Year-over-year Quarterly Revenue Growth of 4
Percent
Design-Ins Totaling $2.2 Billion; Record
Design-Wins of more than $1 Billion
On Track to Meet 20 Percent Utilization Goal at
the Mohawk Valley Fab in Fourth Quarter of Fiscal 2024
Wolfspeed, Inc. (NYSE: WOLF) today announced its results for the
first quarter of fiscal 2024.
Quarterly Financial Highlights (Continuing operations only.
All comparisons are to the first quarter of fiscal 2023)
- Consolidated revenue of $197.4 million, compared to $189.4
million
- Mohawk Valley Fab contributed $4.0 million in revenue
- Device design-ins of $2.2 billion and quarterly record of over
$1 billion in device design-wins
- GAAP gross margin of 12.5%, compared to 35.7%
- Non-GAAP gross margin of 15.6%, compared to 38.8%
-
GAAP and non-GAAP gross margins for the first quarter of fiscal
2024 include the impact of $34.4 million of underutilization costs,
representing approximately 1,740 basis points of gross margin. See
"Start-up and Underutilization Costs" below for additional
information.
"We kicked off our fiscal year with a strong quarter in both
execution and market share. Not only have we continued to win in
the marketplace, as evidenced by our third highest quarter of
design-ins and a record quarter of design-wins, we have clear focus
on the ramp of our Mohawk Valley Fab," said Wolfspeed CEO, Gregg
Lowe. "At Mohawk Valley, we have an outstanding operations team in
place, Building 10 on our Durham campus is producing enough 200mm
wafers ahead of the needs of Mohawk Valley, and we already have
enough qualified product to satisfy our 20 percent utilization
goals."
Lowe continued, “We remain steadfast in our long-term vision for
the future of this industry. The market opportunity for silicon
carbide stands at $6 billion today, up from $400 million just five
years ago. This further validates our strategy to invest now to
capitalize on the immense opportunities at-hand, and the
significant opportunity in the future. We have amassed significant
materials expertise over the decades, which combined with the
capacity of our new materials factory in Siler City, will increase
our wafer production by 10x when fully operational, and creates
significant competitive advantages over our peers and new entrants.
We will be better positioned to support our customers’ needs going
forward and cater to a whole host of new applications for silicon
carbide technology. As the only pure-play silicon carbide company
in the market today, we believe that we are best positioned to
capitalize on a decades long tailwind that represents a $20 billion
addressable market by 2030."
As previously announced, on August 22, 2023, Wolfspeed entered
into a definitive agreement to sell its RF product line to MACOM
Technology Solutions Holdings, Inc. (MACOM) for approximately $75
million in cash, subject to a customary purchase price adjustment,
and 711,528 shares of MACOM common stock, valued at $50 million
based on the 30 trading day trailing average closing price for
MACOM’s common stock through August 21, 2023. Wolfspeed expects to
close the transaction by the end of calendar 2023.
Business Outlook:
For its second quarter of fiscal 2024, Wolfspeed targets revenue
from continuing operations in a range of $192 million to $222
million. GAAP net loss from continuing operations is targeted at
$131 million to $153 million, or $1.04 to $1.22 per diluted share.
Non-GAAP net loss from continuing operations is targeted to be in a
range of $71 million to $88 million, or $0.56 to $0.70 per diluted
share. Targeted non-GAAP net loss from continuing operations
excludes $60 million to $65 million of estimated expenses, net of
tax, primarily related to stock-based compensation expense,
amortization of discount and debt issuance costs, net of
capitalized interest, project, transformation and transaction costs
and loss on Wafer Supply Agreement.
Start-up and Underutilization Costs:
As part of expanding its production footprint to support
expected growth, Wolfspeed is incurring significant factory
start-up costs relating to facilities the Company is constructing
or expanding that have not yet started revenue generating
production. These factory start-up costs have been and will be
expensed as operating expenses in the statement of operations.
