|
Delaware
|
04-2302115
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
20 Sylvan Road,
|
Woburn
|
Massachusetts
|
01801
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|||
|
|
|
|
|
(781)
|
376-3000
|
|
||
(Registrant’s telephone number, including area code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
Common Stock, par value $0.25 per share
|
SWKS
|
Nasdaq Global Select Market
|
Large accelerated filer
|
þ
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
PAGE NO.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
December 27, 2019
|
|
December 28,
2018 |
||||
Net revenue
|
$
|
896.1
|
|
|
$
|
972.0
|
|
Cost of goods sold
|
451.8
|
|
|
486.9
|
|
||
Gross profit
|
444.3
|
|
|
485.1
|
|
||
Operating expenses:
|
|
|
|
|
|
||
Research and development
|
107.7
|
|
|
109.2
|
|
||
Selling, general and administrative
|
55.4
|
|
|
47.8
|
|
||
Amortization of intangibles
|
3.1
|
|
|
7.4
|
|
||
Restructuring and other charges (benefit)
|
0.8
|
|
|
(0.2
|
)
|
||
Total operating expenses
|
167.0
|
|
|
164.2
|
|
||
Operating income
|
277.3
|
|
|
320.9
|
|
||
Other income, net
|
1.4
|
|
|
2.9
|
|
||
Income before income taxes
|
278.7
|
|
|
323.8
|
|
||
Provision for income taxes
|
21.6
|
|
|
38.9
|
|
||
Net income
|
$
|
257.1
|
|
|
$
|
284.9
|
|
Earnings per share:
|
|
|
|
|
|
||
Basic
|
$
|
1.51
|
|
|
$
|
1.61
|
|
Diluted
|
$
|
1.50
|
|
|
$
|
1.60
|
|
Weighted average shares:
|
|
|
|
||||
Basic
|
170.2
|
|
|
176.6
|
|
||
Diluted
|
171.6
|
|
|
177.7
|
|
||
|
|
|
|
||||
Cash dividends declared and paid per share
|
$
|
0.44
|
|
|
$
|
0.38
|
|
|
Three Months Ended
|
||||||
|
December 27,
2019 |
|
December 28,
2018 |
||||
Net income
|
$
|
257.1
|
|
|
$
|
284.9
|
|
Other comprehensive income, net of tax
|
|
|
|
||||
Fair value of investments
|
(0.1
|
)
|
|
0.1
|
|
||
Comprehensive income
|
$
|
257.0
|
|
|
$
|
285.0
|
|
|
As of
|
||||||
|
December 27, 2019
|
|
September 27,
2019 |
||||
ASSETS
|
(unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
928.2
|
|
|
$
|
851.3
|
|
Marketable securities
|
262.2
|
|
|
203.3
|
|
||
Receivables, net of allowance of $0.8 and $0.8, respectively
|
426.8
|
|
|
465.3
|
|
||
Inventory
|
604.4
|
|
|
609.7
|
|
||
Other current assets
|
124.9
|
|
|
105.0
|
|
||
Total current assets
|
2,346.5
|
|
|
2,234.6
|
|
||
Property, plant and equipment, net
|
1,190.8
|
|
|
1,205.6
|
|
||
Operating lease right-of-use assets
|
159.1
|
|
|
—
|
|
||
Goodwill
|
1,189.8
|
|
|
1,189.8
|
|
||
Intangible assets, net
|
96.5
|
|
|
107.9
|
|
||
Deferred tax assets, net
|
39.9
|
|
|
40.8
|
|
||
Marketable securities
|
38.2
|
|
|
27.6
|
|
||
Other long-term assets
|
31.0
|
|
|
33.3
|
|
||
Total assets
|
$
|
5,091.8
|
|
|
$
|
4,839.6
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
138.5
|
|
|
$
|
190.5
|
|
Accrued compensation and benefits
|
79.9
|
|
|
76.0
|
|
||
Other current liabilities
|
114.8
|
|
|
107.5
|
|
||
Total current liabilities
|
333.2
|
|
|
374.0
|
|
||
Long-term tax liabilities
