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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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46-5288992
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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7628 Thorndike Road, Greensboro, North Carolina 27409-9421
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(Address of principal executive offices)
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(Zip Code)
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(336) 664-1233
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(Registrant's telephone number, including area code)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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Item 1. Financial Statements
(Unaudited).
|
|
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July 2, 2016
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|
April 2, 2016
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||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
(Note 7)
|
$
|
433,034
|
|
|
$
|
425,881
|
|
Short-term investments
(Note 7)
|
13,873
|
|
|
186,808
|
|
||
Accounts receivable, less allowance of $171 and $143 as of July 2, 2016 and April 2, 2016, respectively
|
400,679
|
|
|
316,356
|
|
||
Inventories
(Note 3)
|
455,771
|
|
|
427,551
|
|
||
Prepaid expenses
|
68,329
|
|
|
63,850
|
|
||
Other receivables
|
69,871
|
|
|
47,380
|
|
||
Other current assets
|
43,863
|
|
|
41,384
|
|
||
Total current assets
|
1,485,420
|
|
|
1,509,210
|
|
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Property and equipment, net of accumulated depreciation of $779,610 at July 2, 2016 and $751,898 at April 2, 2016
|
1,160,953
|
|
|
1,046,888
|
|
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Goodwill
(Note 4)
|
2,174,639
|
|
|
2,135,697
|
|
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Intangible assets, net of accumulated amortization of $882,291 at July 2, 2016 and $763,640 at April 2, 2016
(Note 4)
|
1,775,937
|
|
|
1,812,515
|
|
||
Long-term investments
(Note 7)
|
26,000
|
|
|
26,050
|
|
||
Other non-current assets
|
65,038
|
|
|
66,459
|
|
||
Total assets
|
$
|
6,687,987
|
|
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$
|
6,596,819
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
263,478
|
|
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$
|
205,364
|
|
Accrued liabilities
|
142,509
|
|
|
137,889
|
|
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Other current liabilities
|
14,346
|
|
|
30,548
|
|
||
Total current liabilities
|
420,333
|
|
|
373,801
|
|
||
Long-term debt
(Note 5)
|
988,372
|
|
|
988,130
|
|
||
Deferred tax liabilities
(Note 6)
|
163,644
|
|
|
152,160
|
|
||
Other long-term liabilities
|
82,062
|
|
|
83,056
|
|
||
Total liabilities
|
1,654,411
|
|
|
1,597,147
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 127,817 and 127,386 shares issued and outstanding at July 2, 2016 and April 2, 2016, respectively
|
5,483,200
|
|
|
5,442,613
|
|
||
Accumulated other comprehensive loss, net of tax
|
(4,141
|
)
|
|
(3,133
|
)
|
||
Accumulated deficit
|
(445,483
|
)
|
|
(439,808
|
)
|
||
Total stockholders’ equity
|
5,033,576
|
|
|
4,999,672
|
|
||
Total liabilities and stockholders’ equity
|
$
|
6,687,987
|
|
|
$
|
6,596,819
|
|
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Three Months Ended
|
|
||||||
|
July 2, 2016
|
|
June 27, 2015
|
|
||||
Revenue
|
$
|
698,537
|
|
|
$
|
673,641
|
|
|
Cost of goods sold
|
422,062
|
|
|
394,124
|
|
|
||
Gross profit
|
276,475
|
|
|
279,517
|
|
|
||
Operating expenses:
|
|
|
|
|
||||
Research and development
|
117,137
|
|
|
117,210
|
|
|
||
Marketing and selling
|
109,036
|
|
|
109,645
|
|
|
||
General and administrative
|
34,559
|
|
|
36,083
|
|
|
||
Other operating expense
|
10,002
|
|
|
17,914
|
|
|
||
Total operating expenses
|
270,734
|
|
|
280,852
|
|
|
||
Income (loss) from operations
|
5,741
|
|
|
(1,335
|
)
|
|
||
Interest expense
(Note 5)
|
(15,187
|
)
|
|
(548
|
)
|
|
||
Interest income
|
278
|
|
|
392
|
|
|
||
Other (expense) income
|
(500
|
)
|
|
4,119
|
|
|
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|
|
|
|
|
||||
(Loss) income before income taxes
|
(9,668
|
)
|
|
2,628
|
|
|
||
|
|
|
|
|
||||
Income tax benefit (expense)
(Note 6)
|
3,993
|
|
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(592
|
)
|
|
||
Net (loss) income
|
$
|
(5,675
|
)
|
|
$
|
2,036
|
|
|
|
|
|
|
|
||||
Net (loss) income per share
(Note 2):
|
|
|
|
|
||||
Basic
|
$
|
(0.04
|
)
|
|
$
|
0.01
|
|
|
Diluted
|
$
|
(0.04
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
||||
Weighted average shares of common stock outstanding
(Note 2):
|
|
|
|
|
||||
Basic
|
127,541
|
|
|
149,322
|
|
|
||
Diluted
|
127,541
|
|
|
154,461
|
|
|
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Three Months Ended
|
|
||||||
|
July 2, 2016
|
|
June 27, 2015
|
|
||||
Net (loss) income
|
$
|
(5,675
|
)
|
|
$
|
2,036
|
|
|
Other comprehensive (loss) income:
|
|
|
|
|
||||
Unrealized gain on marketable securities, net of tax
|
72
|
|
|
812
|
|
|
||
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term-investment nature
|
(1,111
|
)
|
|
122
|
|
|
||
Reclassification adjustments, net of tax:
|
|
|
|
|
||||
Recognized gain on marketable securities
|
—
|
|
|
(1,928
|
)
|
|
||
Amortization of pension actuarial loss
|
31
|
|
|
35
|
|
|
||
Other comprehensive loss
|
(1,008
|
)
|
|
(959
|
)
|
|
||
Total comprehensive (loss) income
|
$
|
(6,683
|
)
|
|
$
|
1,077
|
|
|
|
Three Months Ended
|
||||||
|
July 2, 2016
|
|
June 27, 2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(5,675
|
)
|
|
$
|
2,036
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
46,352
|
|
|
42,738
|
|
||
Amortization and other non-cash items
|
119,735
|
|
|
123,121
|
|
||
Deferred income taxes
|
2,509
|
|
|
3,849
|
|
||
Foreign currency adjustments
|
(1,645
|
)
|
|
76
|
|
||
Loss (income) on investments and other assets, net
|
168
|
|
|
(3,551
|
)
|
||
Stock-based compensation expense
|
30,594
|
|
|
48,170
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(79,501
|
)
|
|
(54,245
|
)
|
||
Inventories
|
(30,270
|
)
|
|
(21,606
|
)
|
||
Prepaid expenses and other current and non-current assets
|
(28,578
|
)
|
|
(9,600
|
)
|
||
Accounts payable and accrued liabilities
|
23,010
|
|
|
22,631
|
|
||
Income tax (recoverable) / payable
|
(17,459
|
)
|
|
(5,630
|
)
|
||
Other liabilities
|
149
|
|
|
(6,557
|
)
|
||
Net cash provided by operating activities
|
59,389
|
|
|
141,432
|
|
||
Investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(130,440
|
)
|
|
(89,395
|
)
|
||
Purchase of a business
(Note 4)
|
(117,498
|
)
|
|
—
|
|
||
Proceeds from sale of property and equipment
|
17
|
|
|
140
|
|
||
Purchase of available-for-sale securities
|
—
|
|
|
(86,145
|
)
|
||
Proceeds from maturities and sales of available-for-sale securities
|
172,920
|
|
|
100,263
|
|
||
Net cash used in investing activities
|
(75,001
|
)
|
|
(75,137
|
)
|
||
Financing activities:
|
|
|
|
||||
Debt issuance costs
|
(2
|
)
|
|
(1,335
|
)
|
||
Proceeds from the issuance of common stock
|
25,962
|
|
|
18,386
|
|
||
Repurchase of common stock, including transaction costs
|
—
|
|
|
(50,009
|
)
|
||
Tax withholding paid on behalf of employees for restricted stock units
|
(2,810
|
)
|
|
(7,504
|
)
|
||
Restricted cash associated with financing activities
|
4
|
|
|
(8
|
)
|
||
Other financing
|
—
|
|
|
(3
|
)
|
||
Net cash provided by (used in) financing activities
|
23,154
|
|
|
(40,473
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(389
|
)
|
|
(34
|
)
|
||
Net increase in cash and cash equivalents
|
7,153
|
|
|
25,788
|
|
||
Cash and cash equivalents at the beginning of the period
|
425,881
|
|
|
299,814
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
433,034
|
|
|
$
|
325,602
|
|
Non-cash investing information:
|
|
|
|
||||
Capital expenditure adjustments included in liabilities
|
$
|
29,885
|
|
|
$
|
6,599
|
|
|
|
Three Months Ended
|
||||||
|
|
July 2, 2016
|
|
June 27, 2015
|
||||
Numerator:
|
|
|
|
|
||||
Numerator for basic and diluted net (loss) income per share — net (loss) income available to common stockholders
|
|
$
|
(5,675
|
)
|
|
$
|
2,036
|
|
Denominator:
|
|
|
|
|
||||
Denominator for basic net (loss) income per share — weighted average shares
|
|
127,541
|
|
|
149,322
|
|
||
Effect of dilutive securities:
|
|
|
|
|
||||
Stock-based awards
|
|
—
|
|
|
5,139
|
|
||
Denominator for diluted net (loss) income per share — adjusted weighted average shares and assumed conversions
|
|
127,541
|
|
|
154,461
|
|
||
Basic net (loss) income per share
|
|
$
|
(0.04
|
)
|
|
$
|
0.01
|
|
Diluted net (loss) income per share
|
|
$
|
(0.04
|
)
|
|
$
|
0.01
|
|
|
July 2, 2016
|
|
April 2, 2016
|
||||
Raw materials
|
$
|
102,910
|
|
|
$
|
89,928
|
|
Work in process
|
241,276
|
|
|
228,626
|
|
||
Finished goods
|
111,585
|
|
|
108,997
|
|
||
Total inventories
|
$
|
455,771
|
|
|
$
|
427,551
|
|
|
Mobile Products
|
|
Infrastructure and Defense Products
|
|
Total
|
||||||
Balance as of April 2, 2016
|
$
|
1,751,503
|
|
|
$
|
384,194
|
|
|
$
|
2,135,697
|
|
Goodwill resulting from GreenPeak
|
—
|
|
|
39,124
|
|
|
39,124
|
|
|||
Translation
|
—
|
|
|
(182
|
)
|
|
(182
|
)
|
|||
Balance at July 2, 2016
|
$
|
1,751,503
|
|
|
$
|
423,136
|
|
|
$
|
2,174,639
|
|
|
July 2, 2016
|
|
April 2, 2016
|
||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
||||||||
Intangible Assets:
|
|
|
|
|
|
|
|
||||||||
In-process research and development
|
$
|
267,000
|
|
|
N/A
|
|
|
$
|
267,000
|
|
|
N/A
|
|
||
Technology licenses
|
13,346
|
|
|
11,172
|
|
|
12,446
|
|
|
11,021
|
|
||||
Customer relationships
|
1,272,725
|
|
|
447,072
|
|
|
1,267,103
|
|
|
377,357
|
|
||||
Developed technology
|
989,335
|
|
|
323,989
|
|
|
915,163
|
|
|
277,736
|
|
||||
Wafer supply agreement
|
20,443
|
|
|
20,443
|
|
|
20,443
|
|
|
20,443
|
|
||||
Trade names
|
29,353
|
|
|
14,529
|
|
|
29,000
|
|
|
12,083
|
|
||||
Backlog
|
65,000
|
|
|
65,000
|
|
|
65,000
|
|
|
65,000
|
|
||||
Non-compete agreement
|
1,026
|
|
|
86
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
2,658,228
|
|
|
$
|
882,291
|
|
|
$
|
2,576,155
|
|
|
$
|
763,640
|
|
Fiscal Year
|
Estimated
Amortization Expense |
||
2017
|
$
|
505,502
|
|
2018
|
542,634
|
|
|
2019
|
455,402
|
|
|
2020
|
206,986
|
|
|
2021
|
144,066
|
|
|
July 2, 2016
|
|
April 2, 2016
|
||||
6.75% Senior Notes due 2023
|
$
|
450,000
|
|
|
$
|
450,000
|
|
