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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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October 1, 2016
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April 2, 2016
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||||
ASSETS
|
|
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|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
(Note 7)
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$
|
469,219
|
|
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$
|
425,881
|
|
Short-term investments
(Note 7)
|
—
|
|
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186,808
|
|
||
Accounts receivable, less allowance of $100 and $143 as of October 1, 2016 and April 2, 2016, respectively
|
491,489
|
|
|
316,356
|
|
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Inventories
(Note 3)
|
437,135
|
|
|
427,551
|
|
||
Prepaid expenses
|
58,579
|
|
|
63,850
|
|
||
Other receivables
|
78,022
|
|
|
47,380
|
|
||
Other current assets
|
48,092
|
|
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41,384
|
|
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Total current assets
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1,582,536
|
|
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1,509,210
|
|
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Property and equipment, net of accumulated depreciation of $820,306 at October 1, 2016 and $751,898 at April 2, 2016
|
1,240,050
|
|
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1,046,888
|
|
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Goodwill
(Note 4)
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2,174,918
|
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2,135,697
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|
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Intangible assets, net
(Note 4)
|
1,656,158
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1,812,515
|
|
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Long-term investments
(Note 7)
|
34,902
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26,050
|
|
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Other non-current assets
|
63,058
|
|
|
66,459
|
|
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Total assets
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$
|
6,751,622
|
|
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$
|
6,596,819
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
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|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
323,696
|
|
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$
|
205,364
|
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Accrued liabilities
|
212,220
|
|
|
137,889
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|
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Other current liabilities
|
21,529
|
|
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30,548
|
|
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Total current liabilities
|
557,445
|
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|
373,801
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|
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Long-term debt
(Note 5)
|
988,625
|
|
|
988,130
|
|
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Deferred tax liabilities
(Note 6)
|
146,927
|
|
|
152,160
|
|
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Other long-term liabilities
|
82,249
|
|
|
83,056
|
|
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Total liabilities
|
1,775,246
|
|
|
1,597,147
|
|
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Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding
|
—
|
|
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—
|
|
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Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 126,995 and 127,386 shares issued and outstanding at October 1, 2016 and April 2, 2016, respectively
|
5,413,742
|
|
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5,442,613
|
|
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Accumulated other comprehensive loss, net of tax
|
(3,730
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)
|
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(3,133
|
)
|
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Accumulated deficit
|
(433,636
|
)
|
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(439,808
|
)
|
||
Total stockholders’ equity
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4,976,376
|
|
|
4,999,672
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|
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Total liabilities and stockholders’ equity
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$
|
6,751,622
|
|
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$
|
6,596,819
|
|
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Three Months Ended
|
|
Six Months Ended
|
||||||||||||
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October 1, 2016
|
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October 3, 2015
|
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October 1, 2016
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October 3, 2015
|
||||||||
Revenue
|
$
|
864,698
|
|
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$
|
708,335
|
|
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$
|
1,563,235
|
|
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$
|
1,381,976
|
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Cost of goods sold
|
547,899
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423,487
|
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969,961
|
|
|
817,611
|
|
||||
Gross profit
|
316,799
|
|
|
284,848
|
|
|
593,274
|
|
|
564,365
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
126,078
|
|
|
118,293
|
|
|
243,215
|
|
|
235,503
|
|
||||
Marketing and selling
|
108,128
|
|
|
105,925
|
|
|
217,164
|
|
|
215,570
|
|
||||
General and administrative
|
30,455
|
|
|
29,069
|
|
|
65,014
|
|
|
65,152
|
|
||||
Other operating expense
|
6,745
|
|
|
13,522
|
|
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16,747
|
|
|
31,436
|
|
||||
Total operating expenses
|
271,406
|
|
|
266,809
|
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|
542,140
|
|
|
547,661
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|
||||
Income from operations
|
45,393
|
|
|
18,039
|
|
|
51,134
|
|
|
16,704
|
|
||||
Interest expense
