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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________
FORM 10-Q
_________________
(Mark One)
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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended December 25, 2020
or
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-39675
_________________
ALLEGRO MICROSYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
_________________
| | | | | | | | |
| | |
Delaware | 46-2405937 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| | |
955 Perimeter Road | 03103 |
Manchester, | New Hampshire | (Zip Code) |
(Address of principal executive offices) | |
(603) 626-2300
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
_________________
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | | ALGM | | The Nasdaq Global Select Market |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | |
Large accelerated filer | | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | | ☒ | Smaller reporting company | ☐ |
| | | Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of February 1, 2021, the registrant had 189,433,744 shares of common stock, $0.01 par value per share, outstanding.
TABLE OF CONTENTS
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, the impact of the ongoing and global COVID-19 pandemic on our business, prospective products and the plans and objectives of management for future operations, may be forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding liquidity, growth and profitability strategies and factors and trends affecting our business are forward-looking statements. Without limiting the foregoing, in some cases, you can identify forward-looking statements by terms such as “aim,” “may,” “will,” “should,” “expect,” “exploring,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “seek,” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future results, performance, or achievements, and one should avoid placing undue reliance on such statements.
Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to us. Such beliefs and assumptions may or may not prove to be correct. Additionally, such forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified in Part I., Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A “Risk Factors” in this Quarterly Report. These risks and uncertainties include, but are not limited to:
•downturns or volatility in general economic conditions, including as a result of the COVID-19 pandemic, particularly in the automotive market;
•our ability to compete effectively, expand our market share and increase our net sales and profitability;
•our ability to compensate for decreases in average selling prices of our products;
•the cyclical nature of the analog semiconductor industry;
•shifts in our product mix or customer mix, which could negatively impact our gross margin;
•our ability to manage any sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our products;
•any disruptions at our primary third-party wafer fabrication facilities;
•our ability to fully realize the benefits of past and potential future initiatives designed to improve our competitiveness, growth and profitability;
•our ability to accurately predict our quarterly net sales and operating results;
•our ability to adjust our supply chain volume to account for changing market conditions and customer demand;
•our reliance on a limited number of third-party wafer fabrication facilities and suppliers of other materials;
•our dependence on manufacturing operations in the Philippines;
•our reliance on distributors to generate sales;
•our indebtedness may limit our flexibility to operate our business;
•the loss of one or more significant end customers;
•our ability to develop new product features or new products in a timely and cost-effective manner;
•our ability to meet customers’ quality requirements;
•uncertainties related to the design win process and our ability to recover design and development expenses and to generate timely or sufficient net sales or margins; changes in government trade policies, including the imposition of tariffs and export restrictions;
•our exposures to warranty claims, product liability claims and product recalls;
•our ability to protect our proprietary technology and inventions through patents or trade secrets;
•our ability to commercialize our products without infringing third-party intellectual property rights;
•disruptions or breaches of our information technology systems;
•risks related to governmental regulation and other legal obligations, including privacy, data protection, information security, consumer protection, environmental and occupational health and safety, anti-corruption and anti-bribery, and trade controls;
•our dependence on international customers and operations;
•the availability of rebates, tax credits and other financial incentives on end-user demands for certain products;
•the volatility of currency exchange rates;
•risks related to acquisitions of and investments in new businesses, products or technologies, joint ventures and other strategic transactions;
•our ability to raise capital to support our growth strategy;
•our ability to effectively manage our growth and to retain key and highly skilled personnel;
•changes in tax rates or the adoption of new tax legislation;
•risks related to litigation, including securities class action litigation; and
•our ability to accurately estimate market opportunity and growth forecasts.
Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.
You should read this Quarterly Report and the documents that we reference in this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of any new information, future events or otherwise.
Unless the context otherwise requires, references to “we,” “us,” “our,” the “Company” and “Allegro” refer to the operations of Allegro MicroSystems, Inc. and its consolidated subsidiaries.
