MACOM Technology Solutions Holdings, Inc. (MTSI) 2013 Q2 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Mindspeed Q2 2013 earnings conference call. At this time, all lines are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Kevin Trosian, Vice President, Corporate Development and Investor Relations. Please go ahead.

各位女士、各位先生，大家好，歡迎參加 Mindspeed 2013 年第二季（Q2）財報電話會議。目前所有線路均為僅收聽模式。稍後我們將進行問答環節，屆時會提供相關指示。（接線員指示）提醒各位，今天的電話會議將被錄音。現在我想把會議交給今天的主持人——Kevin Trosian，企業發展與投資人關係副總裁。請開始。

Thank you and good afternoon to all of you who have joined us for today's call to discuss Mindspeed's fiscal second quarter of 2013 financial results. Our press release issued this afternoon detailing these results may be accessed in the Investors section of our website at www.mindspeed.com.

謝謝，各位下午好，感謝各位參加今天的電話會議，一同討論 Mindspeed 2013 會計年度第二季的財務結果。我們今天下午發布的新聞稿已詳述這些結果，可至我們網站 www.mindspeed.com 的「投資人」專區查閱。

Today, our CEO, Raouf Halim, will describe some key milestones for the business, our progress in the wireless small cell market and the strategic focus of the Company going forward. Following Mr. Halim, Stephen Ananias, our CFO, will review fiscal second-quarter 2013 financial results and provide financial guidance for our fiscal third quarter of 2013.

今天，我們的執行長 Raouf Halim 將說明公司業務的一些關鍵里程碑、我們在無線小型基地台（small cell）市場的進展，以及公司未來的策略重點。Halim 先生之後，我們的財務長 Stephen Ananias 將回顧 2013 會計年度第二季的財務結果，並提供 2013 會計年度第三季的財務展望。

Before we begin, I want to remind you that our comments today will include forward-looking statements within the meaning of federal securities laws. Forward-looking statements include, among others, statements regarding our expectations, goals or intentions, including, but not limited to, our current assessment of the demand environment and trends in our target markets, including the anticipated environment and trends in fiscal 2013, our assessment of growth opportunities in specific product markets such as 4G LTE and the small cell wireless market generally and our current expectations for fiscal third-quarter net product revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income and expense and the provision for income taxes and weighted average diluted shares outstanding.

在開始之前，我想提醒各位，我們今天的評論將包含聯邦證券法所定義的前瞻性陳述。前瞻性陳述包括但不限於關於我們的預期、目標或意圖的陳述，其中包括但不限於：我們目前對需求環境以及目標市場趨勢的評估（包括對 2013 會計年度預期的環境與趨勢）、我們對特定產品市場（例如 4G LTE 以及整體小型基地台無線市場）成長機會的評估，以及我們目前對 2013 會計年度第三季淨產品營收、非 GAAP 毛利率、非 GAAP 營業費用、非 GAAP 其他收益與費用、所得稅費用以及加權平均稀釋流通股數的預期。

These forward-looking statements are based on management's current expectations, estimates, forecasts and projections and are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements.

這些前瞻性陳述係基於管理階層目前的預期、估計、預測與推估，並受制於可能導致實際結果與事件與前瞻性陳述所述內容出現重大差異的風險與不確定性。

Our business is and any financial projections provided today are subject to numerous risks and uncertainties, including our ability to grow and maintain our revenues from various product markets, our ability to manage operating expenses, the impact of any failure to realize anticipated revenue growth or operating expense savings, fluctuations in our operating results and the potential for future operating losses and negative cash flows, loss of or diminished demand from one or more key customers or distributors, our ability to successfully develop and introduce new products, pricing pressures and the potential for intellectual property and other litigation.

我們的業務以及今天提供的任何財務預測均受多項風險與不確定性影響，包括：我們在各產品市場中成長並維持營收的能力、我們管理營業費用的能力、未能實現預期營收成長或營業費用節省所帶來的影響、我們營運結果的波動，以及未來可能出現營運虧損與負現金流的可能性；一個或多個主要客戶或經銷商的需求流失或減弱；我們成功開發並推出新產品的能力；價格壓力；以及智慧財產權與其他訴訟的可能性。

In addition, the financial statements released as part of our press release and earnings conference call are preliminary and include an estimated goodwill and asset impairment charge of approximately $33.5 million relating to our wireless infrastructure reporting unit. These estimates constitute forward-looking statements under applicable securities laws. We have not completed testing related to these impairment charges and they are subject to change.

此外，作為我們新聞稿與財報電話會議一部分所發布的財務報表為初步數據，並包含與我們無線基礎設施（wireless infrastructure）報導單位相關、約 3,350 萬美元的商譽及資產減損費用之估計。依適用證券法規，這些估計構成前瞻性陳述。我們尚未完成與這些減損費用相關的測試，因此其金額仍可能變動。

The final impairment charges reported in our Form 10-Q for the fiscal second quarter of 2013 could differ materially from the preliminary estimate that we announced today. Any increase in the amount of the impairment charge would have the effect of increasing our net loss for the fiscal second quarter of 2013.

我們在 2013 會計年度第二季的 Form 10-Q 中最終報告的減損費用，可能與我們今天宣布的初步估計存在重大差異。任何減損費用金額的增加，都將使我們 2013 會計年度第二季的淨虧損增加。

Additional risks and uncertainties that could cause our actual results to differ from those set forth in any forward-looking statements are discussed in more detail under the caption Risk Factors in our annual report on Form 10-K for the fiscal year ended September 28, 2012 and our quarterly report on Form 10-Q for the fiscal first quarter of 2013. They will also be included in our soon-to-be-filed quarterly report on Form 10-Q for the fiscal second quarter of 2013 and in our future filings with the SEC.

