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Allegro MicroSystems Reports Third Quarter 2025 Results
Source: Nasdaq GlobeNewswire / 30 Jan 2025 07:00:01 America/New_York
MANCHESTER, N.H., Jan. 30, 2025 (GLOBE NEWSWIRE) -- Allegro MicroSystems, Inc. (“Allegro” or the “Company”) (Nasdaq: ALGM), a global leader in power and sensing semiconductor solutions for motion control and energy efficient systems, today announced financial results for its third quarter ended December 27, 2024.
“We delivered on our commitments with third quarter sales of $178 million and non-GAAP EPS of $0.07, both above the midpoint of our guidance,” said Vineet Nargolwala, President and CEO of Allegro. “During the quarter, we introduced a record number of new magnetic sensing and power products to the market, further expanding our differentiated portfolios. This increasing velocity further solidifies our market leadership and positions us well for above market growth.”
Third Quarter Financial Highlights:
In thousands, except per share data Three-Month Period Ended Nine-Month Period Ended December 27, 2024 September 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net Sales Automotive $ 130,066 $ 141,893 $ 194,764 $ 403,143 $ 577,515 Industrial and other 47,806 45,498 60,220 129,039 231,271 Total net sales $ 177,872 $ 187,391 $ 254,984 $ 532,182 $ 808,786 GAAP Financial Measures Gross margin % 45.7 % 45.7 % 52.5 % 45.4 % 55.8 % Operating margin % — % 2.2 % 14.4 % (1.2 )% 22.3 % Diluted EPS $ (0.04 ) $ (0.18 ) $ 0.17 $ (0.31 ) $ 0.82 Non-GAAP Financial Measures Gross margin % 49.1 % 48.8 % 54.6 % 48.9 % 57.0 % Operating margin % 10.8 % 11.7 % 27.2 % 9.6 % 29.8 % Diluted EPS $ 0.07 $ 0.08 $ 0.32 $ 0.18 $ 1.11 Business Outlook
For the fourth quarter of fiscal year 2025 ending March 28, 2025, the Company expects total net sales to be in the range of $180 million to $190 million.
The Company also estimates the following results on a non-GAAP basis:
- Gross Margin is expected to be between 46% and 48%, which contemplates the impact of annual pricing agreements ahead of cost reductions, as well as higher capacity charges resulting from adjusted production levels in the quarter,
- Operating expenses are expected to increase by approximately 5% sequentially to $72 million, primarily due to annual payroll tax resets,
- As a result of the expected repricing of the term loan and anticipated $30 million Q4 debt repayment, the Company now expects Interest Expense to be approximately $6 million, and
- Diluted Earnings per Share are expected to be between $0.03 and $0.07.
Allegro has not provided a reconciliation of its fourth fiscal quarter outlook for non-GAAP Gross Margin, non-GAAP Operating Expenses, non-GAAP Interest Expense, and non-GAAP Diluted Earnings per Share because estimates of all of the reconciling items cannot be provided without unreasonable efforts. It is difficult to reasonably provide a forward-looking estimate between such forward-looking non-GAAP measures and the comparable forward-looking U.S. generally accepted accounting principles (“GAAP”) measures. Certain factors that are materially significant to Allegro’s ability to estimate these items are out of its control and/or cannot be reasonably predicted.
Earnings Webcast
A webcast will be held on Thursday, January 30, 2025 at 8:30 a.m., Eastern Time. Vineet Nargolwala, President and Chief Executive Officer, and Derek P. D’Antilio, Executive Vice President and Chief Financial Officer, will discuss Allegro’s business and financial results.
The webcast will be available on the Investor Relations section of the Company’s website at investors.allegromicro.com. A recording of the webcast will be posted in the same location shortly after the call concludes and will be available for at least 90 days.
About Allegro MicroSystems
Allegro MicroSystems is a leading global designer, developer, fabless manufacturer and marketer of sensor integrated circuits (“ICs”) and application-specific analog power ICs enabling emerging technologies in the automotive and industrial markets. Allegro’s diverse product portfolio provides efficient and reliable solutions for the electrification of vehicles, automotive ADAS safety features, automation for Industry 4.0 and power saving technologies for data centers and clean energy applications.
