Market Overview

Skyworks Exceeds Q4 FY18 Expectations

Share:
  • Record Q4 Revenue of $1.008B with GAAP Diluted EPS of $1.58 and
    Non-GAAP EPS of $1.94
  • Record FY18 Revenue of $3.868B with GAAP Diluted EPS of $5.01 and
    Non-GAAP EPS of $7.22
  • Returned $1.003B to Shareholders via Repurchase of 7.7M Shares and
    Increased Dividends in FY18
  • Guides Revenue to Between $1.000B and $1.020B with Non-GAAP Diluted
    EPS of $1.91 in Q1 FY19

Skyworks Solutions, Inc. (NASDAQ:SWKS) an innovator of high performance
analog semiconductors connecting people, places and things, today
reported fourth fiscal quarter and year-end results for the period ended
September 28, 2018. Revenue for the fourth fiscal quarter was a record
$1.008 billion, up 13 percent sequentially and exceeding consensus
estimates.

On a GAAP basis, operating income for the fourth fiscal quarter of 2018
was $340.1 million with diluted earnings per share of $1.58. On a
non-GAAP basis, operating income was $379.6 million with non-GAAP
diluted earnings per share of $1.94, $0.03 better than Company guidance.

For fiscal year 2018, revenue was $3.868 billion, up 6 percent
year-over-year with GAAP diluted earnings per share of $5.01. Non-GAAP
diluted earnings per share for fiscal year 2018 was $7.22, up 12 percent
from fiscal year 2017.

"Skyworks delivered a record fourth quarter and fiscal 2018, marking our
ninth consecutive year of revenue and non-GAAP earnings growth ─
demonstrably outperforming the broader semiconductor industry," said
Liam K. Griffin, president and chief executive officer of Skyworks.
"From industrial IoT to frictionless commerce, autonomous vehicles,
ubiquitous streaming and virtual reality, Skyworks is revolutionizing
the way the world communicates. As 5G rapidly approaches, we are pushing
the performance envelope with our comprehensive Sky5™ platform and
positioning Skyworks to extend our reach across a wide array of high
growth applications."

Fourth Quarter Business Highlights

  • Validated leadership performance of Sky5™ suite for 5G New Radio
    architectures
  • Introduced 5G wideband, 16-state antenna aperture tuners
  • Powered Samsung's Galaxy flagship smartphones
  • Deployed massive MIMO and small cell solutions for global
    infrastructure
  • Secured wireless networking sockets at Cisco for high-density
    enterprise applications
  • Launched millimeter wave RF technology at a major avionics supplier
  • Ramped connectivity and telematics engines with BMW, Geely, Hyundai,
    Tesla and Toyota
  • Supported DOCSIS 3.1 CATV modems/gateways with 2.4 and 5 GHz front-ends
  • Captured LTE Cat M content within u-blox's machine-to-machine modules
  • Leveraged smart audio solutions at Microsoft, Nintendo and Sony gaming
    platforms

First Fiscal Quarter 2019 Outlook

We provide earnings guidance on a non-GAAP basis because certain
information necessary to reconcile such guidance to GAAP is difficult to
estimate and dependent on future events outside of our control.
Please
refer to the attached Discussion Regarding the Use of Non-GAAP Financial
Measures in this press release for a further discussion of our use of
non-GAAP measures, including quantification of known expected adjustment
items.

"Skyworks' continued strength in broad markets coupled with the launch
of a diverse set of high performance mobile solutions is offsetting unit
declines in premium smartphones and overall China softness," said Kris
Sennesael, senior vice president and chief financial officer of
Skyworks. "Specifically in the first fiscal quarter of 2019, we
anticipate revenue to be between $1.000 billion and $1.020 billion with
non-GAAP diluted earnings per share of $1.91 at the midpoint of our
revenue range. Despite the near term industry weakness, we intend to
deliver our tenth consecutive fiscal year of revenue and non-GAAP
earnings growth."

Dividend Payment

Skyworks' Board of Directors has declared a cash dividend of $0.38 per
share of the Company's common stock, payable on December 18, 2018, to
stockholders of record at the close of business on November 27, 2018.