可能導致我們實際結果與任何前瞻性陳述所述內容不同的其他風險與不確定性，已在我們截至 2012 年 9 月 28 日止會計年度的 Form 10-K 年報，以及 2013 會計年度第一季的 Form 10-Q 季報中「風險因素」章節更詳細地討論。這些內容也將納入我們即將提交的 2013 會計年度第二季 Form 10-Q 季報，以及我們未來向 SEC 提交的文件中。

Forward-looking statements made during this call are made only as of the date hereof and the Company undertakes no obligation to update or revise the forward-looking statements whether as a result of new information, future events or otherwise.

本次電話會議中的前瞻性陳述僅截至本日有效，公司不承擔因新資訊、未來事件或其他原因而更新或修訂前瞻性陳述的任何義務。

During our call today, we will be making reference to non-GAAP financial measures, which exclude our preliminary estimates of impairment charges, as well as stock-based compensation expense and the related payroll costs, restructuring charges, nonrecurring legal and settlement costs and amortization of acquired intangible assets, among other items.

在今天的電話會議中，我們將提及非 GAAP 財務衡量指標，其排除我們對減損費用的初步估計，以及以股份為基礎的薪酬費用及相關薪資稅成本、重組費用、一次性法律與和解成本、收購無形資產攤銷等其他項目。

For a reconciliation of non-GAAP to GAAP financial measures, please refer to the Investors section of our website at www.mindspeed.com and our earnings press release and our Form 8-K furnished to the SEC today. We do not provide a reconciliation of the forward-looking non-GAAP measures to GAAP measures because of our inability to project restructuring charges, employee separation costs and stock-based compensation-related expenses. With that, I will now turn the call over to Raouf Halim, our Chief Executive Officer.

如需非 GAAP 與 GAAP 財務衡量指標之調節表，請參閱我們網站 www.mindspeed.com 的「投資人」專區，以及我們的財報新聞稿與今日提供給 SEC 的 Form 8-K。我們未提供前瞻性非 GAAP 指標與 GAAP 指標之調節，因為我們無法預測重組費用、員工離職相關成本以及與以股份為基礎薪酬相關的費用。接下來，我將把電話會議交給我們的執行長 Raouf Halim。

Thank you, Kevin. Good afternoon, everyone. Let me start by saying that, like many of you, I was disappointed with our performance this past quarter, which was driven primarily by weakness in the 3G wireless market. That said, our productline for high-performance analog and communications processors performed consistently with our expectations and 4G LTE met our goal of doubling in the quarter.

謝謝你，Kevin。各位下午好。首先我想說，和各位許多人一樣，我對我們上季的表現感到失望，主要原因是 3G 無線市場疲弱。儘管如此，我們的高效能類比與通訊處理器產品線表現符合我們的預期，而 4G LTE 也達成了我們在本季倍增的目標。

To provide a quick overview of our performance in the quarter, Q2 product revenue was $35.4 million, down 8% sequentially versus the prior quarter's product revenue. Further, we posted a modest non-GAAP operating loss of approximately $541,000 versus a $1.4 million non-GAAP profit the prior quarter after excluding the positive benefits of the $6 million non-core IP sale.

簡要概述本季表現，第二季產品營收為 3,540 萬美元，較上一季的產品營收按季下滑 8%。此外，在排除 600 萬美元非核心 IP 出售所帶來的正面效益後，我們錄得約 54.1 萬美元的輕微非 GAAP 營業虧損；而上一季則為 140 萬美元的非 GAAP 營業獲利。

On the call today, I will provide an overview of the performance of our three productlines during the quarter and I will touch a bit on our announcement that we are working with Morgan Stanley.

在今天的電話會議上，我將概述我們三條產品線在本季的表現，並簡要談及我們宣布正與 Morgan Stanley 合作一事。

Starting with HPA. HPA accounted for 44% of our revenues in Q2, down sequentially after a rapid pace of growth in the last four quarters as we had anticipated. Overall strength was driven by a number of new products, which we demonstrated at both the National Association of Broadcasters Conference or NAB, as well as the Optical Fiber Conference or OFC.

先從 HPA 開始。HPA 在第二季占我們營收的 44%，在過去四季快速成長後，如我們所預期，本季按季下滑。整體強勁表現主要由多款新產品帶動，我們在美國國家廣播協會展（National Association of Broadcasters Conference，NAB）以及光纖通訊大會（Optical Fiber Conference，OFC）上均展示了這些產品。

At NAB we were showcasing our 3 gigabit, 6 gigabit and 12 gigabit products, which we believe are at the forefront of the industry's shift to 4K ultra-high definition TV. At OFC, our new products received a lot of customer interest, including our low-power 28 gigabit per second CDRs, which enable high density networking within data centers, our broad crosspoint switch productline, as well as our broad PMD portfolio for fiber-to-the-home deployments worldwide.