(Note 5)
|
(15,554
|
)
|
|
(660
|
)
|
|
(30,741
|
)
|
|
(1,208
|
)
|
||||
Interest income
|
192
|
|
|
472
|
|
|
470
|
|
|
864
|
|
||||
Other (expense) income
|
(311
|
)
|
|
381
|
|
|
(811
|
)
|
|
4,500
|
|
||||
|
|
|
|
|
|
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|
||||||||
Income before income taxes
|
29,720
|
|
|
18,232
|
|
|
20,052
|
|
|
20,860
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax expense
(Note 6)
|
(17,873
|
)
|
|
(13,784
|
)
|
|
(13,880
|
)
|
|
(14,376
|
)
|
||||
Net income
|
$
|
11,847
|
|
|
$
|
4,448
|
|
|
$
|
6,172
|
|
|
$
|
6,484
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share
(Note 2):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.09
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
$
|
0.04
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock outstanding
(Note 2):
|
|
|
|
|
|
|
|
||||||||
Basic
|
127,546
|
|
|
146,053
|
|
|
127,543
|
|
|
147,627
|
|
||||
Diluted
|
132,329
|
|
|
150,783
|
|
|
132,461
|
|
|
152,562
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1, 2016
|
|
October 3, 2015
|
|
October 1, 2016
|
|
October 3, 2015
|
||||||||
Net income
|
$
|
11,847
|
|
|
$
|
4,448
|
|
|
$
|
6,172
|
|
|
$
|
6,484
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable securities, net of tax
|
1
|
|
|
(105
|
)
|
|
73
|
|
|
707
|
|
||||
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term-investment nature
|
353
|
|
|
(97
|
)
|
|
(758
|
)
|
|
25
|
|
||||
Reclassification adjustments, net of tax:
|
|
|
|
|
|
|
|
||||||||
Realized gain on marketable securities
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
(1,958
|
)
|
||||
Amortization of pension actuarial loss
|
57
|
|
|
34
|
|
|
88
|
|
|
69
|
|
||||
Other comprehensive income (loss)
|
411
|
|
|
(198
|
)
|
|
(597
|
)
|
|
(1,157
|
)
|
||||
Total comprehensive income
|
$
|
12,258
|
|
|
$
|
4,250
|
|
|
$
|
5,575
|
|
|
$
|
5,327
|
|
|
Six Months Ended
|
||||||
|
October 1, 2016
|
|
October 3, 2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
6,172
|
|
|
$
|
6,484
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
97,177
|
|
|
88,807
|
|
||
Amortization and other non-cash items
|
243,397
|
|
|
250,940
|
|
||
Excess tax benefit from exercises of stock options
|
(56
|
)
|
|
—
|
|
||
Deferred income taxes
|
(13,310
|
)
|
|
2,388
|
|
||
Foreign currency adjustments
|
1,128
|
|
|
427
|
|
||
Gain on investments and other assets, net
|
(165
|
)
|
|
(3,132
|
)
|
||
Stock-based compensation expense
|
56,636
|
|
|
83,900
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(170,920
|
)
|
|
(84,496
|
)
|
||
Inventories
|
(11,689
|
)
|
|
(51,803
|
)
|
||
Prepaid expenses and other current and non-current assets
|
(23,617
|
)
|
|
(5,469
|
)
|
||
Accounts payable and accrued liabilities
|
136,832
|
|
|
31,599
|
|
||
Income tax (recoverable) / payable
|
(13,205
|
)
|
|
(585
|
)
|
||
Other liabilities
|
1,007
|
|
|
(8,833
|
)
|
||
Net cash provided by operating activities
|
309,387
|
|
|
310,227
|
|
||
Investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(250,419
|
)
|
|
(169,686
|
)
|
||
Purchase of a business, net of cash acquired
(Note 4)
|
(118,173
|
)
|
|
—
|
|
||
Purchase of available-for-sale securities
|
(469
|
)
|
|
(150,104
|
)
|
||
Proceeds from maturities and sales of available-for-sale securities
|
186,793
|
|
|
370,067
|
|
||
Other investing activities
|
(4,710
|
)
|
|
(24,745
|
)
|
||
Net cash (used in) provided by investing activities
|
(186,978
|
)
|
|
25,532
|
|
||
Financing activities:
|
|
|
|
||||
Proceeds from debt issuances
|
—
|
|
|
125,000
|
|
||
Payment of debt
|
—
|
|
|
(50,000
|
)
|
||
Debt issuance costs
|
—
|
|
|
(1,339
|
)
|
||
Excess tax benefit from exercises of stock options
|
56
|
|
|
—
|
|
||
Proceeds from the issuance of common stock
|
27,077
|
|
|
29,708
|
|
||
Repurchase of common stock, including transaction costs
|
(91,400
|
)
|
|
(549,940
|
)
|
||
Tax withholding paid on behalf of employees for restricted stock units
|
(14,763
|
)
|
|
(19,430
|
)
|
||
Other financing activities
|
(3
|
)
|
|
83
|
|
||
Net cash used in financing activities
|
(79,033
|
)
|
|
(465,918
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(38
|
)
|
|
(58
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
43,338
|
|
|
(130,217
|
)
|
||
Cash and cash equivalents at the beginning of the period
|
425,881
|
|
|
299,814
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
469,219
|
|
|
$
|
169,597
|
|
Non-cash investing information:
|
|
|
|
||||
Capital expenditure adjustments included in liabilities
|
$
|
43,602
|
|
|
$
|
5,217
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1, 2016
|
|
October 3, 2015
|
|
October 1, 2016
|
|
October 3, 2015
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Numerator for basic and diluted net income per share — net income available to common stockholders
|
$
|
11,847
|
|
|
$
|
4,448
|
|
|
$
|
6,172
|
|
|
$
|
6,484
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic net income per share — weighted average shares
|
127,546
|
|
|
146,053
|
|
|
127,543
|
|
|
147,627
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock-based awards
|
4,783
|
|
|
4,730
|
|
|
4,918
|
|
|
4,935
|
|
||||
Denominator for diluted net income per share — adjusted weighted average shares and assumed conversions
|
132,329
|
|
|
150,783
|
|
|
132,461
|
|
|
152,562
|
|
||||
Basic net income per share
|
$
|
0.09
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
$
|
0.04
|
|
Diluted net income per share
|
$
|
0.09
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
$
|
0.04
|
|
|
October 1, 2016
|
|
April 2, 2016
|
||||
Raw materials
|
$
|
106,874
|
|
|
$
|
89,928
|
|
Work in process
|
222,695
|
|
|
228,626
|
|
||
Finished goods
|
107,566
|
|
|
108,997
|
|
||
Total inventories
|
$
|
437,135
|
|
|
$
|
427,551
|
|
|
Mobile Products
|
|
Infrastructure and Defense Products
|
|
Total
|
||||||
Balance as of April 2, 2016
|
$
|
1,751,503
|
|
|
$
|
384,194
|
|
|
$
|
2,135,697
|
|
Acquisition
|
—
|
|
|
39,221
|
|
|
39,221
|
|
|||
Balance at October 1, 2016
|
$
|
1,751,503
|
|
|
$
|
423,415
|
|
|
$
|
2,174,918
|
|
|
October 1, 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
|
|
|
11,357
|
|
|
12,446
|
|
|
11,021
|
|
||||
Customer relationships
|
1,272,725
|
|
|
516,943
|
|
|
1,267,103
|
|
|
377,357
|
|
||||
Developed technology
|
989,335
|
|
|
371,125
|
|
|
915,163
|
|
|
277,736
|
|
||||
Wafer supply agreement
|
20,443
|
|
|
20,443
|
|
|
20,443
|
|
|
20,443
|
|
||||
Trade names
|
29,353
|
|
|
16,989
|
|
|
29,000
|
|
|
12,083
|
|
||||
Backlog
|