When a new facility begins revenue generating production, the
operating costs of that facility that were previously expensed as
start-up costs will instead be primarily reflected as part of the
cost of production within the cost of revenue, net line item in our
statement of operations. For example, the Mohawk Valley Fab began
revenue generating production at the end of fiscal 2023 and the
costs of operating this facility going forward will be primarily
reflected in cost of revenue, net in future periods.
During the period when production begins, but before the
facility is at its expected utilization level, Wolfspeed expects
some of the costs to operate the facility will not be absorbed into
the cost of inventory. The costs incurred to operate the facility
in excess of the costs absorbed into inventory are referred to as
underutilization costs and are expensed as incurred to cost of
revenue, net. These costs are expected to be substantial as
Wolfspeed ramps up the facility to the expected utilization
level.
Wolfspeed incurred $8.4 million of factory start-up costs and
$34.4 million of underutilization costs in the first quarter of
fiscal 2024. No underutilization costs were incurred in the first
quarter of fiscal 2023.
For the second quarter of fiscal 2024, operating expenses are
expected to include approximately $11 million of factory start-up
costs primarily in connection with materials expansion efforts.
Cost of revenue, net, is expected to include approximately $35
million of underutilization costs primarily in connection with the
Mohawk Valley Fab.
Quarterly Conference Call:
Wolfspeed will host a conference call at 5:00 p.m. Eastern time
today to review the highlights of its first quarter results and its
fiscal second quarter 2024 business outlook, including significant
factors and assumptions underlying the targets noted above.
The conference call will be available to the public through a
live audio web broadcast via the Internet. For webcast details,
visit Wolfspeed's website at investor.wolfspeed.com/events.cfm.
Supplemental financial information, including the non-GAAP
reconciliation attached to this press release, is available on
Wolfspeed's website at investor.wolfspeed.com/results.cfm.
About Wolfspeed, Inc.
Wolfspeed (NYSE: WOLF) leads the market in the worldwide
adoption of silicon carbide and gallium nitride (GaN) technologies.
We provide industry-leading solutions for efficient energy
consumption and a sustainable future. Wolfspeed’s product families
include silicon carbide and GaN materials, power devices and RF
devices targeted for various applications such as electric
vehicles, fast charging, 5G, renewable energy and storage, and
aerospace and defense. We unleash the power of possibilities
through hard work, collaboration and a passion for innovation.
Learn more at www.wolfspeed.com.
Non-GAAP Financial Measures:
This press release highlights the Company's financial results on
both a GAAP and a non-GAAP basis. The GAAP results include certain
costs, charges and expenses that are excluded from non-GAAP
results. By publishing the non-GAAP measures, management intends to
provide investors with additional information to further analyze
the Company's performance, core results and underlying trends.
Wolfspeed's management evaluates results and makes operating
decisions using both GAAP and non-GAAP measures included in this
press release. Non-GAAP results are not prepared in accordance with
GAAP and non-GAAP information should be considered a supplement to,
and not a substitute for, financial statements prepared in
accordance with GAAP. Investors and potential investors are
encouraged to review the reconciliation of non-GAAP financial
measures to their most directly comparable GAAP measures attached
to this press release.
Beginning with the fourth quarter of fiscal 2023, the Company no
longer excludes start-up expenses from its non-GAAP measures and
will not exclude underutilization from its future non-GAAP
measures. Prior period non-GAAP measures have been updated in this
press release to reflect the current presentation of the Company's
non-GAAP measures. As a result of this change, previously published
non-GAAP financial measures for the Company for prior periods which
exclude start-up expenses are not directly comparable to the
non-GAAP measures included herein.
Forward-Looking Statements:
The schedules attached to this release are an integral part of
the release. This press release contains forward-looking statements
involving risks and uncertainties, both known and unknown, that may
cause Wolfspeed’s actual results to differ materially from those
indicated in the forward-looking statements. Forward-looking
statements by their nature address matters that are, to different
degrees, uncertain, such as statements about our plans to grow the
business, our ability to achieve our targets for the second quarter
of fiscal 2024 and periods beyond, our ability to meet targeted
utilization rates at the Mohawk Valley Fab, and our market growth.