Forward-Looking Statements
This press release 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. All statements, other than statements of historical facts, contained in this press release including statements regarding our future results of operations and financial position, business strategy, prospective products and the plans and objectives of management for future operations, including, among others, statements regarding the liquidity, growth and profitability strategies and factors affecting our business are 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.
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,” “would,” “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 current expectations, 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 II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended March 29, 2024, as any such factors may be updated from time to time in our Quarterly Reports on Form 10-Q and our other filings with the Securities and Exchange Commission (the “SEC”). These risks and uncertainties include, but are not limited to: downturns or volatility in general economic conditions; our ability to compete effectively, expand our market share and increase our net sales and profitability; our reliance on a limited number of third-party semiconductor wafer fabrication facilities and suppliers of other materials; any failure to adjust purchase commitments and inventory management based on changing market conditions or customer demand; shifts in our product mix, customer mix or channel mix, which could negatively impact our gross margin; the cyclical nature of the semiconductor industry, including the analog segment in which we compete; any downturn or disruption in the automotive market or industry; our ability to successfully integrate the acquisition of other companies or technologies and products into our business; our ability to compensate for decreases in average selling prices of our products and increases in input costs; 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; our ability to accurately predict our quarterly net sales and operating results and meet the expectations of investors; our dependence on manufacturing operations in the Philippines; our reliance on distributors to generate sales; events beyond our control impacting us, our key suppliers or our manufacturing partners; our ability to develop new product features or new products in a timely and cost-effective manner; our ability to manage growth; any slowdown in the growth of our end markets; the loss of one or more significant customers; 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 export restrictions and tariffs; our exposures to warranty claims, product liability claims and product recalls; our dependence on international customers and operations; the availability of rebates, tax credits and other financial incentives on end-user demands for certain products; risks, liabilities, costs and obligations related to governmental regulations and other legal obligations, including export/trade control, privacy, data protection, information security, cybersecurity, consumer protection, environmental and occupational health and safety, antitrust, anti-corruption and anti-bribery, product safety, environmental protection, employment matters and tax; the volatility of currency exchange rates; our ability to raise capital to support our growth strategy; our indebtedness may limit our flexibility to operate our business; our ability to effectively manage our growth and to retain key and highly skilled personnel; 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 or confidential information or those of our third-party service providers; our principal stockholder continues to have influence over us; anti-takeover provisions in our organizational documents and under the General Corporation Law of the State of Delaware; any failure to design, implement or maintain effective internal control over financial reporting; changes in tax rates or the adoption of new tax legislation; the negative impacts of sustained inflation on our business; the physical, transition and litigation risks presented by climate change; and other events beyond our control. 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 press release and the documents that we reference 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. All forward-looking statements speak only as of the date of this press release, and except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, changed circumstances or otherwise.
This press release includes certain non-GAAP financial measures as defined by the SEC rules. These non-GAAP financial measures are provided in addition to, and not as a substitute for or superior to measures of, financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their most directly comparable GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the presented non-GAAP financial measures as tools for comparison.
This press release may not be reproduced, forwarded to any person or published, in whole or in part.