65,000
|
|
|
65,000
|
|
|
65,000
|
|
|
65,000
|
|
||||
Non-compete agreement
|
1,026
|
|
|
213
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
2,658,228
|
|
|
$
|
1,002,070
|
|
|
$
|
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
|
|
|
October 1, 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
|
(11,375
|
)
|
|
(11,870
|
)
|
||
Total long-term debt
|
$
|
988,625
|
|
|
$
|
988,130
|
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
October 1, 2016
|
|
|
|
|
|
|
|
||||||||
Auction rate securities
|
$
|
2,150
|
|
|
$
|
—
|
|
|
$
|
(398
|
)
|
|
$
|
1,752
|
|
Money market funds
|
91,878
|
|
|
—
|
|
|
—
|
|
|
91,878
|
|
||||
|
$
|
94,028
|
|
|
$
|
—
|
|
|
$
|
(398
|
)
|
|
$
|
93,630
|
|
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
|
|
|
October 1, 2016
|
|
April 2, 2016
|
||||||||||||
|
Cost
|
|
Estimated
Fair Value
|
|
Cost
|
|
Estimated
Fair Value
|
||||||||
Due in less than one year
|
$
|
91,878
|
|
|
$
|
91,878
|
|
|
$
|
342,163
|
|
|
$
|
342,181
|
|
Due after ten years
|
2,150
|
|
|
1,752
|
|
|
2,150
|
|
|
1,800
|
|
||||
Total investments in debt securities
|
$
|
94,028
|
|
|
$
|
93,630
|
|
|
$
|
344,313
|
|
|
$
|
343,981
|
|
|
|
|
|
|
Total
|
|
Quoted Prices In
Active Markets For
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
||||||
October 1, 2016
|
|
|
|
|
|
||||||||||
|
Assets:
|
|
|
|
|
|
|||||||||
|
|
Available-for-sale securities
|
|
|
|
|
|
||||||||
|
|
|
|
Auction rate securities
(1)
|
$
|
1,752
|
|
|
$
|
—
|
|
|
$
|
1,752
|
|
|
|
|
|
Money market funds
|
91,878
|
|
|
91,878
|
|
|
—
|
|
|||
|
|
|
Total available-for-sale securities
|
93,630
|
|
|
91,878
|
|
|
1,752
|
|
||||
|
|
|
Invested funds in deferred compensation plan
(3)
|
7,858
|
|
|
7,858
|
|
|
—
|
|
||||
|
|
|
|
Total assets measured at fair value
|
$
|
101,488
|
|
|
$
|
99,736
|
|
|
$
|
1,752
|
|
|
Liabilities:
|
|
|
|
|
|
|||||||||
|
|
|
Deferred compensation plan obligation
(3)
|
7,858
|
|
|
7,858
|
|
|
—
|
|
||||
|
|
|
|
Total liabilities measured at fair value
|
$
|
7,858
|
|
|
$
|
7,858
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
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
|
|
Six Months Ended
|
||||||||||||
|
October 1,
2016 |
|
October 3,
2015 |
|
October 1,
2016 |
|
October 3,
2015 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
MP
|
$
|
706,138
|
|
|
$
|
578,160
|
|
|
$
|
1,253,215
|
|
|
$
|
1,129,047
|
|
IDP
|
157,590
|
|
|
129,205
|
|
|
308,080
|
|
|
250,989
|
|
||||
All other (1)
|
970
|
|
|
970
|
|
|
1,940
|
|
|
1,940
|
|
||||
Total revenue
|
$
|
864,698
|
|
|
$
|
708,335
|
|
|
$
|
1,563,235
|
|
|
$
|
1,381,976
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
||||||||
MP
|
$
|
164,397
|
|
|
$
|
171,974
|
|
|
$
|
297,374
|
|
|
$
|
345,717
|
|
IDP
|
32,416
|
|
|
22,850
|
|
|
67,067
|
|
|
36,922
|
|
||||
All other
|
(151,420
|
)
|
|
(176,785
|
)
|
|
(313,307
|
)
|
|
(365,935
|
)
|
||||
Income from operations
|
45,393
|
|
|
18,039
|
|
|
51,134
|
|
|
16,704
|
|
||||
Interest expense
|
(15,554
|
)
|
|
(660
|
)
|
|
(30,741
|
)
|
|
(1,208
|
)
|
||||
Interest income
|
192
|
|
|
472
|
|
|
470
|
|
|
864
|
|
||||
Other (expense) income
|
(311
|
)
|
|
381
|
|
|
(811
|
)
|
|
4,500
|
|
||||
Income before income taxes
|
$
|
29,720
|
|
|
$
|
18,232
|
|
|
$
|
20,052
|
|
|
$
|
20,860
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
October 1,
2016 |
|
October 3,
2015 |
|
October 1,
2016 |
|
October 3,
2015 |
||||||||
Reconciliation of “All other” category:
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
$
|
(26,042
|
)
|
|
$
|
(35,729
|
)
|
|
$
|
(56,636
|
)
|
|
$
|
(83,900
|
)
|
Amortization of intangible assets
|
(119,646
|
)
|
|
(128,028
|
)
|
|
(238,991
|
)
|
|
(251,230
|
)
|
||||
Acquisition and integration related costs
|
(8,962
|
)
|
|
(5,589
|
)
|
|
(15,722
|
)
|
|
(16,003
|
)
|
||||
Acquired inventory step-up and revaluation
|
(318
|
)
|
|
—
|
|
|
(1,517
|
)
|
|
—
|
|
||||
Restructuring and disposal costs
|
(468
|
)
|
|
(2,403
|
)
|
|
(882
|
)
|
|
(3,830
|
)
|
||||
IPR litigation settlement (costs)
|
5,100
|
|
|
(192
|
)
|
|
4,944
|
|
|
(340
|
)
|
||||
Start-up costs
|
(2,012
|
)
|
|
(3,496
|
)
|
|
(4,088
|
)
|
|
(7,206
|
)
|
||||
Other expenses (including gain (loss) on assets and other miscellaneous corporate overhead)
|
928
|
|
|
(1,348
|
)
|
|
(415
|
)
|
|
(3,426
|
)
|
||||
Loss from operations for “All other”
|
$
|
(151,420
|
)
|
|
$
|
(176,785
|
)
|
|
$
|
(313,307
|
)
|
|
$
|
(365,935
|
)
|
(i)
|
the 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 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
|
||||||||||||||||||
|
October 1, 2016
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
195,307
|
|
|
$
|
273,912
|
|
|
$
|
—
|
|
|
$
|
469,219
|
|
Accounts receivable, less allowance
|
—
|
|
|
52,707
|
|
|
439,934
|
|
|
(1,152
|
)
|
|
491,489
|
|
|||||
Intercompany accounts and notes receivable
|
—
|
|
|
636,122
|
|
|
71,542
|
|
|
(707,664
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
97,206
|
|
|
416,982
|
|
|
(77,053
|
)
|
|
437,135
|
|
|||||
Prepaid expenses
|
—
|
|
|
50,024
|
|
|
8,555
|
|
|
—
|
|
|
58,579
|
|
|||||
Other receivables
|
—
|
|
|
5,830
|
|
|
72,192
|
|
|
—
|
|
|
78,022
|
|
|||||
Other current assets
|
—
|
|
|
47,752
|
|
|
340
|
|
|
—
|
|
|
48,092
|
|
|||||
Total current assets
|
—
|
|
|
1,084,948
|
|
|
1,283,457
|
|
|
(785,869
|
)
|
|
1,582,536
|
|
|||||
Property and equipment, net
|
—
|
|
|
924,409
|
|
|
315,641
|
|
|
—
|
|
|
1,240,050
|
|
|||||
Goodwill
|
—
|
|
|
1,953,102
|
|
|
221,816
|
|
|
—
|
|
|
2,174,918
|
|
|||||
Intangible assets, net
|
—
|
|
|
696,062
|
|
|
960,096
|
|
|
—
|
|
|
1,656,158
|
|
|||||
Long-term investments
|
—
|
|
|
26,002
|
|
|
8,900
|
|
|
—
|
|
|
34,902
|
|
|||||
Long-term intercompany accounts and notes receivable
|
—
|
|
|
398,243
|
|
|
129,734
|
|
|
(527,977
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
6,144,541
|
|
|
1,664,717
|
|
|
—
|
|
|
(7,809,258
|
)
|
|
—
|
|
|||||
Other non-current assets
|
955
|
|
|
37,666
|
|
|
24,437
|
|
|
—
|
|
|
63,058
|
|
|||||
Total assets
|
$
|
6,145,496
|
|
|
$
|
6,785,149
|
|
|
$
|
2,944,081
|
|
|
$
|
(9,123,104
|
)
|
|
$
|
6,751,622
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
116,802
|
|
|
$
|
206,894
|
|
|
$
|
—
|
|
|
$
|
323,696
|
|
Intercompany accounts and notes payable
|
—
|
|
|
71,542
|
|
|
636,122
|
|
|
(707,664
|
)
|
|
—
|
|
|||||
Accrued liabilities
|
23,152
|
|
|
144,233
|
|
|
44,835
|
|
|
—
|
|
|
212,220
|
|
|||||
Other current liabilities
|
—
|
|
|
715
|
|
|
20,814
|
|
|
—
|
|
|
21,529
|
|
|||||
Total current liabilities