Skyworks' Fourth Fiscal Quarter 2018 Conference Call

Skyworks will host a conference call with analysts to discuss its fourth
fiscal quarter 2018 results and business outlook today at 5:00 p.m.
Eastern time. To listen to the conference call via the Internet, please
visit the investor relations section of Skyworks' website. To listen to
the conference call via telephone, please call (800) 230-1093 (domestic)
or (612) 234-9959 (international), confirmation code: 455397.

Playback of the conference call will begin at 9:00 p.m. Eastern time on
November 8 and end at 9:00 p.m. Eastern time on November 15. The replay
will be available on Skyworks' website or by calling (800) 475-6701
(domestic) or (320) 365-3844 (international), access code: 455397.

About Skyworks

Skyworks Solutions, Inc. is empowering the wireless networking
revolution. Our highly innovative analog semiconductors are connecting
people, places and things spanning a number of new and previously
unimagined applications within the aerospace, automotive, broadband,
cellular infrastructure, connected home, industrial, medical, military,
smartphone, tablet and wearable markets.

Skyworks is a global company with engineering, marketing, operations,
sales and support facilities located throughout Asia, Europe and North
America and is a member of the S&P 500® and Nasdaq-100®
market indices (NASDAQ:SWKS). For more information, please visit
Skyworks' website at: www.skyworksinc.com.

Safe Harbor Statement

This news release includes "forward-looking statements" intended to
qualify for the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include without limitation information relating to future
results and expectations of Skyworks (e.g., certain projections and
business trends, plans for dividend payments, the use of its stock
repurchase program, and cash return rate to shareholders).
Forward-looking statements can often be identified by words such as
"anticipates," "expects," "forecasts," "intends," "believes," "plans,"
"may," "will," or "continue," and similar expressions and variations or
negatives of these words. All such statements are subject to certain
risks, uncertainties and other important factors that could cause actual
results to differ materially and adversely from those projected, and may
affect our future operating results, financial position and cash flows.

These risks, uncertainties and other important factors include, but are
not limited to: the susceptibility of the semiconductor industry and the
markets addressed by our, and our customers', products to economic
downturns; our reliance on several key customers for a large percentage
of our sales; the volatility of our stock price; declining selling
prices, decreased gross margins, and loss of market share as a result of
increased competition; our ability to obtain design wins from customers;
economic, social, military and geo-political conditions in the countries
in which we, our customers or our suppliers operate, including security
and health risks, imposition of trade protection measures (e.g., tariffs
or taxes), increased import/export restrictions and controls, and
possible disruptions in transportation networks and fluctuations in
foreign currency exchange rates; changes in laws, regulations and/or
policies that could adversely affect our operations and financial
results, the economy and our customers' demand for our products, or the
financial markets and our ability to raise capital; fluctuations in our
manufacturing yields due to our complex and specialized manufacturing
processes; our ability to develop, manufacture and market innovative
products, avoid product obsolescence, reduce costs in a timely manner,
transition our products to smaller geometry process technologies, and
achieve higher levels of design integration; the quality of our products
and any defect remediation costs; the availability and pricing of
third-party semiconductor foundry, assembly and test capacity, raw
materials and supplier components; our ability to retain, recruit and
hire key executives, technical personnel and other employees in the
positions and numbers, with the experience and capabilities, and at the
compensation levels needed to implement our business and product plans;
the timing, rescheduling or cancellation of significant customer orders
and our ability, as well as the ability of our customers, to manage
inventory; our ability to prevent theft of our intellectual property,
disclosure of confidential information, or breaches of our information
technology systems; uncertainties of litigation, including potential
disputes over intellectual property infringement and rights, as well as
payments related to the licensing and/or sale of such rights; our
ability to continue to grow and maintain an intellectual property
portfolio and obtain needed licenses from third parties; our ability to
make certain investments and acquisitions, integrate companies we
acquire, and/or enter into strategic alliances; and other risks and
uncertainties, including, but not limited to, those detailed from time
to time in our filings with the Securities and Exchange Commission.

The forward-looking statements contained in this news release are made
only as of the date hereof, and we undertake no obligation to update or
revise the forward-looking statements, whether as a result of new
information, future events or otherwise.