PART I – FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
ALLEGRO MICROSYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share amounts)
| | | | | | | | | | | |
| December 25, 2020 (Unaudited) | | March 27, 2020 |
Assets | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 157,653 | | | $ | 214,491 | |
Restricted cash | 6,520 | | | 5,385 | |
Trade accounts receivable, net of allowances for doubtful accounts of $138 and $288 at December 25, 2020 and March 27, 2020, respectively | 67,334 | | | 59,457 | |
Trade and other accounts receivable due from related party | 20,153 | | | 30,851 | |
Accounts receivable - other | 1,373 | | | 1,796 | |
Inventories | 94,021 | | | 127,227 | |
Prepaid expenses and other current assets | 31,476 | | | 9,014 | |
Total current assets | 378,530 | | | 448,221 | |
Property, plant and equipment, net | 214,372 | | | 332,330 | |
Deferred income tax assets | 23,188 | | | 7,217 | |
Goodwill | 20,249 | | | 1,285 | |
Intangible assets, net | 36,420 | | | 19,958 | |
Equity investment in related party | 26,657 | | | — | |
Other assets, net | 12,482 | | | 8,810 | |
Total assets | $ | 711,898 | | | $ | 817,821 | |
Liabilities, Non-Controlling Interest and Stockholders' Equity | | | |
Current liabilities: | | | |
Trade accounts payable | $ | 20,262 | | | $ | 20,762 | |
Amounts due to related party | 2,078 | | | 4,494 | |
Accrued expenses and other current liabilities | 66,779 | | | 56,855 | |
| | | |
Current portion of related party debt | — | | | 25,000 | |
Bank lines-of-credit | — | | | 43,000 | |
Total current liabilities | 89,119 | | | 150,111 | |
Obligations due under Senior Secured Credit Facilities | 25,000 | | | — | |
Related party notes payable, less current portion | — | | | 17,700 | |
Other long-term liabilities | 20,861 | | | 15,878 | |
Total liabilities | 134,980 | | | 183,689 | |
Commitments and contingencies (Note 16) | | | |
Stockholders' Equity: | | | |
| | | |
Preferred Stock, $0.01 par value; 20,000,000 shares authorized, no shares issued or outstanding at December 25, 2020 and March 27, 2020 | — | | | — | |
Common stock, $0.01 par value; 1,000,000,000 shares authorized, 189,431,726 shares issued and outstanding at December 25, 2020; No shares authorized, issued or outstanding at March 27, 2020 | 1,894 | | | — | |
Class A, $0.01 par value; No shares authorized, issued or outstanding at December 25, 2020; 12,500,000 shares authorized; 10,000,000 shares issued and outstanding at March 27, 2020 | — | | | 100 | |
Class L, $0.01 par value; No shares authorized, issued or outstanding at December 25, 2020; 1,000,000 shares authorized; 622,470 shares issued and outstanding at March 27, 2020 | — | | | 6 | |
Additional paid-in capital | 589,202 | | | 458,697 | |
(Accumulated deficit) / retained earnings | (5,094) | | | 194,355 | |
Accumulated other comprehensive loss | (10,171) | | | (19,976) | |
Equity attributable to Allegro MicroSystems, Inc. | 575,831 | | | 633,182 | |
Non-controlling interests | 1,087 | | | 950 | |
Total stockholders' equity | 576,918 | | | 634,132 | |
Total liabilities, non-controlling interest and stockholders' equity | $ | 711,898 | | | $ | 817,821 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
ALLEGRO MICROSYSTEMS, INC.
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three-Month Period Ended | | Nine-Month Period Ended |
| December 25, 2020 | | December 27, 2019 | | December 25, 2020 | | December 27, 2019 |
Net sales | $ | 138,010 | | | $ | 143,267 | | | $ | 343,529 | | | $ | 426,158 | |
Net sales to related party | 26,439 | | | 16,535 | | | 72,570 | | | 49,327 | |
Total net sales | 164,449 | | | 159,802 | | | 416,099 | | | 475,485 | |
Cost of goods sold | 90,024 | | | 98,277 | | | 224,203 | | | 285,967 | |
Gross profit | 74,425 | | | 61,525 | | | 191,896 | | | 189,518 | |
Operating expenses: | | | | | | | |
Research and development | 30,999 | | | 25,485 | | | 80,509 | | | 77,565 | |
Selling, general and administrative | 67,650 | | | 24,909 | | | 118,677 | | | 78,030 | |
Total operating expenses | 98,649 | | | 50,394 | | | 199,186 | | | 155,595 | |
Operating (loss) income | (24,224) | | | 11,131 | | | (7,290) | | | 33,923 | |
Other (expense) income: | | | | | | | |
Loss on debt extinguishment | (9,055) | | | — | | | (9,055) | | | — | |
Interest (expense) income, net | (2,598) | | | 10 | | | (1,935) | | | (60) | |
Foreign currency transaction (loss) gain | (145) | | | (560) | | | (1,331) | | | 2,800 | |
Income in earnings of equity investment | 949 | | | — | | | 1,407 | | | — | |
Other, net | (510) | | | (81) | | | (297) | | | (1,177) | |
(Loss) income before income tax (benefit) provision | (35,583) | | | 10,500 | | | (18,501) | | | 35,486 | |