在 NAB 上，我們展示了 3Gb、6Gb 與 12Gb 產品，我們相信這些產品走在產業轉向 4K 超高畫質電視的最前沿。在 OFC 上，我們的新產品獲得客戶高度關注，包括我們的低功耗 28Gbps CDR，可在資料中心內實現高密度網路連接；我們廣泛的 crosspoint switch 產品線；以及我們面向全球光纖到府（fiber-to-the-home）部署的完整 PMD 產品組合。

In the broadcast video segment, we continue to record share gains where we lead the industry with state-of-the-art crosspoint switched and SDI components. We expect the 4K ultra-high definition TV to drive an infrastructure upgrade cycle, which supports this new truly incredible viewing experience. Mindspeed is leading the interface in switching upgrade with this inflection point by offering highly integrated low-power 4K SDI and Crosspoint silicon.

在廣播影片區段方面，我們持續記錄到市占成長；我們以最先進的 Crosspoint 交換器與 SDI 元件領先業界。我們預期 4K 超高畫質電視將帶動基礎設施升級週期，支撐這種全新且真正令人驚豔的觀賞體驗。Mindspeed 透過提供高度整合、低功耗的 4K SDI 與 Crosspoint 矽晶片，正引領此轉折點下的介面與交換升級。

Another factor driving our success in HPA is our broad portfolio of PMDs targeting FTTx infrastructure worldwide. We continue to see strong PON demand primarily from Asia and see significant traction for our next generation devices targeting GPON, GEPON, XG-PON and 10G-EPON.

推動我們在 HPA 成功的另一項因素，是我們面向全球 FTTx 基礎設施的廣泛 PMD 產品組合。我們持續看到強勁的 PON 需求主要來自亞洲，且我們針對 GPON、GEPON、XG-PON 與 10G-EPON 的下一代裝置也獲得顯著進展。

Lastly, the HPA team is making significant strides in the 100 gig space with traction of multiple Tier 1 customers. Enterprise networking companies require density improvements for 100 gig networking relative to current form factors. Mindspeed's portfolio of CDRs and PMDs enables this improved density by offering the industry's lowest power consumption. We believe we are very well-positioned with our high-performance analog products and look forward to keeping you updated on our continued progress in growing revenue and marketshare within HPA.

最後，HPA 團隊在 100G 領域也取得重大進展，並獲得多家一線（Tier 1）客戶的採用動能。相較於目前的外形規格，企業網路公司對 100G 網路需要更高的密度提升。Mindspeed 的 CDR 與 PMD 產品組合以業界最低功耗，實現這種密度提升。我們相信，憑藉高效能類比產品，我們已具備非常有利的競爭位置，並期待持續向各位更新我們在 HPA 內擴大營收與市占的進展。

Moving onto our communications processors. Revenue (sic) represented 49% of our Q2 revenues and reached $17 million in our fiscal second quarter, up 17% sequentially. We continue to focus on increasing marketshare in our core service provider provision broadband home router or BHR market with a number of new initiatives, including a focus on consumer [NAV], Deep Packet Inspection, as well as mobile broadband routers. We believe we can leverage our ARM-based processor platform into adjacent markets with low incremental R&D expense, providing earnings leverage to our model in FY 2014. In the quarter, we closed five key design wins, including Tier 1 wins in Japan and Europe.

接著談我們的通訊處理器。營收（原文如此）占我們第二季營收的 49%，在本會計年度第二季達到 1,700 萬美元，較前一季成長 17%。我們持續聚焦於透過多項新計畫，提高我們在核心服務供應商所提供之寬頻家用路由器（BHR）市場的市占，包括聚焦消費者 [NAV]、深度封包檢測（DPI），以及行動寬頻路由器。我們相信，我們可以以較低的增量研發費用，將 ARM 架構處理器平台延伸至相鄰市場，並在 2014 會計年度為我們的模型帶來獲利槓桿。本季我們取得五項關鍵設計導入勝利（design wins），其中包括在日本與歐洲的一線客戶勝利。

And finally, let me update you on our wireless infrastructure business, which accounted for $2.6 million, or 7%, of Q2 revenues. We expected the seasonal slowdown in 3G would be largely offset by some new 3G rollouts. We had originally expected these orders to turn on late in the quarter as they typically do post the Lunar New Year in Asia. Late in the quarter, however, we determined these anticipated ramps were pushing out due to operator delays in deployments. That said, the overall small cell market has appeared to push out, which I will discuss momentarily.

最後，讓我更新我們的無線基礎設施業務：該業務在第二季營收中貢獻 260 萬美元，約占 7%。我們原先預期 3G 的季節性放緩將大致被一些新的 3G 部署所抵銷。我們原本也預期這些訂單會在本季後段啟動，因為在亞洲通常會在農曆新年之後才會出現。然而在本季後段，我們判斷這些預期的放量正因營運商部署延遲而往後推遲。即便如此，整體小型基地台（small cell）市場似乎也出現延後，我稍後會再說明。

Turning to the 4G LTE market, we are pleased that we met our target for 4G LTE rollouts, which doubled versus last quarter, to approximately $1 million in our fiscal Q2. We expect the 4G LTE small cell market to be a long-term grower; though it may be lumpy as new deployments later on. We expect rollouts in both Japan and the US to follow the existing rollouts occurring in Korea at the moment; although these deployments are rolling out at a slower pace than we had originally anticipated.

談到 4G LTE 市場，我們很高興達成 4G LTE 部署目標，較上季倍增，在本會計年度第二季約為 100 萬美元。我們預期 4G LTE 小型基地台市場將是長期成長動能；不過隨著後續新部署，營收可能會呈現波動。我們預期日本與美國的部署將跟隨目前在韓國進行的既有部署；但這些部署的推進速度比我們原先預期更慢。

From numerous recent meetings with carriers, as well as third-party research, we believe operators are committed to small cells and although there are some delays, carriers are expecting to continue with their deployment plans. Further, while we have provided forecasts in the past on specific rollouts and the expected size of these rollouts, we are not going to comment on the magnitude and specific timing at this time.

