Macom Technology Solutions Holdings, Inc. · NASDAQ:MTSI
Macom Technology Solutions — Merger or Acquisition (November 2013)
38 slides from Macom Technology Solutions's merger presentation, Nov 20, 2013
Slide 1: M/A-COM Technology Solutions (MTSI)
M/A-COM Technology Solutions (MTSI) November 2013 Exhibit 99.1
Slide 2: Forward-Looking Statement Safe Harbor and Use of Non-GAAP Financial Measures
Forward-Looking Statement Safe Harbor and Use of Non-GAAP Financial Measures This presentation contains forward-looking statements based on management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include, among others, statements conc
Slide 3: Tender Offer Information
Tender Offer Information This communication is for informational purposes only and is not an offer to purchase any shares of Mindspeed or a solicitation of an offer to sell securities. MACOM and Micro Merger Sub, Inc. have filed a tender offer statement on Schedule TO, including an offer to purchase
Slide 4: RF, µW and mmW franchise built on 60+ years of innovation
RF, µ W and mmW franchise built on 60+ years of innovation MACOM is a leading supplier of high performance RF, µW, and mmW products Company Snapshot Strong catalog business with 2,700+ products Advanced RF design capabilities solving difficult and complex challenges Established customer base of 6,00
Slide 5: Leader in high performance RF, µW and mmW analog semiconductors
Leader in high performance RF, µW and mmW analog semiconductors Broad catalog business of long lifecycle products serving large and diverse end markets Focused R&D investments in high-growth, high-margin applications Growth and richer product mix driving gross and operating margin expansion Scalable
Slide 6: Broad catalog portfolio and breadth of channel
Broad catalog portfolio and breadth of channel Leader in High Performance RF, µW and mmW Source: MACOM estimates based on internal and external (WSTS, ABI Research, Strategy Analytics, Engalco, Ovum, Infonetics, EJL, NSR, Yole) sources
Slide 7: Broad Catalog of Specialized Products
Integrated Circuits Power Pallets & Transistors Passive Components Diodes, Switch Limiters, Switches Active Components Multi-Chip Modules Radio Frequency Millimeter Wave Broad Catalog of Specialized Products 1 MHz 6 GHz Microwave 20 GHz 110 GHz Industrial Broad- band Wireless Data, Toll Tags GPS, Av
Slide 8: Blended Organic Growth Model Targets 2-3x Market CAGR
Blended Organic Growth Model Targets 2-3x Market CAGR Source: MACOM estimates based on internal and external (WSTS, ABI Research, Strategy Analytics, Engalco, Ovum, Infonetics, EJL, NSR, Yole, Moody’s, Dell ‘Oro) sources
Slide 9: New products target 70+% gross margins
New products target 70+% gross margins Focused on Selected High-Growth Opportunities Deep Commitment to Technology Leadership Investment Focused on High Growth, High Margin (1) Products R&D focused on high growth opportunities with disruptive technologies M&A delivering high growth opportunities bas
Slide 10: CED @®
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Slide 11: MACOM
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Slide 12: ‘Advenced driver
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Slide 13: 100G in the Network: Enterprise 100G Optical
PRODUCTS & TECHNOLOGY KEY CUSTOMERS APPLICATIONS 100G IN THE NETWORK Enterprise – 100G Optical Source: MACOM estimates based on internal and external (Infonetics, Dell’Oro) sources
Slide 14: Optomai and Mindspeed acquisitions deliver 30-year heritage of innovation
Optomai and Mindspeed acquisitions deliver 30-year heritage of innovation 100G Optical – 10 Year Cycle of Innovation Products Device Technology Applications
Slide 15: Mindspeed's SiGe Will Expand MACOM Technology Base
Mindspeed’s SiGe Will Expand MACOM Technology Base
Slide 16: SiGe expands SAM in two directions
SiGe Mindspeed SiGe Mindspeed Mindspeed will deliver technology leadership Will expand SAM in core RF and µw markets SiGe expands SAM in two directions 2,000 3,000 $3,600M GaAs GaN LDMOS SOI SiGe GaAs GaN LDMOS SOI SiGe The SiGe Opportunity Space Served Available Market by Technology Source: MACOM e
Slide 17: GaN as a Market Dislocator
GaN as a Market Dislocator Gallium Nitride is a wide bandgap semiconductor whose critical electric field is 10x that of GaAs and 20x that of Silicon enabling unprecedented power and bandwidth capability
Slide 18: Slide 18
Slide 19: Aerospace & Defense – AESA Radar
X-band AESA RADAR PRODUCTS & TECHNOLOGY KEY CUSTOMERS APPLICATIONS Aerospace & Defense – AESA Radar MMICs MPAR Module and Board Transistors Diodes Components Source: MACOM estimates based on internal and external (Engalco) sources
Slide 20: 60-year heritage of radar innovation
60-year heritage of radar innovation AESA Radar – 20 Year Cycle of Innovation Products Device Technology Applications
Slide 21: Aerospace & Defense – mmW Satellite Link
PRODUCTS & TECHNOLOGY KEY CUSTOMERS APPLICATIONS mmW SATCOM GROWTH Aerospace & Defense – mmW Satellite Link Single Chip T/R Module GaN Transistor MELF Diodes Filters Source: MACOM estimates based on internal and external (Engalco,NSR) sources
Slide 22: 40-year heritage of satellite link innovation
40-year heritage of satellite link innovation mmW Satellite Link – 10 Year Cycle of Innovation Products Device Technology Applications
Slide 23: Scalable, Fab-lite Manufacturing Strategy
Scalable, Fab-lite Manufacturing Strategy
Slide 24: Mindspeed Will Strengthen our Global Position
Mindspeed Will Strengthen our Global Position Note: Geographic revenue based on the quarter ended June 28, 2013 for MACOM and Mindspeed. Mindspeed revenue excludes non-recurring revenue related to sales of intellectual property.