|
309.5
|
|
|
312.4
|
|
||
Long-term operating lease liabilities
|
150.9
|
|
|
—
|
|
||
Other long-term liabilities
|
30.9
|
|
|
30.9
|
|
||
Total liabilities
|
824.5
|
|
|
717.3
|
|
||
|
|
|
|||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, no par value: 25.0 shares authorized, no shares issued
|
—
|
|
|
—
|
|
||
Common stock, $0.25 par value: 525.0 shares authorized; 231.5 shares issued and 170.5 shares outstanding at December 27, 2019, and 230.2 shares issued and 170.1 shares outstanding at September 27, 2019
|
42.6
|
|
|
42.5
|
|
||
Additional paid-in capital
|
3,251.9
|
|
|
3,188.0
|
|
||
Treasury stock, at cost
|
(3,513.8
|
)
|
|
(3,412.9
|
)
|
||
Retained earnings
|
4,494.6
|
|
|
4,312.6
|
|
||
Accumulated other comprehensive loss
|
(8.0
|
)
|
|
(7.9
|
)
|
||
Total stockholders’ equity
|
4,267.3
|
|
|
4,122.3
|
|
||
Total liabilities and stockholders’ equity
|
$
|
5,091.8
|
|
|
$
|
4,839.6
|
|
|
Shares of common stock
|
|
Par value of common stock
|
|
Shares of treasury stock
|
|
Value of treasury stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive loss
|
|
Total stockholders’ equity
|
||||||||||||||
Balance at September 27, 2019
|
170.1
|
|
|
$
|
42.5
|
|
|
60.1
|
|
|
$
|
(3,412.9
|
)
|
|
$
|
3,188.0
|
|
|
$
|
4,312.6
|
|
|
$
|
(7.9
|
)
|
|
$
|
4,122.3
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
257.1
|
|
|
—
|
|
|
257.1
|
|
||||||
Exercise and settlement of share based awards, net of shares withheld for taxes
|
1.1
|
|
|
0.3
|
|
|
0.3
|
|
|
(26.7
|
)
|
|
34.6
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29.1
|
|
|
—
|
|
|
—
|
|
|
29.1
|
|
||||||
Stock repurchase program
|
(0.7
|
)
|
|
(0.2
|
)
|
|
0.7
|
|
|
(74.2
|
)
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
(74.2
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75.1
|
)
|
|
—
|
|
|
(75.1
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||||
Balance at December 27, 2019
|
170.5
|
|
|
$
|
42.6
|
|
|
61.1
|
|
|
$
|
(3,513.8
|
)
|
|
$
|
3,251.9
|
|
|
$
|
4,494.6
|
|
|
$
|
(8.0
|
)
|
|
$
|
4,267.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at September 28, 2018
|
177.4
|
|
|
$
|
44.4
|
|
|
51.0
|
|
|
$
|
(2,732.5
|
)
|
|
$
|
3,061.0
|
|
|
$
|
3,732.9
|
|
|
$
|
(8.8
|
)
|
|
$
|
4,097.0
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
284.9
|
|
|
—
|
|
|
284.9
|
|
||||||
Exercise and settlement of share based awards, net of shares withheld for taxes
|
0.7
|
|
|
0.1
|
|
|
0.2
|
|
|
(19.6
|
)
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|
(14.4
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.3
|
|
|
—
|
|
|
—
|
|
|
21.3
|
|
||||||
Stock repurchase program
|
(4.0
|
)
|
|
(1.0
|
)
|
|
4.0
|
|
|
(284.0
|
)
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
(284.0
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67.1
|
)
|
|
—
|
|
|
(67.1
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
||||||
Balance at December 28, 2018
|
174.1
|
|
|
$
|
43.5
|
|
|
55.2
