EXAR A NEW DIRECTION. Mixed Signal and Data Management Solutions for a Connected World

Transcription

1 EXAR A NEW DIRECTION Mixed Signal and Data Management Solutions for a Connected World

2 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 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., and December 30, 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: or the SEC s website at: 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.

3 Exar Corporation Founded: 1971 Headquarters: Fremont, California Design Centers: Silicon Valley, California; Hangzhou, China and Eatontown, New Jersey; Toronto, Canada Employees: 301 Revenue: $122mm* Net Margin: 15% March Quarter** Balance Sheet: $205mm Cash, No Debt *Fiscal 2013 **Non-GAAP

4 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

5 Financial Performance Fiscal Year 2013 Fourth Quarter Ending March 2013* Revenue $31.2 million - 1% Growth Q/Q, 12% Y/Y Gross Margin 52.7% Basis Point Increase Q/Q Operating Income $4.3 million - 21% Increase Q/Q EPS $ % Increase Q/Q *Non-GAAP Results

6 Exar Success Model FY 12 Results* Q1FY13 Results* Q2FY13 Results* Q3FY13 Results* Q4FY13 Results* FY 13 Results* Long-Term Model* Revenue $131M $29.3M $30.6M $31.0M $31.2M $122M $45M Gross Margin 47% 47% 47% 49% 53% 49% Operating Expense Operating Inc/ (Loss) 52% 44% 40% 38% 39% 40% 53% - 55% 32% - 34% (5%) 3% 7% 11% 14% 9% 23% EPS -$0.10 $0.03 $0.06 $0.09 $0.10 $0.28 $ $0.25 *Non-GAAP Results

7 Operating Income/Loss* $4,500 Q4-13 $4,316 Q3-13 $3,560 $1,750 $774 Q2-13 $2,225 Q1-13 $893 $k $87 $134 -$1,000 -$404 -$1,528 -$1,544 -$1,232 -$1,967 -$2,448 -$3,750 -$2,930 -$3,725 -$3,079 -$4,249 -$4,968 -$4,744 -$5,438 -$5,384 Q4-12 -$6,500 -$6,155 Q3-08 Q1-09 Q3-09 Q1-10 Q3-10 Q1-11 Q3-11 Q1-12 Q3-12 Q1-13 Q3-13 *Quarterly Non-GAAP Results 7

8 Revenue Per Employee Trend Title $500, $375, $250, $125, $

9 Strategic Vision Achievement of Success Model Serve High Growth Markets with Innovative Value-Added Solutions High Performance Analog Mixed Signal Data Management Solutions Consistent Profitable Growth Differentiation - Technology and Innovation Diversity - Markets, Customers and Products Appreciation in Shareholder Value Non-GAAP EBIT Growth GAAP EPS Growth

10 Market Focus Networking and Storage Industrial and Embedded Systems Communications Infrastructure

11 Product Focus Power Management Products Connectivity Products Data Management Solutions

12 Product Line Contribution* 21% Power Connectivity Data Compression Communications 9% 16% 54% *Fiscal Year 2013

13 End Market Contribution* 30% Networking Industrial Communications Other 20% 49% *Fiscal Year 2013

14 Geographic Contribution* 27% Americas Asia Europe 14% 59% *Fiscal Year 2013

15 Power Management Products Analog Power Management Switching Regulators Switching Controllers Linear Regulators Supervisory Controllers Programmable Power Multiple Output Synchronous Buck Controllers

16 End Market Focus Served Available Market (SAM) Market Volume ASP SAM Customers Set Top Box 150M $2.00 $300M Pace, Motorola Technicolor Switches/Routers 20M $5.00 $100M Cisco, HP, Alcatel, Huawei MF Printers 10M $5.00 $50M HP, Canon, Konica, Minolta Servers 15M $10.00 $150M HP, IBM, Dell, Intel Surveillance 40M $2.00 $80M Siemens, Johnson, Pelco Patient Monitor 10M $3.00 $30M GE, Honeywell, Mindray BTS/BSC/RRH 5M $8.00 $40M NSN, Ericsson, ZTE POS 15M $2.00 $30M Ingenico, Hypercom Others 40M $2.50 $100M Auto, Gateway, Consumer TOTAL $880M

