operations

36,723

29,814

15,217

GAAP and non-GAAP interest and other income (expense), net

(5,148

)

(4,261

)

(2,863

)

Non-recurring interest and other income (expense), net

384

-

-

Non-GAAP interest and other income (expense), net

(4,764

)

(4,261

)

(2,863

)

GAAP loss before income taxes

(28,803

)

(38,836

)

(10,789

)

Total non-GAAP adjustments

60,762

64,389

23,143

Non-GAAP income before income taxes

31,959

25,553

12,354

GAAP income tax benefit

(4,131

)

(2,191

)

(2,685

)

Adjustment for non-cash tax benefits/expenses

6,048

3,724

3,303

Non-GAAP income tax provision

1,917

1,533

618

GAAP net loss

(24,672

)

(36,645

)

(8,104

)

Total non-GAAP adjustments before income taxes

60,762

64,389

23,143

Less: total tax adjustments

6,048

3,724

3,303

Non-GAAP net income

$

30,042

$

24,020

$

11,736

Shares used in computing non-GAAP basic net income per share

74,335

73,402

71,746

Shares used in computing non-GAAP diluted net income per share

77,926

75,324

72,707

Non-GAAP basic net income per share

$

0.40

$

0.33

$

0.16

Non-GAAP diluted net income per share

$

0.39

$

0.32

$

0.16

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS

(in thousands, except per share data)

Three Months Ended

December 31, September December 31, 2020 30, 2020 2019

GAAP gross profit $ 83,087 $ 66,206 $ 36,624

Stock-based compensation 160 143 149

Performance based equity 124 180 (21 )

Amortization of inventory fair value 18,500 14,445 - adjustments

Amortization of purchased intangible 10,667 9,901 8,513 assets

Non-GAAP gross profit 112,538 90,875 45,265



GAAP R&D expenses 70,504 55,816 23,467

Stock-based compensation (7,410 ) (6,056 ) (3,955 )

Performance based equity (6,124 ) (6,190 ) (421 )

Non-GAAP R&D expenses 56,970 43,570 19,091



GAAP SG&A expenses 36,238 41,685 20,924

Stock-based compensation (6,970 ) (7,349 ) (3,643 )

Performance based equity (2,991 ) (2,991 ) (604 )

Amortization of purchased intangible (6,200 ) (6,057 ) (5,723 ) assets

Acquisition and integration costs (1,200 ) (7,762 ) -

IP litigation costs, net (32 ) (35 ) 3

Non-GAAP SG&A expenses 18,845 17,491 10,957



GAAP restructuring expenses - 3,280 159

Restructuring charges - (3,280 ) (159 )

Non-GAAP restructuring expenses - - -



GAAP loss from operations (23,655 ) (34,575 ) (7,926 )

Total non-GAAP adjustments 60,378 64,389 23,143

Non-GAAP income from operations 36,723 29,814 15,217



GAAP and non-GAAP interest and other (5,148 ) (4,261 ) (2,863 ) income (expense), net

Non-recurring interest and other 384 - - income (expense), net

Non-GAAP interest and other income (4,764 ) (4,261 ) (2,863 ) (expense), net



GAAP loss before income taxes (28,803 ) (38,836 ) (10,789 )

Total non-GAAP adjustments 60,762 64,389 23,143

Non-GAAP income before income taxes 31,959 25,553 12,354



GAAP income tax benefit (4,131 ) (2,191 ) (2,685 )

Adjustment for non-cash tax benefits/ 6,048 3,724 3,303 expenses

Non-GAAP income tax provision 1,917 1,533 618



GAAP net loss (24,672 ) (36,645 ) (8,104 )

Total non-GAAP adjustments before 60,762 64,389 23,143 income taxes

Less: total tax adjustments 6,048 3,724 3,303

Non-GAAP net income $ 30,042 $ 24,020 $ 11,736



Shares used in computing non-GAAP 74,335 73,402 71,746 basic net income per share

Shares used in computing non-GAAP 77,926 75,324 72,707 diluted net income per share

Non-GAAP basic net income per share $ 0.40 $ 0.33 $ 0.16

Non-GAAP diluted net income per share $ 0.39 $ 0.32 $ 0.16

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS

(in thousands, except per share data)

Year Ended

December 31, 2020

December 31, 2019

GAAP gross profit

$

212,798

$

167,685

Stock-based compensation

577

577

Performance based equity

482

52

Amortization of inventory fair value adjustments

32,945

-

Amortization of purchased intangible assets

37,730

33,892

Non-GAAP gross profit

284,532

202,206

GAAP R&D expenses

179,993

98,344

Stock-based compensation

(22,252

)