|
|
|
$
|
(3,036.1
|
)
|
|
$
|
3,088.4
|
|
|
$
|
3,950.7
|
|
|
$
|
(8.2
|
)
|
|
$
|
4,038.3
|
|
|
Three Months Ended
|
||||||
|
December 27,
2019 |
|
December 28,
2018 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
257.1
|
|
|
$
|
284.9
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Share-based compensation
|
33.6
|
|
|
20.8
|
|
||
Depreciation
|
79.8
|
|
|
77.5
|
|
||
Amortization of intangible assets, including inventory step-up
|
11.4
|
|
|
15.5
|
|
||
Deferred income taxes
|
0.9
|
|
|
1.8
|
|
||
Other, net
|
—
|
|
|
1.0
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Receivables, net
|
38.5
|
|
|
131.4
|
|
||
Inventory
|
7.9
|
|
|
(5.0
|
)
|
||
Accounts payable
|
(6.7
|
)
|
|
(22.2
|
)
|
||
Other current and long-term assets and liabilities
|
(24.1
|
)
|
|
43.3
|
|
||
Net cash provided by operating activities
|
398.4
|
|
|
549.0
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(111.2
|
)
|
|
(129.5
|
)
|
||
Purchases of marketable securities
|
(131.5
|
)
|
|
(2.2
|
)
|
||
Sales and maturities of marketable securities
|
62.2
|
|
|
303.2
|
|
||
Net cash provided by (used in) investing activities
|
(180.5
|
)
|
|
171.5
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repurchase of common stock - payroll tax withholdings on equity awards
|
(26.6
|
)
|
|
(19.4
|
)
|
||
Repurchase of common stock - stock repurchase program
|
(74.2
|
)
|
|
(284.0
|
)
|
||
Dividends paid
|
(75.1
|
)
|
|
(67.1
|
)
|
||
Net proceeds from exercise of stock options
|
34.9
|
|
|
2.4
|
|
||
Net cash used in financing activities
|
(141.0
|
)
|
|
(368.1
|
)
|
||
Net increase in cash and cash equivalents
|
76.9
|
|
|
352.4
|
|
||
Cash and cash equivalents at beginning of period
|
851.3
|
|
|
733.3
|
|
||
Cash and cash equivalents at end of period
|
$
|
928.2
|
|
|
$
|
1,085.7
|
|
Supplemental cash flow disclosures:
|
|
|
|
||||
Income taxes paid
|
$
|
26.1
|
|
|
$
|
1.6
|
|
Non-cash investing in capital expenditures, accrued but not paid
|
70.1
|
|
|
56.7
|
|
|
Three Months Ended
|
||||||
|
December 27, 2019
|
|
December 28,
2018 |
||||
United States
|
$
|
590.4
|
|
|
$
|
600.1
|
|
China
|
168.4
|
|
|
194.5
|
|
||
South Korea
|
59.0
|
|
|
99.1
|
|
||
Taiwan
|
42.0
|
|
|
40.7
|
|
||
Europe, Middle East and Africa
|
30.3
|
|
|
32.7
|
|
||
Other Asia-Pacific
|
6.0
|
|
|
4.9
|
|
||
Total
|
$
|
896.1
|
|
|
$
|
972.0
|
|
|
Current
|
|
Noncurrent
|
||||||||||||
Available for sale:
|
December 27, 2019
|
|
September 27,
2019 |
|
December 27, 2019
|
|
September 27,
2019 |
||||||||
U.S. Treasury and government
|
$
|
58.6
|
|
|
$
|
34.2
|
|
|
$
|
27.7
|
|
|
$
|
20.0
|
|
Corporate bonds and notes
|
94.9
|
|
|
66.2
|
|
|
10.5
|
|
|
5.9
|
|
||||
Municipal bonds
|
108.7
|
|
|
102.9
|
|
|
—
|
|
|
1.7
|
|
||||
Total
|
$
|
262.2
|
|
|
$
|
203.3
|
|
|
$
|
38.2
|
|
|
$
|
27.6
|
|
•
|
Level 1 - Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data.
|
•
|
Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by the Company.
