MACOM Technology Solutions Holdings, Inc. (MTSI) saw its loss narrow to $0.96 million, or $0.02 a share for the quarter ended Dec. 30, 2016. In the previous year period, the company reported a loss of $15.57 million, or $0.29 a share. On the other hand, adjusted net income for the quarter stood at $31.84 million, or $0.57 a share compared with $21.83 million or $0.40 a share, a year ago.
Revenue during the quarter surged 31.08 percent to $151.75 million from $115.77 million in the previous year period. Gross margin for the quarter contracted 37 basis points over the previous year period to 51.73 percent. Total expenses were 93.06 percent of quarterly revenues, down from 99.87 percent for the same period last year. This has led to an improvement of 681 basis points in operating margin to 6.94 percent.
Operating income for the quarter was $10.54 million, compared with $0.15 million in the previous year period.
However, the adjusted operating income for the quarter stood at $40.96 million compared to $27.68 million in the prior year period. At the same time, adjusted operating margin improved 308 basis points in the quarter to 26.99 percent from 23.91 percent in the last year period.
John Croteau, MACOM's President and Chief Executive Officer, stated, "Top line revenue for the quarter was effectively flat sequentially due to expected seasonality across our businesses. Networks and Multi-market were up year on year 31% and 48%, respectively. Aerospace and Defense grew sequentially due to strength in MMICs, and was up 20% year on year."
For the second-quarter, MACOM Technology Solutions Holdings, Inc. expects revenue to be in the range of $180 million to $186 million. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.59 to $0.63.
Operating cash flow improves significantly
MACOM Technology Solutions Holdings, Inc. has generated cash of $20.41 million from operating activities during the quarter, up 31.54 percent or $4.89 million, when compared with the last year period.
The company has spent $4.04 million cash to meet investing activities during the quarter as against cash outgo of $82.68 million in the last year period.
Cash flow from financing activities was $5.01 million for the quarter as against cash outgo of $7.13 million in the last year period.
Cash and cash equivalents stood at $353.92 million as on Dec. 30, 2016, up 640.29 percent or $306.11 million from $47.81 million on Jan. 01, 2016.
Working capital increases sharply
MACOM Technology Solutions Holdings, Inc. has recorded an increase in the working capital over the last year. It stood at $554.71 million as at Dec. 30, 2016, up 123.10 percent or $306.08 million from $248.64 million on Jan. 01, 2016. Current ratio was at 7.37 as on Dec. 30, 2016, up from 4.08 on Jan. 01, 2016.
Days sales outstanding went down to 65 days for the quarter compared with 69 days for the same period last year.
Days inventory outstanding has decreased to 72 days for the quarter compared with 148 days for the previous year period.
Debt increases substantially
MACOM Technology Solutions Holdings, Inc. has witnessed an increase in total debt over the last one year. It stood at $594.21 million as on Dec. 30, 2016, up 71.42 percent or $247.57 million from $346.64 million on Jan. 01, 2016. Total debt was 49.65 percent of total assets as on Dec. 30, 2016, compared with 38.58 percent on Jan. 01, 2016. Debt to equity ratio was at 1.28 as on Dec. 30, 2016, up from 0.83 as on Jan. 01, 2016. Interest coverage ratio improved to 1.43 for the quarter from 0.04 for the same period last year.
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