(16,545

)

Performance based equity

(16,118

)

(1,391

)

Depreciation of fixed asset fair value adjustments

-

(6

)

Non-GAAP R&D expenses

141,623

80,402

GAAP SG&A expenses

130,025

88,762

Stock-based compensation

(24,172

)

(14,938

)

Performance based equity

(8,262

)

(1,822

)

Amortization of purchased intangible assets

(23,529

)

(23,035

)

Acquisition and integration costs

(14,322

)

-

IP litigation costs, net

(181

)

(81

)

Non-GAAP SG&A expenses

59,559

48,886

GAAP impairment losses

86

-

Impairment losses

(86

)

-

Non-GAAP impairment losses

-

-

GAAP restructuring expenses

3,833

2,636

Restructuring charges

(3,833

)

(2,636

)

Non-GAAP restructuring expenses

-

-

GAAP loss from operations

(101,139

)

(22,057

)

Total non-GAAP adjustments

184,489

94,975

Non-GAAP income from operations

83,350

72,918

GAAP interest and other income (expense), net

(13,713

)

(10,427

)

Non-recurring interest and other income (expense), net

384

(1,006

)

Non-GAAP interest and other income (expense), net

(13,329

)

(11,433

)

GAAP loss before income taxes

(114,852

)

(32,484

)

Total non-GAAP adjustments

184,873

93,969

Non-GAAP income before income taxes

70,021

61,485

GAAP income tax benefit

(16,259

)

(12,586

)

Adjustment for non-cash tax benefits/expenses

20,460

16,296

Non-GAAP income tax provision

4,201

3,710

GAAP net loss

(98,593

)

(19,898

)

Total non-GAAP adjustments before income taxes

184,873

93,969

Less: total tax adjustments

20,460

16,296

Non-GAAP net income

$

65,820

$

57,775

Shares used in computing non-GAAP basic net income per share

73,133

71,005

Shares used in computing non-GAAP diluted net income per share

74,928

72,381

Non-GAAP basic net income per share

$

0.90

$

0.81

Non-GAAP diluted net income per share

$

0.88

$

0.80

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS

(in thousands, except per share data)

Year Ended

December 31, December 31, 2020 2019

GAAP gross profit $ 212,798 $ 167,685

Stock-based compensation 577 577

Performance based equity 482 52

Amortization of inventory fair value adjustments 32,945 -

Amortization of purchased intangible assets 37,730 33,892

Non-GAAP gross profit 284,532 202,206



GAAP R&D expenses 179,993 98,344

Stock-based compensation (22,252 ) (16,545 )

Performance based equity (16,118 ) (1,391 )

Depreciation of fixed asset fair value - (6 ) adjustments

Non-GAAP R&D expenses 141,623 80,402



GAAP SG&A expenses 130,025 88,762

Stock-based compensation (24,172 ) (14,938 )

Performance based equity (8,262 ) (1,822 )

Amortization of purchased intangible assets (23,529 ) (23,035 )

Acquisition and integration costs (14,322 ) -

IP litigation costs, net (181 ) (81 )

Non-GAAP SG&A expenses 59,559 48,886



GAAP impairment losses 86 -

Impairment losses (86 ) -

Non-GAAP impairment losses - -



GAAP restructuring expenses 3,833 2,636

Restructuring charges (3,833 ) (2,636 )

Non-GAAP restructuring expenses - -



GAAP loss from operations (101,139 ) (22,057 )

Total non-GAAP adjustments 184,489 94,975

Non-GAAP income from operations 83,350 72,918



GAAP interest and other income (expense), net (13,713 ) (10,427 )

Non-recurring interest and other income 384 (1,006 ) (expense), net

Non-GAAP interest and other income (expense), (13,329 ) (11,433 ) net



GAAP loss before income taxes (114,852 ) (32,484 )

Total non-GAAP adjustments 184,873 93,969

Non-GAAP income before income taxes 70,021 61,485



GAAP income tax benefit (16,259 ) (12,586 )

Adjustment for non-cash tax benefits/expenses 20,460 16,296

Non-GAAP income tax provision 4,201 3,710



GAAP net loss (98,593 ) (19,898 )