17 POWER XR Exar Programmable PowerSuite 5.0

18 Exar Programmable Power SINGLE INPUT - FOUR OUTPUT ANALOG FEATURES EXAR 147 # OF COMPONENTS 33 DISCRETE SOFT-START YES DISCRETE MARGINING YES DISCRETE SEQUENCE & TRACK YES NO DYNAMIC CONTROL YES NO FAULT MANAGEMENT YES NO I2C INTERFACE YES

19 Power Management Revenue $9.00 $6.75 $M $4.50 $2.25 $0 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413

20 Data Compression and Security Hardware Acceleration and Software Solutions Compression Decompression Acceleration Encryption Decryption

21 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

22 Data Compression and Security Data 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 $70M Network Security Cisco, Juniper, Huawei, F5 $140M VOIP Security Acme Packet, Cisco $25M Remote Replication HP, IBM, Raytheon $30M TOTAL $525M

23 CPU v. Storage IOPS Input Output Operations per Second " " CPU 12,000X Increase " Bottleneck 10000" 1000" 100" STORAGE 120X Increase 10" 1" 1" 2" 3" 4" 5" 6" 7" 8" 9" 10" 11"

24 Data Compression Application Off-Load Processor and Software Compression Engine with PCIe Interface CLOUD WAN PCIe ENTERPRISE Exar DX1845 EXAR DX1845 1GbE/10GbE PCIe PCIe PCIe CPU SUB-SYSTEM

25 Panther I First Generation Compression/Security Engine with PCIe Interface Transform Engine PCIe 4x DMA Hash Encryption Compression Flash Ctlr GPIO RNG Public Key Engine PK Mgr

26 Panther II 2nd Generation Compression and Security Engine with PCIe and FPGA Interface Public Key Engine PCIe 4x DMA Transform Engine Hash Encryption Flash Ctlr GPIO RNG Config FPGA Control Compression Interlacken Interface External FPGA

27 Data Compression/Security Revenue $7.00 Legacy Security Processor Compression Engine $5.25 $M $3.50 $1.75 $0 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413

28 Altior Acquistion AltraFlex GZIP Compression/ Acceleration Board - 10Gbps to 15Gbps Exar Altior Hardware Hardware CeDeFS Software Application Transparent Compression Software Hardware + Software = AltraStar Software Software AltraFlex + CeDeFs tuned to Hadoop/MapReduce

29 Altior CeDeFS OEM Solution Applications Native Linux Kernel CeDeFS 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. Native Linux FS Storage Volume Panther I, II or Altior PCIe Card

30 Hadoop File System

31 AltraHadoop CeDeFS

32 Connectivity Bridges UARTs USB PCIe I2C Transceivers Differential Serial

33 Connectivity Products Total Available Market (TAM) UARTs $150M $500M $300M Transceivers Bridges Digital $1,500M

34 Connectivity Products UARTS, Bridges and Transceivers Comm Industrial Point-of-Sale Value Embedded Computing Servers Consumer Volume

35 Connectivity Application UART and Transceiver UART RS232 RS485 Distance RS232 RS485 UART EQUIPMENT

36 Connectivity Revenue $21.00 $15.75 $M $10.50 $5.25 $0 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413

37 Exar Summary

38 Core Assets, Markets and Products Management Team - Strong Record of Success Brand Recognition - 40 Years of History Customers - 14,000 Worldwide Channel Partners - Future, Arrow and WT Balance Sheet $200M Cash Networking Industrial Communications Power Management Data Management Connectivity

39 Exar Success Model FY 12 Results* Q1FY13 Results* Q2FY13 Results* Q3FY13 Results* Q4FY13 Results* FY 13 Results* Long-Term Model* Revenue $131M $29.3M $30.6M $31.0M $31.2M $122M $45M Gross Margin 47% 47% 47% 49% 53% 49% Operating Expense Operating Inc/ (Loss) 52% 44% 40% 38% 39% 40% 53% - 55% 32% - 34% (5%) 3% 7% 11% 14% 9% 23% EPS -$0.10 $0.03 $0.06 $0.09 $0.10 $0.28 $ $0.25 *Non-GAAP Results

40 Thank you Louis DiNardo President and CEO and Ryan Benton Chief Financial Officer