Slide 25: Experienced and Proven Management Team
Experienced and Proven Management Team
Slide 26: Financial Overview
FINANCIAL OVERVIEW
Slide 27: High-performance analog semiconductor business model
High-performance analog semiconductor business model • Proprietary products • Long lifecycles • Established customer relationships Strong and cash generative broad catalog business Focused R&D investment in new high-growth, high margin (70+%) products Strong balance sheet, cash flow and return on ca
Slide 28: Projected Financial Model Post Mindspeed Acquisition
Post Closing Model (2) EPS accretion expected to be between $0.15-$0.20 per share in FY 2014 and $0.25-$0.30 per share in FY 2015 (4) 1. Revenue for FY13 for MACOM and Mindspeed. Mindspeed revenue excludes wireless business and non-recurring revenue related to sales of intellectual property. 2. Post
Slide 29: MACOM Fiscal 2013 Results & Q1 2014 Guidance
Incremental revenue model targets 60% gross margin (1) contribution REVENUE GROSS MARGIN (1) OPERATING MARGIN (1) EPS (1) ($ in millions) MACOM Fiscal 2013 Results & Q1 2014 Guidance 1. Non-GAAP. 2. Q2 actual includes $0.02 EPS related to CY12 tax credits. 3. Guidance is as of November 5, and not re
Slide 30: Margin Expansion Through Growth, Mix Shift and Acquisition
Incremental revenue model targets 60% blended gross margin contribution Margin Expansion Through Growth, Mix Shift and Acquisition (1) 70%+ GM < 70% GM (1) Non-GAAP. Mindspeed information excludes wireless and communications processors businesses and non recurring sales of intellectual property.
Slide 31: MACOM Growth vs. Industry and Peers FY2012 - FY2013
High Performance RF and uW Semiconductor Industry High Performance Analog Handset Suppliers MACOM Growth vs. Industry and Peers FY2012 - FY2013 Source: Public filings and consensus estimates for FY13
Slide 32: Strong Balance Sheet, Cash Flow and Return on Capital
$110 million in cash, zero debt and untapped $300 million credit line as of September 27, 2013 Cash Balance (1) Free Cash Flow (2) (% of Rev.) Return on Capital Employed (2) Strong Balance Sheet, Cash Flow and Return on Capital ($ in millions) 1. Balances shown are as of the end of the periods prese
Slide 33: Capitalization: Model with $214 Million in Borrowings
MACOM (1) Mindspeed (1) Post Close Model (2) Capitalization Cash and cash equivalents $110.4 $35.0 $30.0 Outstanding debt - 57.6 214.1 Net outstanding debt NA $22.6 $184.1 Leverage ratio (2) 2.1x Net leverage ratio (2) 1.8x Model with $214 Million in borrowings against $300 Million Revolver 1) MACOM
Slide 34: Summary
Summary Continued revenue growth through market share gains and strength of catalog business Accelerating growth through targeted acquisitions and investments in high growth, defensible markets Margin expansion through acquisition , high margin new products and richer product mix Increasing profitab
Slide 35: Appendix
APPENDIX
Slide 36: Non-GAAP Financial Measures Definitions
Unless otherwise disclosed, non-GAAP financial information excludes amortization of intangibles, share-based and other non-cash compensation expense, restructuring charges, certain litigation costs, changes in the carrying values of liabilities measured at fair value, contingent consideration, other
Slide 37: Reconciliation of GAAP to Non-GAAP Results
($ in thousands) 2010 2011 2012 Fiscal Years December 28, 2012 March 29, 2013 Three Months Ended Note: MTSI’s fiscal year end is the Friday closest to September . Reconciliation of GAAP to Non-GAAP Results th
Slide 38: Reconciliation of GAAP to Non-GAAP Results Continued
Reconciliation of GAAP to Non-GAAP Results Continued Free-Cash Flow (FCF) ($ in thousands ) Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13 Revenue $77,125 $74,563 $75,014 $77,824 $82,225 $83,655 Net cash from operating activities - GAAP 8,121 9,075 9,042 12,995 13,447 1,317 Contingent consideration
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