7.00% Senior Notes due 2025
|
550,000
|
|
|
550,000
|
|
||
Less unamortized issuance costs
|
(11,628
|
)
|
|
(11,870
|
)
|
||
Total long-term debt
|
$
|
988,372
|
|
|
$
|
988,130
|
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
July 2, 2016
|
|
|
|
|
|
|
|
||||||||
Auction rate securities
|
$
|
2,150
|
|
|
$
|
—
|
|
|
$
|
(400
|
)
|
|
$
|
1,750
|
|
Corporate debt
|
13,873
|
|
|
—
|
|
|
—
|
|
|
13,873
|
|
||||
Money market funds
|
57,798
|
|
|
—
|
|
|
—
|
|
|
57,798
|
|
||||
|
$
|
73,821
|
|
|
$
|
—
|
|
|
$
|
(400
|
)
|
|
$
|
73,421
|
|
April 2, 2016
|
|
|
|
|
|
|
|
||||||||
U.S. government/agency securities
|
$
|
149,874
|
|
|
$
|
19
|
|
|
$
|
(1
|
)
|
|
$
|
149,892
|
|
Auction rate securities
|
2,150
|
|
|
—
|
|
|
(350
|
)
|
|
1,800
|
|
||||
Corporate debt
|
45,510
|
|
|
—
|
|
|
—
|
|
|
45,510
|
|
||||
Money market funds
|
146,779
|
|
|
—
|
|
|
—
|
|
|
146,779
|
|
||||
|
$
|
344,313
|
|
|
$
|
19
|
|
|
$
|
(351
|
)
|
|
$
|
343,981
|
|
|
July 2, 2016
|
|
April 2, 2016
|
||||||||||||
|
Cost
|
|
Estimated
Fair Value
|
|
Cost
|
|
Estimated
Fair Value
|
||||||||
Due in less than one year
|
$
|
71,671
|
|
|
$
|
71,671
|
|
|
$
|
342,163
|
|
|
$
|
342,181
|
|
Due after ten years
|
2,150
|
|
|
1,750
|
|
|
2,150
|
|
|
1,800
|
|
||||
Total investments in debt securities
|
$
|
73,821
|
|
|
$
|
73,421
|
|
|
$
|
344,313
|
|
|
$
|
343,981
|
|
|
|
|
|
|
Total
|
|
Quoted Prices In
Active Markets For
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
||||||
July 2, 2016
|
|
|
|
|
|
||||||||||
|
Assets:
|
|
|
|
|
|
|||||||||
|
|
Available-for-sale securities
|
|
|
|
|
|
||||||||
|
|
|
|
Auction rate securities
(1)
|
$
|
1,750
|
|
|
$
|
—
|
|
|
$
|
1,750
|
|
|
|
|
|
Corporate debt
(2)
|
13,873
|
|
|
—
|
|
|
13,873
|
|
|||
|
|
|
|
Money market funds
|
57,798
|
|
|
57,798
|
|
|
—
|
|
|||
|
|
|
Total available-for-sale securities
|
73,421
|
|
|
57,798
|
|
|
15,623
|
|
||||
|
|
|
Invested funds in deferred compensation plan
(3)
|
7,169
|
|
|
7,169
|
|
|
—
|
|
||||
|
|
|
|
Total assets measured at fair value
|
$
|
80,590
|
|
|
$
|
64,967
|
|
|
$
|
15,623
|
|
|
Liabilities:
|
|
|
|
|
|
|||||||||
|
|
|
Deferred compensation plan obligation
(3)
|
7,169
|
|
|
7,169
|
|
|
—
|
|
||||
|
|
|
|
Total liabilities measured at fair value
|
$
|
7,169
|
|
|
$
|
7,169
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
April 2, 2016
|
|
|
|
|
|
||||||||||
|
Assets:
|
|
|
|
|
|
|||||||||
|
|
Available-for-sale securities
|
|
|
|
|
|
||||||||
|
|
|
|
U.S. government/agency securities
|
$
|
149,892
|
|
|
$
|
149,892
|
|
|
$
|
—
|
|
|
|
|
|
Auction rate securities
(1)
|
1,800
|
|
|
—
|
|
|
1,800
|
|
|||
|
|
|
|
Corporate debt
(2)
|
45,510
|
|
|
—
|
|
|
45,510
|
|
|||
|
|
|
|
Money market funds
|
146,779
|
|
|
146,779
|
|
|
—
|
|
|||
|
|
|
Total available-for-sale securities
|
343,981
|
|
|
296,671
|
|
|
47,310
|
|
||||
|
|
|
Invested funds in deferred compensation plan
(3)
|
6,468
|
|
|
6,468
|
|
|
—
|
|
||||
|
|
|
|
Total assets measured at fair value
|
$
|
350,449
|
|
|
$
|
303,139
|
|
|
$
|
47,310
|
|
|
Liabilities:
|
|
|
|
|
|
|||||||||
|
|
|
Deferred compensation plan obligation
(3)
|
6,468
|
|
|
6,468
|
|
|
—
|
|
||||
|
|
|
|
Total liabilities measured at fair value
|
$
|
6,468
|
|
|
$
|
6,468
|
|
|
$
|
—
|
|
|
Three Months Ended
|
||||||
|
July 2,
2016 |
|
June 27,
2015 |
||||
Revenue:
|
|
|
|
||||
MP
|
$
|
547,077
|
|
|
$
|
550,886
|
|
IDP
|
150,490
|
|
|
121,785
|
|
||
All other (1)
|
970
|
|
|
970
|
|
||
Total revenue
|
$
|
698,537
|
|
|
$
|
673,641
|
|
Income (loss) from operations:
|
|
|
|
||||
MP
|
$
|
132,977
|
|
|
$
|
173,742
|
|
IDP
|
34,651
|
|
|
14,073
|
|
||
All other
|
(161,887
|
)
|
|
(189,150
|
)
|
||
Income (loss) from operations
|
5,741
|
|
|
(1,335
|
)
|
||
Interest expense
|
(15,187
|
)
|
|
(548
|
)
|
||
Interest income
|
278
|
|
|
392
|
|
||
Other (expense) income
|
(500
|
)
|
|
4,119
|
|
||
(Loss) income before income taxes
|
$
|
(9,668
|
)
|
|
$
|
2,628
|
|
|
Three Months Ended
|
||||||
|
July 2,
2016 |
|
June 27,
2015 |
||||
Reconciliation of “All other” category:
|
|
|
|
||||
Stock-based compensation expense
|
$
|
(30,594
|
)
|
|
$
|
(48,170
|
)
|
Amortization of intangible assets
|
(119,345
|
)
|
|
(123,202
|
)
|
||
Acquisition and integration related costs
|
(6,760
|
)
|
|
(10,415
|
)
|
||
Acquired inventory step-up and revaluation
|
(1,199
|
)
|
|
—
|
|
||
Restructuring and disposal costs
|
(414
|
)
|
|
(1,427
|
)
|
||
IPR litigation costs
|
(156
|
)
|
|
(148
|
)
|
||
Start-up costs
|
(2,076
|
)
|
|
(3,710
|
)
|
||
Other expenses (including gain (loss) on assets and other miscellaneous corporate overhead)
|
(1,343
|
)
|
|
(2,078
|
)
|
||
Loss from operations for “All other”
|
$
|
(161,887
|
)
|
|
$
|
(189,150
|
)
|
(i)
|
the Parent Company, the issuer of the Notes;
|
(ii)
|
the guarantor subsidiaries, on a combined basis, as specified in the Indenture;
|
(iii)
|
the non-guarantor subsidiaries, on a combined basis;
|
(iv)
|
consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Parent Company, the guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate intercompany profit in inventory, (c) eliminate the investments in the Company’s subsidiaries and (d) record consolidating entries; and
|
(v)
|
the Company, on a consolidated basis.