|
|
As of December 27, 2019
|
|
As of September 27, 2019
|
||||||||||||||||||||||||||||
|
|
|
Fair Value Measurements
|
|
|
|
Fair Value Measurements
|
||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents*
|
$
|
928.2
|
|
|
$
|
852.5
|
|
|
$
|
75.7
|
|
|
$
|
—
|
|
|
$
|
851.3
|
|
|
$
|
809.5
|
|
|
$
|
41.8
|
|
|
$
|
—
|
|
U.S. Treasury and government securities
|
86.3
|
|
|
46.5
|
|
|
39.8
|
|
|
—
|
|
|
54.2
|
|
|
28.4
|
|
|
25.8
|
|
|
—
|
|
||||||||
Corporate bonds and notes
|
105.4
|
|
|
—
|
|
|
105.4
|
|
|
—
|
|
|
72.1
|
|
|
—
|
|
|
72.1
|
|
|
—
|
|
||||||||
Municipal bonds
|
108.7
|
|
|
—
|
|
|
108.7
|
|
|
—
|
|
|
104.6
|
|
|
—
|
|
|
104.6
|
|
|
—
|
|
||||||||
Total
|
$
|
1,228.6
|
|
|
$
|
899.0
|
|
|
$
|
329.6
|
|
|
$
|
—
|
|
|
$
|
1,082.2
|
|
|
$
|
837.9
|
|
|
$
|
244.3
|
|
|
$
|
—
|
|
|
As of
|
||||||
|
December 27,
2019 |
|
September 27,
2019 |
||||
Raw materials
|
$
|
22.8
|
|
|
$
|
24.4
|
|
Work-in-process
|
376.5
|
|
|
336.2
|
|
||
Finished goods
|
202.8
|
|
|
245.7
|
|
||
Finished goods held on consignment by customers
|
2.3
|
|
|
3.4
|
|
||
Total inventory
|
$
|
604.4
|
|
|
$
|
609.7
|
|
|
As of
|
||||||
|
December 27,
2019 |
|
September 27,
2019 |
||||
Land and improvements
|
$
|
11.8
|
|
|
$
|
11.7
|
|
Buildings and improvements
|
392.0
|
|
|
354.4
|
|
||
Furniture and fixtures
|
38.0
|
|
|
33.8
|
|
||
Machinery and equipment
|
2,346.6
|
|
|
2,311.5
|
|
||
Construction in progress
|
157.0
|
|
|
172.5
|
|
||
Total property, plant and equipment, gross
|
2,945.3
|
|
|
2,883.9
|
|
||
Accumulated depreciation
|
(1,754.5
|
)
|
|
(1,678.3
|
)
|
||
Total property, plant and equipment, net
|
$
|
1,190.8
|
|
|
$
|
1,205.6
|
|
|
|
As of
|
|
As of
|
||||||||||||||||||||
|
Weighted Average Amortization Period (Years) |
December 27, 2019
|
|
September 27, 2019
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated Amortization |
|
Net
Carrying Amount |
|
Gross
Carrying Amount |
|
Accumulated Amortization |
|
Net
Carrying Amount |
|||||||||||||
Customer relationships
|
5.0
|
$
|
18.2
|
|
|
$
|
(13.0
|
)
|
|
$
|
5.2
|
|
|
$
|
25.6
|
|
|
$
|
(19.5
|
)
|
|
$
|
6.1
|
|
Developed technology and other
|
4.1
|
94.4
|
|
|
(56.9
|
)
|
|
37.5
|
|
|
94.4
|
|
|
(48.9
|
)
|
|
45.5
|
|
||||||
Trademarks
|
3.0
|
1.6
|
|
|
(1.5
|
)
|
|
0.1
|
|
|
1.6
|
|
|
(1.3
|
)
|
|
0.3
|
|
||||||
Technology licenses
|
3.1
|
24.9
|
|
|
(7.1
|
)
|
|
17.8
|
|
|
24.9
|
|
|
(4.8
|
)
|
|
20.1
|
|
||||||
IPR&D
|
|
35.9
|
|
|
—
|
|
|
35.9
|
|
|
35.9
|
|
|
—
|
|
|
35.9
|
|
||||||
Total intangible assets
|
|
$
|
175.0
|
|
|
$
|
(78.5
|
)
|
|
$
|
96.5
|
|
|
$
|
182.4
|
|
|
$
|
(74.5
|
)
|
|
$
|
107.9
|
|
|
Remaining 2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
||||||||||||
Amortization expense, cost of goods sold
|
$
|
15.6
|
|
|
$
|
4.9
|
|
|
$
|
0.9
|
|
|
$
|
1.0
|
|
|
$
|
1.0
|
|
|
$
|
1.9
|
|
Amortization expense, operating expense
|
$
|
17.4
|
|
|
$
|
11.7