Actual results could differ materially due to a number of factors,
including but not limited to, ongoing uncertainty in global
economic and geopolitical conditions, such as the ongoing military
conflict between Russia and Ukraine and the recent conflict between
Hamas and Israel, infrastructure development or customer or
industrial demand that could negatively affect product demand,
including as a result of an economic slowdown or recession,
collectability of receivables and other related matters as
consumers and businesses may defer purchases or payments, or
default on payments; risks associated with our expansion plans,
including design and construction delays and cost overruns, timing
and amount of government incentives actually received, issues in
installing and qualifying new equipment and ramping production,
poor production process yields and quality control, and potential
increases to our restructuring costs; the risk that we do not meet
our production commitments to those customers who provide us with
capacity reservation deposits or similar payments; the risk that we
may experience production difficulties that preclude us from
shipping sufficient quantities to meet customer orders or that
result in higher production costs, lower yields and lower margins;
our ability to lower costs; the risk that our results will suffer
if we are unable to balance fluctuations in customer demand and
capacity, including bringing on additional capacity on a timely
basis to meet customer demand; the risk that longer manufacturing
lead times may cause customers to fulfill their orders with a
competitor's products instead; product mix; risks associated with
the ramp-up of production of our new products, and our entry into
new business channels different from those in which we have
historically operated; our ability to convert customer design-ins
to design-wins and sales of significant volume, and, if customer
design-in activity does result in such sales, when such sales will
ultimately occur and what the amount of such sales will be; the
risk that the economic and political uncertainty caused by the
tariffs imposed by the United States on Chinese goods, and
corresponding Chinese tariffs and currency devaluation in response,
may negatively impact demand for our products; the risk that we or
our channel partners are not able to develop and expand customer
bases and accurately anticipate demand from end customers, which
can result in increased inventory and reduced orders as we
experience wide fluctuations in supply and demand; risks related to
international sales and purchases; risks resulting from the
concentration of our business among few customers, including the
risk that customers may reduce or cancel orders or fail to honor
purchase commitments; the risk that our investments may experience
periods of significant market value and interest rate volatility
causing us to recognize fair value losses on our investment; the
risk posed by managing an increasingly complex supply chain
(including managing the impacts of ongoing supply constraints in
the semiconductor industry and meeting purchase commitments under
take-or-pay arrangements with certain suppliers) that has the
ability to supply a sufficient quantity of raw materials,
subsystems and finished products with the required specifications
and quality; risks relating to the COVID-19 pandemic or future
outbreaks of infectious diseases or similar public health events,
including the risk of disruptions to our operations, supply chain,
including our contract manufacturers, or customer demand; the risk
we may be required to record a significant charge to earnings if
our remaining goodwill or amortizable assets become impaired; risks
relating to confidential information theft or misuse, including
through cyber-attacks or cyber intrusion; our ability to complete
development and commercialization of products under development;
the rapid development of new technology and competing products that
may impair demand or render our products obsolete; the potential
lack of customer acceptance for our products; risks associated with
ongoing litigation; the risk that customers do not maintain their
favorable perception of our brand and products, resulting in lower
demand for our products; the risk that our products fail to perform
or fail to meet customer requirements or expectations, resulting in
significant additional costs; risks associated with strategic
transactions; and other factors discussed in our filings with the
Securities and Exchange Commission (SEC), including our report on
Form 10-K for the fiscal year ended June 25, 2023, and subsequent
reports filed with the SEC. These forward-looking statements
represent Wolfspeed's judgment as of the date of this release.
Except as required under the U.S. federal securities laws and the
rules and regulations of the SEC, Wolfspeed disclaims any intent or
obligation to update any forward-looking statements after the date
of this release, whether as a result of new information, future
events, developments, changes in assumptions or otherwise.
Wolfspeed® is a registered trademark of Wolfspeed, Inc.