Note to Editors: Skyworks and the Skyworks symbol are trademarks or
registered trademarks of Skyworks Solutions, Inc. or its subsidiaries in
the United States and other countries. Third-party brands and names are
for identification purposes only, and are the property of their
respective owners.

 
SKYWORKS SOLUTIONS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
           
Three Months Ended Twelve Months Ended
(in millions, except per share amounts) September 28,
2018
September 29,
2017
September 28,
2018
September 29,
2017
Net revenue $ 1,008.4 $ 984.6 $ 3,868.0 $ 3,651.4
Cost of goods sold 504.8   485.7   1,917.3   1,809.6
Gross profit 503.6 498.9 1,950.7 1,841.8
Operating expenses:
Research and development 103.0 91.8 404.5 355.2
Selling, general and administrative 54.4 56.4 207.8 204.6
Amortization of acquisition-related intangibles 6.3 5.0 18.3 27.6
Restructuring and other charges (0.2 ) (0.2 ) 0.8   0.6
Total operating expenses 163.5 153.0 631.4 588.0
Operating income 340.1 345.9 1,319.3 1,253.8
Other income, net 3.3   1.8   12.8   3.2
Income before income taxes 343.4 347.7 1,332.1 1,257.0
Provision for income taxes 57.9   66.4   413.7   246.8
Net income $ 285.5   $ 281.3   $ 918.4   $ 1,010.2
 
Earnings per share:
Basic $ 1.60   $ 1.53   $ 5.06   $ 5.48
Diluted $ 1.58   $ 1.51   $ 5.01   $ 5.41
Weighted average shares:
Basic 178.6   183.4   181.3   184.3
Diluted 180.2   185.7   183.2   186.7
 
 
SKYWORKS SOLUTIONS, INC.
UNAUDITED RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
           
Three Months Ended Twelve Months Ended
(in millions) September 28,
2018
September 29,
2017
September 28,
2018
September 29,
2017
GAAP gross profit $ 503.6 $ 498.9 $ 1,950.7 $ 1,841.8
Share-based compensation expense [a] 2.8 3.5 14.4 13.6
Acquisition-related expenses (benefit) [b] 4.5 4.5
Amortization of acquisition-related intangibles [c] 2.3 2.3
Impairment and restructuring-related charges (reversals) [d] 2.8     2.8    
Non-GAAP gross profit $ 516.0   $ 502.4   $ 1,974.7   $ 1,855.4  
GAAP gross margin % 49.9 % 50.7 % 50.4 % 50.4 %
Non-GAAP gross margin % 51.2 % 51.0 % 51.1 % 50.8 %
 
Three Months Ended Twelve Months Ended
(in millions) September 28,
2018
September 29,
2017
September 28,
2018
September 29,
2017
GAAP operating income $ 340.1 $ 345.9 $ 1,319.3 $ 1,253.8
Share-based compensation expense [a] 21.5 24.2 107.8 88.5
Acquisition-related expenses (benefit) [b] 4.3 0.3 (2.6 ) 4.6
Amortization of acquisition-related intangibles [c] 8.7 5.0 20.7 27.6
Impairment and restructuring-related charges (reversals) [d] 5.0 (0.2 ) 6.0 0.6
Litigation settlement gains, losses and expenses [e] 4.0 4.0
Deferred executive compensation expense (benefit) [f]     (1.7 )  
Non-GAAP operating income $ 379.6   $ 379.2   $ 1,449.5   $ 1,379.1  
GAAP operating margin % 33.7 % 35.1 % 34.1 % 34.3 %
Non-GAAP operating margin % 37.6 % 38.5 % 37.5 % 37.8 %
 
Three Months Ended Twelve Months Ended
(in millions) September 28,
2018
September 29,
2017
September 28,
2018
September 29,
2017
GAAP net income $ 285.5 $ 281.3 $ 918.4 $ 1,010.2
Share-based compensation expense [a] 21.5 24.2 107.8 88.5
Acquisition-related expenses (benefit) [b] 4.3 0.3 (2.6 ) 4.6
Amortization of acquisition-related intangibles [c] 8.7 5.0 20.7 27.6
Impairment and restructuring-related charges (reversals) [d] 5.0 (0.2 ) 6.0 0.6
Litigation settlement gains, losses and expenses [e] 4.0 4.0
Deferred executive compensation expense (benefit) [f] (1.7 )
Tax adjustments [g] 24.7   24.2   274.8   69.6  
Non-GAAP net income $ 349.7   $ 338.8   $ 1,323.4   $ 1,205.1  
 