Total non-GAAP adjustments before income taxes 184,873 93,969

Less: total tax adjustments 20,460 16,296

Non-GAAP net income $ 65,820 $ 57,775



Shares used in computing non-GAAP basic net 73,133 71,005 income per share

Shares used in computing non-GAAP diluted net 74,928 72,381 income per share

Non-GAAP basic net income per share $ 0.90 $ 0.81

Non-GAAP diluted net income per share $ 0.88 $ 0.80

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Three Months Ended

December 31, 2020

September 30, 2020

December 31, 2019

GAAP gross profit

42.7

%

42.3

%

52.3

%

Stock-based compensation

0.1

%

0.1

%

0.2

%

Performance based equity

0.1

%

0.1

%

-

%

Amortization of inventory fair value adjustments

9.5

%

9.2

%

-

%

Amortization of purchased intangible assets

5.5

%

6.3

%

12.2

%

Non-GAAP gross profit

57.8

%

58.0

%

64.6

%

GAAP R&D expenses

36.2

%

35.6

%

33.5

%

Stock-based compensation

(3.8

)%

(3.9

)%

(5.7

)%

Performance based equity

(3.1

)%

(4.0

)%

(0.6

)%

Non-GAAP R&D expenses

29.3

%

27.8

%

27.3

%

GAAP SG&A expenses

18.6

%

26.6

%

29.9

%

Stock-based compensation

(3.6

)%

(4.7

)%

(5.2

)%

Performance based equity

(1.5

)%

(1.9

)%

(0.9

)%

Amortization of purchased intangible assets

(3.2

)%

(3.9

)%

(8.2

)%

Acquisition and integration costs

(0.6

)%

(5.0

)%

-

%

IP litigation costs, net

-

%

-

%

-

%

Non-GAAP SG&A expenses

9.7

%

11.2

%

15.7

%

GAAP restructuring expenses

-

%

2.1

%

0.2

%

Restructuring charges

-

%

(2.1

)%

(0.2

)%

Non-GAAP restructuring expenses

-

%

-

%

-

%

GAAP loss from operations

(12.2

)%

(22.1

)%

(11.3

)%

Total non-GAAP adjustments

31.0

%

41.1

%

33.1

%

Non-GAAP income from operations

18.9

%

19.0

%

21.7

%

GAAP and non-GAAP interest and other income (expense), net

(2.6

)%

(2.7

)%

(4.1

)%

Non-recurring interest and other income (expense), net

0.2

%

-

%

-

%

Non-GAAP interest and other income (expense), net

(2.4

)%

(2.7

)%

(4.1

)%

GAAP loss before income taxes

(14.8

)%

(24.8

)%

(15.4

)%

Total non-GAAP adjustments before income taxes

31.2

%

41.1

%

33.1

%

Non-GAAP income before income taxes

16.4

%

16.3

%

17.6

%

GAAP income tax benefit

(2.1

)%

(1.4

)%

(3.8

)%

Adjustment for non-cash tax benefits/expenses

3.1

%

2.4

%

4.7

%

Non-GAAP income tax provision

1.0

%

1.0

%

0.9

%

GAAP net loss

(12.7

)%

(23.4

)%

(11.6

)%

Total non-GAAP adjustments before income taxes

31.2

%

41.1

%

33.1

%

Less: total tax adjustments

3.1

%

2.4

%

4.7

%

Non-GAAP net income

15.4

%

15.3

%

16.8

%

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Three Months Ended

December September December 31, 2020 30, 2020 31, 2019

GAAP gross profit 42.7 % 42.3 % 52.3 %

Stock-based compensation 0.1 % 0.1 % 0.2 %

Performance based equity 0.1 % 0.1 % - %

Amortization of inventory fair value 9.5 % 9.2 % - %adjustments

Amortization of purchased intangible 5.5 % 6.3 % 12.2 %assets

Non-GAAP gross profit 57.8 % 58.0 % 64.6 %



GAAP R&D expenses 36.2 % 35.6 % 33.5 %

Stock-based compensation (3.8 )% (3.9 )% (5.7 )%

Performance based equity (3.1 )% (4.0 )% (0.6 )%

Non-GAAP R&D expenses 29.3 % 27.8 % 27.3 %



GAAP SG&A expenses 18.6 % 26.6 % 29.9 %

Stock-based compensation (3.6 )% (4.7 )% (5.2 )%

Performance based equity (1.5 )% (1.9 )% (0.9 )%

Amortization of purchased intangible (3.2 )% (3.9 )% (8.2 )%assets