根據近期與多家電信業者的會議，以及第三方研究，我們相信營運商對小型基地台仍具承諾；儘管存在一些延遲，電信業者仍預期將持續其部署計畫。此外，雖然我們過去曾就特定部署與其預期規模提供預測，但目前我們不會評論其規模大小與具體時程。

We remain focused on the small cell wireless market, which we believe has a number of growth opportunities, which we are well-positioned to capitalize on. Although, at the same time, we forecast this revenue stream will be lumpy in the early stages of deployments.

我們仍專注於小型基地台無線市場；我們相信該市場存在多項成長機會，而我們也具備良好條件加以把握。不過同時，我們預期在部署初期，這條營收來源將呈現波動。

First, as published by a number of third-party research firms, we hold the number one position for small cell SOCs and we will continue to focus on maintaining this marketshare position and our technology and design win lead against our competitors.

第一，正如多家第三方研究機構所發布，我們在小型基地台 SoC 市場居於第一名；我們將持續專注於維持此市占地位，以及相較競爭對手在技術與設計導入勝利上的領先。

Second, we are seeing a number of opportunities for rollouts in TD-SCDMA in China where we ship the only chip in commercial deployment at this time and have a core position with leading operators such as China Mobile.

第二，我們在中國的 TD-SCDMA 部署方面看到多項機會；目前我們出貨的是唯一已進入商用部署的晶片，並且在中國移動等領先營運商中占有核心地位。

Following our strong product showcase at Mobile World Congress, we have strong interest from customers to further evaluate and engage with our dual-mode 3G W-CDMA plus LTE Transcede-based solutions. We were also surprised with the strong interest in LTE advanced features such as carrier aggregation. We are engaged with Tier 1 OEM and service providers for Transcede-based evaluation of our carrier grade solution consisting of our award-winning SOC and internally developed advanced physical layer software, as well as robust integration with partners' commercial stacks.

在世界行動通訊大會（Mobile World Congress）上成功展示產品之後，我們看到客戶對進一步評估並採用我們的雙模 3G W-CDMA 加 LTE、以 Transcede 為基礎的解決方案抱持高度興趣。我們也對客戶對 LTE-Advanced 功能（例如載波聚合）的強烈興趣感到意外。我們正與一線 OEM 與服務供應商合作，針對以 Transcede 為基礎的評估，推進我們的電信級解決方案；該方案由我們獲獎的 SoC 與內部開發的先進實體層軟體所構成，並可與合作夥伴的商用協定堆疊進行穩健整合。

Continued advanced features and real carrier deployments of our small cell solutions are positioning us well for continued deployments in Korea and follow-on deployments in Japan and in the US. Continued hardening of our carrier-grade software and significant improvements to our solution are putting more space between us and our competitors and maintaining or improving our marketshare.

持續的先進功能導入，以及我們小型基地台解決方案在真實電信網路中的部署，讓我們在韓國的持續部署與日本、美國的後續部署方面具備良好態勢。我們持續強化電信級軟體並大幅改善解決方案，進一步拉開與競爭對手的差距，並維持或提升我們的市占。

Turning to our small cell wireless outlook for the rest of 2013, we are focused on guidance for the current quarter and will not be providing a forecast for the full year for wireless nor quarterly revenue forecasts for each of our productlines. However, it is fair to say that our wireless revenues will not quite reach the level of our prior forecasts of roughly $25 million in this fiscal year.

談到 2013 年剩餘期間我們對小型基地台無線業務的展望，我們將聚焦於本季的財測指引，不會提供無線業務的全年預測，也不會針對各產品線提供逐季營收預測。不過可以合理地說，我們的無線營收將無法完全達到先前對本會計年度約 2,500 萬美元的預測水準。

That said, we still believe the small cell market offers a great growth opportunity for us and we want to make sure the investment community understands our key differentiators and in particular why Mindspeed remains the leader in the small cell SOC market.

即便如此，我們仍相信小型基地台市場為我們提供了極佳的成長機會；我們也希望投資社群能理解我們的關鍵差異化優勢，特別是為何 Mindspeed 仍是小型基地台 SoC 市場的領導者。

First, the market has become standardized on the system-on-a-chip approach versus discrete processors and FPGAs. Additionally, Mindspeed owns the industry's broadest range of wireless radio air interface standards and can therefore market in any region across the globe. And finally, we have carrier-proven technology for typically risk-averse service providers enabling a smoother testing cycle and faster deployment for our OEM customers. These, amongst many other factors, have given us the market-leading position for system-on-a-chip solutions in the growing small cell markets.

第一，市場已在系統單晶片（SoC）方案上趨於標準化，相較於分離式處理器與 FPGA。其次，Mindspeed 擁有業界最廣泛的無線射頻空中介面標準覆蓋，因此可在全球任何地區進行行銷。最後，我們擁有經營運商驗證的技術；對通常風險趨避的服務供應商而言，這可帶來更順暢的測試週期與更快的部署，並使我們的 OEM 客戶受益。上述因素以及其他多項因素，使我們在成長中的小型基地台市場中，取得系統單晶片解決方案的市場領先地位。

Finally, you probably saw that we issued a second press release today. We announced that we are working with Morgan Stanley to explore strategic alternatives. In the context of changing industry conditions, our financial profile, as well as approaches by third parties, we believe it is prudent to evaluate our alternatives thoroughly. Obviously we will keep you updated if there are material developments that come out of the process. That is all we are going to say on this subject on today's call. With that, I would now like to turn the call over to Stephen to provide more detail on last quarter's financials and our fiscal Q3 guidance. Stephen?

