EXAR A NEW DIRECTION · 2019. 9. 20. · • Ryan Benton CFO 20-year Finance Executive - •...
Transcript of EXAR A NEW DIRECTION · 2019. 9. 20. · • Ryan Benton CFO 20-year Finance Executive - •...
EXARA NEW DIRECTION
Mixed Signal and Data Management Solutions for a Connected World
1Sunday, March 17, 13
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements contained in this presentation include statements about future financial and operating results, economic growth rates, industry and market conditions, potential synergies and cost savings, the ability to drive growth and expand customer and partner relationships, changes in gross margins, revenues and operating expenses, manufacturing yields or operations, product development initiatives, design win conversion and other such statements. These statements are not guarantees of future performance, involve risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. In any forward-looking statement in which the Company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. Information concerning risk factors are detailed in the Company's SEC reports, including the Annual Report on Form 10-K for the year ended April 1, 2012 and the Quarterly Report on Form 10-Q for the quarters ended July 1, 2012, and September 30, 2012. Generally Accepted Accounting Principles The Company reports its financial results in accordance with GAAP. Additionally, the Company supplements reported GAAP financials with non-GAAP measures which are included in related press releases and reports furnished to the SEC, copies of which are available at the Company’s website: http://www.exar.com or the SEC’s website at: http://www.sec.gov. In this presentation, we are disclosing non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income or loss, non-GAAP net income or loss, and non-GAAP basic and diluted net income or loss per share, which are adjusted to exclude from our GAAP results all stock-based compensation expense, amortization of acquired intangible assets, restructuring charges and exit costs, provision for dispute resolution, and related income tax effects. These non-GAAP measures are presented in part to enhance the understanding of the Company’s historical financial performance and comparability between reporting periods. The Company believes the non-GAAP presentation, when shown in conjunction with the corresponding GAAP measures, provide relevant and useful information to analysts, investors, management and other interested parties. For its internal purposes, the Company uses the foregoing non-GAAP measures to evaluate performance across reporting periods, determine certain employee benefits as well as plan for and forecast the Company’s future periods. These non-GAAP measures are not in accordance with, or an alternative for 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. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures.
, and December 30, 2012.
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Exar Corporation
• Founded: 1971
• Headquarters: Fremont, California
• Design Centers: Silicon Valley and Hangzhou China
• Employees: 275
• Revenue: $131mm*
• Net Margin: 13% December Quarter**
• Balance Sheet: ≈$200mm Cash, No Debt
*Fiscal 2012**Non-GAAP
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Management Team
• Louis DiNardo CEO 30-year Semiconductor Veteran - • ADI, LLTC, XICOR, ISIL, EXAR
• Todd Smathers SVP Operations 30-year Semiconductor Veteran - • NSM, LLTC, XICOR, ISIL, EXAR
• Carlos Laber SVP R&D 30-year Semiconductor Veteran - • NSM, MCRL, XICOR, ISIL, ON Semiconductor, EXAR
• Steve Bakos SVP Sales 30-year Semiconductor Veteran - • NSM, LLTC, XICOR, ISIL, Conexant, EXAR
• Ryan Benton CFO 20-year Finance Executive -• SynapSense, ASMI, eFunds, EXAR
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Financial Results
• Fiscal Year 2012 Fourth Quarter Restructuring
• 45% Reduction in Headcount
• Site Consolidation
• Overhaul of Executive Staff
• ≈$25M* in Expense and Cost Reduction
*Non-GAAP Results
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Financial Results
• Fiscal Year 2013 First Quarter Ending June 2012*• Revenue $29.3 million {5% Growth Q/Q}
• Gross Margin 47.2% {720 Basis Point Increase Q/Q}
• Operating Income $0.9 million {$6.3 million Increase Q/Q}
• EPS $0.03 {$0.13 Increase Q/Q}
• Fiscal Year 2013 Second Quarter Ending September 2012*• Revenue $30.6 million {5% Growth}
• Gross Margin 46.7% {50 Basis Point Decrease Q/Q}
• Operating Income $2.2 million {149% Increase Q/Q}
• EPS $0.06 {100% Increase Q/Q}