WOLFSPEED, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited)
Three months ended
(in millions of U.S. Dollars, except per
share data)
September 24, 2023
September 25, 2022
Revenue, net
$197.4
$189.4
Cost of revenue, net
172.7
121.7
Gross profit
24.7
67.7
Gross margin percentage
13
%
36
%
Operating expenses:
Research and development
44.1
40.3
Sales, general and administrative
64.1
50.0
Factory start-up costs
8.4
38.4
Amortization or impairment of
acquisition-related intangibles
0.3
0.5
Loss on disposal or impairment of other
assets
0.1
0.1
Other operating expense
2.6
1.9
Total operating expense
119.6
131.2
Operating loss
(94.9
)
(63.5
)
Operating loss percentage
(48
)%
(34
)%
Non-operating expense (income), net
28.5
(49.5
)
Loss before income taxes
(123.4
)
(14.0
)
Income tax expense
0.2
0.1
Net loss from continuing
operations
(123.6
)
(14.1
)
Net loss from discontinued operations
(279.1
)
(12.1
)
Net loss
(402.7
)
(26.2
)
Basic and diluted loss per
share
Continuing operations
($0.99
)
($0.11
)
Net loss
($3.22
)
($0.21
)
Weighted average shares - basic and
diluted (in thousands)
125,105
124,035
WOLFSPEED, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in millions of U.S. Dollars)
September 24, 2023
June 25, 2023
Assets
Current assets:
Cash, cash equivalents, and short-term
investments
$3,347.6
$2,954.9
Accounts receivable, net
154.2
154.8
Inventories
340.9
288.8
Income taxes receivable
0.4
0.8
Prepaid expenses
69.2
36.8
Other current assets
153.7
131.5
Current assets held for sale from
discontinued operations
13.7
38.9
Total current assets
4,079.7
3,606.5
Property and equipment, net
2,453.3
2,164.3
Goodwill
359.2
359.2
Intangible assets, net
24.7
24.6
Long-term receivables
2.6
2.6
Deferred tax assets
1.2
1.2
Other assets
392.1
303.3
Long-term assets held for sale from
discontinued operations
—
125.0
Total assets
$7,312.8
$6,586.7
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable and accrued expenses
$548.9
$534.5
Accrued contract liabilities
44.8
39.0
Income taxes payable
9.8
9.6
Finance lease liabilities
0.4
0.4
Other current liabilities
56.3
35.7
Current liabilities held for sale from
discontinued operations
96.1
8.6
Total current liabilities
756.3
627.8
Long-term liabilities:
Long-term debt
2,131.5
1,149.5
Convertible notes, net
3,027.9
3,025.6
Deferred tax liabilities
4.2
3.9
Finance lease liabilities - long-term
9.1
9.2
Other long-term liabilities
145.1
143.5
Long-term liabilities held for sale from
discontinued operations
—
5.3
Total long-term liabilities
5,317.8
4,337.0
Shareholders’ equity:
Common stock
0.2
0.2
Additional paid-in-capital
3,728.6
3,711.0
Accumulated other comprehensive loss
(23.2
)
(25.1
)
Accumulated deficit
(2,466.9
)
(2,064.2
)
Total shareholders’ equity
1,238.7
1,621.9
Total liabilities and shareholders’
equity
$7,312.8
$6,586.7
WOLFSPEED, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited)
Three months ended
(in millions of U.S. Dollars)
September 24, 2023
September 25, 2022
Operating activities:
Net loss
($402.7
)
($26.2
)
Net loss from discontinued operations
(279.1
)
(12.1
)
Net loss from continuing operations
(123.6
)
(14.1
)
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation and amortization
40.1
33.5
Amortization of debt issuance costs and
discount, net of non-cash capitalized interest
7.2
1.3
Stock-based compensation
19.7
19.8
Loss on disposal or impairment of
long-lived assets, including loss on disposal portion of factory
start-up costs
—
1.9
Amortization of (premium) discount on
investments, net
(5.3
)
1.4
Deferred income taxes
0.3
0.2
Changes in operating assets and
liabilities:
Accounts receivable, net
0.6
(8.2
)
Inventories
(50.0
)
(17.8
)
Prepaid expenses and other assets
(34.7
)
0.6
Accounts payable
(18.1
)
(4.8
)
Accrued salaries and wages and other
liabilities
45.3
(25.2
)
Accrued contract liabilities
5.8
0.4
Net cash used in operating activities of
continuing operations
(112.7
)
(11.0
)
Net cash used in operating activities of