最後，各位可能也注意到我們今天發布了第二則新聞稿。我們宣布正與摩根士丹利合作，探索策略性替代方案。在產業環境變化、我們的財務概況，以及第三方接觸等背景下，我們認為審慎且全面地評估各種選項是明智之舉。當然，若此流程出現重大進展，我們會持續向各位更新。今天的電話會議中，關於此議題我們就說到這裡。接下來，我想把電話交給 Stephen，請他更詳細說明上季財務表現以及我們第三季的財測指引。Stephen？

Thank you. I will now review the financial results for our fiscal second quarter of 2013 and provide the financial outlook for our fiscal third quarter. First, let's discuss our Q2 results. Total revenue for the fiscal second quarter was $35.4 million. Product revenue from the high-performance analog business represented 44% of total revenue and recorded $15.7 million, down 18% compared to the prior quarter. Product revenue from the communications processors business represented 49% of total revenue and recorded $17.1 million, up 17% compared to the prior quarter.

謝謝。我現在將回顧我們2013會計年度第二季的財務結果，並提供2013會計年度第三季的財務展望。首先，讓我們討論第二季的結果。會計年度第二季總營收為3,540萬美元。高效能類比業務的產品營收占總營收的44%，為1,570萬美元，較前一季下降18%。通訊處理器業務的產品營收占總營收的49%，為1,710萬美元，較前一季成長17%。

Product revenue from the wireless infrastructure business represented the remaining 7% of total revenue and recorded $2.6 million, down 44% versus the prior quarter. Product revenue for the fiscal second quarter was split by geographic region as follows -- Asia-Pacific at 72%, Americas at 19% and Europe at 9%. China specifically represented 33% of total fiscal second-quarter product revenue. No end customer represented product revenues of 10% or greater in the fiscal second quarter.

無線基礎設施業務的產品營收占總營收其餘的7%，為260萬美元，較前一季下降44%。會計年度第二季的產品營收按地理區域分布如下——亞太地區占72%、美洲占19%、歐洲占9%。其中，中國占會計年度第二季產品營收的33%。在會計年度第二季，沒有任何終端客戶的產品營收占比達到或超過10%。

Now turning to gross margin, non-GAAP gross profit was $21.5 million or 60.7% of product revenue, consistent with our expectation of between 60% and 61%. This was down 80 basis points versus our prior fiscal quarter on a non-GAAP basis after excluding the positive benefits of the $6 million noncore IP sale in the prior quarter.

接著看毛利率，非GAAP毛利為2,150萬美元，或占產品營收的60.7%，符合我們對60%至61%的預期。在排除前一季6,000萬美元非核心IP出售所帶來的正面效益後，以非GAAP基礎計算，本季較上一會計季度下降80個基點。

Margins declined compared to the prior quarter principally due to product mix. Total non-GAAP operating expenses were $22 million consistent with our original guidance to reduce operating expenses to the level prior to the Picochip acquisition. Non-GAAP operating expenses were comprised of research and development expenses of $14.9 million and selling, general and administrative expenses of $7.1 million. The resulting non-GAAP operating loss for the fiscal second quarter was approximately $541,000.

相較前一季，毛利率下滑主要是由於產品組合所致。非GAAP營業費用總額為2,200萬美元，符合我們原先的指引，即將營業費用降低至收購Picochip之前每季的水準。非GAAP營業費用包括研發費用1,490萬美元，以及銷售、一般及行政費用710萬美元。因此，會計年度第二季的非GAAP營業損失約為54.1萬美元。

Now finishing the income statement for the fiscal second quarter. Non-GAAP other income and expenses totaled a net expense of approximately $283,000 composed primarily of net interest expense, partially offset by a reimbursable foreign research and development credit. The provision for income taxes was $154,000. Non-GAAP net loss for the fiscal second quarter was approximately $978,000 resulting in a non-GAAP loss per share of $0.02.

接著完成會計年度第二季的損益表。非GAAP其他收入及費用合計為淨費用約28.3萬美元，主要由淨利息費用構成，部分由可報銷的海外研發抵減所抵銷。所得稅費用為15.4萬美元。會計年度第二季非GAAP淨損約為97.8萬美元，對應非GAAP每股虧損0.02美元。

Turning now to the balance sheet for the fiscal second quarter, cash and cash equivalents were $46.6 million at the end of the fiscal second quarter of 2013, down $4.6 million versus the prior quarter. Accounts receivable at the end of the quarter were $19.3 million, resulting in net days sales outstanding of 48 days, up from 38 days in the prior quarter. Inventories at the end of the quarter were $11 million resulting in non-GAAP inventory turns of 5.1 versus 6.4 turns in the prior quarter.

現在看會計年度第二季的資產負債表，截至2013會計年度第二季末，現金及約當現金為4,660萬美元，較前一季減少460萬美元。季末應收帳款為1,930萬美元，淨應收帳款週轉天數（DSO）為48天，高於前一季的38天。季末存貨為1,100萬美元，非GAAP存貨週轉率為5.1次，低於前一季的6.4次。

As we first discussed during our fiscal Q3 2012 earnings call, we committed to return our non-GAAP operating expenses back to the pre-Picochip acquisition level of $22 million per quarter. We have achieved this goal and expect to modestly lower operating expenses in the fiscal third quarter of 2013. Further, we expect to narrow our cash burn in this current fiscal quarter.