Three Months Ended Twelve Months Ended
September 28,
2018
September 29,
2017
September 28,
2018
September 29,
2017
GAAP net income per share, diluted $ 1.58 $ 1.51 $ 5.01 $ 5.41
Share-based compensation expense [a] 0.12 0.13 0.59 0.48
Acquisition-related expenses (benefit) [b] 0.02 (0.01 ) 0.02
Amortization of acquisition-related intangibles [c] 0.05 0.03 0.11 0.15
Impairment and restructuring-related charges (reversals) [d] 0.03 0.03
Litigation settlement gains, losses and expenses [e] 0.02 0.02
Deferred executive compensation expense (benefit) [f] (0.01 )
Tax adjustments [g] 0.14   0.13   1.50   0.37  
Non-GAAP net income per share, diluted $ 1.94   $ 1.82   $ 7.22   $ 6.45  
 

SKYWORKS SOLUTIONS, INC.
DISCUSSION REGARDING THE USE OF
NON-GAAP FINANCIAL MEASURES

Our earnings release contains some or all of the following financial
measures that have not been calculated in accordance with United States
Generally Accepted Accounting Principles ("GAAP"): (i) non-GAAP gross
profit and gross margin, (ii) non-GAAP operating income and operating
margin, (iii) non-GAAP net income, and (iv) non-GAAP diluted earnings
per share. As set forth in the "Unaudited Reconciliations of Non-GAAP
Financial Measures" table found above, we derive such non-GAAP financial
measures by excluding certain expenses and other items from the
respective GAAP financial measure that is most directly comparable to
each non-GAAP financial measure. Management uses these non-GAAP
financial measures to evaluate our operating performance and compare it
against past periods, make operating decisions, forecast for future
periods, compare our operating performance against peer companies and
determine payments under certain compensation programs. These non-GAAP
financial measures provide management with additional means to
understand and evaluate the operating results and trends in our
ongoing business by eliminating certain non-recurring expenses and other
items that management believes might otherwise make comparisons of our
ongoing business with prior periods and competitors more difficult,
obscure trends in ongoing operations or reduce management's ability to
make forecasts.

We provide investors with non-GAAP gross profit and gross margin,
non-GAAP operating income and operating margin, non-GAAP net income and
non-GAAP diluted earnings per share because we believe it is important
for investors to be able to closely monitor and understand changes in
our ability to generate income from ongoing business operations. We
believe these non-GAAP financial measures give investors an additional
method to evaluate historical operating performance and identify trends,
an additional means of evaluating period-over-period operating
performance and a method to facilitate certain comparisons of our
operating results to those of our peer companies. We also believe that
providing non-GAAP operating income and operating margin allows
investors to assess the extent to which our ongoing operations impact
our overall financial performance. We further believe that providing
non-GAAP net income and non-GAAP diluted earnings per share allows
investors to assess the overall financial performance of our ongoing
operations by eliminating the impact of share-based compensation
expense, acquisition-related expenses, amortization of
acquisition-related intangibles, certain impairment and
restructuring-related charges, litigation settlement gains, losses and
expenses, certain deferred executive compensation and certain tax items
which may not occur in each period presented and which may represent
non-cash items unrelated to our ongoing operations. We believe that
disclosing these non-GAAP financial measures contributes to enhanced
financial reporting transparency and provides investors with added
clarity about complex financial performance measures.

We calculate non-GAAP gross profit by excluding from GAAP gross profit,
share-based compensation expense, acquisition-related expenses,
amortization of acquisition-related intangibles and certain impairment
and restructuring-related expenses. We calculate non-GAAP operating
income by excluding from GAAP operating income, share-based compensation
expense, acquisition-related expenses, amortization of
acquisition-related intangibles, certain impairment and
restructuring-related charges, litigation settlement gains, losses and
expenses, and certain deferred executive compensation. We calculate
non-GAAP net income and diluted earnings per share by excluding from
GAAP net income and diluted earnings per share, share-based compensation
expense, acquisition-related expenses, amortization of
acquisition-related intangibles, certain impairment and
restructuring-related charges, litigation settlement gains, losses and
expenses, certain deferred executive compensation, and certain tax
items. We exclude the items identified above from the respective
non-GAAP financial measure referenced above for the reasons set forth
with respect to each such excluded item below:

Share-Based Compensation - because (1) the total amount of
expense is partially outside of our control because it is based on
factors such as stock price volatility and interest rates, which may be
unrelated to our performance during the period in which the expense is
incurred, (2) it is an expense based upon a valuation methodology
premised on assumptions that vary over time, and (3) the amount of the
expense can vary significantly between companies due to factors that can
be outside of the control of such companies.

Acquisition-Related Expenses - including such items as, when
applicable, amortization of acquired intangible assets, fair value
adjustments to contingent consideration, fair value charges incurred
upon the sale of acquired inventory, acquisition-related expenses,
including deemed compensation expenses and interest expense on
seller-financed debt, because they are not considered by management in
making operating decisions and we believe that such expenses do not have
a direct correlation to our future business operations and thereby
including such charges does not necessarily reflect the performance of
our ongoing operations for the period in which such charges or reversals
are incurred.

Impairment and Restructuring-Related Charges - these charges are
one-time in nature and have no direct correlation to our future business
operations and including such charges does not necessarily reflect the
performance of our ongoing operations for the period in which such
charges are incurred.

Litigation Settlement Gains, Losses and Expenses - including
gains, losses and expenses related to the resolution of
other-than-ordinary-course threatened and actually filed lawsuits and
other-than-ordinary-course contractual disputes, because (1) they are
not considered by management in making operating decisions, (2) such
litigation has been infrequent in nature, (3) such gains, losses and
expenses are generally not directly controlled by management, (4) we
believe such gains, losses and expenses do not necessarily reflect the
performance of our ongoing operations for the period in which such
charges are recognized and (5) the amount of such gains or losses and
expenses can vary significantly between companies and make comparisons
less reliable.

Deferred Executive Compensation - including charges related to
any contingent obligation pursuant to an executive severance agreement,
because that expense has no direct correlation with our recurring
business operations and including such expenses does not accurately
reflect the compensation expense for the period in which incurred.

Certain Income Tax Items - including certain deferred tax charges
and benefits that do not result in a current tax payment or tax refund
and other adjustments, including but not limited to, items unrelated to
the current fiscal year or that are not indicative of our ongoing
business operations.

The non-GAAP financial measures presented in the table above should not
be considered in isolation and are not an alternative for the respective
GAAP financial measure that is most directly comparable to each such
non-GAAP financial measure. Investors are cautioned against placing
undue reliance on these non-GAAP financial measures and are urged to
review and consider carefully the adjustments made by management to the
most directly comparable GAAP financial measures to arrive at these
non-GAAP financial measures. Non-GAAP financial measures may have
limited value as analytical tools because they may exclude certain
expenses that some investors consider important in evaluating our
operating performance or ongoing business performance. Further, non-GAAP
financial measures are likely to have limited value for purposes of
drawing comparisons between companies because different companies may
calculate similarly titled non-GAAP financial measures in different ways
because non-GAAP measures are not based on any comprehensive set of
accounting rules or principles.

Our earnings release contains forward-looking estimates of non-GAAP
diluted earnings per share for the first quarter of our 2019 fiscal year
("Q1 2019"). We provide this non-GAAP measure to investors on a
prospective basis for the same reasons (set forth above) that we provide
it to investors on a historical basis. We are unable to provide a
reconciliation of our forward-looking estimate of Q1 2019 GAAP diluted
earnings per share to a forward-looking estimate of Q1 2019 non-GAAP
diluted earnings per share because certain information needed to make a
reasonable forward-looking estimate of GAAP diluted earnings per share
for Q1 2019 (other than estimated share-based compensation expense of
$0.10 to $0.20 per diluted share, certain tax items of $0.00 to $0.15
per diluted share and estimated amortization of intangibles of $0.07 to
$0.11 per diluted share) is difficult to predict and estimate and is
often dependent on future events that may be uncertain or outside of our
control. Such events may include unanticipated changes in our GAAP
effective tax rate, unanticipated one-time charges related to asset
impairments (fixed assets, inventory, intangibles or goodwill),
unanticipated acquisition-related expenses, unanticipated litigation
settlement gains, losses and expenses and other unanticipated
non-recurring items not reflective of ongoing operations. The probable
significance of these unknown items, in the aggregate, is estimated to
be in the range of $0.00 to $0.05 in quarterly earnings per diluted
share on a GAAP basis. Our forward-looking estimates of both GAAP and
non-GAAP measures of our financial performance may differ materially
from our actual results and should not be relied upon as statements of
fact.