discontinued operations
(34.7
)
(1.7
)
Cash used in operating
activities
(147.4
)
(12.7
)
Investing activities:
Purchases of property and equipment
(442.0
)
(107.7
)
Purchases of patent and licensing
rights
(1.3
)
(1.1
)
Proceeds from sale of property and
equipment
—
1.6
Purchases of short-term investments
(775.3
)
(28.9
)
Proceeds from maturities of short-term
investments
370.0
68.8
Proceeds from sale of short-term
investments
24.8
25.4
Reimbursement of property and equipment
purchases from long-term incentive agreement
39.6
46.7
Proceeds from sale of business resulting
from the receipt of transaction related note receivable
—
101.8
Net cash (used in) provided by investing
activities of continuing operations
(784.2
)
106.6
Net cash used in investing activities of
discontinued operations
(1.7
)
(3.8
)
Cash (used in) provided by investing
activities
(785.9
)
102.8
Financing activities:
Proceeds from long-term debt
borrowings
1,000.0
—
Payments of debt issuance costs
(46.0
)
—
Proceeds from issuance of common stock
0.5
0.5
Tax withholding on vested equity
awards
(15.0
)
(16.9
)
Payments on long-term debt borrowings,
including finance lease obligations
(0.1
)
(0.2
)
Commitment fees on long-term incentive
agreement
(1.0
)
(1.0
)
Cash provided by (used in) financing
activities
938.4
(17.6
)
Effects of foreign exchange changes on
cash and cash equivalents
(0.1
)
(0.4
)
Net change in cash and cash
equivalents
5.0
72.1
Cash and cash equivalents, beginning of
period
1,757.0
449.5
Cash and cash equivalents, end of
period
$1,762.0
$521.6
Product Line Revenue
Three months ended
(in millions of U.S. Dollars)
September 24, 2023
September 25, 2022
Power Products
$101.2
$104.5
Materials Products
96.2
84.9
Total
$197.4
$189.4
Non-GAAP Measures of Financial Performance
To supplement the Company's consolidated financial statements
presented in accordance with generally accepted accounting
principles, or GAAP, Wolfspeed uses non-GAAP measures of certain
components of financial performance. These non-GAAP measures
include non-GAAP gross margin, non-GAAP operating (loss) income,
non-GAAP non-operating income (expense), net, non-GAAP net (loss)
income, non-GAAP diluted (loss) earnings per share and free cash
flow. These measures are presented for continuing operations
only.
Reconciliation to the nearest GAAP measure of all historical
non-GAAP measures included in this press release can be found in
the tables included with this press release.
Non-GAAP measures presented in this press release are not in
accordance with or an alternative to measures prepared in
accordance with GAAP and may be different from non-GAAP measures
used by other companies. In addition, these non-GAAP measures are
not based on any comprehensive set of accounting rules or
principles. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with Wolfspeed's results of
operations as determined in accordance with GAAP. These non-GAAP
measures should only be used to evaluate Wolfspeed's results of
operations in conjunction with the corresponding GAAP measures.
Wolfspeed believes that these non-GAAP measures, when shown in
conjunction with the corresponding GAAP measures, enhance
investors' and management's overall understanding of the Company's
current financial performance and the Company's prospects for the
future, including cash flows available to pursue opportunities to
enhance shareholder value. In addition, because Wolfspeed has
historically reported certain non-GAAP results to investors, the
Company believes the inclusion of non-GAAP measures provides
consistency in the Company's financial reporting.
For its internal budgeting process, and as discussed further
below, Wolfspeed's management uses financial statements that do not
include the items listed below and the income tax effects
associated with the foregoing. Wolfspeed's management also uses
non-GAAP measures, in addition to the corresponding GAAP measures,
in reviewing the Company's financial results.