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
July 2, 2016
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
150,131
|
|
|
$
|
282,903
|
|
|
$
|
—
|
|
|
$
|
433,034
|
|
Short-term investments
|
—
|
|
|
13,873
|
|
|
—
|
|
|
—
|
|
|
13,873
|
|
|||||
Accounts receivable, less allowance
|
—
|
|
|
75,532
|
|
|
325,147
|
|
|
—
|
|
|
400,679
|
|
|||||
Intercompany accounts and notes receivable
|
—
|
|
|
617,320
|
|
|
134,392
|
|
|
(751,712
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
118,262
|
|
|
439,544
|
|
|
(102,035
|
)
|
|
455,771
|
|
|||||
Prepaid expenses
|
—
|
|
|
56,469
|
|
|
11,860
|
|
|
—
|
|
|
68,329
|
|
|||||
Other receivables
|
—
|
|
|
5,770
|
|
|
64,101
|
|
|
—
|
|
|
69,871
|
|
|||||
Other current assets
|
—
|
|
|
43,493
|
|
|
370
|
|
|
—
|
|
|
43,863
|
|
|||||
Total current assets
|
—
|
|
|
1,080,850
|
|
|
1,258,317
|
|
|
(853,747
|
)
|
|
1,485,420
|
|
|||||
Property and equipment, net
|
—
|
|
|
883,197
|
|
|
277,756
|
|
|
—
|
|
|
1,160,953
|
|
|||||
Goodwill
|
—
|
|
|
1,953,102
|
|
|
221,537
|
|
|
—
|
|
|
2,174,639
|
|
|||||
Intangible assets, net
|
—
|
|
|
741,188
|
|
|
1,068,586
|
|
|
(33,837
|
)
|
|
1,775,937
|
|
|||||
Long-term investments
|
—
|
|
|
26,000
|
|
|
—
|
|
|
—
|
|
|
26,000
|
|
|||||
Long-term intercompany accounts and notes receivable
|
—
|
|
|
424,333
|
|
|
131,713
|
|
|
(556,046
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
6,137,196
|
|
|
1,664,717
|
|
|
—
|
|
|
(7,801,913
|
)
|
|
—
|
|
|||||
Other non-current assets
|
1,023
|
|
|
38,619
|
|
|
25,396
|
|
|
—
|
|
|
65,038
|
|
|||||
Total assets
|
$
|
6,138,219
|
|
|
$
|
6,812,006
|
|
|
$
|
2,983,305
|
|
|
$
|
(9,245,543
|
)
|
|
$
|
6,687,987
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
99,265
|
|
|
$
|
166,091
|
|
|
$
|
(1,878
|
)
|
|
$
|
263,478
|
|
Intercompany accounts and notes payable
|
—
|
|
|
134,392
|
|
|
617,320
|
|
|
(751,712
|
)
|
|
—
|
|
|||||
Accrued liabilities
|
5,931
|
|
|
103,492
|
|
|
33,086
|
|
|
—
|
|
|
142,509
|
|
|||||
Other current liabilities
|
—
|
|
|
197
|
|
|
14,149
|
|
|
—
|
|
|
14,346
|
|
|||||
Total current liabilities
|
5,931
|
|
|
337,346
|
|
|
830,646
|
|
|
(753,590
|
)
|
|
420,333
|
|
|||||
Long-term debt
|
988,372
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
988,372
|
|
|||||
Deferred tax liabilities
|
(103,634
|
)
|
|
204,465
|
|
|
62,813
|
|
|
—
|
|
|
163,644
|
|
|||||
Long-term intercompany accounts and notes payable
|
213,974
|
|
|
131,713
|
|
|
210,359
|
|
|
(556,046
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
—
|
|
|
33,879
|
|
|
48,183
|
|
|
—
|
|
|
82,062
|
|
|||||
Total liabilities
|
1,104,643
|
|
|
707,403
|
|
|
1,152,001
|
|
|
(1,309,636
|
)
|
|
1,654,411
|
|
|||||
Total stockholders’ equity
|
5,033,576
|
|
|
6,104,603
|
|
|
1,831,304
|
|
|
(7,935,907
|
)
|
|
5,033,576
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
6,138,219
|
|
|
$
|
6,812,006
|
|
|
$
|
2,983,305
|
|
|
$
|
(9,245,543
|
)
|
|
$
|
6,687,987
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
April 2, 2016
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
220,633
|
|
|
$
|
205,248
|
|
|
$
|
—
|
|
|
$
|
425,881
|
|
Short-term investments
|
—
|
|
|
186,808
|
|
|
—
|
|
|
—
|
|
|
186,808
|
|
|||||
Accounts receivable, less allowance
|
—
|
|
|
203,488
|
|
|
112,868
|
|
|
—
|
|
|
316,356
|
|
|||||
Intercompany accounts and notes receivable
|
—
|
|
|
532,508
|
|
|
404,330
|
|
|
(936,838
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
186,627
|
|
|
325,346
|
|
|
(84,422
|
)
|
|
427,551
|
|
|||||
Prepaid expenses
|
—
|
|
|
56,151
|
|
|
7,699
|
|
|
—
|
|
|
63,850
|
|
|||||
Other receivables
|
—
|
|
|
37,033
|
|
|
10,347
|
|
|
—
|
|
|
47,380
|
|
|||||
Other current assets
|
—
|
|
|
40,866
|
|
|
518
|
|
|
—
|
|
|
41,384
|
|
|||||
Total current assets
|
—
|
|
|
1,464,114
|
|
|
1,066,356
|
|
|
(1,021,260
|
)
|
|
1,509,210
|
|
|||||
Property and equipment, net
|
—
|
|
|
807,586
|
|
|
239,495
|
|
|
(193
|
)
|
|
1,046,888
|
|
|||||
Goodwill
|
—
|
|
|
1,868,816
|
|
|
266,881
|
|
|
—
|
|
|
2,135,697
|
|
|||||
Intangible assets, net
|
—
|
|
|
786,314
|
|
|
1,026,201
|
|
|
—
|
|
|
1,812,515
|
|
|||||
Long-term investments
|
—
|
|
|
26,050
|
|
|
—
|
|
|
—
|
|
|
26,050
|
|
|||||
Long-term intercompany accounts and notes receivable
|
—
|
|
|
564,397
|
|
|
267,823
|
|
|
(832,220
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
6,151,119
|
|
|
1,645,846
|
|
|
—
|
|
|
(7,796,965
|
)
|
|
—
|
|
|||||
Other non-current assets
|
1,091
|
|
|
39,478
|
|
|
25,890
|
|
|
—
|
|
|
66,459
|
|
|||||
Total assets
|
$
|
6,152,210
|
|
|
$
|
7,202,601
|
|
|
$
|
2,892,646
|
|
|
$
|
(9,650,638
|
)
|
|
$
|
6,596,819
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
141,792
|
|
|
$
|
66,508
|
|
|
$
|
(2,936
|
)
|
|
$
|
205,364
|
|
Intercompany accounts and notes payable
|
—
|
|
|
404,330
|
|
|
532,508
|
|
|
(936,838
|
)
|
|
—
|
|
|||||
Accrued liabilities
|
25,445
|
|
|
93,609
|
|
|
18,835
|
|
|
—
|
|
|
137,889
|
|
|||||
Other current liabilities
|
—
|
|
|
20,122
|
|
|
10,426
|
|
|
—
|
|
|
30,548
|
|
|||||
Total current liabilities
|
25,445
|
|
|
659,853
|
|
|
628,277
|
|
|
(939,774
|
)
|
|
373,801
|
|
|||||
Long-term debt
|
988,130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
988,130
|
|
|||||
Deferred tax liabilities
|
(93,340
|
)
|
|
195,462
|
|
|
50,038
|
|
|
—
|
|
|
152,160
|
|
|||||
Long-term intercompany accounts and notes payable
|
232,303
|
|
|
267,823
|
|
|
332,094
|
|
|
(832,220
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
—
|
|
|
39,288
|
|
|
43,768
|
|
|
—
|
|
|
83,056
|
|
|||||
Total liabilities
|
1,152,538
|
|
|
1,162,426
|
|
|
1,054,177
|
|
|
(1,771,994