正如我們在2012會計年度第三季法說會上首次提到的，我們承諾將非GAAP營業費用恢復至收購Picochip之前每季2,200萬美元的水準。我們已達成此目標，並預期在2013會計年度第三季小幅降低營業費用。此外，我們預期在本會計季度縮小現金消耗。

As you likely saw in our press release, and as we mentioned at the beginning of the call, the GAAP financial results we presented today are preliminary based on an estimated goodwill and asset impairment charge. We will be writing down the value of goodwill definite lived intangibles and indefinite lived intangibles in the fiscal second quarter associated with the wireless infrastructure reporting unit.

如各位可能已在新聞稿中看到，且如我們在電話會議一開始所提到的，我們今天提供的GAAP財務結果為初步數字，係基於估計的商譽及資產減損費用。我們將在會計年度第二季，針對與無線基礎設施報導單位相關的商譽、有限年期無形資產及不確定年期無形資產進行減記。

This lower than expected deployment of 3G small cell base stations triggered an impairment evaluation. We are currently estimating the goodwill and asset impairment charge to be approximately $33.5 million. We will be finalizing our work on the goodwill and asset impairment analysis between now and the filing of our Form 10-Q. The final goodwill and asset impairment charge could vary materially from our current estimate. Changes in the goodwill and asset impairment charges will result in corresponding changes in the GAAP net loss for the fiscal second quarter.

3G小型基地台的部署低於預期，觸發了減損評估。我們目前估計商譽及資產減損費用約為3,350萬美元。我們將在現在到提交Form 10-Q之間完成商譽及資產減損分析的工作。最終的商譽及資產減損費用可能與目前估計有重大差異。商譽及資產減損費用的變動，將導致會計年度第二季GAAP淨損出現相應變動。

Revenue, non-GAAP metrics, including the non-GAAP results we disclosed in our earnings release and financial tables, and our cash and cash equivalents balance will not change as the result of any change in the Company's current estimate of goodwill and asset impairment charges.

營收、非GAAP指標（包括我們在財報新聞稿與財務表格中揭露的非GAAP結果），以及我們的現金及約當現金餘額，將不會因公司目前對商譽及資產減損費用估計的任何變動而改變。

Further, I have an update on the earnout and net asset adjustment related to the Picochip acquisition. On April 26, 2013, we entered into a settlement agreement with a representative of the Picochip shareholders closing out all outstanding obligations under the acquisition agreement. This included escrow claims, earnout payments and the net asset adjustments on the purchase price.

此外，我也要更新與收購Picochip相關的或有對價（earnout）及淨資產調整事項。2013年4月26日，我們與Picochip股東代表簽訂和解協議，結清收購協議項下所有未結清義務，其中包括託管索賠、或有對價付款以及購買價格的淨資產調整。

As part of this settlement, Mindspeed will receive net payment of approximately $1 million in cash and was relieved of approximately $5.4 million in amounts payable to the Picochip shareholders. We will record this $6.4 million settlement to GAAP other income in the fiscal third quarter. Had this settlement occurred within 12 months from the date of the Picochip acquisition, the $6.4 million would have resulted in a reduction of goodwill and reduced the estimated impairment charge in the fiscal second quarter.

作為此和解的一部分，Mindspeed將收到約100萬美元的現金淨付款，並解除約540萬美元應付給Picochip股東的款項。我們將在2013會計年度第三季把這筆640萬美元的和解金額記錄為GAAP其他收入。若此和解發生在收購Picochip日起12個月內，這640萬美元將會減少商譽，並降低會計年度第二季估計的減損費用。

Now I would like to provide our outlook for the fiscal third quarter of 2013. Given recent market volatility, we anticipate Q3 product revenue will be approximately flat compared to fiscal Q2. We expect non-GAAP gross margin to be approximately 60% and non-GAAP operating expenses to be approximately $21.5 million. Finally, we expect non-GAAP other income and expense and the provision for income taxes to be approximately $1.1 million and weighted average shares outstanding to range between 40.4 million and 40.9 million shares. Operator, we are now ready to open the lines for questions.

現在我想提供我們對2013會計年度第三季的展望。鑑於近期市場波動，我們預期第三季產品營收相較會計年度第二季約持平。我們預期非GAAP毛利率約為60%，非GAAP營業費用約為2,150萬美元。最後，我們預期非GAAP其他收入及費用與所得稅費用合計約為110萬美元，加權平均流通在外股數介於4,040萬股至4,090萬股之間。接線員，我們現在準備開放提問。

(Operator Instructions). Kevin Cassidy, Stifel Nicolaus.

（接線員指示）。Kevin Cassidy，Stifel Nicolaus。

Hello, this is Dean Grumlose calling in for Kevin. Thank you very much for taking my call. I was wondering if you could characterize the push-outs of the small cell deployments a little bit more? Are these related to CapEx decisions by carriers or is it related to the status of field trials or what can we learn about when this ramp may continue?

