In deriving non-GAAP operating expenses from GAAP operating expenses, we exclude stock-based compensation charges and amortization of intangible assets. In deriving non-GAAP income (loss) from operations from GAAP income (loss) from operations, we exclude stock-based compensation charges and amortization of intangible assets. In deriving non-GAAP net income (loss) from GAAP net income (loss), we further exclude loss on extinguishment of debt and gain on the embedded derivative. Stock-based compensation charges, amortization of intangible assets, loss on extinguishment of debt, and gain on the embedded derivative represent charges that recur in amounts unrelated to the Company's operations.
The non-GAAP financial measures we provide have certain limitations because they do not reflect all of the costs associated with the operation of our business as determined in accordance with GAAP. Non-GAAP operating expenses, Non-GAAP income (loss) from operations and Non-GAAP net income (loss) are in addition to, and are not a substitute for or superior to, operating expenses, income (loss) from operations and net income (loss), which are prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. A detailed reconciliation of the non-GAAP measures to the most directly comparable GAAP measure is set forth below. Investors are encouraged to review these reconciliations to appropriately incorporate the non-GAAP measures and the limitations of these measures into their analyses. For complete information on stock-based compensation, amortization of intangible assets, loss on extinguishment of debt, and the change in the fair value of our embedded derivatives, please see our Form 10-Q for the quarterly period ended December 31, 2013 and Form 10-K for the year ended September 30, 2013.
VITESSE SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
December 31, September 30,
2013 2013
--------------- ---------------
(in thousands, except par value)
ASSETS
Current assets:
Cash $ 48,355 $ 68,863
Accounts receivable, net 11,406 9,807
Inventory, net 12,544 10,692
Prepaid expenses and other current
assets 2,946 1,897
--------------- ---------------
Total current assets 75,251 91,259
Property, plant and equipment, net 3,559 3,107
Other intangible assets, net 1,169 1,170
Other assets 3,372 3,425
--------------- ---------------
$ 83,351 $ 98,961
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,449 $ 7,436
Accrued expenses and other current
liabilities 11,422 12,245
Current portion of debt, net 31,694 -
Deferred revenue 2,728 2,215
--------------- ---------------
Total current liabilities 55,293 21,896
Other long-term liabilities 374 407
Long-term debt, net 16,163 16,366
Convertible subordinated debt, net - 44,384
--------------- ---------------
Total liabilities 71,830 83,053
--------------- ---------------
Stockholders' equity:
Preferred stock, $0.01 par value: 10,000
shares authorized; no shares issued or
outstanding - -
Common stock, $0.01 par value: 250,000
shares authorized; 57,829 and 57,545
shares outstanding at December 31, 2013
and September 30, 2013, respectively 578 575
Additional paid-in-capital 1,892,642 1,891,661
Accumulated deficit (1,881,699) (1,876,328)
--------------- ---------------
Total stockholders' equity 11,521 15,908
--------------- ---------------
$ 83,351 $ 98,961
=============== ===============
VITESSE SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended December 31,
--------------------------------
2013 2012
--------------- ---------------
(in thousands, except per share
data)
Net revenues:
Product revenues $ 24,863 $ 23,905
Intellectual property revenues 2,220 1,822
--------------- ---------------
Net revenues 27,083 25,727
--------------- ---------------
Costs and expenses:
Cost of product revenues 10,676 10,975
Engineering, research and development 10,679 10,504
Selling, general and administrative 7,854 7,970
Amortization of intangible assets 88 97
--------------- ---------------
Costs and expenses 29,297 29,546
--------------- ---------------
Loss from operations (2,214) (3,819)
Other expense (income) :
Interest expense, net 1,704 1,970
Gain on compound embedded derivative - (803)
Loss on extinguishment of debt 1,594 -
Other expense (income), net 61 (31)
--------------- ---------------
Other expense, net 3,359 1,136
--------------- ---------------
Loss before income tax (benefit) provision (5,573) (4,955)
Income tax provision (benefit) (202) 77
--------------- ---------------
Net loss $ (5,371) $ (5,032)
=============== ===============
Net loss per common share - basic and
diluted $ (0.09) $ (0.18)
Weighted average common shares outstanding
- basic and diluted 57,610 28,059
VITESSE SEMICONDUCTOR CORPORATION
UNAUDITED RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS
Three Months Ended
-------------------------------------
December December September
31, 2013 31, 2012 30, 2013
----------- ----------- -----------
(in thousands, except per share data)
UNAUDITED RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
GAAP net loss $ (5,371) $ (5,032) $ (5,765)
----------- ----------- -----------
Adjustments:
Stock-based compensation charges 1,265 1,143 1,091
Amortization of intangible assets 88 97 81
Gain on compound embedded derivative - (803) -
Loss on extinguishment of debt 1,594 - -
----------- ----------- -----------
Total GAAP to non-GAAP adjustments 2,947 437 1,172
----------- ----------- -----------
Non-GAAP net loss $ (2,424) $ (4,595) $ (4,593)
=========== =========== ===========
Net loss per common share - basic and
diluted:
GAAP net loss per common share $ (0.09) $ (0.18) $ (0.10)
Adjustments 0.05 0.02 0.02
----------- ----------- -----------
Non-GAAP net loss per common share $ (0.04) $ (0.16) $ (0.08)
=========== =========== ===========
UNAUDITED RECONCILIATION OF GAAP LOSS FROM OPERATIONS TO NON-GAAP LOSS FROM
OPERATIONS
GAAP loss from operations $ (2,214) $ (3,819) $ (3,492)
----------- ----------- -----------
Adjustments:
Stock-based compensation charges 1,265 1,143 1,091
Amortization of intangible assets 88 97 81
----------- ----------- -----------
Total GAAP to non-GAAP adjustments 1,353 1,240 1,172
----------- ----------- -----------
Non-GAAP loss from operations $ (861) $ (2,579) $ (2,320)
=========== =========== ===========
UNAUDITED RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING
EXPENSES
GAAP operating expenses:
Engineering, research and development $ 10,679 $ 10,504 $ 9,940
Selling, general and administrative 7,854 7,970 7,593
Amortization of intangible assets 88 97 81
----------- ----------- -----------
Total GAAP operating expenses 18,621 18,571 17,614
Adjustments:
Stock-based compensation charges 1,081 989 939
Amortization of intangible assets 88 97 81
----------- ----------- -----------
Total GAAP to non-GAAP adjustments 1,169 1,086 1,020
----------- ----------- -----------
Non-GAAP operating expenses $ 17,452 $ 17,485 $ 16,594
=========== =========== ===========