|
|
|
$
|
4.2
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
1.8
|
|
Total amortization expense
|
$
|
33.0
|
|
|
$
|
16.6
|
|
|
$
|
5.1
|
|
|
$
|
1.1
|
|
|
$
|
1.1
|
|
|
$
|
3.7
|
|
|
Three Months Ended
|
||||||
|
December 27, 2019
|
|
December 28,
2018 |
||||
United States income taxes
|
$
|
11.5
|
|
|
$
|
29.5
|
|
Foreign income taxes
|
10.1
|
|
|
9.4
|
|
||
Provision for income taxes
|
$
|
21.6
|
|
|
$
|
38.9
|
|
|
|
|
|
||||
Effective tax rate
|
7.8
|
%
|
|
12.0
|
%
|
|
Three Months Ended
|
||||||
|
December 27, 2019
|
|
December 28,
2018 |
||||
Cost of goods sold
|
$
|
4.2
|
|
|
$
|
3.6
|
|
Research and development
|
14.8
|
|
|
12.5
|
|
||
Selling, general and administrative
|
14.6
|
|
|
4.7
|
|
||
Total share-based compensation
|
$
|
33.6
|
|
|
$
|
20.8
|
|
|
Three Months Ended
|
||
|
December 27,
2019 |
||
Operating cash flows from operating leases
|
$
|
5.1
|
|
Operating lease assets obtained in exchange for new lease liabilities
|
20.7
|
|
|
December 27,
2019 |
||
2020
|
$
|
11.8
|
|
2021
|
23.4
|
|
|
2022
|
22.1
|
|
|
2023
|
21.8
|
|
|
2024
|
20.1
|
|
|
Thereafter
|
89.7
|
|
|
Total lease payments
|
188.9
|
|
|
Less: imputed interest
|
(28.7
|
)
|
|
Present value of lease liabilities
|
160.2
|
|
|
Less: current portion (included in other current assets)
|
(9.3
|
)
|
|
Total
|
$
|
150.9
|
|
|
September 27,
2019 |
||
2020
|
$
|
26.7
|
|
2021
|
25.9
|
|
|
2022
|
24.8
|
|
|
2023
|
23.3
|
|
|
2024
|
21.5
|
|
|
Thereafter
|
97.7
|
|
|
Total
|
$
|
219.9
|
|
|
December 27,
2019 |
|
Weighted-average remaining lease term (years)
|
8.26
|
|
Weighted-average discount rate
|
3.37
|
%
|
|
Three Months Ended
|
||||||
|
December 27,
2019 |
|
December 28,
2018 |
||||
Net income
|
$
|
257.1
|
|
|
$
|
284.9
|
|
|
|
|
|
||||
Weighted average shares outstanding – basic
|
170.2
|
|
|
176.6
|
|
||
Dilutive effect of equity based awards
|
1.4
|
|
|
1.1
|
|
||
Weighted average shares outstanding – diluted
|
171.6
|
|
|
177.7
|
|
||
|
|
|
|
||||
Net income per share – basic
|
$
|
1.51
|
|
|
$
|
1.61
|
|
Net income per share – diluted
|
$
|
1.50
|
|
|
$
|
1.60
|
|
|
|
|
|
||||
Anti-dilutive common stock equivalents
|
0.5
|
|
|
1.7
|
|
|
Three Months Ended
|
||||
|
December 27,
2019 |
|
December 28,
2018 |
||
Net revenue
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
50.4
|
|
|
50.1
|
|
Gross profit
|
49.6
|
|
|
49.9
|
|
Operating expenses:
|
|
|
|
|
|
Research and development
|
12.0
|
|
|
11.2
|
|
Selling, general and administrative
|
6.2
|
|
|
4.9
|
|
Amortization of intangibles
|
0.3
|
|
|
0.8
|
|
Restructuring and other charges (benefit)
|
0.1
|
|
|
—
|
|
Total operating expenses
|
18.6
|
|
|
16.9
|
|
Operating income
|
31.0
|
|
|
33.0
|
|
Other income, net
|
0.2
|
|
|
0.3
|
|
Income before income taxes
|
31.2
|
|
|
33.3
|
|
Provision for income taxes
|
2.4
|
|
|
4.0
|
|
Net income
|
28.8
|
%
|
|
29.3
|
%
|
•
|