[a]   These charges represent expense recognized in accordance with ASC
718 - Compensation, Stock Compensation. For the three months ended
September 28, 2018, approximately $2.8 million, $10.4 million and
$8.3 million were included in cost of goods sold, research and
development expense and selling, general and administrative expense,
respectively. For the fiscal year ended September 28, 2018,
approximately $14.4 million, $42.6 million and $50.8 million were
included in cost of goods sold, research and development expense and
selling, general and administrative expense, respectively.
 
For the three months ended September 29, 2017, approximately $3.5
million, $9.4 million and $11.3 million were included in cost of
goods sold, research and development expense and selling, general
and administrative expense, respectively. For the fiscal year ended
September 29, 2017, approximately $13.6 million, $35.3 million and
$39.6 million were included in cost of goods sold, research and
development expense and selling, general and administrative expense,
respectively.
 
[b] The acquisition-related expenses recognized during the three months
ended September 28, 2018, include a $3.8 million charge to general
and administrative expenses primarily associated with acquisitions
completed or contemplated during the period and a $4.5 million
charge to cost of goods sold related to the sale of acquired
inventory, partially offset by a $4.0 million benefit for fair value
adjustments to reduce contingent considerations. The
acquisition-related expenses recognized during the fiscal year ended
September 28, 2018, include a $4.7 million charge to general and
administrative expenses primarily associated with acquisitions
completed or contemplated during the period and a $4.5 million
charge to cost of goods sold related to the sale of acquired
inventory, partially offset by a $11.8 million benefit for fair
value adjustments to reduce contingent considerations.
 
The acquisition-related expenses recognized during the three months
and fiscal year ended September 29, 2017, include a $0.3 million and
a $4.6 million charge, respectively, to general and administrative
expenses primarily associated with acquisitions completed or
contemplated during the period.
 
[c] During the three months ended September 28, 2018, the Company
incurred $2.3 million and $6.4 million in amortization of
acquisition-related intangibles included in cost of goods sold, and
selling, general and administrative expense, respectively. For the
fiscal year ended September 28, 2018, the Company incurred $2.3
million and $18.4 million in amortization of acquisition-related
intangibles included in cost of goods sold, and selling, general and
administrative expense, respectively.
 
During the three months and fiscal year ended September 29, 2017,
the Company incurred $5.0 million and $27.6 million, respectively,
in amortization of acquisition-related intangibles included in
selling, general and administrative expense.
 
[d] During the three months and fiscal year ended September 28, 2018,
the Company recognized $2.2 million and $3.2 million in
non-recurring charges, respectively, and a $2.8 million impairment
charge included in cost of goods sold.
 
During the three months and fiscal year ended September 29, 2017,
the Company incurred a $0.2 million credit and a $0.6 million
charge, respectively, in employee severance costs primarily related
to restructuring plans that were implemented during the periods.
 
[e] During the three months and fiscal year ended September 29, 2017,
the Company recognized a $4.0 million charge to general and
administrative expenses associated with ongoing litigations.
 
[f] During the three months and fiscal year ended September 28, 2018,
the Company recognized a $1.7 million benefit in deferred executive
compensation expense.
 
[g] During the three months and fiscal year ended September 28, 2018,
these amounts primarily represent the use of net operating loss and
research and development tax credit carryforwards, deferred tax
expense not affecting taxes payable, the release of previously
reserved items that are no longer required as a result of expiration
of the statute of limitations, and non-cash expense (benefit)
related to uncertain tax positions. Included in these amounts for
the fiscal year ended September 28, 2018, is a one-time charge of
$224.6 million related to the mandatory deemed repatriation tax on
foreign earnings and a one-time charge of $18.3 million related to
the revaluation of deferred tax assets and liabilities related to
tax reform.
 