|
)
|
|
1,597,147
|
|
|||||
Total stockholders’ equity
|
4,999,672
|
|
|
6,040,175
|
|
|
1,838,469
|
|
|
(7,878,644
|
)
|
|
4,999,672
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
6,152,210
|
|
|
$
|
7,202,601
|
|
|
$
|
2,892,646
|
|
|
$
|
(9,650,638
|
)
|
|
$
|
6,596,819
|
|
|
Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
|
||||||||||||||||||
|
Three Months Ended July 2, 2016
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
404,978
|
|
|
$
|
732,494
|
|
|
$
|
(438,935
|
)
|
|
$
|
698,537
|
|
Cost of goods sold
|
—
|
|
|
344,567
|
|
|
479,042
|
|
|
(401,547
|
)
|
|
422,062
|
|
|||||
Gross profit
|
—
|
|
|
60,411
|
|
|
253,452
|
|
|
(37,388
|
)
|
|
276,475
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
11,669
|
|
|
9,840
|
|
|
98,487
|
|
|
(2,859
|
)
|
|
117,137
|
|
|||||
Marketing and selling
|
6,058
|
|
|
25,534
|
|
|
86,612
|
|
|
(9,168
|
)
|
|
109,036
|
|
|||||
General and administrative
|
12,867
|
|
|
2,099
|
|
|
19,926
|
|
|
(333
|
)
|
|
34,559
|
|
|||||
Other operating expense
|
—
|
|
|
4,093
|
|
|
5,941
|
|
|
(32
|
)
|
|
10,002
|
|
|||||
Total operating expenses
|
30,594
|
|
|
41,566
|
|
|
210,966
|
|
|
(12,392
|
)
|
|
270,734
|
|
|||||
Income (loss) from operations
|
(30,594
|
)
|
|
18,845
|
|
|
42,486
|
|
|
(24,996
|
)
|
|
5,741
|
|
|||||
Interest expense
|
(14,768
|
)
|
|
(818
|
)
|
|
(1,578
|
)
|
|
1,977
|
|
|
(15,187
|
)
|
|||||
Interest income
|
—
|
|
|
1,482
|
|
|
567
|
|
|
(1,771
|
)
|
|
278
|
|
|||||
Other (expense) income
|
—
|
|
|
(321
|
)
|
|
(945
|
)
|
|
766
|
|
|
(500
|
)
|
|||||
(Loss) income before income taxes
|
(45,362
|
)
|
|
19,188
|
|
|
40,530
|
|
|
(24,024
|
)
|
|
(9,668
|
)
|
|||||
Income tax benefit (expense)
|
10,295
|
|
|
(27,087
|
)
|
|
20,785
|
|
|
—
|
|
|
3,993
|
|
|||||
Income in subsidiaries
|
29,392
|
|
|
—
|
|
|
—
|
|
|
(29,392
|
)
|
|
—
|
|
|||||
Net (loss) income
|
$
|
(5,675
|
)
|
|
$
|
(7,899
|
)
|
|
$
|
61,315
|
|
|
$
|
(53,416
|
)
|
|
$
|
(5,675
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive (loss) income
|
$
|
(6,683
|
)
|
|
$
|
(7,827
|
)
|
|
$
|
60,235
|
|
|
$
|
(52,408
|
)
|
|
$
|
(6,683
|
)
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
|
||||||||||||||||||
|
Three Months Ended June 27, 2015
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
725,762
|
|
|
$
|
566,828
|
|
|
$
|
(618,949
|
)
|
|
673,641
|
|
|
Cost of goods sold
|
—
|
|
|
547,523
|
|
|
463,940
|
|
|
(617,339
|
)
|
|
394,124
|
|
|||||
Gross profit
|
—
|
|
|
178,239
|
|
|
102,888
|
|
|
(1,610
|
)
|
|
279,517
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
21,473
|
|
|
43,670
|
|
|
60,011
|
|
|
(7,944
|
)
|
|
117,210
|
|
|||||
Marketing and selling
|
20,087
|
|
|
33,508
|
|
|
62,859
|
|
|
(6,809
|
)
|
|
109,645
|
|
|||||
General and administrative
|
6,610
|
|
|
22,556
|
|
|
9,179
|
|
|
(2,262
|
)
|
|
36,083
|
|
|||||
Other operating expense
|
—
|
|
|
15,428
|
|
|
2,486
|
|
|
—
|
|
|
17,914
|
|
|||||
Total operating expenses
|
48,170
|
|
|
115,162
|
|
|
134,535
|
|
|
(17,015
|
)
|
|
280,852
|
|
|||||
(Loss) income from operations
|
(48,170
|
)
|
|
63,077
|
|
|
(31,647
|
)
|
|
15,405
|
|
|
(1,335
|
)
|
|||||
Interest expense
|
—
|
|
|
(886
|
)
|
|
(559
|
)
|
|
897
|
|
|
(548
|
)
|
|||||
Interest income
|
—
|
|
|
522
|
|
|
607
|
|
|
(737
|
)
|
|
392
|
|
|||||
Other income (expense)
|
—
|
|
|
4,517
|
|
|
(239
|
)
|
|
(159
|
)
|
|
4,119
|
|
|||||
Income (loss) before income taxes
|
(48,170
|
)
|
|
67,230
|
|
|
(31,838
|
)
|
|
15,406
|
|
|
2,628
|
|
|||||
Income tax (expense) benefit
|
16,083
|
|
|
(11,888
|
)
|
|
(4,787
|
)
|
|
—
|
|
|
(592
|
)
|
|||||
Income in subsidiaries
|
34,123
|
|
|
—
|
|
|
—
|
|
|
(34,123
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
2,036
|
|
|
$
|
55,342
|
|
|
$
|
(36,625
|
)
|
|
$
|
(18,717
|
)
|
|
$
|
2,036
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
$
|
1,077
|
|
|
$
|
53,889
|
|
|
$
|
(36,467
|
)
|
|
$
|
(17,422
|
)
|
|
$
|
1,077
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Three Months Ended July 2, 2016
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(23,150
|
)
|
|
$
|
(137,694
|
)
|
|
$
|
220,233
|
|
|
$
|
—
|
|
|
$
|
59,389
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property and equipment
|
—
|
|
|
(106,301
|
)
|
|
(24,139
|
)
|
|
—
|
|
|
(130,440
|
)
|
|||||
Purchase of a business
|
—
|
|
|
—
|
|
|
(117,498
|
)
|
|
—
|
|
|
(117,498
|
)
|
|||||
Proceeds from sale of property and equipment
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Proceeds from maturities of available-for-sale securities
|
—
|
|
|
172,920
|
|
|
—
|
|
|
—
|
|
|
172,920
|
|
|||||
Net cash (used in) provided by investing activities
|
—
|
|
|
66,636
|
|
|
(141,637
|
)
|
|
—
|
|
|
(75,001
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt issuance costs
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Proceeds from the issuance of common stock
|
25,962
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,962
|
|
|||||
Tax withholding paid on behalf of employees for restricted stock units
|
(2,810
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,810
|
)
|
|||||
Restricted cash associated with financing activities
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Net transactions with related parties
|
—
|
|
|
552
|
|
|
(552
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
23,150
|
|
|
556
|
|
|
(552
|
)
|
|
—
|
|
|
23,154
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(389
|
)
|
|
—
|
|
|
(389
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
(70,502
|
)
|
|
77,655
|
|
|
—
|
|
|
7,153
|
|
|||||
Cash and cash equivalents at the beginning of the period
|
—
|
|
|
220,633