Wolfspeed excludes the following items from one or more of its
non-GAAP measures when applicable:
Stock-based compensation expense. This expense consists of
expenses for stock options, restricted stock, performance stock
awards and employee stock purchases through its Employee Stock
Purchase Program. Wolfspeed excludes stock-based compensation
expenses from its non-GAAP measures because they are non-cash
expenses that Wolfspeed does not use to evaluate core operating
performance.
Amortization or impairment of acquisition-related intangibles.
Wolfspeed incurs amortization or impairment of acquisition-related
intangibles in connection with acquisitions. Wolfspeed excludes
these items because they are non-cash expenses that Wolfspeed does
not use to evaluate core operating performance.
Project, transformation and transaction costs. The Company has
incurred professional services fees and other costs associated with
completed and potential acquisitions and divestitures, as well as
internal transformation programs focused on optimizing the
Company's administrative processes. Wolfspeed excludes these items
because Wolfspeed believes they are not reflective of the ongoing
operating results of Wolfspeed's business.
Severance costs. The Company has incurred costs in conjunction
with the termination of key executive personnel. Wolfspeed excludes
these items because Wolfspeed believes they have no direct
correlation to the ongoing operating results of Wolfspeed's
business.
Gain on arbitration proceedings. In the first quarter of fiscal
2023, Wolfspeed received an arbitration award in relation to a
former customer failing to fulfill contractual obligations to
purchase a certain amount of product over a period of time. A final
payment was received in the second quarter of fiscal 2023.
Wolfspeed excludes this item because Wolfspeed believes it is not
reflective of the ongoing operating results of Wolfspeed's
business.
Amortization of discount and debt issuance costs, net of
capitalized interest. The issuance of the Company's convertible
senior notes in April 2020, February 2022 and November 2022, the
sale of the Company's 2030 senior secured notes in June 2023 and
the receipt of deposits in connection with an unsecured customer
refundable deposit agreement in July 2023 results in amortization
of discount and debt issuance costs. Wolfspeed excludes
amortization of discount and debt issuance costs from its non-GAAP
measures because they are non-cash expenses that Wolfspeed does not
use to evaluate core operating performance.
Loss (gain) on Wafer Supply Agreement. In connection with the
completed sale of the LED Products business unit to SMART Global
Holdings, Inc., and its wholly owned subsidiary, the Company
entered into a Wafer Supply and Fabrication Services Agreement (the
Wafer Supply Agreement), pursuant to which the Company supplies
CreeLED, Inc. (CreeLED) with certain silicon carbide materials and
fabrication services for up to four years. Wolfspeed excludes the
financial impact of this agreement because Wolfspeed believes it is
not reflective of the ongoing operating results of Wolfspeed's
business.
Income tax adjustment. This amount reconciles GAAP tax (benefit)
expense to a calculated non-GAAP tax (benefit) expense utilizing a
non-GAAP tax rate. The non-GAAP tax rate estimates an appropriate
tax rate if the listed non-GAAP items were excluded. This
reconciling item adjusts non-GAAP net (loss) income to the amount
it would be if the calculated non-GAAP tax rate was applied to
non-GAAP (loss) income before income taxes.
Wolfspeed may incur some of these same expenses, including
income taxes associated with these expenses, in future periods.
In addition to the non-GAAP measures discussed above, Wolfspeed
also uses free cash flow as a measure of operating performance and
liquidity. Free cash flow represents operating cash flows from
continuing operations less net purchases of property and equipment
and patent and licensing rights. Wolfspeed considers free cash flow
to be an operating performance and a liquidity measure that
provides useful information to management and investors about the
amount of cash generated by the business after the purchases of
property and equipment, a portion of which can then be used to,
among other things, invest in Wolfspeed's business, make strategic
acquisitions and strengthen the balance sheet. A limitation of the
utility of free cash flow as a measure of operating performance and
liquidity is that it does not represent the residual cash flow
available to the company for discretionary expenditures, as it
excludes certain mandatory expenditures such as debt service.