Income tax (benefit) provision | (30,523) | | | 1,542 | | | (27,913) | | | 11,710 | |
Net (loss) income | (5,060) | | | 8,958 | | | 9,412 | | | 23,776 | |
Net income attributable to non-controlling interests | 35 | | | 32 | | | 103 | | | 101 | |
Net (loss) income attributable to Allegro MicroSystems, Inc. | $ | (5,095) | | | $ | 8,926 | | | $ | 9,309 | | | $ | 23,675 | |
Net (loss) income attributable to Allegro MicroSystems, Inc. per share (Note 17): | | | | | | | |
Basic | $ | (0.04) | | | $ | 0.89 | | | $ | 0.19 | | | $ | 2.37 | |
Diluted | $ | (0.04) | | | $ | 0.89 | | | $ | 0.05 | | | $ | 2.37 | |
Weighted average shares outstanding: | | | | | | | |
Basic | 124,363,078 | | | 10,000,000 | | | 48,121,026 | | | 10,000,000 | |
Diluted | 124,363,078 | | | 10,000,000 | | | 171,638,787 | | | 10,000,000 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
ALLEGRO MICROSYSTEMS, INC.
Consolidated Statements of Comprehensive (Loss) Income
(in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three-Month Period Ended | | Nine-Month Period Ended |
| December 25, 2020 | | December 27, 2019 | | December 25, 2020 | | December 27, 2019 |
Net (loss) income | $ | (5,060) | | | $ | 8,958 | | | $ | 9,412 | | | $ | 23,776 | |
Foreign currency translation adjustment | 3,972 | | | 2,886 | | | 10,152 | | | 1,869 | |
Net actuarial loss amortization of net transition obligation and prior service costs related to defined benefit plans, net of tax | — | | | — | | | (313) | | | — | |
Comprehensive (loss) income | $ | (1,088) | | | $ | 11,844 | | | $ | 19,251 | | | $ | 25,645 | |
Comprehensive expense attributable to non-controlling interest | (10) | | | (23) | | | (34) | | | (5) | |
Comprehensive (loss) income attributable to Allegro MicroSystems, Inc. | $ | (1,098) | | | $ | 11,821 | | | $ | 19,217 | | | $ | 25,640 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
ALLEGRO MICROSYSTEMS, INC.
Consolidated Statements of Changes in Equity
(in thousands, except share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock, Class A | | Common Stock, Class L | | | Preferred Stock | | Common Stock | | Additional Paid-In Capital | | Retained Earnings / Accum. Deficit | | Accumulated Other Comprehensive Loss | | Non-Controlling Interests | | Total Equity |
| Shares | | Amount | | Shares | | Amount | | | Shares | | Amount | | Shares | | Amount | | | | | |
Balance at September 25, 2020 | 10,000,000 | | | $ | 100 | | | 638,298 | | | $ | 6 | | | | — | | | $ | — | | | — | | | $ | — | | | $ | 439,732 | | | $ | 208,759 | | | $ | (14,133) | | | $ | 1,042 | | | $ | 635,506 | |
Net income | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | (5,095) | | | — | | | 35 | | | (5,060) | |
Capitalization changes related to organizational structure of affiliates and direct and indirect interests in subsidiaries | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | 527 | | | — | | | — | | | — | | | 527 | |
Reclassification of certain class L shares | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | 298 | | | — | | | — | | | — | | | 298 | |
Stock-based compensation | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | 45,876 | | | — | | | — | | | — | | | 45,876 | |
Issuance of common stock in connection with IPO, net of underwriting discounts and other offering costs | — | | | — | | | — | | | — | | | | — | | | — | | | 25,000,000 | | | 250 | | | 321,175 | | | — | | | — | | | — | | | 321,425 | |
Conversion of Class A and Class L common stock into common stock in connection with the IPO | (10,000,000) | | | (100) | | | (636,301) | | | (6) | | | | — | | | — | | | 166,500,000 | | | 1,665 | | | (1,559) | | | — | | | — | | | — | | | — | |
Repurchase of Class A and Class L common stock to cover related taxes | — | | | — | | | (1,997) | | | — | | | | — | | | — | | | (2,068,274) | | | (21) | | | (27,686) | | | — | | | — | | | — | | | (27,707) | |
Conversion of LTCIP/TRIP awards into restricted stock units in connection with the IPO | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | 2,081 | | | — | | | — | | | — | | | 2,081 | |
Cash dividend paid to holders of Class A common stock | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | (191,242) | | | (208,758) | | | — | | | — | | | (400,000) | |
Foreign currency translation adjustment | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,962 | | | 10 | | | 3,972 | |
Balance at December 25, 2020 | — | | | $ | — | | | — | | | $ | — | | | | — | | | $ | — | | | 189,431,726 | | | $ | 1,894 | | | $ | 589,202 | | | $ | (5,094) | | | $ | (10,171) | | | $ | 1,087 | | | $ | 576,918 | |
ALLEGRO MICROSYSTEMS, INC.