ALLEGRO MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)Three-Month Period Ended Nine-Month Period Ended December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 Net sales $ 177,872 $ 254,984 $ 532,182 $ 808,786 Cost of goods sold 96,657 121,156 290,534 357,505 Gross profit 81,215 133,828 241,648 451,281 Operating expenses: Research and development 43,317 44,396 132,031 130,799 Selling, general and administrative 37,939 52,746 116,221 140,135 Total operating expenses 81,256 97,142 248,252 270,934 Operating (loss) income (41 ) 36,686 (6,604 ) 180,347 Interest and other (expense) income (7,561 ) (315 ) (25,902 ) (2,801 ) Loss on change in fair value of forward repurchase contract — — (34,752 ) — (Loss) income before income taxes (7,602 ) 36,371 (67,258 ) 177,546 Income tax (benefit) provision (803 ) 2,969 (9,233 ) 17,584 Net (loss) income (6,799 ) 33,402 (58,025 ) 159,962 Net income attributable to non-controlling interests 61 57 185 150 Net (loss) income attributable to Allegro MicroSystems, Inc. $ (6,860 ) $ 33,345 $ (58,210 ) $ 159,812 Net (loss) income per common share attributable to Allegro MicroSystems, Inc.: Basic $ (0.04 ) $ 0.17 $ (0.31 ) $ 0.83 Diluted $ (0.04 ) $ 0.17 $ (0.31 ) $ 0.82 Weighted average shares outstanding: Basic 184,011,189 192,724,541 188,886,583 192,384,315 Diluted 184,011,189 194,570,380 188,886,583 194,925,040 Supplemental Schedule of Total Net Sales
The following table summarizes total net sales by market within the Company’s unaudited condensed consolidated statements of operations:
Three-Month Period Ended Change Nine-Month Period Ended Change December 27, 2024 December 29, 2023 Amount % December 27, 2024 December 29, 2023 Amount % (Dollars in thousands) (Dollars in thousands) Automotive $ 130,066 $ 194,764 $ (64,698 ) (33 )% $ 403,143 $ 577,515 $ (174,372 ) (30 )% Industrial and other 47,806 60,220 (12,414 ) (21 )% 129,039 231,271 (102,232 ) (44 )% Total net sales $ 177,872 $ 254,984 $ (77,112 ) (30 )% $ 532,182 $ 808,786 $ (276,604 ) (34 )% ALLEGRO MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)December 27, March 29, 2024
(Unaudited)2024 Assets Current assets: Cash and cash equivalents $ 138,452 $ 212,143 Restricted cash 10,510 10,018 Trade accounts receivable, net 83,805 118,508 Inventories 193,140 162,302 Prepaid income taxes 36,037 31,908 Prepaid expenses and other current assets 33,683 33,584 Current portion of related party notes receivable — 3,750 Total current assets 495,627 572,213 Property, plant and equipment, net 320,975 321,175 Deferred income tax assets 65,398 54,496 Goodwill 202,101 202,425 Intangible assets, net 261,553 276,854 Related party notes receivable, less current portion — 4,688 Equity investment in related party 30,914 26,727 Other assets 65,172 72,025 Total assets $ 1,441,740 $ 1,530,603 Liabilities, Non-Controlling Interests and Stockholders’ Equity Current liabilities: Trade accounts payable $ 39,685 $ 35,964 Amounts due to related party 2,102 1,626 Accrued expenses and other current liabilities 57,751 76,389 Current portion of long-term debt 1,374 3,929 Total current liabilities 100,912 117,908 Long-term debt 374,729 249,611 Other long-term liabilities 31,673 31,368 Total liabilities 507,314 398,887 Commitments and contingencies Stockholders’ Equity: Preferred stock — — Common stock 1,840 1,932 Additional paid-in capital 1,004,080 694,332 (Accumulated deficit) retained earnings (38,791 ) 463,012 Accumulated other comprehensive loss (34,084 ) (28,841 ) Equity attributable to Allegro MicroSystems, Inc. 933,045 1,130,435 Non-controlling interests 1,381 1,281 Total stockholders’ equity 934,426 1,131,716 Total liabilities, non-controlling interests and stockholders’ equity $ 1,441,740 $ 1,530,603 ALLEGRO MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)Three-Month Period Ended Nine-Month Period Ended December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 Cash flows from operating activities: Net (loss) income $ (6,799 ) $ 33,402 $ (58,025 ) $ 159,962 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 16,123 20,195 48,578 49,548 Amortization of