During the three months and fiscal year ended September 29, 2017,
these amounts primarily represent the use of net operating loss
and research and development tax credit carryforwards, deferred
tax expense not affecting taxes payable, tax deductible
share-based compensation expense in excess of GAAP share-based
compensation expense, the release of previously reserved items
that are no longer required as a result of IRS audits, and
non-cash expense (benefit) related to uncertain tax positions.

 
SKYWORKS SOLUTIONS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
           
(in millions) September 28,
2018
September 29,
2017
Assets
Cash, cash equivalents and marketable securities $ 1,050.2 $ 1,616.8
Accounts receivable, net 655.8 454.7
Inventory 490.2 493.5
Property, plant and equipment, net 1,140.9 882.3
Goodwill and intangible assets, net 1,333.5 950.8
Other assets 158.3   175.5
Total assets $ 4,828.9   $ 4,573.6
 
Liabilities and Equity
Accounts payable $ 229.9 $ 258.4
Accrued and other liabilities 502.0 249.5
Stockholders' equity 4,097.0   4,065.7
Total liabilities and equity $ 4,828.9   $ 4,573.6
 
 
SKYWORKS SOLUTIONS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
           
Three Months Ended Twelve Months Ended
(in millions) September 28,
2018
September 29,
2017
September 28,
2018
September 29,
2017
Cash flow from operating activities
Net income $ 285.5 $ 281.3 $ 918.4 $ 1,010.2
Adjustments to reconcile net income to net cash provided by
operating activities:
Share-based compensation 21.5 24.2 107.8 88.5
Depreciation 73.6 60.4 272.5 227.2
Amortization of intangible assets 10.2 5.0 26.7 27.6
Deferred income taxes (8.3 ) (0.6 ) 27.3 2.2
Excess tax benefit from share-based compensation (5.4 ) (40.8 )
Changes in fair value of contingent consideration (4.1 ) (1.3 ) (11.9 ) (1.3 )
Other (1.0 ) 0.3 (0.7 ) 0.3
Changes in operating assets:
Receivables, net (180.1 ) (57.3 ) (193.8 ) (37.1 )
Inventory 22.1 (10.5 ) 11.9 (69.2 )
Other current and long-term assets 33.6 12.6 (12.2 ) 3.3
Accounts payable (69.7 ) 79.7 (126.0 ) 147.8
Other current and long-term liabilities 24.3   29.2   240.6   97.6  
Net cash provided by operations 207.6   417.6   1,260.6   1,456.3  
Cash flow from investing activities
Capital expenditures (112.3 ) (85.3 ) (422.3 ) (303.3 )
Payments for acquisitions, net of cash acquired (404.0 ) (404.0 ) (13.7 )
Purchased intangibles (12.1 ) (8.6 ) (12.1 )
Purchases of marketable securities (160.5 ) (683.7 )
Maturities and sales of marketable securities 335.6     368.2   3.2  
Net cash used in investing activities (341.2 ) (97.4 ) (1,150.4 ) (325.9 )
Cash flow from financing activities
Excess tax benefit from share-based compensation 5.4 40.8
Repurchase of common stock — payroll tax withholdings on equity
awards
(0.5 ) (1.2 ) (48.0 ) (49.2 )
Repurchase of common stock — stock repurchase program (235.0 ) (101.8 ) (759.5 ) (432.3 )
Dividends paid (68.0 ) (58.9 ) (243.2 ) (214.6 )
Net proceeds from exercise of stock options 4.0 8.0 38.8 53.8
Proceeds from employee stock purchase plan 8.3 7.8 18.2 15.0
Deferred payments for intangible assets (5.5 ) (5.5 )
Payments of contingent consideration   (1.2 )   (5.4 )
Net cash used in financing activities (291.2 ) (147.4 ) (993.7 ) (597.4 )
Net increase (decrease) in cash and cash equivalents (424.8 ) 172.8 (883.5 ) 533.0
Cash and cash equivalents at beginning of period 1,158.1   1,444.0   1,616.8   1,083.8  
Cash and cash equivalents at end of period $ 733.3   $ 1,616.8   $ 733.3   $ 1,616.8  

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