|
|
|
205,248
|
|
|
—
|
|
|
425,881
|
|
|||||
Cash and cash equivalents at the end of the period
|
$
|
—
|
|
|
$
|
150,131
|
|
|
$
|
282,903
|
|
|
$
|
—
|
|
|
$
|
433,034
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Three Months Ended June 27, 2015
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by operating activities
|
$
|
40,462
|
|
|
$
|
94,864
|
|
|
$
|
6,106
|
|
|
$
|
—
|
|
|
$
|
141,432
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property and equipment
|
—
|
|
|
(71,602
|
)
|
|
(17,793
|
)
|
|
—
|
|
|
(89,395
|
)
|
|||||
Proceeds from sale of property and equipment
|
—
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|||||
Purchase of available-for-sale securities
|
—
|
|
|
(86,145
|
)
|
|
—
|
|
|
—
|
|
|
(86,145
|
)
|
|||||
Proceeds from maturities and sales of available-for-sale securities
|
—
|
|
|
100,263
|
|
|
—
|
|
|
—
|
|
|
100,263
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(57,344
|
)
|
|
(17,793
|
)
|
|
—
|
|
|
(75,137
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt issuance costs
|
(1,335
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,335
|
)
|
|||||
Proceeds from the issuance of common stock
|
18,386
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,386
|
|
|||||
Repurchase of common stock, including transaction costs
|
(50,009
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,009
|
)
|
|||||
Tax withholding paid on behalf of employees for restricted stock units
|
(7,504
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,504
|
)
|
|||||
Restricted cash associated with financing activities
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Other financing
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Net transactions with related parties
|
—
|
|
|
(341
|
)
|
|
341
|
|
|
—
|
|
|
—
|
|
|||||
Net cash (used in) provided by financing activities
|
(40,462
|
)
|
|
(352
|
)
|
|
341
|
|
|
—
|
|
|
(40,473
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
37,168
|
|
|
(11,380
|
)
|
|
—
|
|
|
25,788
|
|
|||||
Cash and cash equivalents at the beginning of the period
|
—
|
|
|
154,332
|
|
|
145,482
|
|
|
—
|
|
|
299,814
|
|
|||||
Cash and cash equivalents at the end of the period
|
$
|
—
|
|
|
$
|
191,500
|
|
|
$
|
134,102
|
|
|
$
|
—
|
|
|
$
|
325,602
|
|
•
|
changes in business and economic conditions, including downturns in the semiconductor industry and the overall economy;
|
•
|
our ability to accurately predict market requirements and evolving industry standards in a timely manner;
|
•
|
our ability to accurately predict customer demand and thereby avoid the possibility of obsolete inventory, which would reduce our profit margins;
|
•
|
our customers’ and distributors’ ability to manage the inventory they hold and forecast their demand;
|
•
|
our ability to successfully integrate acquired businesses, operations, product technologies and personnel as well as achieve expected synergies;
|
•
|
our ability to achieve cost savings and improve yields and margins on our new and existing products;
|
•
|
our ability to respond to possible downward pressure on the average selling prices of our products caused by our customers or our competitors;
|
•
|
our ability to utilize our capacity efficiently, or to acquire or source additional capacity, in response to customer demand;
|
•
|
the inability of one or more of our customers to access their traditional sources of credit, which could lead them to reduce their level of purchases or seek credit or other accommodations from us;
|
•
|
our ability to continue to improve our product designs, develop new products in response to new technologies, and achieve design wins;
|
•
|
our dependence on a limited number of customers for a substantial portion of our revenue;
|
•
|
our reliance on the U.S. government and on U.S government sponsored programs (principally for defense and aerospace applications) for a portion of our revenue;
|
•
|
our ability to bring new products to market in response to market shifts and to use technological innovation to shorten time-to-market for our products;
|
•
|
the risks associated with our wafer fabrication facilities, our assembly facilities and our test and tape and reel facilities;
|
•
|
variability in manufacturing yields;
|
•
|
variability in raw material costs and availability of raw materials;
|
•
|
our dependence on third parties, including wafer foundries, wafer starting material suppliers, passive component manufacturers, assembly and packaging suppliers and test and tape and reel suppliers;
|
•
|
our ability to manage platform provider and customer relationships;
|
•
|
our ability to procure, commercialize and enforce intellectual property rights (IPR) and to operate our business without infringing on the unlicensed IPR of others;
|
•
|
the risks associated with security breaches and other similar disruptions, which could compromise our information and expose us to liability and could cause our business and reputation to suffer;
|
•
|
currency fluctuations, tariffs, trade barriers, tax and export license requirements and health and security issues associated with our foreign operations;
|
•
|
a future decision to repatriate non-U.S. earnings for which we have not previously provided for U.S. taxes;
|
•
|
our ability to attract and retain skilled personnel and develop leaders for key business units and functions; and
|
•
|
failure to realize the anticipated benefits of the Business Combination, including difficulty in integrating the businesses of RFMD and TriQuint or not realizing the expected amount and timing of cost savings and operating synergies.