|
23,152
|
|
|
333,292
|
|
|
908,665
|
|
|
(707,664
|
)
|
|
557,445
|
|
|||||
Long-term debt
|
988,625
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
988,625
|
|
|||||
Deferred tax liabilities
|
(113,216
|
)
|
|
211,501
|
|
|
48,642
|
|
|
—
|
|
|
146,927
|
|
|||||
Long-term intercompany accounts and notes payable
|
270,559
|
|
|
129,734
|
|
|
127,684
|
|
|
(527,977
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
—
|
|
|
33,369
|
|
|
48,880
|
|
|
—
|
|
|
82,249
|
|
|||||
Total liabilities
|
1,169,120
|
|
|
707,896
|
|
|
1,133,871
|
|
|
(1,235,641
|
)
|
|
1,775,246
|
|
|||||
Total stockholders’ equity
|
4,976,376
|
|
|
6,077,253
|
|
|
1,810,210
|
|
|
(7,887,463
|
)
|
|
4,976,376
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
6,145,496
|
|
|
$
|
6,785,149
|
|
|
$
|
2,944,081
|
|
|
$
|
(9,123,104
|
)
|
|
$
|
6,751,622
|
|
|
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 Income (Loss)
|
||||||||||||||||||
|
Three Months Ended October 1, 2016
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
272,065
|
|
|
$
|
842,144
|
|
|
$
|
(249,511
|
)
|
|
$
|
864,698
|
|
Cost of goods sold
|
—
|
|
|
240,837
|
|
|
529,298
|
|
|
(222,236
|
)
|
|
547,899
|
|
|||||
Gross profit
|
—
|
|
|
31,228
|
|
|
312,846
|
|
|
(27,275
|
)
|
|
316,799
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
6,248
|
|
|
12,427
|
|
|
115,044
|
|
|
(7,641
|
)
|
|
126,078
|
|
|||||
Marketing and selling
|
1,796
|
|
|
33,251
|
|
|
84,910
|
|
|
(11,829
|
)
|
|
108,128
|
|
|||||
General and administrative
|
17,998
|
|
|
13,929
|
|
|
7,790
|
|
|
(9,262
|
)
|
|
30,455
|
|
|||||
Other operating expense
|
—
|
|
|
94
|
|
|
1,012
|
|
|
5,639
|
|
|
6,745
|
|
|||||
Total operating expenses
|
26,042
|
|
|
59,701
|
|
|
208,756
|
|
|
(23,093
|
)
|
|
271,406
|
|
|||||
Income (loss) from operations
|
(26,042
|
)
|
|
(28,473
|
)
|
|
104,090
|
|
|
(4,182
|
)
|
|
45,393
|
|
|||||
Interest expense
|
(15,167
|
)
|
|
(589
|
)
|
|
(1,741
|
)
|
|
1,943
|
|
|
(15,554
|
)
|
|||||
Interest income
|
—
|
|
|
1,510
|
|
|
624
|
|
|
(1,942
|
)
|
|
192
|
|
|||||
Other (expense) income
|
—
|
|
|
189
|
|
|
1,780
|
|
|
(2,280
|
)
|
|
(311
|
)
|
|||||
Income (loss) before income taxes
|
(41,209
|
)
|
|
(27,363
|
)
|
|
104,753
|
|
|
(6,461
|
)
|
|
29,720
|
|
|||||
Income tax (expense) benefit
|
9,581
|
|
|
(23,457
|
)
|
|
(3,997
|
)
|
|
—
|
|
|
(17,873
|
)
|
|||||
Income in subsidiaries
|
43,475
|
|
|
—
|
|
|
—
|
|
|
(43,475
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
11,847
|
|
|
$
|
(50,820
|
)
|
|
$
|
100,756
|
|
|
$
|
(49,936
|
)
|
|
$
|
11,847
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
$
|
12,258
|
|
|
$
|
(50,819
|
)
|
|
$
|
101,166
|
|
|
$
|
(50,347
|
)
|
|
$
|
12,258
|
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
|
||||||||||||||||||
|
Three Months Ended October 3, 2015
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
640,261
|
|
|
$
|
697,459
|
|
|
$
|
(629,385
|
)
|
|
$
|
708,335
|
|
Cost of goods sold
|
—
|
|
|
491,627
|
|
|
538,663
|
|
|
(606,803
|
)
|
|
423,487
|
|
|||||
Gross profit
|
—
|
|
|
148,634
|
|
|
158,796
|
|
|
(22,582
|
)
|
|
284,848
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
16,802
|
|
|
48,962
|
|
|
59,942
|
|
|
(7,413
|
)
|
|
118,293
|
|
|||||
Marketing and selling
|
14,949
|
|
|
28,155
|
|
|
66,751
|
|
|
(3,930
|
)
|
|
105,925
|
|
|||||
General and administrative
|
3,979
|
|
|
17,039
|
|
|
27,722
|
|
|
(19,671
|
)
|
|
29,069
|
|
|||||
Other operating expense
|
—
|
|
|
13,121
|
|
|
399
|
|
|
2
|
|
|
13,522
|
|
|||||
Total operating expenses
|
35,730
|
|
|
107,277
|
|
|
154,814
|
|
|
(31,012
|
)
|
|
266,809
|
|
|||||
Income (loss) from operations
|
(35,730
|
)
|
|
41,357
|
|
|
3,982
|
|
|
8,430
|
|
|
18,039
|
|
|||||
Interest expense
|
(579
|
)
|
|
(504
|
)
|
|
(596
|
)
|
|
1,019
|
|
|
(660
|
)
|
|||||
Interest income
|
—
|
|
|
625
|
|
|
705
|
|
|
(858
|
)
|
|
472
|
|
|||||
Other income (expense)
|
—
|
|
|
(1,515
|
)
|
|
(165
|
)
|
|
2,061
|
|
|
381
|
|
|||||
Income (loss) before income taxes
|
(36,309
|
)
|
|
39,963
|
|
|
3,926
|
|
|
10,652
|
|
|
18,232
|
|
|||||
Income tax (expense) benefit
|
9,566
|
|
|
(4,736
|
)
|
|
(18,614
|
)
|
|
—
|
|
|
(13,784
|
)
|
|||||
Income in subsidiaries
|
31,191
|
|
|
—
|
|
|
—
|
|
|
(31,191
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
4,448
|
|
|
$
|
35,227
|
|
|
$
|
(14,688
|
)
|
|
$
|
(20,539
|
)
|
|
$
|
4,448
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
$
|
4,250
|
|
|
$
|
35,093
|
|
|
$
|
(14,751
|
)
|
|
$
|
(20,342
|
)
|
|
$
|
4,250
|
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
|
||||||||||||||||||
|
Six Months Ended October 1, 2016
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
677,043
|
|
|
$
|
1,574,638
|
|
|
$
|
(688,446
|
)
|
|
$
|
1,563,235
|
|
Cost of goods sold
|
—
|
|
|
585,404
|
|
|
1,008,340
|
|
|
(623,783
|
)
|
|
969,961
|
|
|||||
Gross profit
|
—
|
|
|
91,639
|
|
|
566,298
|
|
|
(64,663
|
)
|
|
593,274
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
17,917
|
|
|
22,267
|
|
|
213,531
|
|
|
(10,500
|
)
|
|
243,215
|
|
|||||
Marketing and selling
|
7,854
|
|
|
58,785
|
|
|
171,522
|
|
|
(20,997
|
)
|
|
217,164
|
|
|||||
General and administrative
|
30,865
|
|
|
16,028
|
|
|
27,716
|
|
|
(9,595
|
)
|
|
65,014
|
|
|||||
Other operating expense
|
—
|
|
|
4,187
|
|
|
6,953
|
|
|
5,607
|
|
|
16,747
|
|
|||||
Total operating expenses
|
56,636
|
|
|
101,267
|
|
|
419,722
|
|
|
(35,485
|
)
|
|
542,140
|
|
|||||
Income (loss) from operations
|
(56,636
|
)
|
|
(9,628
|
)
|
|
146,576
|
|
|
(29,178
|
)
|
|
51,134
|
|
|||||
Interest expense
|
(29,935
|
)
|
|
(1,407
|
)
|
|
(3,319
|
)
|
|
3,920
|
|
|
(30,741
|
)
|
|||||
Interest income
|
—
|
|
|
2,992
|
|
|
1,191
|
|
|
(3,713
|
)
|
|
470
|
|
|||||
Other (expense) income
|
—
|
|
|
(132
|
)
|
|
835
|
|
|
(1,514
|
)
|
|
(811
|
)
|
|||||
Income (loss) before income taxes
|
(86,571
|
)
|
|
(8,175
|
)
|
|
145,283
|
|
|
(30,485
|
)
|
|
20,052
|
|
|||||
Income tax (expense) benefit
|
19,876
|
|
|
(50,544
|
)
|
|
16,788
|
|
|
—
|
|
|
(13,880
|
)
|
|||||
Income in subsidiaries
|
72,867
|
|
|
—
|
|
|
—
|
|
|
(72,867
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
6,172
|
|
|
$
|
(58,719
|
)
|
|
$
|
162,071
|
|
|
$
|
(103,352
|
)
|
|
$
|
6,172
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
$
|
5,575
|
|
|
$
|
(58,646
|
)
|
|
$
|
161,401
|
|
|
$
|
(102,755
|
)
|
|
$
|
5,575
|
|
|
Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
|
||||||||||||||||||
|
Six Months Ended October 3, 2015
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
1,366,023
