“In the fourth quarter, our business performed well overall, highlighted by strong sequential revenue growth from our Infrastructure category. More specifically, in 2018, our wireless backhaul infrastructure business recorded nearly 50% growth. Our Connected Home business also delivered on the beginning of an anticipated recovery, which is now in its early stages. The Industrial and Multi-market business, as expected, was soft, which we believe reflects an overall industry slowdown. These results yielded GAAP net revenue of $87.6 million and net cash flows from operating activities of $24.2 million. These strong operating cash flows enabled us to pre-pay $15.0 million towards our outstanding term-loan debt, which further reduced our net leverage ratio to approximately 1.75 at the end of the fourth quarter,” commented Kishore Seendripu, Ph.D., Chairman and CEO.
“As we begin 2019, we are very excited about the positive early customer feedback regarding the new products launching this year which address the large communications Infrastructure market. Specifically, we have launched our 400G PAM4 DSP plus integrated driver and TIA system solution targeting high speed interconnect data center deployments in the second half of 2019 and our new wireless radio-transceiver targeting the 5G massive MIMO wireless opportunity, slated for sampling in the first half of 2019. These key infrastructure product launches combined with the aforementioned strength in our wireless backhaul business and the beginning of the recovery of our broadband business provide us confidence in our ability to realize our strong mid-term and long-term growth aspirations. Our technology leadership, along with our continued operating expense discipline, strongly position us to be able to navigate a turbulent market environment while supporting our long-term growth initiatives,” continued Dr. Seendripu.
First Quarter 2019 Business Outlook
The company expects revenue in the first quarter 2019 to be approximately $82 million to $87 million, and also estimates the following:
- GAAP gross margin of approximately 52.5% to 53.5%;
- Non-GAAP gross margin of approximately 63.0% to 64.0%;
- GAAP operating expenses of approximately $56.0 million to $56.5 million; and
- Non-GAAP operating expenses of approximately $36.0 million to $36.5 million.
Webcast and Conference Call
MaxLinear will host its fourth quarter financial results conference call today, February 5, 2019 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access this call, dial US toll free: 1-877-407-3109 / International: 1-201-493-6798. A live webcast of the conference call will be accessible from the investor relations section of the MaxLinear website at http://investors.maxlinear.com, and will be archived and available after the call at http://investors.maxlinear.com until February 19, 2019. A replay of the conference call will also be available until February 19, 2019 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13686233.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning our future financial performance (including our current guidance for first quarter 2019 revenue, gross margins, and operating expense and statements concerning expectations of potential developments in our target markets, including management’s views with respect to trends in our DOCSIS and Connected Home markets. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking statements are based on management’s current, preliminary expectations and are subject to various risks and uncertainties. Risks and uncertainties affecting our business and future operating results include, without limitation, intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; uncertainties concerning how end user markets for our products will develop, including in particular new markets we are entering but also existing markets such as cable; potential uncertainties arising from continued consolidation among cable television and satellite operators in our target markets and continued consolidation among competitors within the semiconductor industry generally; our ability to develop and introduce new and enhanced products on a timely basis and achieve market acceptance of those products, particularly as we seek to expand outside of our historic markets; potential decreases in average selling prices for our products; risks relating to intellectual property protection and the prevalence of intellectual property litigation in our industry; the impact on our financial condition of the indebtedness arising from the Exar transaction; our reliance on a limited number of third party manufacturers; and our lack of long-term supply contracts and dependence on limited sources of supply.
In addition to these risks and uncertainties, investors should review
the risks and uncertainties contained in our filings with the Securities
and Exchange Commission (SEC), including our Quarterly Report on Form
10-Q for the quarter ended September 30, 2018, and our Current Reports
on Form 8-K, as well as the information to be set forth under the
caption “Risk Factors” in MaxLinear’s Annual Report on Form 10-K for the
year ended December 31, 2018, which we expect to file shortly. All
forward-looking statements are based on the estimates, projections and
assumptions of management as of February 5, 2019, and MaxLinear is under
no obligation (and expressly disclaims any such obligation) to update or
revise any forward-looking statements whether as a result of new
information, future events, or otherwise.