|
•
|
Mobile Products (MP)
- MP is a leading global supplier of RF solutions that perform various functions in the increasingly complex cellular radio front end section of smartphones and other cellular devices. These RF solutions are required in fourth generation (“4G”) data-centric devices operating under Long-Term Evolution 4G networks, as well as third generation and second generation mobile devices. Our solutions include complete RF front end modules that combine high-performance filters, power amplifiers ("PAs"), low noise amplifiers ("LNAs") and switches, PA modules, transmit modules, antenna control solutions, antenna switch modules, diversity receive modules and envelope tracking power
|
•
|
Infrastructure and Defense Products (IDP)
- IDP is a leading global supplier of RF solutions that support diverse global applications, including ubiquitous high-speed network connectivity to the cloud, data center communications, rapid internet connectivity throughout the home and workplace, and upgraded military capabilities across the globe. Qorvo’s RF solutions enhance performance and reduce complexity in cellular base stations, optical long haul, data center and metro networks, WiFi networks, cable networks, and emerging fifth generation ("5G") wireless networks. Our IDP products include high power GaAs and GaN PAs, LNAs, switches, RF filter solutions, CMOS system-on-a-chip ("SoC") solutions and various multichip and hybrid assemblies. Our market-leading RF solutions for defense and aerospace upgrade communications and radar systems for air, land and sea. Our RF solutions for the IoT enable the connected car and an array of industrial applications, and we serve the home automation market with SoC solutions based on ZigBee and Bluetooth Smart technologies. During the first quarter of fiscal 2017, we acquired GreenPeak Technologies ("GreenPeak"), a leader in ultra-low power, short range RF communication technology. The acquisition expanded our customer offering to include highly integrated RF solutions and SoCs for the connected home and the rapidly growing IoT.
|
•
|
During the first quarter of fiscal 2017, we acquired GreenPeak, a leader in ultra-low power, short-range RF communication technology.
|
•
|
Quarterly revenue increased
3.7%
as compared to the
first
quarter of
fiscal 2016
, due to improved global demand for our wireless infrastructure and WiFi products, as well as the inclusion of GreenPeak revenue in the three months ended
July 2, 2016
.
|
•
|
Gross margin for the quarter was
39.6%
as compared to
41.5%
for the
first
quarter of
fiscal 2016
. Although revenue increased, we experienced average selling price erosion and an unfavorable change in product mix towards lower margin products.
|
•
|
Operating income was
$5.7 million
for the
first
quarter of
fiscal 2017
as compared to operating loss of
$1.3 million
for the
first
quarter of
fiscal 2016
. This improvement was primarily due to lower stock-based compensation expenses and lower integration and restructuring costs. These increases in operating income were partially offset by decreased gross margin and higher personnel expenses primarily driven by increased headcount.
|
•
|
Diluted loss per share for the
first
quarter of
fiscal 2017
was
$0.04
as compared to diluted earnings per share of
$0.01
for the
first
quarter of
fiscal 2016
.
|
•
|
Cash flow from operations was
$59.4 million
for the
first
quarter of
fiscal 2017
as compared to
$141.4 million
for the
first
quarter of
fiscal 2016
. This year-over-year decrease was primarily attributable to lower profitability and an increase in accounts receivable, which was related to the timing of shipments.
|
•
|
Capital expenditures were
$130.4 million
for the
first
quarter of
fiscal 2017
as compared to
$89.4 million
for the
first
quarter of
fiscal 2016
. This year-over-year increase was primarily related to projects for increasing premium filter capacity, projects for manufacturing cost savings initiatives, as well as the purchase of a wafer fabrication facility (including equipment), which we currently plan to use to expand our BAW filter capacity.
|
•
|
During the
first
quarter of
fiscal 2017
, we recorded merger-related expenses, integration costs and restructuring expenses totaling
$7.5 million
as compared to
$13.3 million
in the first quarter of
fiscal 2016
.
|
•
|
During the first quarter of fiscal 2017, we recorded interest expense of
$17.5 million
(which was offset by
$3.0 million
of capitalized interest) on the
$1.0 billion
of senior notes that were issued in the third quarter of fiscal 2016. Interest paid on these notes during the three months ended
July 2, 2016
was
$36.7 million
.
|
|
Three Months Ended
|
|||||||||||||||||||
|
July 2,
2016 |
|
% of
Revenue
|
|
June 27,
2015 |
|
% of
Revenue
|
|
Increase (Decrease)
|
|
Percentage
Change
|
|||||||||
Revenue
|
$
|
698,537
|
|
|
100.0
|
%
|
|
$
|
673,641
|
|
|
100.0
|
%
|
|
$
|
24,896
|
|
|
3.7
|
%
|
Cost of goods sold
|
422,062
|
|
|
60.4
|
|
|
394,124
|
|
|
58.5
|
|
|
27,938
|
|
|
7.1
|
|
|||
Gross profit
|
276,475
|
|
|
39.6
|
|
|
279,517
|
|
|
41.5
|
|
|
(3,042
|
)
|
|
(1.1
|
)
|
|||
Research and development
|
117,137
|
|
|
16.8
|
|
|
117,210
|
|
|
17.4
|
|
|
(73
|
)
|
|
(0.1
|
)
|
|||
Marketing and selling
|
109,036
|
|
|
15.6
|
|
|
109,645
|
|
|
16.3
|
|
|
(609
|
)
|
|
(0.6
|
)
|
|||
General and administrative
|
34,559
|
|
|
5.0
|
|
|
36,083
|
|
|
5.3
|
|
|
(1,524
|
)
|
|
(4.2
|
)
|
|||
Other operating expense
|
10,002
|
|
|
1.4
|
|
|
17,914
|
|
|
2.7
|
|
|
(7,912
|
)
|
|
(44.2
|
)
|
|||
Operating income (loss)
|
$
|
5,741
|
|
|
0.8
|
%
|
|
$
|
(1,335
|
)
|
|
(0.2
|
)%
|
|
7,076
|
|
|
530.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
(In thousands, except percentages)
|
|
July 2,
2016 |
|
June 27,
2015 |
|
Decrease
|
|
Percentage
Change
|
|||||||
Revenue
|
|
$
|
547,077
|
|
|
$
|
550,886
|
|
|
$
|
(3,809
|
)
|
|
(0.7
|
)%
|
Operating income
|
|
132,977
|
|
|
173,742
|
|
|
(40,765
|
)
|
|
(23.5
|
)
|
|||
Operating income as a % of revenue
|
|
24.3
|
%
|
|
31.5
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
(In thousands, except percentages)
|
|
July 2,
2016 |
|
June 27,
2015 |
|
Increase
|
|
Percentage
Change
|
|||||||
Revenue
|
|
$
|
150,490
|
|
|
$
|
121,785
|
|
|
$
|
28,705
|
|
|
23.6
|
%
|
Operating income
|
|
34,651
|
|
|
14,073
|
|
|
20,578
|
|
|
146.2
|
|
|||
Operating income as a % of revenue
|
|
23.0
|
%
|
|
11.6
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
(In thousands)
|
|
July 2,
2016 |
|
June 27,
2015 |
||||
Interest expense
|
|
$
|
(15,187
|
)
|
|
$
|
(548
|
)
|
Interest income
|
|
278
|
|
|
392
|
|
||
Other (expense) income
|
|
(500
|
)
|
|
4,119
|
|
||
Income tax benefit (expense)
|
|
3,993
|
|
|
(592
|
)
|
•
|
We have filled two open positions within the tax department and identified potential candidates for an additional open position. We will continue to evaluate the structure of our tax organization and add resources as needed.
|
•
|
We have implemented a single income tax provision model in conjunction with completing our move to a single integrated ERP system.