deferred financing costs 694 185 1,781 292 Deferred income taxes (3,751 ) (10,119 ) (11,546 ) (28,253 ) Stock-based compensation 10,588 10,920 32,251 32,839 Loss on change in fair value of forward repurchase contract — — 34,752 — Provisions for inventory and expected credit losses 3,031 429 7,519 9,851 Change in fair value of marketable securities — — — 3,579 Other non-cash reconciling items 68 (25 ) 6,645 18 Changes in operating assets and liabilities: Trade accounts receivable (7,061 ) 5,081 34,356 (2,564 ) Inventories (19,243 ) 11,312 (38,074 ) (19,909 ) Prepaid expenses and other assets 14,407 7,368 (1,401 ) (13,085 ) Trade accounts payable (8,203 ) (12,299 ) 5,467 (9,604 ) Due to and from related parties (3,568 ) 705 564 6,817 Accrued expenses and other current and long-term liabilities (4,469 ) 9,404 (21,307 ) (20,540 ) Net cash (used in) provided by operating activities (8,183 ) 76,558 41,560 168,951 Cash flows from investing activities: Purchases of property, plant and equipment (13,615 ) (34,399 ) (34,564 ) (110,500 ) Acquisition of business, net of cash acquired 319 (408,119 ) 319 (408,119 ) Sales of marketable securities — — — 16,175 Net cash used in investing activities (13,296 ) (442,518 ) (34,245 ) (502,444 ) Cash flows from financing activities: Net proceeds from Refinanced 2023 Term Loan Facility — — 193,483 — Repayment of 2023 Term Loan Facility (25,000 ) — (75,000 ) — Borrowings of senior secured debt, net of deferred financing costs — 245,452 — 245,452 Repayment of 2020 Term Loan Facility — (25,000 ) — (25,000 ) Repayments of other debt — (743 ) — (743 ) Finance lease payments (318 ) — (703 ) — Receipts on related party notes receivable — 938 1,875 2,813 Payments for taxes related to net share settlement of equity awards (483 ) (10,732 ) (12,780 ) (24,823 ) Proceeds from issuance of common stock under employee stock purchase plan — — 1,987 1,899 Repurchases of common stock (116 ) — (853,921 ) — Net proceeds from issuance of common stock — — 665,850 — Payment of debt issuance costs — — — (1,450 ) Net cash (used in) provided by financing activities (25,917 ) 209,915 (79,209 ) 198,148 Effect of exchange rate changes on cash and cash equivalents and restricted cash (2,680 ) 1,349 (1,305 ) 375 Net (decrease) increase in cash and cash equivalents and restricted cash (50,076 ) (154,696 ) (73,199 ) (134,970 ) Cash and cash equivalents and restricted cash at beginning of period 199,038 378,431 222,161 358,705 Cash and cash equivalents and restricted cash at end of period: $ 148,962 $ 223,735 $ 148,962 $ 223,735 Non-GAAP Financial Measures
In addition to the measures presented in our condensed consolidated financial statements, we regularly review other measures, defined as non-GAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts and make strategic decisions. The key measures we consider are non-GAAP Gross Profit, non-GAAP Gross Margin, non-GAAP Operating Expenses, non-GAAP Operating Income, non-GAAP Operating Margin, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP Profit before Tax, non-GAAP Income Tax Provision, non-GAAP Effective Tax Rate, non-GAAP Net Income Attributable to Allegro MicroSystems, Inc, non-GAAP Basic and Diluted Earnings per Share, non-GAAP Free Cash Flow, and non-GAAP Free Cash Flow as percentage of net sales (collectively, the “Non-GAAP Financial Measures”). These Non-GAAP Financial Measures provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or that occur relatively infrequently and/or that management considers to be unrelated to our core operations, and in the case of non-GAAP Income Tax Provision, management believes that this non-GAAP measure of income taxes provides it with the ability to evaluate the non-GAAP Income Tax Provision across different reporting periods on a consistent basis, independent of special items and discrete items, which may vary in size and frequency. These Non-GAAP Financial Measures are used by both management and our board of directors, together with the comparable GAAP information, in evaluating our current performance and planning our future business activities.