|
|
|
$
|
1,264,287
|
|
|
$
|
(1,248,334
|
)
|
|
$
|
1,381,976
|
|
Cost of goods sold
|
—
|
|
|
1,039,150
|
|
|
1,002,603
|
|
|
(1,224,142
|
)
|
|
817,611
|
|
|||||
Gross profit
|
—
|
|
|
326,873
|
|
|
261,684
|
|
|
(24,192
|
)
|
|
564,365
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
38,275
|
|
|
92,632
|
|
|
119,953
|
|
|
(15,357
|
)
|
|
235,503
|
|
|||||
Marketing and selling
|
35,036
|
|
|
61,663
|
|
|
129,610
|
|
|
(10,739
|
)
|
|
215,570
|
|
|||||
General and administrative
|
10,589
|
|
|
39,595
|
|
|
36,901
|
|
|
(21,933
|
)
|
|
65,152
|
|
|||||
Other operating expense
|
—
|
|
|
28,549
|
|
|
2,885
|
|
|
2
|
|
|
31,436
|
|
|||||
Total operating expenses
|
83,900
|
|
|
222,439
|
|
|
289,349
|
|
|
(48,027
|
)
|
|
547,661
|
|
|||||
Income (loss) from operations
|
(83,900
|
)
|
|
104,434
|
|
|
(27,665
|
)
|
|
23,835
|
|
|
16,704
|
|
|||||
Interest expense
|
(579
|
)
|
|
(1,390
|
)
|
|
(1,155
|
)
|
|
1,916
|
|
|
(1,208
|
)
|
|||||
Interest income
|
—
|
|
|
1,147
|
|
|
1,312
|
|
|
(1,595
|
)
|
|
864
|
|
|||||
Other income (expense)
|
—
|
|
|
3,002
|
|
|
(404
|
)
|
|
1,902
|
|
|
4,500
|
|
|||||
Income (loss) before income taxes
|
(84,479
|
)
|
|
107,193
|
|
|
(27,912
|
)
|
|
26,058
|
|
|
20,860
|
|
|||||
Income tax (expense) benefit
|
25,649
|
|
|
(16,624
|
)
|
|
(23,401
|
)
|
|
—
|
|
|
(14,376
|
)
|
|||||
Income in subsidiaries
|
65,314
|
|
|
—
|
|
|
—
|
|
|
(65,314
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
6,484
|
|
|
$
|
90,569
|
|
|
$
|
(51,313
|
)
|
|
$
|
(39,256
|
)
|
|
$
|
6,484
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
$
|
5,327
|
|
|
$
|
89,318
|
|
|
$
|
(51,219
|
)
|
|
$
|
(38,099
|
)
|
|
$
|
5,327
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Six Months Ended October 1, 2016
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
79,030
|
|
|
$
|
(27,693
|
)
|
|
$
|
258,050
|
|
|
$
|
—
|
|
|
$
|
309,387
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property and equipment
|
—
|
|
|
(189,037
|
)
|
|
(61,382
|
)
|
|
—
|
|
|
(250,419
|
)
|
|||||
Purchase of a business
|
—
|
|
|
—
|
|
|
(118,173
|
)
|
|
—
|
|
|
(118,173
|
)
|
|||||
Purchase of available-for-sale securities
|
—
|
|
|
(469
|
)
|
|
—
|
|
|
—
|
|
|
(469
|
)
|
|||||
Proceeds from maturities and sales of available-for-sale securities
|
—
|
|
|
186,793
|
|
|
—
|
|
|
—
|
|
|
186,793
|
|
|||||
Other investing activities
|
—
|
|
|
4,190
|
|
|
(8,900
|
)
|
|
—
|
|
|
(4,710
|
)
|
|||||
Net cash (used in) provided by investing activities
|
—
|
|
|
1,477
|
|
|
(188,455
|
)
|
|
—
|
|
|
(186,978
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Excess tax benefit from exercises of stock options
|
56
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
Proceeds from the issuance of common stock
|
27,077
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,077
|
|
|||||
Repurchase of common stock, including transaction costs
|
(91,400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91,400
|
)
|
|||||
Tax withholding paid on behalf of employees for restricted stock units
|
(14,763
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,763
|
)
|
|||||
Other financing
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Net transactions with related parties
|
—
|
|
|
893
|
|
|
(893
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
(79,030
|
)
|
|
890
|
|
|
(893
|
)
|
|
—
|
|
|
(79,033
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
(38
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
(25,326
|
)
|
|
68,664
|
|
|
—
|
|
|
43,338
|
|
|||||
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
|
$
|
—
|
|
|
$
|
195,307
|
|
|
$
|
273,912
|
|
|
$
|
—
|
|
|
$
|
469,219
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Six Months Ended October 3, 2015
|
||||||||||||||||||
(in thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by operating activities
|
$
|
466,001
|
|
|
$
|
(110,207
|
)
|
|
$
|
(45,567
|
)
|
|
$
|
—
|
|
|
$
|
310,227
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property and equipment
|
—
|
|
|
(156,030
|
)
|
|
(13,656
|
)
|
|
—
|
|
|
(169,686
|
)
|
|||||
Purchase of available-for-sale securities
|
—
|
|
|
(150,104
|
)
|
|
—
|
|
|
—
|
|
|
(150,104
|
)
|
|||||
Proceeds from maturities and sales of available-for-sale securities
|
—
|
|
|
370,067
|
|
|
—
|
|
|
—
|
|
|
370,067
|
|
|||||
Other investing activities
|
—
|
|
|
(24,745
|
)
|
|
—
|
|
|
—
|
|
|
(24,745
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
39,188
|
|
|
(13,656
|
)
|
|
—
|
|
|
25,532
|
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from debt
|
125,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,000
|
|
|||||
Payment of debt
|
(50,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,000
|
)
|
|||||
Debt issuance costs
|
(1,339
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,339
|
)
|
|||||
Proceeds from the issuance of common stock
|
29,708
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,708
|
|
|||||
Repurchase of common stock, including transaction costs
|
(549,940
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(549,940
|
)
|
|||||
Tax withholding paid on behalf of employees for restricted stock units
|
(19,430
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,430
|
)
|
|||||
Other financing
|
—
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|||||
Net transactions with related parties
|
—
|
|
|
(709
|
)
|
|
709
|
|
|
—
|
|
|
—
|
|
|||||
Net cash (used in) provided by financing activities
|
(466,001
|
)
|
|
(626
|
)
|
|
709
|
|
|
—
|
|
|
(465,918
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(58
|
)
|
|
—
|
|
|
(58
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
(71,645
|
)
|
|
(58,572
|
)
|
|
—
|
|
|
(130,217
|
)
|
|||||
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
|
$
|
—
|
|
|
$
|
82,687
|
|
|
$
|
86,910
|
|
|
$
|
—
|
|
|
$
|
169,597
|
|
•
|
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;
|
•
|
our ability to efficiently and successfully operate our wafer fabrication facilities, assembly facilities and 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;
|
•
|
the impact of stringent environmental regulations;
|
•
|
the adverse impact of any future decision to repatriate non-U.S. earnings;
|
•
|
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
|
•
|
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, B.V. ("GreenPeak"), a leader in ultra-low power, short range RF communication technology. The acquisition expanded our offerings to include integrated RF solutions and SoCs for the connected home and the IoT.