Net revenue decreased by 7.8% to $896.1 million for the three months ended December 27, 2019, as compared with the corresponding period in fiscal 2019. This decrease in revenue was primarily driven by reduced demand resulting from the U.S. Bureau of Industry and Security of the U.S. Department of Commerce placing Huawei Technologies Co., Ltd. and certain of its affiliates (collectively, “Huawei”) on the Bureau’s Entity List (the “Entity List”) in May 2019.
|
•
|
Our ending cash, cash equivalents and marketable securities balance increased 13.5% to $1,228.6 million as of December 27, 2019, from $1,082.2 million as of September 27, 2019. This increase in cash, cash equivalents and marketable securities during the three months ended December 27, 2019, was primarily the result of cash generated from operations of $398.4 million, partially offset by the repurchase of 0.7 million shares of common stock for $74.2 million, capital expenditures of $111.2 million, and dividend payments of $75.1 million.
|
|
Three Months Ended
|
||||||
|
December 27,
2019 |
Change
|
December 28,
2018 |
||||
(dollars in millions)
|
|
|
|
||||
Net revenue
|
$
|
896.1
|
|
(7.8)%
|
$
|
972.0
|
|
|
Three Months Ended
|
||||||
|
December 27,
2019 |
Change
|
December 28,
2018 |
||||
(dollars in millions)
|
|
|
|
||||
Gross profit
|
$
|
444.3
|
|
(8.4)%
|
$
|
485.1
|
|
% of net revenue
|
49.6
|
%
|
|
49.9
|
%
|
|
Three Months Ended
|
||||||
|
December 27,
2019 |
Change
|
December 28,
2018 |
||||
(dollars in millions)
|
|
|
|
||||
Research and development
|
$
|
107.7
|
|
(1.4)%
|
$
|
109.2
|
|
% of net revenue
|
12.0
|
%
|
|
11.2
|
%
|
|
Three Months Ended
|
||||||
|
December 27,
2019 |
Change
|
December 28,
2018 |
||||
(dollars in millions)
|
|
|
|
||||
Selling, general and administrative
|
$
|
55.4
|
|
16.0%
|
$
|
47.8
|
|
% of net revenue
|
6.2
|
%
|
|
4.9
|
%
|
|
Three Months Ended
|
||||||
|
December 27,
2019 |
Change
|
December 28,
2018 |
||||
(dollars in millions)
|
|
|
|
||||
Amortization of intangibles, cost of goods sold
|
$
|
8.3
|
|
2.5%
|
$
|
8.1
|
|
Amortization of intangibles, operating expense
|
3.1
|
|
(58.1)%
|
7.4
|
|
||
Total amortization of intangibles, including inventory step-up
|
11.4
|
|
|
15.5
|
|
||
% of net revenue
|
1.3
|
%
|
|
1.6
|
%
|
|
Three Months Ended
|
||||||
|
December 27,
2019 |
Change
|
December 28,
2018 |
||||
(dollars in millions)
|
|
|
|
||||
Provision for income taxes
|
$
|
21.6
|
|
(44.4)%
|
$
|
38.9
|
|
% of net revenue
|
2.4
|
%
|
|
4.0
|
%
|
|
Three Months Ended
|
||||||
(in millions)
|
December 27,
2019 |
|
December 28,
2018 |
||||
Cash and cash equivalents at beginning of period
|
$
|
851.3
|
|
|
$
|
733.3
|
|
Net cash provided by operating activities
|
398.4
|
|
|
549.0
|
|
||
Net cash provided by (used in) investing activities
|
(180.5
|
)
|
|
171.5
|
|
||
Net cash used in financing activities
|
(141.0
|
)
|
|
(368.1
|
)
|
||
Cash and cash equivalents at end of period