The Non-GAAP Financial Measures are supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP. These Non-GAAP Financial Measures should not be considered as substitutes for GAAP financial measures, such as gross profit, gross margin, net income or any other performance measures derived in accordance with GAAP. Also, in the future we may incur expenses or charges, such as those being adjusted in the calculation of these Non-GAAP Financial Measures. Our presentation of these Non-GAAP Financial Measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. These Non-GAAP Financial Measures exclude costs related to acquisition and related integration expenses, amortization of acquired intangible assets, stock-based compensation, restructuring actions, related-party activities and other non-operational costs.
Non-GAAP Income Tax Provision
In calculating non-GAAP Income Tax Provision, we have added back the following to GAAP Income Tax Provision:
- Tax effect of adjustments to GAAP results—Represents the estimated income tax effect of the adjustments to non-GAAP Profit before Tax described below and elimination of discrete tax adjustments.
Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin Three-Month Period Ended Nine-Month Period Ended December 27, 2024 September 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 (Dollars in thousands) (Dollars in thousands) GAAP Gross Profit $ 81,215 $ 85,662 $ 133,828 $ 241,648 $ 451,281 GAAP Gross Margin (% of net sales) 45.7 % 45.7 % 52.5 % 45.4 % 55.8 % Non-GAAP adjustments Transaction-related costs 5 10 523 14 523 Purchased intangible amortization 4,875 4,875 3,648 14,625 4,323 Restructuring costs 522 16 166 1,738 166 Stock-based compensation 802 817 1,073 2,180 4,625 Total Non-GAAP Adjustments $ 6,204 $ 5,718 $ 5,410 $ 18,557 $ 9,637 Non-GAAP Gross Profit $ 87,419 $ 91,380 $ 139,238 $ 260,205 $ 460,918 Non-GAAP Gross Margin (% of net sales) 49.1 % 48.8 % 54.6 % 48.9 % 57.0 % Reconciliation of Non-GAAP Operating Expenses Three-Month Period Ended Nine-Month Period Ended December 27, 2024 September 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 (Dollars in thousands) (Dollars in thousands) GAAP Operating Expenses $ 81,256 $ 81,595 $ 97,142 $ 248,252 $ 270,934 Research and Development Expenses GAAP Research and Development Expenses 43,317 43,510 44,396 132,031 130,799 Non-GAAP adjustments Transaction-related costs 333 206 343 1,568 352 Restructuring costs 568 260 908 997 908 Stock-based compensation 3,960 3,523 3,870 11,218 10,340 Other costs(1) — 3 — 3 — Non-GAAP Research and Development Expenses 38,456 39,518 39,275 118,245 119,199 Selling, General and Administrative Expenses GAAP Selling, General and Administrative Expenses 37,939 38,085 52,746 116,221 140,135 Non-GAAP adjustments Transaction-related costs 148 275 9,543 1,237 14,419 Purchased intangible amortization 535 535 495 1,605 1,210 Restructuring costs 1,264 2,046 5,795 4,355 5,795 Stock-based compensation 5,826 7,205 5,977 18,853 17,874 Other costs(1) 391 (1,820 ) 283 (618 ) 383 Non-GAAP Selling, General and Administrative Expenses 29,775 29,844 30,653 90,789 100,454 Total Non-GAAP Adjustments 13,025 12,233 27,214 39,218 51,281 Non-GAAP Operating Expenses $ 68,231 $ 69,362 $ 69,928 $ 209,034 $ 219,653 (1) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure, such as project evaluation costs, which consist of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions. Reconciliation of Non-GAAP Operating Income and Non-GAAP Operating Margin Three-Month Period Ended Nine-Month Period Ended December 27, 2024 September 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 (Dollars in thousands) (Dollars in thousands) GAAP Operating (Loss) Income $ (41 ) $ 4,067 $ 36,686 $ (6,604 ) $ 180,347 GAAP Operating Margin (% of net sales) — % 2.2 % 14.4 % (1.2 )% 22.3 % Transaction-related costs 486 491 10,409 2,819 15,294 Purchased intangible amortization 5,410 5,410 4,143 16,230 5,533 Restructuring costs 2,354 2,322 6,869 7,090 6,869 Stock-based compensation 10,588 11,545 10,920 32,251 32,839 Other costs(1) 391 (1,817 ) 283 (615 ) 383 Total Non-GAAP Adjustments $ 19,229 $ 17,951 $ 32,624 $ 57,775 $ 60,918 Non-GAAP Operating Income $ 19,188 $ 22,018 $ 69,310 $ 51,171 $ 241,265 Non-GAAP Operating Margin (% of net sales) 10.8 % 11.7 % 27.2 % 9.6 % 29.8 % (1) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure, such as project evaluation costs, which consist of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions. Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin Three-Month Period Ended Nine-Month Period Ended December 27, 2024 September 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 (Dollars in thousands) (Dollars in thousands) GAAP Net (Loss) Income $ (6,799 ) $ (33,613 ) $ 33,402 $ (58,025 ) $ 159,962 GAAP Net (Loss) Income Margin (% of net sales) (3.8 )% (17.9 )% 13.1 % (10.9 )% 19.8 % Interest expense 7,762 10,353 3,854 23,492 5,381 Interest income (388 ) (420 ) (857 ) (1,302 ) (2,550 ) Income tax (benefit) provision (803 ) (9,470 ) 2,969 (9,233 ) 17,584 Depreciation & amortization 16,123 15,997 20,227 48,578 49,645 EBITDA $ 15,895 $ (17,153 ) $ 59,595 $ 3,510 $ 230,022 Transaction-related costs 486 3,295 10,409 5,623 15,294 Restructuring costs 2,354 2,067 6,869 6,835 6,869 Stock-based compensation 10,588 11,545 10,920 32,251 32,839 Loss on change in fair value of forward repurchase contract — 34,752 — 34,752 — Other costs(1) 998 (2,195 ) (551 ) 1,610 5,339 Adjusted EBITDA $ 30,321 $ 32,311 $ 87,242 $ 84,581 $ 290,363 Adjusted EBITDA Margin (% of net sales) 17.0 % 17.2 % 34.2 % 15.9 % 35.9 % (1) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure, such as project evaluation costs, which consist of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions, and income (loss) in earnings of equity investments. Reconciliation of Non-GAAP Profit before Tax Three-Month Period Ended Nine-Month Period Ended December 27, 2024 September 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 (Dollars in thousands) (Dollars in thousands) GAAP (Loss) Income before Income Taxes $ (7,602 ) $ (43,083 ) $ 36,371 $ (67,258 ) $ 177,546 Transaction-related costs 486 3,295 10,409 5,623 15,294 Transaction-related interest 192 141 162 1,042 162 Purchased intangible amortization 5,410 5,410 4,143 16,230 5,533 Restructuring costs 2,354 2,067 6,869 6,835 6,869 Stock-based compensation 10,588 11,545 10,920 32,251 32,839 Loss on change in fair value of forward repurchase contract — 34,752 — 34,752 — Other costs(1) 1,427 1,428 (551 ) 5,662 5,339 Total Non-GAAP Adjustments $ 20,457 $ 58,638 $ 31,952 $ 102,395 $ 66,036 Non-GAAP Profit before Tax $ 12,855 $ 15,555 $ 68,323 $ 35,137 $ 243,582 (1) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure, such as project evaluation costs, which consist of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions, and income (loss) in earnings of equity investments. Reconciliation of Non-GAAP Income Tax Provision and Non-GAAP Effective Tax Rate Three-Month Period Ended Nine-Month Period Ended December 27, 2024 September 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 (Dollars in thousands) (Dollars in thousands) GAAP Income Tax (Benefit) Provision $ (803 ) $ (9,470 ) $ 2,969 $ (9,233 ) $ 17,584 GAAP effective