Consolidated Statements of Changes in Equity
(in thousands, except share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock, Class A | | Common Stock, Class L | | | Preferred Stock | | Common Stock | | Additional Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Non-Controlling Interests | | Total Equity |
| Shares | | Amount | | Shares | | Amount | | | Shares | | Amount | | Shares | | Amount | | | | | |
Balance at September 27, 2019 | 10,000,000 | | | $ | 100 | | | 607,620 | | | $ | 6 | | | | — | | | $ | — | | | — | | | $ | — | | | $ | 448,510 | | | $ | 172,134 | | | $ | (17,277) | | | $ | 865 | | | $ | 604,338 | |
Net income | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | 8,926 | | | — | | | 32 | | | 8,958 | |
Stock-based compensation | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | 303 | | | — | | | — | | | — | | | 303 | |
Foreign currency translation adjustment | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,863 | | | 23 | | | 2,886 | |
Balance at December 27, 2019 | 10,000,000 | | | $ | 100 | | | 607,620 | | | $ | 6 | | | | — | | | $ | — | | | — | | | $ | — | | | $ | 448,813 | | | $ | 181,060 | | | $ | (14,414) | | | $ | 920 | | | $ | 616,485 | |
ALLEGRO MICROSYSTEMS, INC.
Consolidated Statements of Changes in Equity
(in thousands, except share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock, Class A | | Common Stock, Class L | | | Preferred Stock | | Common Stock | | Additional Paid-In Capital | | Retained Earnings / Accum. Deficit | | Accumulated Other Comprehensive Loss | | Non-Controlling Interests | | Total Equity |
| Shares | | Amount | | Shares | | Amount | | | Shares | | Amount | | Shares | | Amount | | | | | |
Balance at March 27, 2020 | 10,000,000 | | | $ | 100 | | | 622,470 | | | $ | 6 | | | | — | | | $ | — | | | — | | | $ | — | | | $ | 458,697 | | | $ | 194,355 | | | $ | (19,976) | | | $ | 950 | | | $ | 634,132 | |
Net income | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | 9,309 | | | — | | | 103 | | | 9,412 | |
Issuance of Class L shares, net of forfeitures | — | | | — | | | 15,828 | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Capitalization changes related to organizational structure of affiliates and direct and indirect interests in subsidiaries | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | (19,165) | | | — | | | — | | | — | | | (19,165) | |
Stock-based compensation | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | 46,901 | | | — | | | — | | | — | | | 46,901 | |
Issuance of common stock in connection with IPO, net of underwriting discounts and other offering costs | — | | | — | | | — | | | — | | | | — | | | — | | | 25,000,000 | | | 250 | | | 321,175 | | | — | | | — | | | — | | | 321,425 | |
Conversion of Class A and Class L common stock into common stock in connection with the IPO | (10,000,000) | | | (100) | | | (636,301) | | | (6) | | | | — | | | — | | | 166,500,000 | | | 1,665 | | | (1,559) | | | — | | | — | | | — | | | — | |
Repurchase of Class A and Class L common stock to cover related taxes | — | | | — | | | (1,997) | | | — | | | | — | | | — | | | (2,068,274) | | | (21) | | | (27,686) | | | — | | | — | | | — | | | (27,707) | |
Conversion of LTCIP/TRIP awards into restricted stock units in connection with the IPO | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | 2,081 | | | — | | | — | | | — | | | 2,081 | |
Cash dividend paid to holders of Class A common stock | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | (191,242) | | | (208,758) | | | — | | | — | | | (400,000) | |
Foreign currency translation adjustment | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | 10,118 | | | 34 | | | 10,152 | |
Net actuarial loss and amortization of net transition obligation and prior service costs related to defined benefit plans, net of tax | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | (313) | | | — | | | (313) | |
Balance at December 25, 2020 | — | | | $ | — | | | — | | | $ | — | | | | — | | | $ | — | | | 189,431,726 | | | $ | 1,894 | | | $ | 589,202 | | | $ | (5,094) | | | $ | (10,171) | | | $ | 1,087 | | | $ | 576,918 | |
ALLEGRO MICROSYSTEMS, INC.