|
$
|
928.2
|
|
|
$
|
1,085.7
|
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
|
9/28/19-10/25/19
|
279,111(2)
|
$77.61
|
278,064
|
$1.60 billion
|
10/26/19-11/22/19
|
264,799(3)
|
$99.48
|
—
|
$1.60 billion
|
11/23/19-12/27/19
|
466,657(4)
|
$113.25
|
463,724
|
$1.55 billion
|
Total
|
1,197,144
|
|
741,788
|
|
Exhibit
Number
|
Exhibit Description
|
Form
|
Incorporated by Reference
|
Filed Herewith
|
||
File No.
|
Exhibit
|
Filing Date
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1*+
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
101.INS
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)
|
|
|
|
|
|
|
|
|
|
|
|
SKYWORKS SOLUTIONS, INC.
|
|
|
|
|
|
Date:
|
January 24, 2020
|
By:
|
/s/ Liam K. Griffin
|
|
|
|
Liam K. Griffin
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
By:
|
/s/ Kris Sennesael
|
|
|
|
Kris Sennesael
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Accounting and Financial Officer)
|
1.
|
Purpose: The FY20 Executive Incentive Plan (the “FY20 Plan”) is designed to reward key management for achieving certain financial and business objectives.
|
2.
|
Plan Period: The FY20 Plan covers the Company’s fiscal year 2020 (i.e., September 28, 2019, through October 2, 2020). There will be two performance periods, the first consisting of the first half of the fiscal year (i.e., September 28, 2019, through March 27, 2020), and the second consisting of the second half of the fiscal year (i.e., March 28, 2020, through October 2, 2020).
|
3.
|
Eligibility: This program applies to the Chief Executive Officer and his direct reporting senior executives. Other key employees may be added based upon the recommendation of the Chief Executive Officer and subsequent approval of the Compensation Committee. Those employees not covered by this FY20 Plan may be eligible for other programs established by Skyworks.
|
4.
|
Incentive Targets: Participants are eligible to earn an incentive bonus equal to a percentage of their base salary based on the Company’s achievement of certain performance metrics as set forth below. Nominal, target and stretch incentive awards have been established as follows (shown as a percentage of the participant’s base salary):
|
Name
|
Incentive
At Nominal
|
Incentive
At Target
|
Incentive
At Stretch
|
CEO
|
80%
|
160%
|
320%
|
CFO
|
50%
|
100%
|
200%
|
Other SVP/VPs
|
40%
|
80%
|
160%
|
Special Participants
|
TBD
|
TBD
|
TBD
|
5.
|
Metrics: The performance metrics for FY20 are as follows:
|
Metric
|
Nominal
|
Target
|
Stretch
|
|
|
|
|
1st Half Metrics ($M)
|
|
|
|
Corporate EBITDA Dollars1
|
**
|
**
|
**
|
Corporate Revenue
|
**
|
**
|
**
|
2nd Half Metrics ($M)2
|
|
|
|
Corporate EBITDA Dollars1
|
TBD
|
TBD
|
TBD
|
Corporate Revenue
|
TBD
|
TBD
|
TBD
|
|
1st Half EBITDA
|
2nd Half EBITDA
|
1st Half Revenue
|
2nd Half Revenue
|
All Participants
|
25%
|
25%
|
25%
|
25%
|
6.