*Non-GAAP Results
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7
Operating Income/Loss
-$6,500
-$3,875
-$1,250
$1,375
$4,000
Q3-08 Q1-09 Q3-09 Q1-10 Q3-10 Q1-11 Q3-11 Q1-12 Q3-12 Q1-13 Q3-13
$3,560
$2,225
$893
-$5,384
-$2,448
$774
$134
-$5,438
-$3,079
-$1,232
-$1,967
$87
-$1,544
-$4,249
-$4,744
-$3,725
-$2,930
-$404
-$1,528
-$4,968
-$6,155
Q3-13
Q1-13
Q2-13
Q4-12
Quarterly Non-GAAP Results
$k
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Financial Goals and Performance
• Goals
• Consistent Profitable Growth
• Differentiation - Technology and Innovation
• Diversity - Markets, Customers and Products
• Appreciation in Shareholder Value
• Non-GAAP EBIT Growth
• GAAP EPS Growth
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Exar Success Model
FY’12Results*
Q1FY13Results*
Q2FY13Results*
Q3FY13Results*
Long-Term Model*
Revenue $131M $29.3M $30.6M $31.0M ≈$45M
Gross Margin 47% 47% 47% 49% 53% - 55%
Operating Expense 52% 44% 40% 38% 32% - 34%
Operating Inc/(Loss) (5%) 3% 7% 11% ≈23%
EPS -$0.10 $0.03 $0.06 $0.09 $0.20 - $0.25
*Non-GAAP Results
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Strategic VisionAchievement of Success Model
• Serve High Growth Markets with Innovative Value-Added Solutions
• High Performance Analog Mixed Signal
• Market Selection - Networking, Communications, Industrial
• Product Definition - Power Management, Connectivity, Signal Processing
• Sales and Marketing Focus - Dedicated Sales Force
• Data Management Solutions
• Market Selection - Big Data Analytics
• Product Definition - Compression and Security
• Sales and Marketing Focus - Dedicated Sales Force
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Market Focus
• Networking and Storage
• Industrial and Embedded Systems
• Communications Infrastructure
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Product Focus
• Power Management Products
• Connectivity Products
• Data Management Solutions
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Product Line Contribution
21%
55%15%
9%PowerConnectivityData CompressionCommunications
Q3 Fiscal Year 2013 YTD
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End Market Contribution
40%
40%
20%NetworkingIndustrialCommunications
Company Estimates Q3 Fiscal Year 2013 YTD
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Geographic Contribution
26%
60%
14%AmericasAsiaEurope
Q3 Fiscal Year 2013 YTD
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Power Management Products
• Analog Power Management
• Switching Regulators
• Switching Controllers
• Linear Regulators
• Supervisory Controllers
• Programmable Power
• Multiple Output Synchronous Buck Controllers
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End Market FocusServed Available Market (SAM)
Market Volume ASP SAM CustomersSet Top Box 150M $2.00 $300M Pace, Motorola Technicolor
Switches/Routers 20M $5.00 $100M Cisco, HP, Alcatel, HuaweiMF Printers 10M $5.00 $50M HP, Canon, Konica, Minolta
Servers 15M $10.00 $150M HP, IBM, Dell, IntelSurveillance 40M $2.00 $80M Siemens, Johnson, Pelco
Patient Monitor 10M $3.00 $30M GE, Honeywell, MindrayBTS/BSC/RRH 5M $8.00 $40M NSN, Ericsson, ZTE
POS 15M $2.00 $30M Ingenico, HypercomOthers 40M $2.50 $100M Auto, Gateway, ConsumerTOTAL $880M
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POWERXR
Exar Programmable PowerSuite 5.0
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Exar Programmable PowerSINGLE INPUT - FOUR OUTPUT
ANALOG FEATURES EXAR
147 # OF COMPONENTS 33DISCRETE SOFT-START YES
DISCRETE MARGINING YES
DISCRETE SEQUENCE & TRACK YES
NO DYNAMIC CONTROL YES
NO FAULT MANAGEMENT YES
NO I2C INTERFACE YES
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Exar Programmable PowerCOMPETITION
• Analog Solutions - Discrete Point of Load Solutions have Limited Use in Next Generation Server Designs
• No Programmability - Complex Design Implementation
• No Multiple Outputs - Significantly Larger Bill-of-Material
• No Support for Intel Energy Monitoring - Lacks support for next generation requirements in Server Point-of-Load Requirements
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Power Management Revenue
0
2.25
4.5
6.75
9
Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313
$M
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Data Compression and SecurityHardware Acceleration and Software Solutions
• Compression
• Decompression
• Acceleration
• Encryption
• Decryption
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Data Compression and Security
• High Growth Markets Supporting Social Networking, Industrial Internet and Financial Technology