Consolidated Statements of Changes in Equity
(in thousands, except share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock, Class A | | Common Stock, Class L | | | Preferred Stock | | Common Stock | | Additional Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Non-Controlling Interests | | Total Equity |
| Shares | | Amount | | Shares | | Amount | | | Shares | | Amount | | Shares | | Amount | | | | | |
Balance at March 29, 2019 | 10,000,000 | | | $ | 100 | | | 607,620 | | | $ | 6 | | | | — | | | $ | — | | | — | | | $ | — | | | $ | 447,762 | | | $ | 157,385 | | | $ | (16,278) | | | $ | 814 | | | $ | 589,789 | |
Net income | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | 23,675 | | | — | | | 101 | | | 23,776 | |
Stock-based compensation | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | 1,051 | | | — | | | — | | | — | | | 1,051 | |
Foreign currency translation adjustment | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,864 | | | 5 | | | 1,869 | |
Balance at December 27, 2019 | 10,000,000 | | | $ | 100 | | | 607,620 | | | $ | 6 | | | | — | | | $ | — | | | — | | | $ | — | | | $ | 448,813 | | | $ | 181,060 | | | $ | (14,414) | | | $ | 920 | | | $ | 616,485 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
ALLEGRO MICROSYSTEMS, INC.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| | | | | | | | | | | |
| Nine-Month Period Ended |
| December 25, 2020 | | December 27, 2019 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | |
Net income | $ | 9,412 | | | $ | 23,776 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 36,225 | | | 47,608 | |
Amortization of deferred financing costs | 226 | | | — | |
Deferred income taxes | (17,526) | | | (288) | |
Stock-based compensation | 46,901 | | | 1,051 | |
Loss on disposal of assets | 272 | | | 718 | |
Loss on debt extinguishment | 9,055 | | | — | |
Provisions for inventory and bad debt | 3,857 | | | 3,353 | |
Changes in operating assets and liabilities: | | | |
Trade accounts receivable | (5,975) | | | 15,540 | |
Accounts receivable - other | 115 | | | 657 | |
Inventories | 1,118 | | | (341) | |
Prepaid expenses and other assets | (29,655) | | | (6,165) | |
Trade accounts payable | 2,411 | | | 1,100 | |
Due to/from related parties | 8,283 | | | (20,969) | |
Accrued expenses and other current and long-term liabilities | (1,185) | | | (17,270) | |
Net cash provided by operating activities | 63,534 | | | 48,770 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | |
Purchases of property, plant and equipment | (25,880) | | | (34,997) | |
Acquisition of business, net of cash acquired | (8,500) | | | — | |
Proceeds from sales of property, plant and equipment | 314 | | | 3,936 | |
Contribution of cash balances due to divestiture of subsidiary | (16,335) | | | — | |
Net cash used in investing activities | (50,401) | | | (31,061) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | |
Related party note receivable | 51,377 | | | 30,000 | |
Proceeds from initial public offering, net of underwriting discounts and other offering costs | 321,425 | | | — | |
Payments for taxes related to net share settlement of equity awards | (27,707) | | | — | |
Dividends paid | (400,000) | | | — | |
Borrowings of senior secured debt, net of deferred financing costs | 315,719 | | | — | |
Repayment of senior secured debt | (300,000) | | | — | |
Repayment of unsecured credit facilities | (33,000) | | | — | |
Net cash (used in) provided by financing activities | (72,186) | | | 30,000 | |
Effect of exchange rate changes on Cash and cash equivalents and Restricted cash | 3,350 | | | (6,452) | |
Net (decrease) increase in Cash and cash equivalents and Restricted cash | (55,703) | | | 41,257 | |
Cash and cash equivalents and Restricted cash at beginning of period | 219,876 | | | 103,257 | |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD: | $ | 164,173 | | | $ | 144,514 | |
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: | | | |
Cash and cash equivalents at beginning of period | $ | 214,491 | | | $ | 99,743 | |
Restricted cash at beginning of period | 5,385 | | | 3,514 | |
Cash and cash equivalents and Restricted cash at beginning of period | $ | |