你好，我是代替Kevin來電的Dean Grumlose。非常感謝接聽我的電話。我想請問你們能否更進一步描述小型基地台部署延後（push-outs）的情況？這些是否與電信商的資本支出（CapEx）決策有關，或是與場域測試的進度有關，或是我們能從中了解這波放量何時可能持續？

Yes, Dean, this is Raouf. I would say that the push-outs of small cell deployments are primarily associated with the technical implications and some of the interactions between small cells and macro cells. As you know, there are a lot of standards that are developing in this area, such as heterogeneous networks or HetNet, a lot of interference mitigation implementations and standards that are developing. And I think there is a tremendous amount of real-world learning that carriers are going through right now as they finalize their exact deployments of small cells and as they figure out how to make them coexistent and successful in the presence of existing macrocell-based networks.

是的，Dean，我是Raouf。我會說，小型基地台部署的延後主要與技術層面的影響，以及小型基地台與宏基地台之間的一些互動有關。如你所知，這個領域正在發展許多標準，例如異質網路（heterogeneous networks，或HetNet），以及許多干擾抑制（interference mitigation）的實作與標準也在發展中。我認為，電信商目前正經歷大量的實務學習，因為他們正在敲定小型基地台的具體部署方式，並思考如何在既有以宏基地台為主的網路環境中，讓小型基地台能夠共存並成功運作。

So it doesn't really have much to do with CapEx. It has a lot to do with learnings from field trials and how those are getting incorporated into the base technology. We are very pleased in fact to be in the forefront of these deployments, as you may know. We are deploying 4G LTE small cells in Korea and we are learning alongside our customers and carriers such as SK Telecom and Korea Telecom. These are very valuable learnings and as I commented in my prepared script earlier, we are certainly benefiting from that learning experience and hardening our software implementation and achieving interop with a variety of user equipment or UEs and also wringing out these coexistence issues that I mentioned. So again, it doesn't have anything to do with CapEx; it has a lot more to do with the learning cycles from field trials.

所以這其實與資本支出（CapEx）沒有太大關係。它更多與現場試驗的學習成果，以及這些成果如何被納入基礎技術有關。如你所知，我們事實上非常高興能站在這些部署的最前線。我們正在韓國部署 4G LTE 小型基地台（small cells），並與我們的客戶及電信營運商（carriers），例如 SK Telecom 與 Korea Telecom，一起學習。這些都是非常寶貴的經驗；正如我先前在準備好的講稿中提到的，我們確實正從這些學習經驗中受益，強化我們的軟體實作，並與各式各樣的用戶設備（UEs）達成互通性（interop），同時也在解決我提到的這些共存（coexistence）問題。因此再說一次，這與 CapEx 無關；更多是與現場試驗的學習週期有關。

That's helpful. Thank you very much.

這很有幫助。非常感謝。

(Operator Instructions). Phil Dumas, Geode Capital.

（接線員指示）。Geode Capital 的 Phil Dumas。

Yes, this question is for Steve. Hi, Steve, how are you?

是的，這個問題要問 Steve。嗨，Steve，你好嗎？

Good, how are you?

很好，你呢？

Good. So just a couple of quick questions on cash flow. So CapEx for the year without payments under license agreements, you are still looking at $4 million or so?

很好。那我有幾個關於現金流的快速問題。今年的 CapEx（不含授權協議下的付款），你們仍然預期大約是 400 萬美元左右嗎？

Per quarter? Yes, it is likely to come down a bit from there, but that is certainly where it has been in the past.

以每季來看嗎？是的，可能會比那個數字再降一些，但過去確實大致是那個水準。

I'm sorry, for 2013, fiscal 2013? So it is $1 million a quarter and $4 million for the year, correct?

抱歉，我是指 2013 年、2013 財年？所以是每季 100 萬美元、全年 400 萬美元，對嗎？

You are talking about just CapEx specifically?

你是指僅就 CapEx 這一項而言嗎？

Specifically without payments under license agreement.

是的，特別是不含授權協議下的付款。

Yes, that is correct.

是的，沒錯。

Okay. And in terms of the license agreement payments, with lower revenues, does that number get reduced or do you still expect it around the $12 million to $13 million?

好的。那就授權協議付款而言，在營收較低的情況下，那個數字會降低嗎？還是你們仍預期大約在 1,200 萬到 1,300 萬美元左右？

At this point, I think assuming the $12 million to $13 million is still appropriate. Obviously, this is one of the things that we are evaluating and hoping to prioritize the investments and bring our cash expenses down.

就目前而言，我認為以 1,200 萬到 1,300 萬美元來假設仍是合適的。當然，這也是我們正在評估的事項之一，我們也希望能優先排序投資，並降低我們的現金支出。

Okay, because I mean through the first six months, it looks to be $2.7 million, so it is mostly back-end-loaded, is that fair?

好的，因為我的意思是，從前六個月來看似乎是 270 萬美元，所以大部分是集中在後半段支付，這樣說合理嗎？

Yes, that is correct.

是的，沒錯。

Okay. So then, of course, you have the convert, which is $15 million, which is the bulk of your cash burn for the year. Does part of -- I don't know if you can comment on this -- but part of your strategic priorities here has to be, if you raise another $15 million, you are somewhat not totally in the clear, but somewhat in the clear here and obviously that leaves a lot of value on the table for everyone potentially. So is that one of the $15 million to $20 million capital raise, is that one of the alternatives you are considering here?

好的。那當然你們還有可轉債（convert），是 1,500 萬美元，這是你們今年現金消耗（cash burn）的主要部分。這其中的一部分——我不知道你能否評論——但你們在這裡的策略優先事項之一必須是：如果你們再募到 1,500 萬美元，你們就算不是完全無虞，但也算相對安全一些；而這顯然可能為所有人保留很多潛在價值。所以，這種 1,500 萬到 2,000 萬美元的募資，是否是你們正在考慮的替代方案之一？

Well, we are evaluating all strategic alternatives, but I will say that we are very mindful of shareholder dilution in that process.