|
•
|
Quarterly revenue
increased
22.1%
as compared to the
second
quarter of
fiscal 2016
, due to higher demand for our cellular RF solutions for smartphones, wireless infrastructure and WiFi products, as well as the addition of GreenPeak revenue.
|
•
|
Gross margin for the second quarter of fiscal 2017 was
36.6%
as compared to
40.2%
for the
second
quarter of
fiscal 2016
. Although year-over-year revenue
increased
substantially, gross margin was adversely impacted by several factors, including an unfavorable change in product mix towards lower margin products, average selling price erosion and unfavorable inventory adjustments primarily due to quality issues and lower than expected manufacturing and assembly yields on a high volume part.
|
•
|
Operating
income
was
$45.4 million
for the
second
quarter of
fiscal 2017
as compared to operating
income
of
$18.0 million
for the
second
quarter of
fiscal 2016
. This improvement was primarily due to increased gross profit, lower stock-based compensation expense and lower intangible asset amortization expense. These increases in operating income were partially offset by higher personnel expense primarily driven by increased manufacturing and research and development headcount.
|
•
|
Diluted earnings per share for the
second
quarter of
fiscal 2017
was
$0.09
as compared
$0.03
for the
second
quarter of
fiscal 2016
.
|
•
|
Cash flow from operations was
$250.0 million
for the
second
quarter of
fiscal 2017
as compared to
$168.8 million
for the
second
quarter of
fiscal 2016
. This year-over-year increase was primarily attributable to changes in working capital and higher profitability.
|
•
|
Capital expenditures were
$120.0 million
for the
second
quarter of
fiscal 2017
as compared to
$80.3 million
for the
second
quarter of
fiscal 2016
. This year-over-year increase was primarily related to projects for increasing premium filter capacity and projects for manufacturing cost savings initiatives.
|
•
|
During the
second
quarter of fiscal 2017, we recorded interest expense of
$17.3 million
(which was offset by
$2.4 million
of capitalized interest) on the
$1.0 billion
of senior notes that were issued in the third quarter of fiscal 2016.
|
•
|
During the second quarter of fiscal 2017, we repurchased approximately
1.6 million
shares of our common stock for approximately
$91.4 million
.
|
|
Three Months Ended
|
|||||||||||||||||||
|
October 1,
2016 |
|
% of
Revenue
|
|
October 3,
2015 |
|
% of
Revenue
|
|
Increase (Decrease)
|
|
Percentage
Change
|
|||||||||
Revenue
|
$
|
864,698
|
|
|
100.0
|
%
|
|
$
|
708,335
|
|
|
100.0
|
%
|
|
$
|
156,363
|
|
|
22.1
|
%
|
Cost of goods sold
|
547,899
|
|
|
63.4
|
|
|
423,487
|
|
|
59.8
|
|
|
124,412
|
|
|
29.4
|
|
|||
Gross profit
|
316,799
|
|
|
36.6
|
|
|
284,848
|
|
|
40.2
|
|
|
31,951
|
|
|
11.2
|
|
|||
Research and development
|
126,078
|
|
|
14.6
|
|
|
118,293
|
|
|
16.7
|
|
|
7,785
|
|
|
6.6
|
|
|||
Marketing and selling
|
108,128
|
|
|
12.5
|
|
|
105,925
|
|
|
15.0
|
|
|
2,203
|
|
|
2.1
|
|
|||
General and administrative
|
30,455
|
|
|
3.5
|
|
|
29,069
|
|
|
4.1
|
|
|
1,386
|
|
|
4.8
|
|
|||
Other operating expense
|
6,745
|
|
|
0.8
|
|
|
13,522
|
|
|
1.9
|
|
|
(6,777
|
)
|
|
(50.1
|
)
|
|||
Operating income
|
$
|
45,393
|
|
|
5.2
|
%
|
|
$
|
18,039
|
|
|
2.5
|
%
|
|
27,354
|
|
|
151.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Six Months Ended
|
|||||||||||||||||||
|
October 1, 2016
|
|
% of Revenue
|
|
October 3, 2015
|
|
% of Revenue
|
|
Increase (Decrease)
|
|
Percentage Change
|
|||||||||
Revenue
|
$
|
1,563,235
|
|
|
100.0
|
%
|
|
$
|
1,381,976
|
|
|
100.0
|
%
|
|
$
|
181,259
|
|
|
13.1
|
%
|
Cost of goods sold
|
969,961
|
|
|
62.0
|
|
|
817,611
|
|
|
59.2
|
|
|
152,350
|
|
|
18.6
|
|
|||
Gross profit
|
593,274
|
|
|
38.0
|
|
|
564,365
|
|
|
40.8
|
|
|
28,909
|
|
|
5.1
|
|
|||
Research and development
|
243,215
|
|
|
15.6
|
|
|
235,503
|
|
|
17.0
|
|
|
7,712
|
|
|
3.3
|
|
|||
Marketing and selling
|
217,164
|
|
|
13.9
|
|
|
215,570
|
|
|
15.6
|
|
|
1,594
|
|
|
0.7
|
|
|||
General and administrative
|
65,014
|
|
|
4.1
|
|
|
65,152
|
|
|
4.7
|
|
|
(138
|
)
|
|
(0.2
|
)
|
|||
Other operating expense
|
16,747
|
|
|
1.1
|
|
|
31,436
|
|
|
2.3
|
|
|
(14,689
|
)
|
|
(46.7
|
)
|
|||
Operating income
|
$
|
51,134
|
|
|
3.3
|
%
|
|
$
|
16,704
|
|
|
1.2
|
%
|
|
34,430
|
|
|
206.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
(In thousands, except percentages)
|
|
October 1,
2016 |
|
October 3,
2015 |
|
Increase (Decrease)
|
|
Percentage
Change
|
|||||||
Revenue
|
|
$
|
706,138
|
|
|
$
|
578,160
|
|
|
$
|
127,978
|
|
|
22.1
|
%
|
Operating income
|
|
164,397
|
|
|
171,974
|
|
|
(7,577
|
)
|
|
(4.4
|
)
|
|||
Operating income as a % of revenue
|
|
23.3
|
%
|
|
29.7
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
Six Months Ended
|
|||||||||||||
(In thousands, except percentages)
|
|
October 1,
2016 |
|
October 3,
2015 |
|
Increase (Decrease)
|
|
Percentage
Change
|
|||||||
Revenue
|
|
$
|
1,253,215
|
|
|
$
|
1,129,047
|
|
|
$
|
124,168
|
|
|
11.0
|
%
|
Operating income
|
|
297,374
|
|
|
345,717
|
|
|
(48,343
|
)
|
|
(14.0
|
)
|
|||
Operating income as a % of revenue
|
|
23.7
|
%
|
|
30.6
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
(In thousands, except percentages)
|
|
October 1,
2016 |
|
October 3,
2015 |
|
Increase
|
|
Percentage
Change
|
|||||||
Revenue
|
|
$
|
157,590
|
|
|
$
|
129,205
|
|
|
$
|
28,385
|
|
|
22.0
|
%
|
Operating income
|
|
32,416
|
|
|
22,850
|
|
|
9,566
|
|
|
41.9
|
|
|||
Operating income as a % of revenue
|
|
20.6
|
%
|
|
17.7
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
Six Months Ended
|
|||||||||||||
(In thousands, except percentages)
|
|
October 1,
2016 |
|
October 3,
2015 |
|
Increase
|
|
Percentage
Change |
|||||||
Revenue
|
|
$
|
308,080
|
|
|
$
|
250,989
|
|
|
$
|
57,091
|
|
|
22.7
|
%
|
Operating income
|
|
67,067
|
|
|
36,922
|
|
|
30,145
|
|
|
81.6
|
|
|||
Operating income as a % of revenue
|
|
21.8
|
%
|
|
14.7
|
%
|
|
|
|
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
(In thousands)
|
|
October 1,
2016 |
|
October 3,
2015 |
October 1,
2016 |
|
October 3,
2015 |
||||||||
Interest expense
|
|
$
|
(15,554
|
)
|
|
$
|
(660
|
)
|
$
|
(30,741
|
)
|
|
$
|
(1,208
|
)
|
Interest income
|
|
192
|
|
|
472
|
|
470
|
|
|
864
|
|
||||
Other (expense) income
|
|
(311
|
)
|
|
381
|
|
(811
|
)
|
|
4,500
|
|
||||
Income tax expense
|
|
(17,873
|
)
|
|
(13,784
|
)
|
(13,880
|
)
|
|
(14,376
|
)
|
•
|
We have implemented a single income tax provision model in conjunction with completing our move to a single integrated ERP system.