WOLFSPEED, INC.
Reconciliation of GAAP to
Non-GAAP Measures - Continuing Operations Only
(in millions of U.S. Dollars,
except per share amounts and percentages)
(unaudited)
Non-GAAP Gross Margin
Three months ended
September 24, 2023
September 25, 2022
GAAP gross profit
$24.7
$67.7
GAAP gross margin percentage
13
%
36
%
Adjustments:
Stock-based compensation expense
6.0
5.8
Non-GAAP gross profit
$30.7
$73.5
Non-GAAP gross margin percentage
16
%
39
%
Non-GAAP Operating Loss
Three months ended
September 24, 2023
September 25, 2022
GAAP operating loss
($94.9
)
($63.5
)
GAAP operating loss percentage
(48
)%
(34
)%
Adjustments:
Stock-based compensation expense:
Cost of revenue, net
6.0
5.8
Research and development
2.7
2.4
Sales, general and administrative
11.0
11.6
Total stock-based compensation expense
19.7
19.8
Amortization or impairment of
acquisition-related intangibles
0.3
0.5
Project, transformation and transaction
costs
2.6
0.9
Executive severance costs
—
1.0
Total adjustments to GAAP operating
loss
22.6
22.2
Non-GAAP operating loss
($72.3
)
($41.3
)
Non-GAAP operating loss percentage
(37
)%
(22
)%
Non-GAAP Non-Operating (Expense)
Income, net
Three months ended
September 24, 2023
September 25, 2022
GAAP non-operating (expense) income,
net
($28.5
)
$49.5
Adjustments:
Gain on arbitration proceedings
—
(49.4
)
Amortization of discount and debt issuance
costs, net of capitalized interest
7.2
1.3
Loss (gain) on Wafer Supply Agreement
6.9
(0.1
)
Non-GAAP non-operating (expense) income,
net
($14.4
)
$1.3
Non-GAAP Net Loss
Three months ended
September 24, 2023
September 25, 2022
GAAP net loss
($123.6
)
($14.1
)
Adjustments:
Stock-based compensation expense
19.7
19.8
Amortization or impairment of
acquisition-related intangibles
0.3
0.5
Project, transformation and transaction
costs
2.6
0.9
Executive severance costs
—
1.0
Gain on arbitration proceedings
—
(49.4
)
Amortization of discount and debt issuance
costs, net of capitalized interest
7.2
1.3
Loss (gain) on Wafer Supply Agreement
6.9
(0.1
)
Total adjustments to GAAP net loss before
provision for income taxes
36.7
(26.0
)
Income tax adjustment - benefit
(expense)
20.3
10.0
Non-GAAP net loss
($66.6
)
($30.1
)
Non-GAAP diluted loss per share
($0.53
)
($0.24
)
Non-GAAP weighted average shares (in
thousands)
125,105
124,035
Free Cash Flow
Three months ended
September 24, 2023
September 25, 2022
Net cash used in operating activities
($112.7
)
($11.0
)
Less: PP&E spending, net of
reimbursements from long-term incentive agreement
(402.4
)
(61.0
)
Less: Patents spending
(1.3
)
(1.1
)
Total free cash flow
($516.4
)
($73.1
)
WOLFSPEED, INC.
Business Outlook Unaudited
GAAP to Non-GAAP Reconciliation
Three Months Ended
(in millions of U.S. Dollars)
December 31, 2023
GAAP net loss from continuing
operations outlook range
($153) to ($131)
Adjustments:
Stock-based compensation expense
21
Amortization of discount and debt issuance
costs, net of capitalized interest
8
Project, transformation and transaction
costs
4
Loss on Wafer Supply Agreement
6
Total adjustments to GAAP net loss before
provision for income taxes
39
Income tax adjustment
26 to 21
Non-GAAP net loss from continuing
operations outlook range
($88) to ($71)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231030261176/en/
Tyler Gronbach Wolfspeed, Inc. Vice President of External
Affairs Phone: 919-407-4820 investorrelations@wolfspeed.com
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