EXAR A NEW DIRECTION · Power Management Market • Programmable Power ($150M TAM) • 100+...
Transcript of EXAR A NEW DIRECTION · Power Management Market • Programmable Power ($150M TAM) • 100+...
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.
2
Exar Corporation
• Founded: 1971
• Headquarters: Fremont, California
• Design Centers: Silicon Valley, California; Hangzhou, China; Eatontown, New Jersey; Toronto, Canada
• Employees: 270
• Revenue: $122mm*
• Net Margin: 15% March Quarter**
• Balance Sheet: ≈$205mm Cash, No Debt
*Fiscal 2013**Non-GAAP
3
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 -• eFunds, ASMI, SynapSense, EXAR
• Parviz Ghaffaripour SVP Connectivity and Power Products• Exar, NSM, MXIM, AATI, Akros Silicon, EXAR
4
Exar Success Model
FY’12Results*
Q1FY13Results*
Q2FY13Results*
Q3FY13Results*
Q4FY13Results*
FY’13Results*
Long-Term Model*
Revenue $131M $29.3M $30.6M $31.0M $31.2M $122M ≈$45M
Gross Margin 47% 47% 47% 49% 53% 49% 53% - 55%
Operating Expense 52% 44% 40% 38% 39% 40% 32% -
34%Operating Inc/
(Loss) (5%) 3% 7% 11% 14% 9% ≈23%
EPS -$0.10 $0.03 $0.06 $0.09 $0.10 $0.28 $0.20 - $0.25
*Non-GAAP Results
5
6
Operating Income/Loss*
-$6,500
-$3,750
-$1,000
$1,750
$4,500
Q3-08 Q1-09 Q3-09 Q1-10 Q3-10 Q1-11 Q3-11 Q1-12 Q3-12 Q1-13 Q3-13
$4,316
$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
Q4-13
6
$0
$125,000
$250,000
$375,000
$500,000
2007 2008 2009 2010 2011 2012 20130
150
300
450
600
Title
Revenue Per Employee Trend
7
Strategic VisionAchievement of Success Model
• Serve High Growth Markets with Innovative Value-Added Solutions
• Big Data, Industrial Internet, Energy Conservation
• Consistent Profitable Growth• Differentiation and Diversity
• Appreciation in Shareholder Value• Non-GAAP EBIT
• GAAP and Non-GAAP EPS
• Free Cash Flow
8
Market Focus
• Networking and Storage
• Industrial and Embedded Systems
• Communications Infrastructure
9
Product Line Contribution*
21%
54%16%
9%PowerConnectivityData CompressionCommunications
*Fiscal Year 2013
11
Data Compression and SecurityHardware Acceleration and Software Solutions
• Compression
• Decompression
• Acceleration
• Encryption
• Decryption
14
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
15
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
16
Data Compression and SecurityData Warehouse Served 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
18
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
19
Altior AcquistionUnstructured Data - MapReduce Hadoop
Hardware
Software
Software
Hardware
Exar Altior
+
Hardware
Software
=
20
Altior CeDeFS SolutionPlug-and-Play
Transparent File System Compression
Applications
Native Linux Kernel
CeDeFS
Native Linux FS
Storage Volume Panther I, II or AltiorPCIe Card
21
DC&S Road MapStructured and Unstructured Data Solutions
ASIC
ASIC
ASIC
ASIC
FPGA ASIC
Panther I6.2Gbps X 4 = 25Gbps
Application Level Integration
Altior 12Gbps
CeDe FS Transparent File System Integration
Panther II 40Gbps
CeDeFS Transparent File System Integration
22
Power Management Products
• Analog Power Management
• Switching Regulators
• Switching Controllers
• Linear Regulators
• Supervisory Controllers
• Programmable Power
• Multiple Output Synchronous Buck Controllers
23
• Intelligent Power Supplies
• Power Telemetry and Energy Monitoring and Conservation
• High Level of Integration for FPGA and SoC Requirements
• Proliferation of Low Voltage Rails
• Energy Conversation
• Faster Clock Speeds and Smaller Geometries
• Module Power
• Ease of Use for Industrial Infrastructure Applications
• Compact Reliable Design for Infrastructure Designs
Power Management Trends
24
Power Management Market• Programmable Power ($150M TAM)
• 100+ Customers in Production- X86/ARM Servers, Base Stations, Teleconferencing, Video Surveillance, Cable Modems, Home Gateways
• Value: Lowest Cost, Highest Integrations Solution
• Linear Products ($3.5B TAM)
• 3800+ Customers - Industrial, Automotive, Networking and Communications. Focus: >1.5A ($200M SAM)
• Value: Broad Portfolio with Low Voltage Low Drop-out Performance
• Non-Isolated DC-DC Switching Regulators ($3.5B TAM)
• 750+ Customers. Focus: > 5A Buck Regulator ($300 SAM)
• Value: Broad Portfolio with Light Load Efficiency
25
Calxeda Energy Card*One XRP per ARM Core*Ease of Design*Improved Time to Market*Dynamic Scaling*Field Upgradeable*Highly Integrated
Exar Programmable Power for Calxeda ARM Core Micro-servers
26
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
27
Connectivity ProductsTotal Available Market (TAM)
$150M$500M
$300M
$1,500M
UARTsTransceiversBridgesDigital
29
Connectivity ProductsUARTS, Bridges and Transceivers
Embedded
IndustrialPoint-of-Sale
Comm
ComputingServers
Consumer
Valu
e
Volume
31
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
33
Exar Success Model
FY’12Results*
Q1FY13Results*
Q2FY13Results*
Q3FY13Results*
Q4FY13Results*
FY’13Results*
Long-Term Model*
Revenue $131M $29.3M $30.6M $31.0M $31.2M $122M ≈$45M
Gross Margin 47% 47% 47% 49% 53% 49% 53% - 55%
Operating Expense 52% 44% 40% 38% 39% 40% 32% -
34%Operating Inc/
(Loss) (5%) 3% 7% 11% 14% 9% ≈23%
EPS -$0.10 $0.03 $0.06 $0.09 $0.10 $0.28 $0.20 - $0.25
*Non-GAAP Results
34