|
How the Plan Works: Upon completion of the applicable performance period, the Chief Executive Officer will provide the Compensation Committee with recommendations for incentive award payments to all named participants of the plan except himself. The Chief Executive Officer may recommend awards below a participant’s nominal incentive award or above a participant’s stretch incentive award. The Chief Executive Officer may also recommend modifications to incentive payments (including, but not limited to, the delivery of equity awards in lieu of cash) to ensure an equitable distribution of incentives. The Committee will review the recommendations and approve the actual amount (and form) of the payment to be made to each participant, including the Chief Executive Officer. All incentive award payments under the FY20 Plan, if earned, will be paid by March 15th of the calendar year following the end of the calendar year in which the performance period ends.
|
7.
|
Administration: If actual performance achieved for the applicable performance period falls between the applicable Nominal and Target levels, or between the Target and Stretch levels, the achievement with respect to such metric shall be calculated based on a straight-line, mathematical interpolation between the applicable vesting percentages.
|
•
|
Payments with respect to the 1st Half metrics will be capped at 100% of the target level attributed to such metric, with any amounts over such level to be paid out after the end of the fiscal year provided that the Company meets its minimum operating income goal (in dollars) after accounting for any incentive award payments (“Minimum Operating Level of Performance”). Similarly, no incentive payments will be made with respect to the 2nd Half metrics unless the Company meets the Minimum Operating Level of Performance.
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•
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Any payment shall be conditioned upon the Participant’s employment by the Company on the date of payment; provided, however, that the Compensation Committee may make exceptions to this requirement, in its sole discretion, including, without limitation, in the case of a participant’s termination of employment, retirement, death or disability.
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•
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Any payments made under this FY20 Plan will be subject to the provisions of the compensation clawback policy that Skyworks implements to comply with applicable law following the SEC’s adoption of final rules related to compensation clawback policies as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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8.
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Taxes: All awards are subject to applicable taxes, including federal, state, local, and social security taxes. Payments under this FY20 Plan will not affect the participant’s base salary, which is used as the basis for Skyworks’ benefits program.
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Sincerely,
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SKYWORKS SOLUTIONS, INC.
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AGREED TO:
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/s/ Liam K. Griffin
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/s/ Kari Durham
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Liam K. Griffin
President and Chief Executive Officer
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Date: 4/13/2018
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1.
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YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;
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2.
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YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN VOLITION;
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3.
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YOU HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON _______________ __, _____ TO CONSIDER IT; AND
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4.
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YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED.
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Repatriation
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Benefit/Expense:
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Benefit Provided or Maximum Expense Reimbursed (in USD):
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Personal tax preparation services by Ernst & Young LLP for calendar years 2019 and 2020
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Benefit provided
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Shipment of personal goods from the host country to the home country (not to exceed 400 cubic feet or 2,600 lbs.)
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Benefit provided
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Up to 30 days of storage for the aforementioned personal goods in either the host country or the home country
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Benefit provided
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Flight from host country to home country
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Benefit provided
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Cost to break apartment lease (or, alternatively, the cost of one month’s notice to vacate) in host country
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Benefit provided
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Miscellaneous expense allowance to cover cleaning, closing accounts, furniture/appliance disposal, etc.
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$1,000
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Acknowledgement & Acceptance
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1.
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I have reviewed this quarterly report on Form 10-Q of Skyworks Solutions, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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January 24, 2020
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/s/ Liam K. Griffin
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Liam K. Griffin
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Skyworks Solutions, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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January 24, 2020
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/s/ Kris Sennesael
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Kris Sennesael
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Senior Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Liam K. Griffin
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Liam K. Griffin
President and Chief Executive Officer
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January 24, 2020
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Kris Sennesael
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Kris Sennesael
Senior Vice President and Chief Financial Officer
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January 24, 2020
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