rfmd-20211002

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 2, 2021


☐			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 001-36801

Qorvo, Inc.

(Exact name of registrant as specified in its charter)


Delaware		46-5288992
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

7628 Thorndike Road
Greensboro,	North Carolina	27409-9421
(Address of principal executive office)		(Zip code)

(336) 664-1233

Registrant's telephone number, including area code

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, $0.0001 par value

QRVO

The Nasdaq Stock Market LLC

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 þ 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 þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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

☐

Table of Contents

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 þ

As of October 28, 2021, there were 110,223,227 shares of the registrant’s common stock outstanding.

Table of Contents

QORVO, INC. AND SUBSIDIARIES

INDEX


			Page
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Income			4
Condensed Consolidated Statements of Comprehensive Income			5
Condensed Consolidated Statements of Stockholders' Equity			6
Condensed Consolidated Statements of Cash Flows			8
Notes to Condensed Consolidated Financial Statements			9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.			18
Item 3. Quantitative and Qualitative Disclosures About Market Risk.			27
Item 4. Controls and Procedures.			27

PART II — OTHER INFORMATION			28

Item 1A. Risk Factors.			28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			29
Item 6. Exhibits.			30

SIGNATURES			31

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PART I — FINANCIAL INFORMATION

ITEM 1.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)


	October 2, 2021		April 3, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,153,172	$	1,397,880
Accounts receivable, net of allowance of $464 and $331 as of October 2, 2021 and April 3, 2021, respectively	662,787		457,431
Inventories	597,563		507,787
Prepaid expenses	49,298		41,572
Other receivables	33,841		27,324
Other current assets	44,606		51,810
Total current assets	2,541,267		2,483,804
Property and equipment, net of accumulated depreciation of $1,655,084 and $1,561,613 as of October 2, 2021 and April 3, 2021, respectively	1,276,810		1,266,031
Goodwill	2,734,116		2,642,708
Intangible assets, net	615,486		611,155
Long-term investments	36,908		35,370
Other non-current assets	371,869		182,402
Total assets	$	7,576,456	$	7,221,470
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	521,569	$	313,868
Accrued liabilities	284,689		255,060
Current portion of long-term debt	5,545		5,092
Other current liabilities	90,692		107,561
Total current liabilities	902,495		681,581
Long-term debt	1,740,552		1,742,550
Other long-term liabilities	205,655		167,914
Total liabilities	2,848,702		2,592,045
Commitments and contingent liabilities (Note 9)
Stockholders’ equity:
Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding	—		—
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 110,461 and 112,557 shares issued and outstanding at October 2, 2021 and April 3, 2021, respectively	4,158,170		4,244,740
Accumulated other comprehensive income	23,431		29,649
Retained earnings	546,153		355,036
Total stockholders’ equity	4,727,754		4,629,425
Total liabilities and stockholders’ equity	$	7,576,456	$	7,221,470

See accompanying Notes to Condensed Consolidated Financial Statements.

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QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


	Three Months Ended				Six Months Ended
	October 2, 2021		October 3, 2020		October 2, 2021		October 3, 2020
Revenue	$	1,255,248	$	1,060,292	$	2,365,599	$	1,847,743
Cost of goods sold	633,695		568,742		1,197,863		1,030,404
Gross profit	621,553		491,550		1,167,736		817,339
Operating expenses:
Research and development	158,377		156,342		310,456		286,413
Selling, general and administrative	93,489		109,372		183,788		195,976
Other operating expense	7,327		4,192		14,030		20,594
Total operating expenses	259,193		269,906		508,274		502,983
Operating income	362,360		221,644		659,462		314,356
Interest expense	(15,327)		(23,486)		(30,606)		(42,335)
Other income, net	4,754		1,920		21,545		25,057

Income before income taxes	351,787		200,078		650,401		297,078

Income tax expense	(32,598)		(63,161)		(45,586)		(63,239)
Net income	$	319,189	$	136,917	$	604,815	$	233,839

Net income per share:
Basic	$	2.87	$	1.20	$	5.43	$	2.04
Diluted	$	2.84	$	1.18	$	5.35	$	2.01

Weighted average shares of common stock outstanding:
Basic	111,035		114,328		111,476		114,388
Diluted	112,411		116,177		113,088		116,395

See accompanying Notes to Condensed Consolidated Financial Statements.

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QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended				Six Months Ended
	October 2, 2021		October 3, 2020		October 2, 2021		October 3, 2020
Net income	$	319,189	$	136,917	$	604,815	$	233,839
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature	(9,517)		18,201		(6,279)		24,288
Reclassification adjustments, net of tax:
Amortization of pension actuarial loss	30		21		61		40
Other comprehensive (loss) income	(9,487)		18,222		(6,218)		24,328
Total comprehensive income	$	309,702	$	155,139	$	598,597	$	258,167

See accompanying Notes to Condensed Consolidated Financial Statements.

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QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)


				Accumulated Other Comprehensive Income		Retained Earnings
	Common Stock
Three Months Ended	Shares	Amount						Total
Balance, July 3, 2021	111,210	$	4,210,914	$	32,918	$	404,562	$	4,648,394
Net income	—	—		—		319,189		319,189
Other comprehensive loss	—	—		(9,487)		—		(9,487)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	459	(36,104)		—		—		(36,104)
Repurchase of common stock, including transaction costs	(1,208)	(45,758)		—		(177,598)		(223,356)
Stock-based compensation	—	29,118		—		—		29,118
Balance, October 2, 2021	110,461	$	4,158,170	$	23,431	$	546,153	$	4,727,754

Balance, June 27, 2020	114,354	$	4,293,621	$	8,394	$	49,230	$	4,351,245
Net income	—	—		—		136,917		136,917
Other comprehensive income	—	—		18,222		—		18,222
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	594	(26,306)		—		—		(26,306)
Repurchase of common stock, including transaction costs	(837)	(31,425)		—		(73,584)		(105,009)
Stock-based compensation	—	32,097		—		—		32,097
Balance, October 3, 2020	114,111	$	4,267,987	$

SEC Form 10-Q filed by Qorvo, Inc.