tax rate 10.6 % 22.0 % 8.2 % 13.7 % 9.9 % Tax effect of adjustments to GAAP results 398 10,071 3,748 10,074 10,128 Non-GAAP Income Tax (Benefit) Provision $ (405 ) $ 601 $ 6,717 $ 841 $ 27,712 Non-GAAP effective tax rate (3.2 )% 3.9 % 9.8 % 2.4 % 11.4 % Reconciliation of Non-GAAP Net Income Attributable to Allegro MicroSystems, Inc. and Non-GAAP Earnings per Share Three-Month Period Ended Nine-Month Period Ended December 27, 2024 September 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 (Dollars in thousands) (Dollars in thousands) GAAP Net (Loss) Income Attributable to Allegro MicroSystems, Inc.(1) $ (6,860 ) $ (33,675 ) $ 33,345 $ (58,210 ) $ 159,812 GAAP Basic weighted average common shares 184,011,189 189,182,850 192,724,541 188,886,583 192,384,315 GAAP Diluted weighted average common shares 184,011,189 189,182,850 194,570,380 188,886,583 194,925,040 GAAP Basic (Loss) Earnings per Share $ (0.04 ) $ (0.18 ) $ 0.17 $ (0.31 ) $ 0.83 GAAP Diluted (Loss) Earnings per Share $ (0.04 ) $ (0.18 ) $ 0.17 $ (0.31 ) $ 0.82 Transaction-related costs 486 3,295 10,409 5,623 15,294 Transaction-related interest 192 141 162 1,042 162 Purchased intangible amortization 5,410 5,410 4,143 16,230 5,533 Restructuring costs 2,354 2,067 6,869 6,835 6,869 Stock-based compensation 10,588 11,545 10,920 32,251 32,839 Loss on change in fair value of forward repurchase contract — 34,752 — 34,752 — Other costs(2) 1,427 1,428 (551 ) 5,662 5,339 Total Non-GAAP Adjustments 20,457 58,638 31,952 102,395 66,036 Tax effect of adjustments to GAAP results(3) (398 ) (10,071 ) (3,748 ) (10,074 ) (10,128 ) Non-GAAP Net Income Attributable to Allegro MicroSystems, Inc. $ 13,199 $ 14,892 $ 61,549 $ 34,111 $ 215,720 Basic weighted average common shares 184,011,189 189,182,850 192,724,541 188,886,583 192,384,315 Diluted weighted average common shares 184,485,792 189,710,595 194,570,380 189,577,693 194,925,040 Non-GAAP Basic Earnings per Share $ 0.07 $ 0.08 $ 0.32 $ 0.18 $ 1.12 Non-GAAP Diluted Earnings per Share $ 0.07 $ 0.08 $ 0.32 $ 0.18 $ 1.11 (1) GAAP Net (Loss) Income Attributable to Allegro MicroSystems, Inc. represents GAAP Net (Loss) Income adjusted for Net Income Attributable to non-controlling interests. (2) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure, such as project evaluation costs, which consists of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions, income (loss) in earnings of equity investments, and unrealized losses (gains) on investments. (3) To calculate the tax effect of adjustments to GAAP results, the Company considers each non-GAAP adjustment by tax jurisdiction and reverses all discrete items to calculate an annual non-GAAP effective tax rate (“NG ETR”). This NG ETR is then applied to Non-GAAP Profit Before Tax to arrive at the tax effect of adjustments to GAAP results. Reconciliation of Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow as Percentage of Net Sales Three-Month Period Ended Nine-Month Period Ended December 27, 2024 September 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023 (Dollars in thousands) (Dollars in thousands) GAAP Operating Cash Flow $ (8,183 ) $ 15,547 $ 76,558 $ 41,560 $ 168,951 GAAP Operating Cash Flow (% of net sales) -4.6 % 8.3 % 30.0 % 7.8 % 20.9 % Non-GAAP adjustments Purchases of property, plant and equipment (13,615 ) (9,972 ) (34,399 ) (34,564 ) (110,500 ) Non-GAAP Free Cash Flow $ (21,798 ) $ 5,575 $ 42,159 $ 6,996 $ 58,451 Non-GAAP Free Cash Flow (% of net sales) (12.3 )% 3.0 % 16.5 % 1.3 % 7.2 % Investor Contact:
Jalene Hoover
VP of Investor Relations & Corporate Communications
+1 (512) 751-6526
jhoover@allegromicro.com