• Big Data Analytics
• Enterprise
• Cloud
• Off-Load Processing
• Lower Cost - Decrease Array Capacity
• Improve System Performance - Throughput and Latency
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Data Compression and SecurityServed Available Market (SAM)
Market Customers SAM
Enterprise Storage EMC, Hitachi, IBM, NetApp $80M
Big Data Analytics Teradata, Oracle, HP, IBM $80M
Cloud Storage Amazon, Microsoft, Rackspace $100M
Cloud Computing IBM, Google, Salesforce $70MNetwork Security Cisco, Juniper, Huawei, F5 $140M
VOIP Security Acme Packet, Cisco $25M
Remote Replication HP, IBM, Raytheon $30M
TOTAL $525M
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1"
10"
100"
1000"
10000"
100000"
1000000"
10000000"
1" 2" 3" 4" 5" 6" 7" 8" 9" 10" 11"
CPU v. Storage IOPSInput Output Operations per Second
STORAGE120X Increase
Bottleneck
CPU12,000X Increase
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Data Compression ApplicationOff-Load Processor and Software Compression
Engine with PCIe Interface
WAN
1GbE/10GbE
ExarDX1845
PCIe
PCIe
PCIe
PCIe
EXARDX1845
CLOUD
ENTERPRISE
CPU
SUB
-SYSTEM
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Panther IFirst Generation Compression/Security Engine
with PCIe Interface
Transform Engine
Hash
Encryption
Compression
DMAPCIe4x
FlashCtlr GPIO RNG Public Key EnginePK
Mgr
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Panther II2nd Generation Compression and Security Engine
with PCIe and FPGA Interface
Transform Engine
Hash
Encryption
Compression
Public Key Engine
DMAPCIe4x
FlashCtlr GPIO RNG Config FPGA
Control
External FPGA
Interlacken Interface
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Altior Products
• AltraFlex
• GZIP Compression/Acceleration Board - 10Gbps to 15Gbps
• CeDeFS Software
• Application Transparent Compression Software
• AltraStar
• AltraFlex + CeDeFs tuned to Hadoop/MapReduce
Hardware
SoftwareSoftware
Hardware
Exar Altior
+
Hardware
Software
=
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Altior CeDeFS OEM Solution
Applications
Native Linux Kernel
CeDeFS
Native Linux FS
Storage Volume Panther I, II or AltiorPCIe Card
CeDeFS is a kernel plug-in at the file system layer that once installed will compress ALL files independent of application.
This solves a major challenge for OEM customer that currently integrate at the application. WIth CeDeFS integration is no longer necessary.
CeDeFS will run on Panther I or Panther II or the existing Altior cards. The solution is Plug-n-Play and is transparent to the operating systems once installed.
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Data Compression/Security Revenue
0
1.5
3
4.5
6
Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313
$M
Legacy Security Processor Compression Engine
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Connectivity
• Bridges
• UARTs
• USB
• PCIe
• I2C
• Transceivers
• Differential
• Serial
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Connectivity ProductsTotal Available Market (TAM)
$150M$500M
$300M
$1,500M
UARTsTransceiversBridgesDigital
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Connectivity ProductsUARTS, Bridges and Transceivers
Embedded
IndustrialPoint-of-Sale
Comm
ComputingServers
Consumer
Valu
e
Volume
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Connectivity ApplicationUART and Transceiver
UART UARTRS232RS485
RS232RS485
Distance
EQUIPMENT
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Connectivity Revenue
0
5.25
10.5
15.75
21
Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313
$M
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Exar Summary
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Core Assets, Markets and Products
Power ManagementData Management
Connectivity
NetworkingIndustrial
Communications
Management Team - Strong Record of SuccessBrand Recognition - 40 Years of History
Customers - 14,000 WorldwideChannel Partners - Future, Arrow and WT
Balance Sheet ≈ $200M Cash
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Exar Success Model
FY’12Results*
Q1FY13Results*
Q2FY13Results*
Q3FY13Results*
Long-Term Model*
Revenue $131M $29.3M $30.6M $31.0M ≈$45M
Gross Margin 47% 47% 47% 49% 53% - 55%
Operating Expense 52% 44% 40% 38% 32% - 34%
Operating Inc/(Loss) (5%) 3% 7% 11% ≈23%
EPS -$0.10 $0.03 $0.06 $0.09 $0.20 - $0.25
*Non-GAAP Results
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Thank youLouis DiNardo
President and CEOand
Ryan BentonChief Financial Officer
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