我們正在評估所有策略性替代方案，但我會說，在這個過程中，我們非常留意股東稀釋（shareholder dilution）問題。

Okay. Thank you.

好的。謝謝。

(Operator Instructions). Elizabeth Howell, Raymond James.

（接線員指示）。Raymond James 的 Elizabeth Howell。

Hi, thanks so much. So could you give us a sense for how we should think about TCP and HPA for the remainder of the year? And maybe, Steve, if you comment a little bit on what you're seeing in China and the contract awards, how they materialized in the quarter?

嗨，非常感謝。那你們能否讓我們了解一下，今年剩餘期間我們應該如何看待 TCP 和 HPA？另外，Steve，如果你能稍微評論一下你在中國看到的情況，以及合約得標在本季是如何落實的？

Yes, definitely. Yes, Elizabeth, this is Raouf. So starting with your first question first, the (inaudible) convergence business or CP for short, as well as HPA, performed very consistently with our expectations in the first half of the year and as we look to the second half, of course, we are not going to guide beyond the current quarter, but I would say that they are very much on track with our expectations and we are very pleased with how those two platforms are playing out for us. And also very pleased frankly with the design wins we have that are broadening the platforms in both [comcrossing] and HPA. So we are not going to guide beyond the current quarter, but I would simply say that they are performing right on track with our expectations at the beginning of this fiscal year.

是的，當然可以。是的，Elizabeth，我是 Raouf。先回答你的第一個問題，（聽不清）融合業務，或簡稱 CP，以及 HPA，在上半年都非常符合我們的預期；展望下半年，當然我們不會對當前季度以外提供指引，但我會說它們非常符合我們的預期進度，我們也對這兩個平台的發展感到非常滿意。坦白說，我們也很高興看到我們取得的設計導入（design wins），正在擴大 [comcrossing] 與 HPA 兩個平台的應用範圍。因此我們不會對當前季度以外提供指引，但我只想說，它們的表現完全符合我們在本財年初的預期。

Then your second question was about China and we certainly experienced a good comeback after the Chinese New Year ended February of last quarter and we saw order patterns start to pick up in the month of March. They were a little later to pick up than we had expected, but they certainly started coming back and we are looking forward to a pretty decent year in China this year. Expectations are for significant growth in the fiber-to-the-home market. Numbers out there are anywhere from 30% to much higher numbers for annual subscriber growth fiber-to-the-home in China specifically and as you know, we have a very strong position there with our HPA business. So we are generally, I would say, positive on trends in China.

你的第二個問題是關於中國。我們在上一季二月、農曆新年結束後，確實看到不錯的回升，並在三月份看到訂單型態開始回溫。回升的時間點比我們預期稍晚一些，但確實開始回來了；我們也期待今年在中國會是相當不錯的一年。市場預期光纖到戶（fiber-to-the-home）在中國將有顯著成長；外界數據從年訂戶成長 30% 到更高的數字都有，特別是在中國的光纖到戶市場。而如你所知，我們在那裡的 HPA 業務具有非常強的市場地位。因此整體而言，我會說我們對中國的趨勢是正面的。

Great, thanks. And then just one quick one. Did I hear you right? Did you say that you do have an engagement now for your dual-mode small cell solution?

很好，謝謝。然後再一個很快的問題。我有沒有聽對？你是說你們現在已經有針對雙模小型基地台解決方案的合作案（engagement）了？

Yes, we do. We are making very good progress with our dual-mode 3G/4G small cells and yes, we do expect to have a good play in dual-mode small cell deployments eventually. Those are pushing out. Dual-mode, you will see that in North America. Primary carriers are going to be people like AT&T certainly, but outside of North America as well, carriers like Vodafone. And then in China, you are going to see dual-mode of a different kind, TD-LTE and TD-SCDMA in China specifically. And so dual-mode takes on different flavors in different parts of the world. And we think we're very well-positioned across the board.

是的，有。我們在雙模 3G/4G 小型基地台方面進展非常順利，而且是的，我們確實預期最終會在雙模小型基地台部署上有不錯的切入點。這些部署時程正在往後推。雙模方面，你會在北美看到；主要營運商當然會是像 AT&T 這樣的業者，但北美以外也會有，例如 Vodafone 這類營運商。然後在中國，你會看到另一種形式的雙模，也就是在中國特別是 TD-LTE 與 TD-SCDMA。因此，雙模在世界不同地區會有不同的樣態。我們認為我們在各方面都處於非常有利的位置。

Great. Thanks very much.

很好。非常感謝。

You are welcome.

不客氣。

I am not showing any other questions in the queue. I would like to turn it back over to Raouf for closing comments.

我這邊顯示目前沒有其他排隊提問。我想把時間交回給 Raouf 做結語。

Okay, well, thank you all very much for joining our fiscal second-quarter call. We look forward to talking to you in roughly three months. Thank you and have a good day.

好的，非常感謝各位參加我們的第二財季電話會議。我們期待大約三個月後再與各位交流。謝謝，祝各位有美好的一天。

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the conference. You may now disconnect. Good day.

謝謝。各位女士、先生，感謝各位參與今天的會議。本次會議到此結束。您現在可以掛線。祝各位有美好的一天。