|
•
|
We have filled three open positions within the tax department. We will continue to evaluate the structure of our tax organization and add resources as needed.
|
•
|
With the assistance of a qualified outside party, we have undergone a review and assessment of our internal controls over accounting for income taxes and the tax provision process. Based on that review and assessment, we are in process of redesigning and enhancing our procedures to improve the effectiveness of the internal controls related to accounting for income taxes.
|
Period
|
|
Total number of shares purchased
(in thousands)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
(in thousands)
|
|
Approximate dollar value of shares that may yet be purchased under the plans or programs
|
||||
July 3, 2016 through July 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$ 250.0 million
|
|
July 31, 2016 through August 27, 3016
|
|
1,077
|
|
|
$
|
55.13
|
|
|
1,077
|
|
|
$ 190.6 million
|
August 28, 2016 through October 1, 2016
|
|
560
|
|
|
57.19
|
|
|
560
|
|
|
$ 158.6 million
|
|
Total
|
|
1,637
|
|
|
$
|
55.82
|
|
|
1,637
|
|
|
$ 158.6 million
|
10.1
|
|
Qorvo, Inc. Cash Bonus Plan (As Amended and Restated Through June 9, 2016) *
|
|
|
|
10.2
|
|
Severance Agreement and Release of All Claims between Steven J. Buhaly and Qorvo US, Inc. *
|
|
|
|
10.3
|
|
Consulting Agreement by and between Qorvo US, Inc. and Steven J. Buhaly *
|
|
|
|
10.4
|
|
Qorvo, Inc. Director Compensation Program, effective August 3, 2016 *
|
|
|
|
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 October 1, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of October 1, 2016 and April 2, 2016; (ii) the Condensed Consolidated Statements of Income for the three and six months ended October 1, 2016 and October 3, 2015; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended October 1, 2016 and October 3, 2015; (iv) the Condensed Consolidated Statements of Cash Flows for the six months ended October 1, 2016 and October 3, 2015; and (v) the Notes to Condensed Consolidated Financial Statements
|
|
|
|
Qorvo, Inc.
|
|
|
|
|
Date:
|
November 7, 2016
|
|
/s/ Mark J. Murphy
|
|
|
|
Mark J. Murphy
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Qorvo, Inc. Cash Bonus Plan (As Amended and Restated Through June 9, 2016) *
|
|
|
|
10.2
|
|
Severance Agreement and Release of All Claims between Steven J. Buhaly and Qorvo US, Inc. *
|
|
|
|
10.3
|
|
Consulting Agreement by and between Qorvo US, Inc. and Steven J. Buhaly *
|
|
|
|
10.4
|
|
Qorvo, Inc. Director Compensation Program, effective August 3, 2016 *
|
|
|
|
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 October 1, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of October 1, 2016 and April 2, 2016; (ii) the Condensed Consolidated Statements of Income for the three and six months ended October 1, 2016 and October 3, 2015; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended October 1, 2016 and October 3, 2015; (iv) the Condensed Consolidated Statements of Cash Flows for the six months ended October 1, 2016 and October 3, 2015; and (v) the Notes to Condensed Consolidated Financial Statements
|
1.
|
Purpose; Plan Background
|
2.
|
Plan Administration
|
3.
|
Eligibility
|
4.
|
Nature of Awards
|
5.
|
Awards
|
6.
|
Termination of Employment and Other Events; Covenants
|
7.
|
Change of Control
|
8.
|
No Right to Employment
|
9.
|
Amendment and Termination
|
10.
|
Effective Date
|
11.
|
Miscellaneous
|
1.
|
Parties.
|
(a)
|
As used in this Agreement, “Employee” shall mean Steven J. Buhaly and any spouse, heirs, executors, representatives, administrators, agents, attorneys and assigns, and any other person or entity acting with or on behalf of Steven J. Buhaly, and any other person claiming by, through or under Steven J. Buhaly.
|
(b)
|
As used in this Agreement, “Employer” shall mean Qorvo, its parent corporation Qorvo, Inc., and any of their respective subsidiaries, affiliated entities, successors and assigns.
|
(c)
|
As used in this Agreement, “Parties” shall mean Employee and Employer.
|
2.
|
Termination of Employment and Policy Payments
.
|
(a)
|
Employee’s final termination date with Employer is July 30, 2016 (the “Termination Date”).
|
(b)
|
Employee will be paid a lump sum cash amount, payable no later than the next scheduled payroll period following the Termination Date, equal to the sum of (i) any accrued but unpaid base salary through the Termination Date, plus (ii) any accrued but unpaid paid time off (PTO) and vacation pay (collectively, the “Cash Payment”). This lump sum Cash Payment, which we calculate to be a gross total of $46,092.62, will be subject to reduction to the extent you take PTO prior to your Termination Date and to applicable tax withholdings.
|
(c)
|
As consideration for this Agreement and for the Policy, the severance payments, the COBRA payments, and the acceleration of options and restricted stock awards set out in Section 4 of the Policy shall occur in accordance with the terms of the Policy and in accordance with the following additional terms:
|
1.
|
The Change of Control Effective Date under both this Agreement and the Policy shall be January 1, 2015.
|
2.
|
The base salary to be paid to Employee pursuant to Section 4(a)(i) of the Policy in twenty-six (26) equal payments shall be $16,355.78 per two week pay period, with the first payment to be made on the first payroll date after the “Release Effective Date” (as defined in the Policy), and the total amount of the twenty-six (26) payments over twelve (12) months will be $425,250.18.
|
3.
|
The additional cash severance payment to be paid to Employee pursuant to Section 4(a)(ii) of the Policy shall be a total payment of $340,200.14 to be paid in twenty-six (26) equal installments of $13,084.62, with the first payment to be made on the first payroll date after the Release Effective Date.
|
4.