|
•
|
With the assistance of a qualified outside party, we are finalizing design of a review and assessment of our internal controls over accounting for income taxes and the tax provision process.
|
3.1
|
|
Amended and Restated Bylaws of Qorvo, Inc., effective as of May 13, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on May 19, 2016)
|
|
|
|
10.1
|
|
Form of Restricted Stock Unit Award Agreement (Director Annual/Supplemental RSUs) (deferral election) pursuant to the Qorvo, Inc. 2012 Stock Incentive Plan. *
|
|
|
|
12.1
|
|
Computation of Consolidated Ratio of Earnings to Fixed Charges
|
|
|
|
31.1
|
|
Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2
|
|
Certification of Periodic Report by Mark J. Murphy, as Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1
|
|
Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2
|
|
Certification of Periodic Report by Mark J. Murphy, as Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101
|
|
The following materials from our Quarterly Report on Form 10-Q for the quarter ended July 2, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of July 2, 2016 and April 2, 2016; (ii) the Condensed Consolidated Statements of Operations for the three months ended July 2, 2016 and June 27, 2015; (iii) the Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended July 2, 2016 and June 27, 2015; (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended July 2, 2016 and June 27, 2015; and (v) the Notes to Condensed Consolidated Financial Statements
|
|
|
|
Qorvo, Inc.
|
|
|
|
|
Date:
|
August 5, 2016
|
|
/s/ Mark J. Murphy
|
|
|
|
Mark J. Murphy
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Amended and Restated Bylaws of Qorvo, Inc., effective as of May 13, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on May 19, 2016).
|
|
|
|
10.1
|
|
Form of Restricted Stock Unit Award Agreement (Director Annual/Supplemental RSUs) (deferral election) pursuant to the Qorvo, Inc. 2012 Stock Incentive Plan. *
|
|
|
|
12.1
|
Computation of Consolidated Ratio of Earnings to Fixed Charges
|
|
|
|
|
31.1
|
Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
31.2
|
Certification of Periodic Report by Mark J. Murphy, as Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
32.1
|
Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
32.2
|
Certification of Periodic Report by Mark J. Murphy, as Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
101
|
|
The following materials from our Quarterly Report on Form 10-Q for the quarter ended July 2, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of July 2, 2016 and April 2, 2016; (ii) the Condensed Consolidated Statements of Operations for the three months ended July 2, 2016 and June 27, 2015; (iii) the Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended July 2, 2016 and June 27, 2015; (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended July 2, 2016 and June 27, 2015; and (v) the Notes to Condensed Consolidated Financial Statements
|
a.
|
The “Participant” is _______________.
|
b.
|
The “Grant Date” is ______________.
|
c.
|
The “Restriction Period” is the period beginning on the Grant Date and ending on such date or dates and occurrence of such conditions as described in Schedule A, which is attached hereto and expressly made a part of this Agreement.
|
d.
|
The number of shares of Common Stock subject to the award of Restricted Stock Units granted under this Agreement shall be __________ shares (the “Shares”).
|
|
Participant:
|
|
____________________
|
|
|
Grant Date:
|
|
____________________
|
|
|
Shares Subject to Award:
|
|
____________________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Quarter Ended
|
|
Fiscal Year Ended
|
||||||||||||||||||||
|
July 2,
2016
|
|
April 2,
2016
|
|
March 28, 2015
|
|
March 29, 2014
|
|
March 30, 2013
|
|
March 31, 2012
|
||||||||||||
Pre-tax income (loss) from continuing operations *
|
$
|
(9,668
|
)
|
|
$
|
(2,862
|
)
|
|
$
|
121,240
|
|
|
$
|
23,873
|
|
|
$
|
(25,899
|
)
|
|
$
|
15,628
|
|
(Income) loss from equity investee
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,146
|
)
|
|
4
|
|
|
(1,631
|
)
|
||||||
Fixed charges
|
19,328
|
|
|
33,203
|
|
|
5,424
|
|
|
10,411
|
|
|
10,257
|
|
|
13,773
|
|
||||||
Capitalized interest
|
(2,967
|
)
|
|
(5,210
|
)
|
|
—
|
|
|
(899
|
)
|
|
(389
|
)
|
|
(345
|
)
|
||||||
Amortization of capitalized interest
|
131
|
|
|
373
|
|
|
486
|
|
|
504
|
|
|
390
|
|
|
301
|
|
||||||
Total adjusted earnings available for fixed charges
|
$
|
6,824
|
|
|
$
|
25,504
|
|
|
$
|
127,150
|
|
|
$
|
31,743
|
|
|
$
|
(15,637
|
)
|
|
$
|
27,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
14,867
|
|
|
$
|
22,687
|
|
|
$
|
837
|
|
|
$
|
390
|
|
|
$
|
739
|
|
|
$
|
1,621
|
|
Capitalized interest
|
2,967
|
|
|
5,210
|
|
|
—
|
|
|
899
|
|
|
389
|
|
|
345
|
|
||||||
Amortization of discount and debt issuance costs
|
320
|
|
|
629
|
|
|
584
|
|
|
5,593
|
|
|
5,793
|
|
|
9,376
|
|
||||||
Portion of rent expense representing interest **
|
1,174
|
|
|
4,677
|
|
|
4,003
|
|
|
3,529
|
|
|
3,336
|
|
|
2,431
|
|
||||||
Total fixed charges
|
$
|
19,328
|
|
|
$
|
33,203
|
|
|
$
|
5,424
|
|
|
$
|
10,411
|
|
|
$
|
10,257
|
|
|
$
|
13,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated ratio of earnings to fixed charges
|
N/A***
|
|
|
N/A***
|
|
|
23.4x
|
|
|
3.0x
|
|
|
N/A***
|
|
|
2.0x
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
* Information presented prior to January 1, 2015 does not include TriQuint's results of operations and as a result, the information may not be comparable.
|
|
|
|||||||||||||||||||||
** The portion of operating rental expense that management believes is representative of the interest component of rent expense is estimated to be one-third of rental expense.
|
|||||||||||||||||||||||
*** Earnings for the quarter ended July 2, 2016 and the fiscal years ended April 2, 2016 and March 30, 2013 were inadequate to cover fixed charges by approximately $12.5 million, $7.7 million and $26.0 million, respectively.
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ ROBERT A. BRUGGEWORTH
|
|
Robert A. Bruggeworth
|
|
President and Chief Executive Officer
|
|
|
|
/s/ MARK J. MURPHY
|
|
Mark J. Murphy
|
|
Chief Financial Officer
|
(1)
|
the
Quarterly
Report on Form
10-Q
of the Company for the fiscal
quarter
ended
July 2, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ ROBERT A. BRUGGEWORTH
|
|
|
Robert A. Bruggeworth
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
August 5, 2016
|
|
(1)
|
the
Quarterly
Report on Form
10-Q
of the Company for the fiscal
quarter
ended
July 2, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/MARK J. MURPHY
|
|
|
Mark J. Murphy
|
|
|
Chief Financial Officer
|
|
|
|
|
|
August 5, 2016
|
|