Acquisition and integration costs (0.6 )% (5.0 )% - %

IP litigation costs, net - % - % - %

Non-GAAP SG&A expenses 9.7 % 11.2 % 15.7 %



GAAP restructuring expenses - % 2.1 % 0.2 %

Restructuring charges - % (2.1 )% (0.2 )%

Non-GAAP restructuring expenses - % - % - %



GAAP loss from operations (12.2 )% (22.1 )% (11.3 )%

Total non-GAAP adjustments 31.0 % 41.1 % 33.1 %

Non-GAAP income from operations 18.9 % 19.0 % 21.7 %



GAAP and non-GAAP interest and other (2.6 )% (2.7 )% (4.1 )%income (expense), net

Non-recurring interest and other 0.2 % - % - %income (expense), net

Non-GAAP interest and other income (2.4 )% (2.7 )% (4.1 )%(expense), net



GAAP loss before income taxes (14.8 )% (24.8 )% (15.4 )%

Total non-GAAP adjustments before 31.2 % 41.1 % 33.1 %income taxes

Non-GAAP income before income taxes 16.4 % 16.3 % 17.6 %



GAAP income tax benefit (2.1 )% (1.4 )% (3.8 )%

Adjustment for non-cash tax benefits/ 3.1 % 2.4 % 4.7 %expenses

Non-GAAP income tax provision 1.0 % 1.0 % 0.9 %



GAAP net loss (12.7 )% (23.4 )% (11.6 )%

Total non-GAAP adjustments before 31.2 % 41.1 % 33.1 %income taxes

Less: total tax adjustments 3.1 % 2.4 % 4.7 %

Non-GAAP net income 15.4 % 15.3 % 16.8 %

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Year Ended

December 31, 2020

December 31, 2019

GAAP gross profit

44.5

%

52.9

%

Stock-based compensation

0.1

%

0.2

%

Performance based equity

0.1

%

0.0

%

Amortization of inventory fair value adjustments

6.9

%

0.0

%

Amortization of purchased intangible assets

7.9

%

10.7

%

Non-GAAP gross profit

59.5

%

63.8

%

GAAP R&D expenses

37.6

%

31.0

%

Stock-based compensation

(4.7

)%

(5.2

)%

Performance based equity

(3.4

)%

(0.4

)%

Depreciation of fixed asset fair value adjustments

-

%

-

%

Non-GAAP R&D expenses

29.6

%

25.4

%

GAAP SG&A expenses

27.2

%

28.0

%

Stock-based compensation

(5.1

)%

(4.7

)%

Performance based equity

(1.7

)%

(0.6

)%

Amortization of purchased intangible assets

(4.9

)%

(7.3

)%

Acquisition and integration costs

(3.0

)%

-

%

IP litigation costs, net

(0.0

)%

-

%

Non-GAAP SG&A expenses

12.4

%

15.4

%

GAAP impairment losses

0.02

%

-

%

Impairment losses

(0.02

)%

-

%

Non-GAAP impairment losses

-

%

-

%

GAAP restructuring expenses

0.8

%

0.8

%

Restructuring charges

(0.8

)%

(0.8

)%

Non-GAAP restructuring expenses

-

%

-

%

GAAP loss from operations

(21.1

)%

(7.0

)%

Total non-GAAP adjustments

38.6

%

29.9

%

Non-GAAP income from operations

17.4

%

23.0

%

GAAP interest and other income (expense), net

(2.9

)%

(3.3

)%

Non-recurring interest and other income (expense), net

0.1

%

(0.3

)%

Non-GAAP interest and other income (expense), net

(2.8

)%

(3.6

)%

GAAP loss before income taxes

(24.0

)%

(10.2

)%

Total non-GAAP adjustments before income taxes

38.6

%

29.6

%

Non-GAAP income before income taxes

14.6

%

19.4

%

GAAP income tax benefit

(3.4

)%

(4.0

)%

Adjustment for non-cash tax benefits/expenses

4.3

%

5.1

%

Non-GAAP income tax provision

0.9

%

1.2

%

GAAP net loss

(20.6

)%

(6.3

)%

Total non-GAAP adjustments before income taxes

38.6

%

29.6

%

Less: total tax adjustments

4.3

%

5.1

%

Non-GAAP net income

13.8

%

18.2

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210203005868/en/

CONTACT: MaxLinear, Inc. Investor Relations Contact: Steven Litchfield Tel: 949-333-0080 IR@maxlinear.com