|
Employee’s medical and dental coverage under Employer’s group health plans
(United Healthcare, Delta Dental/Moda Health, Tufts, Assurant, Kaiser NW, and Kaiser CA, as applicable)
will continue until July 31, 2016. Under a federal law known as COBRA, effective as of August 1, 2016, Employee and his covered dependents will be entitled to elect to continue medical and dental coverage for up to eighteen months (the “COBRA Period”). COBRA is administered through Discovery Benefits, which will mail enrollment forms and instructions to Employee’s home address following the Termination Date. To elect COBRA coverage, Employee must complete, sign and mail the application form to Discovery Benefits within 60 days of the Termination Date. Employee’s medical and dental insurance providers will be notified and Employee’s coverage will be reinstated retroactively to the group health plan termination date upon their receipt of your enrollment election and first payment. Enclosed is a COBRA rate sheet for medical and dental benefits. To the extent the Employee timely elects COBRA continuation coverage under the Employer’s group health plans, as set forth in Section 4(b) of the Policy the Employer will reimburse the Employee for the premiums paid by the Employee to continue Employee’s current coverage (which is Employee plus spouse) for the period specified in Section 4(b) of the Policy. The current rate of reimbursement is $549.39 per each bi-weekly pay period. Such reimbursement will commence following the commencement of Employee’s COBRA coverage and will be made as specified in Section 4(b) of the Policy.
|
5.
|
All stock options granted by TriQuint Semiconductor, Inc. prior to the Change of Control Effective Date shall accelerate and vest and become exercisable in full as of Release Effective Date. Employee may exercise any such vested options until the original expiration date applicable to the options. Outstanding vested options must be exercised through Employee’s Fidelity account. Employee may elect to do a same day sale, sell to cover, or exercise and hold. If Employee wants to exercise and hold the shares, Employee must deposit funds ahead of time into Employee’s Fidelity account to cover the cost of the exercise. If the option is a non-qualified stock option, Employee will also need to pay tax at the time of exercise.
|
6.
|
All unvested restricted stock unit awards granted to Employee by TriQuint Semiconductor, Inc. prior to the Change of Control Effective Date will accelerate and vest in full as of the Release Effective Date. These shares will be net settled for payment of applicable taxes.
|
•
|
Flexible Spending Account (FSA)
. Employee can submit claims for FSA-eligible expenses incurred through the Termination Date. Claims must be submitted within 90 days from the Termination Date. Healthcare FSAs may be continued through COBRA on a post-tax basis. Dependent Care Accounts are not eligible for continuation upon termination of employment. If Employee is enrolled in a Healthcare FSA, the COBRA notification will be mailed directly to Employee from Discovery Benefits. If Employee wants to accept coverage, Employee must complete, sign and mail the application form to Discovery Benefits within 60 days of the Termination Date.
|
•
|
401(k) Plan
. Assuming it exceeds $5,000, Employee’s account balance in Qorvo’s 401(k) Plan may remain in such Plan or be transferred to another qualified plan or IRA at Employee’s election. To transfer your account balance to another qualified plan or IRA or to obtain a distribution from the account, you should visit Fidelity’s website at www.401k.com or call the Fidelity Retirement Benefits Line at 1-800-890-4015. Outstanding loans against Employee’s 401(k) Plan balance must be repaid within 30 days of the Termination Date.
|
•
|
Group Life Insurance and Accidental Death & Dismemberment (AD&D)
. Employee’s Life and Accidental Death and Dismemberment coverage ends on the Termination Date. However, Employee has the option to purchase a portable Term Life policy. Employee is eligible to port the coverage in force at the time employment terminates, including Basic Life, AD&D, Additional Life, and Dependent Life. Employee must apply for portability within 31 days of the Termination Date. If Employee is interested in porting Employee’s Life Insurance coverage, please call The Standard’s Continued Benefits department at: 800-378-4668 or email: cbt@standard.com.
|
•
|
Voluntary Accident, Critical Illness and Hospital Indemnity Insurance
. If Employee is enrolled in Voluntary Accident, Critical Illness and/or Hospital Indemnity Insurance, Employee’s coverage ends on the Termination Date. Unum will send Employee instructions regarding the process for continuation of
|
•
|
Disability Insurance
. Employer-paid short-term and long-term disability insurance coverage ceases effective midnight on the Termination Date. This benefit cannot be converted to an individual plan.
|
•
|
Employee Stock Purchase Plan
. Eligibility for participation in Qorvo’s Employee Stock Purchase Plan ceases effective as of the Termination Date. Qorvo will reimburse payroll deductions credited to your account during the current purchase period no later than the next scheduled payroll period following the Termination Date.
|
•
|
Consulting Agreement
. Qorvo and Employee agree that they will enter into the Consulting Agreement in substantially the form of Exhibit B hereto as of the Termination Date (the “Consulting Agreement”).
|
(a)
|
This Agreement has been written in a manner that is calculated to be understood, and is understood, by Employee.
|
(b)
|
The release provisions of this Agreement apply to any rights Employee may have under the ADEA.
|
(c)
|
The release provisions of this Agreement do not apply to any rights or claims Employee may have under the ADEA that arise after the date that this Agreement is executed.
|
(d)
|
The Employer hereby advises Employee to consult with an attorney prior to executing this Agreement.
|
(e)
|
The Employer is giving Employee a period of forty-five (45) days to consider this Agreement. Employee may accept and sign this Agreement before the expiration of the forty-five (45) day time-period, but is not required to do so by the Employer.
|
(f)
|
For a period of seven (7) days following the signing of this Agreement, Employee may revoke the waiver of ADEA claims made in this Agreement by sending written notice of any such revocation to the Employer. This Agreement shall become effective on the eighth day after Employee signs it, if it has not been revoked during the revocation period.
|
Steven J. Buhaly
|
|
QORVO US, INC.
|
|||
/s/ Steven J. Buhaly
|
|
By:
|
|
/s/ Jeffrey C. Howland
|
|
Signature
|
|
Its:
|
|
Vice President
|
|
Dated:
|
July 29, 2016
|
|
Dated:
|
|
July 29, 2016
|
July 29, 2016
|
/s/ Steven J. Buhaly
|
1.
|
SERVICES AND COMPENSATION
|
2.
|
INTELLECTUAL PROPERTY
|
9.
|
ASSIGNMENT
|
10.
|
NOTICES
|
11.
|
GOVERNING LAW
|
12.
|
ENTIRE AGREEMENT
|
13.
|
WAIVER
|
14.
|
SEVERABILITY
|
15.
|
AMENDMENT
|
16.
|
CAPTIONS
|
17.
|
NO THIRD-PARTY BENEFICIARIES
|
18.
|
COUNTERPARTS
|
CONSULTANT
|
|
QORVO US, INC
|
|
|
|
|
|
|
|
/s/ Steven J. Buhaly
|
|
By: /s/ Jeffrey C. Howland
|
|
|
Steven J. Buhaly
|
|
Name: Vice President
|
|
|
|
|
Title: July 29, 2016
|
|
|
|
|
|
|
|
•
|
Annual cash retainer of $80,000 payable quarterly in arrears;
|
•
|
Additional annual retainer of $68,000 for the Non-Employee Chairman;
|
•
|
Additional annual retainer of $20,000 for the Lead Director;
|
•
|
Additional annual retainer for Committee Chairs:
|
o
|
$20,000 for the Audit Committee Chair;
|
o
|
$20,000 for the Compensation Committee Chair;
|
o
|
$10,000 for the Governance and Nominating Committee Chair; and
|
o
|
$10,000 for the Corporate Development Committee Chair.
|
•
|
Annual restricted stock unit award, representing shares of Company common stock valued at $190,000.
|
|
|
|
/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
October 1, 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
|
|
|
|
|
|
November 7, 2016
|
|
(1)
|
the
Quarterly
Report on Form
10-Q
of the Company for the fiscal
quarter
ended
October 1, 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
|
|
|
|
|
|
November 7, 2016
|
|